Investment in training and skills for innovation in entrepreneurial start-ups and incumbents: evidence from the United Kingdom

Firms that aim to compete globally have to invest in knowledge and have to use knowledge returns to increase their competitive advantage. This paper extends our understanding of returns to knowledge investment by focusing on innovative training and skills in entrepreneurial organizations and incumbents, as well as the role of legal protection in further investment in knowledge. Using novel innovation data for a panel of 4049 firms in the UK, this paper estimates the training premium for the country's most innovative firms. Returns on training vary between start-ups and incumbents and during economically-constrained times. Specifically, the study highlights evidence for higher returns on training during times of crisis and lower returns before the crisis. In filling a gap in the calculation of returns to investment in knowledge creation within organization, the study advances our understanding on how entrepreneurial firms need to invest in training and skills to increase innovation outcomes.