Maaja Vadi and Priit Vahter Received the Mihhail Bronštein Award in Economics
Professor Priit Vahter, Professor of Applied Economics, and Professor Maaja Vadi, Professor of Management, have been awarded the 2024 Mihhail Bronštein Award by the Estonian Academy of Sciences. The prize, worth €10,000, was given for their series of articles titled “Synergies and Learning Effects in the Innovation Process” in recognition of their significant contributions to economic science.
The three-article series, published between 2022 and 2024, provides a novel explanation of several key mechanisms that shape the diversity of the innovation process, which have been underrepresented in previous academic literature. A crucial determinant in innovation processes is how well a company can leverage its resources to achieve synergistic effects and facilitate learning.
- Vahter, P.; Vadi, M. (2024). The relationship of technological and organizational innovation with firm performance: Opening the black box of dynamic complementarities. Technological Forecasting and Social Change, 206, 123516. Read article.
- Love, J.; Roper, S.; Vahter, P. (2023). The dynamics of abandoned innovation activities: Learning from failure or learning to prevent failure? Research Policy, 52 (8), 1−17. Read article.
- Teece, D. J.; Pundziene, A.; Heaton, S.; Vadi, M. (2022). Managing Multi-Sided Platforms: Platform Origins and Go-to-Market Strategy. California Management Review, 64 (4), 5−19. Read article.
The research highlights the importance of understanding how to initiate, sustain, and, when necessary, terminate or discontinue innovation processes. Both concurrent and sequential application of innovation types can create synergies that positively impact organizational performance. The sequence of implementing innovation types is particularly critical from a performance perspective. The research found that organizations perform better when they start with technological innovation and subsequently complement it with organizational innovation. Conversely, the reverse order does not improve performance.
In an interview, Professor Priit Vahter emphasized the practical implications of their findings, particularly the importance of improving management practices and the quality of leadership in companies. He also highlighted the significance of high-quality strategic decision-making and the need to enhance change management capabilities. The practical value of their research is underscored by its publication in leading journals such as Research Policy, Technological Forecasting & Social Change, and California Management Review, elevating its theoretical and practical relevance.
Professor Maaja Vadi noted that their research stands out because, while innovation is a widely studied topic, the combined effect of different types of innovation on organizational performance is often underestimated.
“When technological and organizational innovations are applied together, it is possible to achieve up to 23% greater economic returns within three years. Every company should take note and ask, how can we achieve this 23% better outcome?”
Additionally, Vadi pointed out that the research popularizes the concept of "smart discontinuation," emphasising the importance of halting failing projects early to save resources and pave the way for success. Discontinued or failed innovations should not be seen as wasted expenses. The findings demonstrate that "smart" discontinuation can lead to future success in innovation efforts. Learning effects were particularly evident in innovations terminated during the early phases of the process. A study on multi-sided digital platforms further illustrates the role of organizational capabilities in achieving synergy when bringing new products and services to market. The research underscores the critical importance of developing and maintaining high-quality management.
Author: Sven Tupits
Urmas Varblane, Chairman of the Evaluation Committee and Member of the Estonian Academy of Sciences, highlighted that the competition offers an excellent platform for Estonian economists to showcase their work.
“The level of applications this year was exceptionally high. Our economists’ work has been published in the top 10 global academic journals across various fields, including macroeconomics, innovation studies, and management. We sincerely hope that the family of academician Mihhail Bronštein will continue this competition in the future, as young economists particularly excelled this year, submitting eight diverse and high-quality applications.” Urmas Varblane, Academician and Chairman of the Evaluation Committee
The Mihhail Bronštein Awards in Economics, established in honour of Academician Mihhail Bronštein (23 January 1923 – 9 April 2022), recognizes theoretical developments in economics by Estonian researchers and their successful practical applications. This year marks the third time the prize has been awarded, initiated and financed by the Bronštein family.
The award ceremony can be rewatched on the Estonian Academy of Sciences' YouTube channel.
Read the full article on the Estonian Academy of Sciences' website.
