In this paper, the links between the investment in innovation activities, innovation outputs\u00a0(technological and non-technological innovation), and productivity in services and\u00a0manufacturing are explored using innovation survey data from Uruguay. This is the first\u00a0attempt to study these links for a developing country. The size of firms, their cooperation\u00a0on R&D activities, the use of public financial support, patent protection, and the use of\u00a0market sources of information, are the variables that are more consistently associated\u00a0with the decision to invest in innovation activities across sectors. The main determinants\u00a0of technological and non-technological innovations are the level of investment in\u00a0innovation activities and the size of firms. The results indicate that both technological\u00a0(i.e., product and process) and non-technological (i.e., marketing an organizational)\u00a0innovations are positively associated to productivity gains in services, but nontechnological\u00a0innovations have a more important role. The reverse happens for\u00a0manufacturing; technological innovations are the relevant ones for productivity.<\/p>\n
JEL classifications: O12, O14, O31, O33, O40
\nKey words: Innovation, Productivity, Services, Manufacturing, Developing countries,\u00a0Latin America, Innovation surveys<\/p>\n