Innovation capability and its impact on firm performance

The paper tests several hypotheses within a Best Innovation Management (BIM) model using quantitative data, gathered from a large random sample in a mail survey of companies in the Australian manufacturing, services, construction, and software sectors. A total of 220 responses were obtained, which represents a response rate of 15 per cent. Our results revealed that three factors explain 42 per cent of the variation in innovation performance: Leadership and Strategy; Innovation Capability and New Product Development. E-Commerce and Sustainable Development Orientation were significantly associated with innovation performance. However, the two constructs were not significant differentiators between high and low innovating organisations. The research findings have significant implications for managers by providing an in-depth understanding of key evidence on how to create innovation driven companies.