Innovation and business performance - a provisional multi-regional analysis

Annex 1: Defining two cluster use variables

In the MPPDS we asked firms a series of questions relating to their use of a range of
managerial and IT-based production systems. These original variables were then used
to form two composite indicators of the internal resources of the business. The first of
these related to the use of IT-based production techniques by the firm and covered
CNC, CAD, CAM, AMH, CIM and robotics. Three clusters of businesses were
identified using the SPSS k-means cluster procedure. The results define three groups
of firms; firms with Integrated IT across the range of design (i.e. CAD) and
manufacturing functions; firms with IT Production systems but no computerised
design capability; and, a third group with Low IT Use across both manufacturing and
design functions.

Table A1: IT-based Production Clusters

The second internal resource indicator is based on four variables designed to reflect
firms' use of managerial systems: quality certification, total quality management,
quality circles and just-in-time. Again three clusters were identified using the k-means
cluster procedure in SPSS. The three clusters can be identified as follows: an Informal
Management grouping with low adoption rates of each technique; a Total Quality
group each of which has implemented a total quality management approach; and, a
Certified Quality group which have some form of quality certification but not TQM.

Table A1.2: Management Systems Clusters

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