International Journal of Technology Management (21 papers in press)
Exploring the Effectiveness of Pursuing Competing Technologies in Parallel Projects during Predevelopment
by Ties Van Bommel, Edwin J. Nijssen, Ronald J. Mahieu
Abstract: Prior research has studied the effectiveness of parallel projects in the research and development stages. However, it has ignored predevelopment, which R&D intensive firms generally distinguish as a separate stage lodged between research and development. Predevelopment focuses on activities and decisions to select, from a subset of related technologies, the best option for a product application. Parallel projects are often a means of speeding up this process by actively pursuing learning spillovers. This paper develops assumptions about learning potential and then uses a real option model to test the trade-off between the higher costs and benefits of this parallel project approach. We compare outcomes for predevelopment using the same approach under research and development conditions, respectively. The results reveal that, when moving from research to development, the effectiveness of pursuing competing technologies in parallel projects first increases and then decreases, with a maximum positive result in predevelopment. The results also show that learning spillovers can compensate for the higher investment costs. Data from an empirical case support our findings.
Keywords: competing technologies; interproject learning; parallel development; predevelopment; real options.
Structural Characteristics of Extended Alliance Portfolio Configuration and Firm Innovation
by Hosung Kim
Abstract: So far, the scope of alliance portfolio configuration (APC) studies has included only one degree, namely direct alliances or partners of a focal firm. Based on the sociological concept of Three Degrees of Influence Rule, this study extends the scope of the APC of a focal firm to three degrees, and two structural variables (clustering coefficient and the average distance from a focal firm) are extracted from the extended APCs of 31 Korean bio-pharmaceutical firms. Then, the effects of these variables on firm innovation performance are analyzed using the two-step generalized method of moments (GMM) estimates. The results show that the more clustered the extended APCs are, and the closer their average distance from a focal firm, the more favorable the innovation performance of the firms. Additionally, the average distance was found to moderate the clustering effect in the extended APC. Attempting to interpret the APC with such an expanded concept is expected to accelerate further research in the future.
Keywords: extended alliance portfolio configuration (APC); clustering coefficient; average distance; two-step generalized method of moments (GMM).
Management of Industry 4.0 Reviewing intrinsic and extrinsic adoption drivers and barriers
by Jun-Jun Obiso, Celbert Himang, Lanndon Ocampo, Miriam Bongo, Shirley Ann Caballes, Dharyll Prince Abellana, Custer Deocaris, Roberto Padua
Abstract: The adoption of Industry 4.0 (I4.0) being a global technology advancement have challenged the adoption decision of stakeholders due to inadequate management strategies provided in the current literature. As a result, there exists a disparity of perception among organizations of whether or not the adoption of I4.0 should be pursued. As a part of this management strategy, this paper attempts to review drivers and barriers and characterize each as being intrinsic or extrinsic. Furthermore, these drivers and barriers are categorized according to technological, economic and regulatory, and social factors. As such, the nature of management strategy can be well-established to aid stakeholders in developing appropriate I4.0 programs and initiatives.
Keywords: Industry 4.0; drivers; barriers; intrinsic; extrinsic; literature review.
Commonality opportunity search in industrial product portfolios
by Jakub Kwapisz, Bruce Cameron, Virginia Infante
Abstract: Development of product platforms, modules and common components is recognized in both industry and academia as a means of meeting changing customer needs within reasonable cost and time parameters. Identifying candidate parts to make common across different product portfolios is a complex task. This paper investigates current issues of product platform and modularity development, and focuses on searching for commonality opportunities. The concept of a Commonality Opportunity Search Algorithm (COSA) is introduced as a methodology to quickly identify cost efficient commonality opportunities. COSA streamlines the process of searching thousands of parts in company databases to determine common bases and individual parts differentiation based on available data. The analysed data was collected from numerous departments, which allows for nominating commonality opportunities based on global company strategy rather than on the needs of any individual department. An industrial example is presented to illustrate the feasibility and potential of the proposed methodology.
Keywords: commonality; product platform; modularity; product portfolio; component sharing; part reuse; search algorithm; product development; variety management; duplicate detection; industrial database analysis; management of knowledge; component innovation; design strategy.
Establishing relationships with distant suppliers to explore discontinuous innovation
by Sihem Ben Mahmoud-Jouini
Abstract: A controversy exists in the literature regarding the type of suppliers to consider when leveraging external knowledge for exploring discontinuous innovation (DI): familiar suppliers or distant ones. We argue that firms pursuing DI should establish relationships with distant suppliers along cognitive and relational dimensions and that this requires a specific process. Based on a longitudinal study of a firm that developed such relationships and succeeded in exploring DI, we find that firms can develop such relationships through an approach with three main characteristics: (i) a documented mapping coupling identified DI concepts and their underlying technologies with potential suppliers who master and can provide such technologies, (ii) a structured and transparent process supporting mutual and progressive commitment, and (iii) a specific dedicated entity, separate from the rest of the firm, but at the same time connected to the experts who master the internal knowledge to be combined with the leveraged external knowledge as well as the top managers who will make the decisions regarding further development of the explored opportunities for DI. Simultaneous cooperation with both distant and familiar suppliers enables firms to achieve ambidextrous sourcing and pursue both incremental innovation and DI.
Keywords: Discontinuous innovation; early supplier involvement; distant search; open innovation; exploration; ambidextrous organization.
Market maketh Magic Consequences and Implications of Market Choice for Frugal Innovation
by Lukas Neumann, Stephan Winterhalter, Oliver Gassmann
Abstract: This study systematically analysed 237 Frugal Innovation cases in order to understand the consequences and implications of market choice on the characteristics of a successful Frugal Innovation. The results demonstrate that this type of innovation is disruptive to its respective target market. Further, the study shows that firms that want to achieve such innovation tend to focus either on activities along the value chain or the solution (product/service) itself. This distinction yielded four clusters of Frugal Innovation, which are described in detail, including aspects regarding strategy, organisation, processes and technology.
Keywords: Frugal Innovation; resource-constrained innovation; emerging markets; developing markets; bottom of the pyramid; emerging middle class; disruption; low-end disruption; new market disruption.
Product attributes and digital innovation performance: The importance of country and firm level supporting environment
by Marcelo Alvarado-Vargas, Tejovathi Inamanamelluri, Qi Zou
Abstract: The emergence of digital technology has changed the structure and functions of products. Digitalized products are connectable with digital resources, reprogrammable for personal customization, and upgradable for continuous improvement. Digital innovation (DI) not only makes industrial products capable of serving various customers needs, but also brings great challenges to companies. In the literature, DI critical success factors remain uncovered, so do the environmental conditions that support DI. In this paper, we developed a theoretical model that identifies product attributes (e.g. product modularity, upgradability, usage frequency, and uniqueness) that have effects on product DI performance. Further, we elaborated the importance of establishing and selecting appropriate environment at country level (e.g. degree of uncertainty avoidance and degree of technology proficiency), and firm level (e.g. strategy, resources, and structure) for DI. Essentially, this study suggests that interaction effects of product attributes and supporting environments could significantly improve product DI performance.
Keywords: Digital innovation; product modularity; product upgradability; product usage frequency; product uniqueness; digital innovation supporting environment; digital innovation performance.
Analysing the structure of bioplastic knowledge networks in the automotive industry
by Hyeon Joo Jeong, Youngjoo Ko
Abstract: The purpose of this paper is to understand the structure and characteristics of bioplastic knowledge flows between organisations and the technology in the automobile field. However, the existing network analysis method has a limitation in that it can only analyse the structural characteristics and major actors of the knowledge network. In order to overcome these limitations, we apply the bow-tie model. In particular, we select patent citation information from the global automobile companies Hyundai and Toyota, which have set environmental sustainability as a corporate management priority. The results suggest that these automobile companies have a virtuous circle in bioplastic technology. They internalise outside knowledge through strategic collaboration with bio or chemical companies and then disseminate this knowledge. We also find that there are companies that play an important role in the flow of knowledge. The methodologies used in this paper can gainfully be applied to the analysis of knowledge flow in other fields.
Keywords: knowledge network; knowledge flow; patent citation network; network analysis; node centrality; bow-tie model; innovation strategy; bioplastic; Hyundai; Toyota.
Frugal Innovation for the BoP in Brazil An Analysis and Comparison with Asian Lead Markets
by Christine Wimschneider, Nivedita Agarwal, Alexander Brem
Abstract: In recent years, frugal innovation and its antecedents have gained significant attention in both theory and practice. However, the vast majority of research focuses mainly on China and India and their bottom of the pyramid (BoP) customers. Against this background, our research investigates frugal innovation and its reception in Brazil. We analyse six Brazilian company cases (three multinational corporations and three small- and medium-sized enterprises) in terms of frugal product development, product characteristics, and commercialisation approaches, as well as compare these organisations with findings from Asian lead markets. Our results confirm that the principal dimensions of frugal innovation are cost-effectiveness and ease of use. However, the findings also contradict the paradigm that frugal innovation must be essentially low-cost. Based on these results, we propose a twofold approach to the cost criterion that differentiates between the companys and the customers perspective and focuses on value-based pricing. Further, distinctive product features, branding, and specific marketing activities are crucial for successful frugal innovation in Brazil. This research extends the classification of frugal innovation in prior literature and suggests understanding frugal dimensions as a set of building blocks that can be flexibly applied to frugal product development depending on the context and regional requirements.
Keywords: BoP; Brazil; Emerging Markets; Frugal Innovation; Latin America; Product Development.
AI and IoT based collaborative business ecosystem: A case in Chinese fish farming industry
by Xiaoping Yang, Dongmei Cao, Jing Chen, Zuoping Xiao
Abstract: Life below water has been set as one of the UN sustainable development goals. Meanwhile, digital technologies AI and IoT (A-I) have brought a revolutionary impact on humans life in general and on traditional industries such as manufacture and agriculture in particular. The purpose of this research is to showcase the mechanism of an A-I based collaborative business ecosystem (A-I CBE) through an in-depth case study of a Chinese agricultural science and technology company, Celefish. We demonstrate how Celefish has developed the A-I CBE, leading the value co-creative collaboration between the ecosystem participants. Research suggests that the A-I CBE contributes to evolution and sustainable development of the fish farming ecosystem. The research adds contributions to the business ecosystem theory particularly in value co-creation and sustainability via digital technologies. It also provides practical implications for policymakers and strategic management in applying digital technologies for sustainable development goals.
Keywords: Artificial intelligence (AI); Internet of Things (IoT); Collaborative Business Ecosystem (CBE); Value co-creation; Sustainability; Fish farming industry.
A Method Proposal to Support Decision-Making in Unstable Ecosystems: Application in The Brazilian eSports Ecosystem Case
by Rodrigo Kazuo Ikenami, Viktoriya Lipovaya, Patrícia Gomes, Édison Renato Silva, Paula Martins, Francisco José Duarte
Abstract: This study investigated the term ecosystem and its contribution for the strategic management field. This feature fits with the business scenario, surrounded by uncertainties and risk. The leader/orchestrator role is particular important to navigate under these circumstances. Additionally, the maturity stage mindset helps to locate the ecosystem conditions and trends. In order to apply these principles into a practical framework, an investigation was made focusing the ecosystem boundaries. An ecosystem starts from the end user value proposition offer and it should integrate the suppliers and complementors where there is instability in the delivering flow. We argue the leader/orchestrator moves should align with the ecosystem maturity stage orientations. A methodology was tested into the eSport ecosystem and the results confirmed most of our assumptions and propositions.
Keywords: ecosystem theory; method; ecosystem boundaries; eSports.
How companies respond to growing research costs: Cost control or value creation?
by Karl-Heinz Leitner, Bianca Maria Poti, Rene J.M. Wintjes, Jan Youtie
Abstract: Over the last two decades R&D costs have been increasing considerably across almost all industries. While there is much literature investigating different strategies to exploit R&D investments, we know little about the relative importance of controlling costs. Based on case studies of European and US multinational, R&D intensive companies we study how firms deal with growing R&D costs. We investigate different strategies in which companies can employ to respond to growing research costs. Such strategies can be considered oriented towards controlling cost or focused on opportunities to create value. Overall the case studies reveal that company spending on R&D is not considered a cost per se, but rather an investment. Cost considerations are secondary factors and the main drivers of research investments are based on expected value of innovations, risk and strategic competence development, and anticipating uncertainty concerning the kind of research that might be needed in the future.
Keywords: evolution of R&D costs; managerial strategies; cost drivers; cost control; internationalisation; open innovation; case studies; R&D management; R&D productivity; outsourcing.
The Two Faces of R&D Investments: Push and Pull Factors
by Xin Pan, Xuanjin Chen, Xibao Li
Abstract: Prior research has examined how financial constraints and agency costs affect the allocation of investment in research and design (R&D). However, we still know little about the effect of both factors simultaneously. It is important to investigate this to determine whether the pull or push effect dominates in R&D investment allocation and to determine the causes and extent of R&D investment inefficiency further. While the pull effect reduces investment, the push effect encourages firms to invest more in R&D. The two-tier frontier model was used to examine data from Chinese listed firms from 2009 to 2014. The results indicate that agency costs (the push effect) are the predominant cause of R&D investment inefficiency. The push effect causes 87.97% of Chinese firms to overinvest and leads to an average overinvestment of 41.33% above the optimal level. Moreover, this R&D investment inefficiency is heterogeneous in terms of state ownership structures. A higher percentage of state-owned firms suffer from severe overinvestment. We also found that agency costs result from the principalprincipal (PP) and not principal-agent (PA) conflicts in China.
Keywords: R&D investment; Agency costs; Financial constraints; Inefficiency; China.
Feasibility of Waste Gasification Technologies in the USA
by OMAR ROMERO-HERNANDEZ, Sergio Romero
Abstract: Governments across the globe have adopted different programs to deal with increasing amounts of municipal solid waste (MSW) including recycling, waste prevention programs and waste-to-energy technologies (WTE), such as gasification. Deciding on a specific WTE technology involves an understanding of a complex blend of factors including location, haul distance, regulations, capital costs, feedstock availability, tipping fees, taxes, electricity price, and incentives which do not necessarily denote a linear behavior. Therefore, the business feasibility of gasification technologies is still unclear. This paper includes the development of a model that combines the aforementioned factors in the context of a potential gasification plants in the United States. The model successfully concluded that location is the most sensitive factor for most of the cases. Authors include a geographical analysis which may be used, in combination with the model, to decide on regional energy options and new business opportunities.
Keywords: Gasification; municipal solid waste; electricity production; economic analysis; United States.
The necessity of anterior knowledge exchange activities for technological collaboration and innovation performance improvement
by Euiyoung Chung, Kibaek Lee
Abstract: The adoption of open innovation does not guarantee technological innovation. Many companies have nonetheless implemented open innovation, but success and failure are repeated in the process leading to product innovation performance. In this study, the important elements of technological collaboration, a representative type of open innovation, that can affect product innovation performance were investigated. Also, a structural equation was used to verify the technological collaboration strategy required by the Korean manufacturing industry. In particular, the perspectives on the necessities of anterior knowledge exchange activities and appropriate appropriability mechanisms were considered. The verification results of this study were as follows. First, anterior knowledge exchange activities had a positive effect on the subsequent technological collaboration and product innovation performance, and it was found that STI (Science, Technology, and Innovation) based knowledge was more effective. Second, increased DUI (Doing, Using, and Interacting) based knowledge exchange activity resulted in diminished STI based knowledge effectiveness. Third, the application of informal appropriability mechanisms contributed positively to both technological collaboration and product innovation performance. Based on the verification results of this study, the strategic direction for maximizing technological collaboration and product innovation performance was presented for Korean manufacturing companies.
Keywords: Open innovation; Knowledge exchange; STI; DUI; Technological collaboration; Appropriability mechanisms; Innovation performance.
Special Issue on: Emerging Research Issues in the Field of Frugal Innovation
Frugal innovation in, by and for Europe
by Henning Kroll, Madeleine Gabriel
Abstract: Innovation in Europe is often an exclusive activity, involving large investments to create high specification products and services for elite customers. Frugal innovation, on the other hand, aims to be inclusive, to create value from far fewer resource inputs, and, through creativity at every stage of the innovation process, reach out to customer bases not reached before. This paper analyses how Europe can better capture the potential of frugal innovation at various levels. In summary, it finds that frugal innovations from and for Europe should fulfil three main criteria. First, they should be smart, i.e. truly more than just cheap. Second, they should be high-quality, avoiding an image of poor innovation for the poor. Third, they should be integrated into regional and national innovation strategies as a complement, not a substitute.
Keywords: frugal Innovation; Europe; quality; cost.
Frugal innovation as Environmental Innovation
by Christian Le Bas
Abstract: In this paper we contribute to the literature on frugal innovation in two directions. First, we define FI as a new technological paradigm. Second, we consider FI as an environmental innovation by defining, considering, and drawing the consequences of the economic impact of the environmental side of FI. We suggest a framework accounting for how frugal innovation contributes to sustainability. Finally, we set out the factors driving the implementation of FI, and point to barriers to their diffusion
Keywords: frugal innovation; environment; technological paradigm; sustainability.
The social dimension of frugal innovation
by Rakhshanda Khan, Helinä Melkas
Abstract: In the laypersons mind, the term frugal innovation evokes ideas of frugality, cheap solutions and products designed under resource constraints. Experts in this field, though, share a broader understanding of frugal innovation as the ability to do more with less by increasing business and social value (Radjou and Prabhu, 2014).Various emerging research focusses on its strategic, technological and organisational aspects. However, the core of frugal innovation is its social dimension, yet this has generally been overlooked. The aim of this paper is to explore the social dimension by showing the potential of frugal innovation to prompt social innovation. Empirical material derived from four case studies of successful cross-industry and cross-national frugal innovation illustrates this strong social dimension. In some cases, the boundaries between frugal and social innovation blur as both solve pressing, unaddressed societal needs, thereby positively impacting society. Frugal innovation adds value by producing solutions cheaper than the alternatives, and when costs are lowered significantly, those on the margins of society are often included in the mainstream, allowing non-consumers to become consumers, which itself is social innovation. This paper presents a novel view of frugal innovation and social innovation as closely related. The umbrella term socially driven innovation is suggested to incorporate both social and frugal innovation.
Keywords: Frugal Innovation; Frugality; Social Innovation; Socially driven Innovation.
Frugal Innovation Strategies and Global Competition in Wind Power
by Alexander Gerybadze, Malte Klein
Abstract: The paper provides an evolutionary model of industry development and learning within the wind power sector. Today this industry has attained a mature phase characterized by increased global competition, standardization and stronger emphasis on process innovation. This leads to a greater emphasis on frugal innovation and on cost reduction strategies. The emerging and developing countries already account for 54 % of global new investment in wind energy. Their share will continue to rise, particularly because of frugal design concepts and further efficiency improvements. The wind power sector also offers many opportunities for smart specialization for new industry participants from emerging nations. Manufacturers from China, India, Brazil and several other countries have demonstrated successful strategies of industry development and international expansion. Brazil in particular represents a prototype case for developing wind power based on frugal design concepts. We have selected an illustrative case study of an advanced turbine blade manufacturer from Brazil, and on the interaction with foreign multinational firms. Finally, we also address learning processes in renewable energy policy. While feed-in tariffs often stimulate industry development during early phases, the transfer to an auctioning scheme tends to have a strong impact on price discipline and on frugal innovation.
Keywords: Green Innovation; Frugal Innovation; Wind Power; Dynamic Schumpeterian Competition; Innovation in Emerging Markets.
The Role of Frugal Innovation in the Global Diffusion of Green Technologies
by Carsten Gandenberger, Henning Kroll, Rainer Walz
Abstract: The paper suggests that the debate on sustainable development and sustainable innovation could profit from the concept of frugal innovation, because both concepts acknowledge the limitations of a resource-constrained world. The complex relationship between frugal innovation and sustainable innovation is explored in conceptual terms and results in criteria which denote potential overlaps between both concepts. Furthermore, the paper analyses world trade data of green technologies to demonstrate the increasing relevance of South-South and North-South trade and to derive implications for frugal innovation. Moreover, case studies of frugal and sustainable innovations are analysed in order to highlight their requirements and implications. Maybe the most important conclusion stemming from the considerations in this article is that the integration of frugal and sustainable innovation principles can breathe new life into the discussion about sustainable innovation and sustainable development in general.
Keywords: frugal innovation; sustainable innovation; eco-innovation; sustainable development; pro-poor innovation.
Special Issue on: Artificial Intelligence, Entrepreneurial Development and Innovation
A photo-sharing social network based on blockchain technology
by Jiang DUAN, Li KANG, Zhi CHEN, Tao PENG, Yifeng WANG
Abstract: The online social networks have greatly transformed the way that people interact with each other, and have salient impact on our lives. However, there exist common security challenges and limitations in attracting users activities due to the centralized structure of current online social networks. To address the security challenges and limitations of current online social networks, we exploit the blockchain technology to design a new photo-sharing social network, in which users social behaviors are stored in the blockchain in the form of transactions. Blockchain technology allows the authenticity and credibility of data to be improved and precludes data tampering. To reduce the efficiency limitation caused by transaction confirmation delays on the public chain, we design a new blockchain consensus algorithm to support fast and frequent transactions. Moreover, a new incentive model is designed to quantify the contribution of user in a more accurate and trustworthy way, thereafter, reward the user with financial incentives, as well as enable the user to easily control and claim the ownership of every photos they share to the network.
Keywords: Blockchain; online social network; photo-sharing social network; decentralized network; incentive model.