The Relation between Innovation and Economic Productivity in Defense Sector Firms

This paper investigates the relation between innovation of defense sector firms and the economic efficiency. 22 firms active in defense sector were selected and their operation data in years 1394 and 1395 was captured. The innovation level of every firm was verified by leading and innovation strategy key criterions, innovation resources management, level of intelligence in innovation ideas identification, innovation research and development management, innovation network management and learning procedure, commercializing innovation and social and human resources resulted from innovation. For this purpose, we used 112 items of innovation level evaluation designed by Iran Technology Management Association. Economic productivity is defined as the ratio of output to input. Output is economic value added and input is the cost of factors of production. We have used regression analysis to investigate the study hypothesis. Results show a positive and statistically significant relation between innovation and economic efficiency in defense sector. It is also concluded that defense sector firms can simultaneously focus on innovation and economic efficiency.