We find that the Norwegian R&D tax credit scheme introduced in 2002 mainly works as intended. The scheme is cost-effective and it is used by a large number of firms. It stimulates these firms to invest more in R&D, and, in particular, the effect is positive for small firms with little R&D experience. The returns on the R&D investments supported by the scheme are positive and generally not different from the returns to other R&D investments. We have found examples of what can be interpreted as tax motivated adjustments to the scheme, but to some extent this must be accepted as a cost to subsidy and support schemes intended for use by a large number of economic agents. This is particularly so when attempts are made to keep administrative expenditures and control routines at a low level.

According to a strong and diversified theoretical framework, innovation is one of the usual suspects in defining differences in firm performance. Understanding the diversity that exists within the population of innovative firms is essential for developing appropriate innovation policies. Our study explored the diversity of innovation patterns among Norwegian firms included in the 2018 Community Innovation Survey (CIS2018). By applying factor analysis to a wide array of survey variables and a large sample of firms, we identified eleven typical approaches to innovation, which connect innovation inputs and outputs at the firm level. A main outcome of our study is a novel fine-grained view of innovation as a multifaceted concept. Our research path helps us to find commonalities in innovation behavior across industries and, as a consequence, to better isolate those innovation patterns that differentiate industries from one another. We also show the relation between firm size, on one hand, and each of the firm scores associated to the eleven typical approaches to innovation, on the other hand, thus uncovering ways in which small firms may survive in sectors dominated by large firms.

We use the new taxonomy for innovative firms developed based on microlevel data from the Community Innovation Survey (CIS2018) on a sample of 6360 Norwegian firms, and information on users of COVID-19-related compensation schemes for firms with significant loss of turnover and furloughed employees to analyse how resilient different innovative firms have been to the crisis (in both the short and the long run). By using different probabilistic regression models, we study the probability of firms being affected negatively during the pandemic period between March 2020 and February 2022 covering three waves of societal restrictions in Norway. Our main assumption is that all firms were hit by a shock at an early stage due to a complete lockdown in March 2020, but that firms were more resilient if they either did not use the compensation schemes or used them for a briefer period than the less resilient firms. We find “active R&D doers” to be most resilient, while “strategic adapters” (firms with a main strategy of producing high-quality products for a specific group of customers) are found to be least resilient. These results imply that pre-existing innovation capabilities are important for meeting the crisis.

The coronavirus crisis hit both the world and national economies hard. By using a structural equation modelling (SEM) approach and microlevel data from the Community Innovation Survey (CIS2020) on a representative sample of 6437 Norwegian firms comprising a set of COVID-19-related questions, this paper explores the role of firms’ innovation capabilities and strategic agility in times of crises. Our main hypothesis is that these two concepts are interrelated. More specifically, this paper investigates the ‘push’ and ‘pull’-mechanisms of the pandemic on firms’ innovation strategies, as well as which firms were most agile, adapted quickly, introduced innovation due to the COVID-19 crisis rapidly and became more effective with respect to their pre-crisis innovation capabilities. The results indicate that both mechanisms were active during the coronavirus crisis, and most of the firms carried out strategic reactions and changed their business operations on along-term basis. However, the results for innovation output and efficiency improvements vary significantly. “Process developers”, “active R&D doers” and “radical innovators” (the firms that are persistent innovators with the highest score on performing in-house R&D continuously and on innovating in the pre-crisis period) are found to be most agile during the pandemic. They had both introduced innovation and improved their efficiency in quick response to COVID-19. However, firms with low innovation capabilities demonstrated poorer performance during the crisis. These results imply that pre-existing innovation capabilities are important for firms’ strategic flexibility during crises and their ability to respond to changes quickly and efficiently.