Innovation As A Driver Of Corporate Efficiency: An Analysis Of Italian Service Firms

In an increasingly competitive and dynamic market, innovation is a crucial factor for the success and sustainable growth of companies. It represents the ability to introduce new ideas, products, processes or business models that meet customer needs and improve company operational efficiency. This work investigates the relationship between business efficiency and innovation in Italian companies for 2015-2019 operating in the service industry: we assume that, under normal operating conditions, companies belonging to sectors with a higher propensity to innovation record higher levels of profitability and liquidity and are more solid than companies in sectors with a lower propensity to innovation. The distinction between sectors more and less inclined to innovation takes into account the results of the Community Innovation Survey (CIS) conducted by the National Institute of Statistics (ISTAT). The analysis highlights how innovation has a positive effect on company performance. Sectors with a higher propensity to innovation show better economic and financial efficiency than sectors with a lower propensity to innovation. Even when there are contractions in profitability, liquidity, or asset soundness indices, these do not affect the corporate performance of the most innovative companies, which in any case remain better than those of companies less inclined to innovation.