Productivity of innovation: the effect of innovativeness on start-up survival

This paper provides arguments supporting the association between different measures of innovativeness (i.e., innovation capacity and effectiveness) and the survival of start-ups. Analysing a sample of 9171 innovative Italian start-ups, using Accelerated Failure Time models, we find two main results. First, patents and software licenses seem to strongly predict survival. Second, different measures of innovativeness complement each other: when Research and Development (R&D) expenditures pair with the ownership of patents/software and a skilled workforce, the overall effect on start-up survival gets stronger. It follows that innovativeness, in terms of high skills able to optimize R&D spending, is crucial for the survival of start-ups. Our findings should support policy-making for innovative capability development and "productivity of innovation", and contribute to improving start-ups' credit access and reduce their financial constraints.