Innovation and economic performance of firms in national science & technology park, Islamabad, Pakistan

Science and technology parks (STP) are established to facilitate innovation and the rapid development of cutting-edge technologies. The innovation performance of tenants is the primary feature of all successful STPs globally. The purpose of this study is to investigate firms’ innovation and economic performance at the National Science and Technology Park (NSTP), Islamabad, Pakistan.

The CDM (the acronym of the three authors’ names, Crépon, Duguet and Mairesse) model following a two-stage approach was used to analyze the survey data of 105 tenants. The innovation performance of tenants was estimated through probit regression at Stage 1, and the economic performance of tenants given their innovation performance was examined at Stage II using Tobit regression and the Heckman model.

The findings suggest that compatibility of innovation with the existing competitive advantage of a firm increases the innovation performance of firms, whereas collaboration of firms with NUST for research and development has only a marginal effect on innovation performance. However, the tenant’s business and social networking were weak, possibly due to the short time spent on NSTP.

These STPs are expected to be hubs of technology development and transfer by fostering open innovation through internal and external collaborations. To the best of the authors’ knowledge, this is the first study to estimate the innovation performance of tenants at NSTP, the first fully integrated STP in Pakistan. Despite shortcomings, the innovation and economic performance of NSTP tenants warrant further public policy support to inculcate open innovation culture.