From transferred technology to technological capability:a framework for examining the acquisition of technological capability by Chinese enterprises

This paper conceptualises the enhancement of technological capability by firms, following international technology transfer, as an evolutionary process. During this process, the existing technological, managerial and other complementary resources may require restructuring. Since China is in transition from central planning to market orientation, the organisational and managerial practices of Chinese firms are different from those of international technology suppliers. Resourcebased and evolutionary theories of the firm, which provide insights into the evolution of structures, mechanisms, skills, experiences and technical know-how, have been applied to outline the processes of acquiring technological capability. Selected case studies have been used to illustrate the issues and the framework provides guide for further empirical work.

Transferring technology from university to rural industry within a developing economy context:the case for nurturing communities of practice

The primary aim of this paper is to demonstrate how technology transfer between universities and rural industries in developing countries can be achieved effectively, using independent research and advisory centres as intermediaries. It draws on a longitudinal action research study, which experiments with the process of nurturing and bridging communities of practice amongst recipients of technology and stakeholders concerned with technology diffusion, productivity and economic development. Its empirical evidence is from an academic-related, non-government intervention initiative targeting two small-scale industries, namely fish farming and coffee production, in the Cauca region of Colombia. Results demonstrate how barriers to transfer can be overcome. The intervention is considered as instrumental; its key components and outcomes are discussed in detail. © 2012 Elsevier Ltd. All rights reserved.

Technology sourcing and reverse productivity spillovers in the MNE:global or regional phenomenon?

The focus of this paper is the importance of regions in technology transfer by the multinational firm. Specifically, we focus on an issue that has become known as knowledge or technology sourcing via 'reverse spillovers', i.e. productivity effects running from domestic firms to foreign establishments. Traditionally this issue has presented a challenge for international business scholars, both in terms of identifying the phenomenon and in terms of determining the success of the strategy. In this paper we examine these questions within the context of the debate on globalization/regionalization. For a set of some 4500 subsidiaries of multinationals across a wide range of countries we show that reverse productivity spillovers via technology sourcing are significant but that they tend to be concentrated within 'triad regions' rather than across them. We also find that reverse spillovers from host country multinational enterprises are greater than those from other host country firms or from other foreign affiliates. © 2013 British Academy of Management.

Intermediation for technology diffusion and user innovation in a developing rural economy:a social learning perspective

Technology intermediaries are seen as potent vehicles for addressing perennial problems in transferring technology from university to industry in developed and developing countries. This paper examines what constitutes effective user-end intermediation in a low-technology, developing economy context, which is an under-researched topic. The social learning in technological innovation framework is extended using situated learning theory in a longitudinal instrumental case study of an exemplar technology intermediation programme. The paper documents the role that academic-related research and advisory centres can play as intermediaries in brokering, facilitating and configuring technology, against the backdrop of a group of small-scale pisciculture businesses in a rural area of Colombia. In doing so, it demonstrates how technology intermediation activities can be optimized in the domestication and innofusion of technology amongst end-users. The design components featured in this instrumental case of intermediation can inform policy making and practice relating to technology transfer from university to rural industry. Future research on this subject should consider the intermediation components put forward, as well as the impact of such interventions, in different countries and industrial sectors. Such research would allow for theoretical replication and help improve technology domestication and innofusion in different contexts, especially in less-developed countries.

Investment liberalisation, technology take-off and export markets entry:does foreign ownership structure matter?

Before and after its accession to the WTO in 2001, China has undergone a far-reaching investment liberalisation. As part of this, existing restrictions on foreign ownership structure and mandatory export and technology transfer requirements imposed on foreign firms have been lifted in a number of industries. Against this background we identify the causal effects of foreign acquisitions on export market entry and technology take-off and evaluate whether the level of foreign ownership plays a role in stimulating these changes. Using doubly robust propensity score reweighted bivariate probit regressions to control for the selection bias associated with firm level foreign acquisition incidences, we uncover strong but heterogeneous positive effects on export activity for all types of foreign ownership structure. We also find that minority foreign owned acquisition targets experience higher likelihood of R&D, providing evidence that joint ventures can contribute positively to China's "science and technology take-off".

The future of manufacturing

Anyone who looks at the title of this special issue will agree that the intent behind the preparation of this volume was ambitious: to predict and discuss “The Future of Manufacturing”. Will manufacturing be important in the future? Even though some sceptics might say not, and put on the table some old familiar arguments, we would strongly disagree. To bring subsidies for the argument we issued the call-for-papers for this special issue of Journal of Manufacturing Technology Management, fully aware of the size of the challenge in our hands. But we strongly believed that the enterprise would be worthwhile. The point of departure is the ongoing debate concerning the meaning and content of manufacturing. The easily visualised internal activity of using tangible resources to make physical products in factories is no longer a viable way to characterise manufacturing. It is now a more loosely defined concept concerning the organisation and management of open, interdependent, systems for delivering goods and services, tangible and intangible, to diverse types of markets. Interestingly, Wickham Skinner is the most cited author in this special issue of JMTM. He provides the departure point of several articles because his vision and insights have guided and inspired researchers in production and operations management from the late 1960s until today. However, the picture that we draw after looking at the contributions in this special issue is intrinsically distinct, much more dynamic, and complex. Seven articles address the following research themes: 1.new patterns of organisation, where the boundaries of firms become blurred and the role of the firm in the production system as well as that of manufacturing within the firm become contingent; 2.new approaches to strategic decision-making in markets characterised by turbulence and weak signals at the customer interface; 3.new challenges in strategic and operational decisions due to changes in the profile of the workforce; 4.new global players, especially China, modifying the manufacturing landscape; and 5.new techniques, methods and tools that are being made feasible through progress in new technological domains. Of course, many other important dimensions could be studied, but these themes are representative of current changes and future challenges. Three articles look at the first theme: organisational evolution of production and operations in firms and networks. Karlsson's and Skold's article represent one further step in their efforts to characterise “the extraprise”. In the article, they advance the construction of a new framework, based on “the network perspective” by defining the formal elements which compose it and exploring the meaning of different types of relationships. The way in which “actors, resources and activities” are conceptualised extends the existing boundaries of analytical thinking in operations management and open new avenues for research, teaching and practice. The higher level of abstraction, an intrinsic feature of the framework, is associated to the increasing degree of complexity that characterises decisions related to strategy and implementation in the manufacturing and operations area, a feature that is expected to become more and more pervasive as time proceeds. Riis, Johansen, Englyst and Sorensen have also based their article on their previous work, which in this case is on “the interactive firm”. They advance new propositions on strategic roles of manufacturing and discuss why the configuration of strategic manufacturing roles, at the level of the network, will become a key issue and how the indirect strategic roles of manufacturing will become increasingly important. Additionally, by considering that value chains will become value webs, they predict that shifts in strategic manufacturing roles will look like a sequence of moves similar to a game of chess. Then, lastly under the first theme, Fleury and Fleury develop a conceptual framework for the study of production systems in general derived from field research in the telecommunications industry, here considered a prototype of the coming information society and knowledge economy. They propose a new typology of firms which, on certain dimensions, complements the propositions found in the other two articles. Their telecoms-based framework (TbF) comprises six types of companies characterised by distinct profiles of organisational competences, which interact according to specific patterns of relationships, thus creating distinct configurations of production networks. The second theme is addressed by Kyläheiko and SandstroÍm in their article “Strategic options based framework for management of dynamic capabilities in manufacturing firms”. They propose a new approach to strategic decision-making in markets characterised by turbulence and weak signals at the customer interface. Their framework for a manufacturing firm in the digital age leads to active asset selection (strategic investments in both tangible and intangible assets) and efficient orchestrating of the global value net in “thin” intangible asset markets. The framework consists of five steps based on Porter's five-forces model, the resources-based view, complemented by means of the concepts of strategic options and related flexibility issues. Thun, GroÍssler and Miczka's contribution to the third theme brings the human dimension to the debate regarding the future of manufacturing. Their article focuses on the challenges brought to management by the ageing of workers in Germany but, in the arguments that are raised, the future challenges associated to workers and work organisation in every production system become visible and relevant. An interesting point in the approach adopted by the authors is that not only the factual problems and solutions are taken into account but the perception of the managers is brought into the picture. China cannot be absent in the discussion of the future of manufacturing. Therefore, within the fourth theme, Vaidya, Bennett and Liu provide the evidence of the gradual improvement of Chinese companies in the medium and high-tech sectors, by using the revealed comparative advantage (RCA) analysis. The Chinese evolution is shown to be based on capabilities developed through combining international technology transfer and indigenous learning. The main implication for the Western companies is the need to take account of the accelerated rhythm of capability development in China. For other developing countries China's case provides lessons of great importance. Finally, under the fifth theme, Kuehnle's article: “Post mass production paradigm (PMPP) trajectories” provides a futuristic scenario of what is already around us and might become prevalent in the future. It takes a very intensive look at a whole set of dimensions that are affecting manufacturing now, and will influence manufacturing in the future, ranging from the application of ICT to the need for social transparency. In summary, this special issue of JMTM presents a brief, but undisputable, demonstration of the possible richness of manufacturing in the future. Indeed, we could even say that manufacturing has no future if we only stick to the past perspectives. Embracing the new is not easy. The new configurations of production systems, the distributed and complementary roles to be performed by distinct types of companies in diversified networked structures, leveraged by the new emergent technologies and associated the new challenges for managing people, are all themes that are carriers of the future. The Guest Editors of this special issue on the future of manufacturing are strongly convinced that their undertaking has been worthwhile.

The growing importance of inter-company collaboration

Guest editorial: This special issue has been drawn from papers that were published as part of the Second European Conference on Management of Technology (EuroMOT) which was held at Aston Business School (Birmingham, UK) 10-12 September 2006. This was the official European conference for the International Association for Management of Technology (IAMOT); the overall theme of the conference was “Technology and global integration.” There were many high-calibre papers submitted to the conference and published in the associated proceedings (Bennett et al., 2006). The streams of interest that emerged from these submissions were the importance of: technology strategy, innovation, process technologies, managing change, national policies and systems, research and development, supply chain technology, service and operational technology, education and training, small company incubation, technology transfer, virtual operations, technology in developing countries, partnership and alliance, and financing and investment. This special issue focuses upon the streams of interest that accentuate the importance of collaboration between different organisations. Such organisations vary greatly in character; for instance, they may be large or small, publicly or privately owned, and operate in manufacturing or service sectors. Despite these varying characteristics they all have something in common; they all stress the importance of inter-organisational collaboration as a critical success factor for their organisation. In today's global economy it is essential that organisations decide what their core competencies are what those of complementing organisations are. Core competences should be developed to become a bases of differentiation, leverage and competitive advantage, whilst those that are less mature should be outsourced to other organisations that can claim to have had more recognition and success in that particular core competence (Porter, 2001). This strategic trend can be observed throughout advanced economies and is growing strongly. If a posteriori reasoning is applied here it follows that organisations could continue to become more specialised in fewer areas whilst simultaneously becoming more dependent upon other organisations for critical parts of their operations. Such actions seem to fly in the face of rational business strategy and so the question must be asked: why are organisations developing this way? The answer could lie in the recent changes in endogenous and exogenous factors of the organisation; the former emphasising resource-based issues in the short-term, and strategic positioning in the long-term whilst the later emphasises transaction costs in the short-term and acquisition of new skills and knowledge in the long-term. For a harmonious balance of these forces to prevail requires organisations to firstly declare a shared meta-strategy, then to put some cross-organisational processes into place which have their routine operations automated as far as possible. A rolling business plan would review, assess and reposition each organisation within this meta-strategy according to how well they have contributed (Binder and Clegg, 2006). The important common issue here is that an increasing number of businesses today are gaining direct benefit from increasing their levels of inter-organisational collaboration. Such collaboration has largely been possible due to recent technological advances which can make organisational structures more agile (e.g. the extended or the virtual enterprise), organisational infra-structure more connected, and the sharing of real-time information an operational reality. This special issue consists of research papers that have explored the above phenomenon in some way. For instance, the role of government intervention, the use of internet-based technologies, the role of research and development organisations, the changing relationships between start-ups and established firms, the importance of cross-company communities of practice, the practice of networking, the front-loading of large-scale projects, innovation and the probabilistic uncertainties that organisations experience are explored in these papers. The cases cited in these papers are limited as they have a Eurocentric focus. However, it is hoped that readers of this special issue will gain a valuable insight into the increasing importance of collaborative practices via these studies.

Foreign direct investment and local input linkages in Malaysia

This article examines variations in local input linkages in foreign transnational corporations in Malaysia. The extent to which transnational corporations foster such linkages, particularly in a developing host economy, has become an important issue for policy makers and others concerned with the long-term benefits associated with foreign direct investment. This article employs a unique data set, covering inward investors in the electrical and electronics industry, and analyzes in detail the determinants of variations in local input uses. The article develops a model of local input linkages, based on a transaction-cost framework using firm-specific factors, such as nationality of ownership, the age of the plant and its technology, and the extent to which firms employ locally recruited managers and engineers. In addition, the impacts of various policy measures on local input levels are discussed, and also the importance of the original motivation for investing in Malaysia. The article demonstrates that policy initiatives that target particular outcomes, such as stimulating exports or technology transfer, will result in a greater beneficial impact on the host country economy than more generic subsidies.

Foreign direct investment, access to finance, and innovation activity in Chinese enterprises

A recent, comprehensive database is used to investigate the link between inward foreign direct investment (FDI) and innovation activity in China. The results of the analysis suggest that private and collectively owned firms with foreign capital participation and those with good access to domestic bank loans innovate more than other firms do. Among enterprises not owned by the state, inward FDI at the sectoral level is positively associated with domestic innovative activity only among firms that engage in their own research and development or that have good access to domestic finance. At the sector level the effect of inward FDI into technology transfer is distinguished from the effect on domestic credit opportunities. FDI affecting credit is of little significance for state-owned enterprises and is independent of their access to finance. In contrast, better access to credit is an important channel through which FDI affects the innovation of domestic private and collectively owned enterprises.

Location and network effects on innovation success:evidence for UK, German and Irish manufacturing plants

Recent developments in the new economic geography and the literature on regional innovation systems have emphasised the potentially important role of networking and the characteristics of firms' local operating environment in shaping their innovative activity. Modeling UK, German and Irish plants' investments in R&D, technology transfer and networking, and their effect on the extent and success of plants' innovation activities, casts some doubt on the importance of both of these relationships. In particular, our analysis provides no support for the contention that firms or plants in the UK, Ireland or Germany with more strongly developed external links (collaborative networks or technology transfer) develop greater innovation intensity. However, although inter-firm links also have no effect on the commercial success of plants' innovation activity, intra-group links are important in terms of achieving commercial success. We also find evidence that R&D, technology transfer and networking inputs are substitutes rather than complements in the innovation process, and that there are systematic sectoral and regional influences in the efficiency with which such inputs are translated into innovation outputs. © 2001 Elsevier Science B.V.

Is China's manufacturing sector becoming more high-tech? Evidence on shifts in comparative advantage, 1987-2005

Purpose – The paper assesses the extent to which China’s comparative advantage in manufacturing has shifted towards higher-tech sectors between 1987 and 2005 and proposes possible explanations for the shift. Design/methodology/approach – Revealed comparative advantage (RCA) indices for 27 product groups, representing high-, medium and low-tech sectors have been calculated. Examination of international market attractiveness complements the RCA analysis. Findings for selected sectors are evaluated in the context of other evidence. Findings – While China maintains its competitiveness in low-tech labour intensive products, it has gained RCA in selected medium-tech sectors (e.g. office machines and electric machinery) and the high-tech telecommunications and automatic data processing equipment sectors. Evidence from firm and sector specific studies suggests that improved comparative advantage in medium and high-tech sectors is based on capabilities developing through combining international technology transfer and learning. Research limitations/implications – The quantitative analysis does not explain the shifts in comparative advantage, though the paper suggests possible explanations. Further research at firm and sector levels is required to understand the underlying capability development of Chinese enterprises and the relative competitiveness of Chinese and foreign invested enterprises. Practical implications – Western companies should take account of capability development in China in forming their international manufacturing strategies. The rapid shifts in China’s comparative advantage have lessons for other industrialising countries. Originality/value – While RCA is a well-known methodology, its application at the disaggregated product group level combined with market attractiveness assessment is distinctive. The paper provides a broad assessment of changes in Chinese manufacturing as a basis for further research on capability development at firm and sector levels.

Institutions and firm ownership structure:evidence from Central and Eastern Europe

FDI plays a key role in development, particularly in resource-constrained transition economies of Central and Eastern Europe with relatively low savings rates. Gains from technology transfer play a critical role in motivating FDI, yet potential for it may be hampered by a large technology gap between the source and host country. While the extent of this gap has traditionally been attributed to education, skills and capital intensity, recent literature has also emphasized the possible role of institutional environment in this respect. Despite tremendous interest among policy-makers and academics to understand the factors attracting FDI (Bevan and Estrin, 2000; Globerman and Shapiro, 2003) our knowledge about the effects of institutions on the location choice and ownership structure of foreign firms remains limited. This paper attempts to fill this gap in the literature by examining the link between institutions and foreign ownership structures. To the best of our knowledge, Javorcik (2004) is the only papers, which use firm-level data to analyse the role of institutional quality on an outward investor’s entry mode in transition countries. Our paper extends Javorcik (2004) in a number of ways: (a) rather than a cross-section, we use panel data for the period 1997-2006; (b) rather than a binary variable, we use the percentage foreign ownership as continuous variable; (c) we consider multi-dimensional institutional variables, such as corruption, intellectual property rights protection and government stability. We also use factor analysis to generate a composite index of institutional quality and see how stronger institutional environment could affect foreign ownership; (d) we explore how the distance between institutional environment in source and host countries affect foreign ownership in a host country. The firm-level data used includes both domestic and foreign firms for the period 1997-2006 and is drawn from ORBIS, a commercially available dataset provided by Bureau van Dijk. In order to examine the link between institutions and foreign ownership structures, we estimate four log-linear ownership equations/specifications augmented by institutional and other control variables. We find evidence that the decision of a foreign firm to either locate its subsidiary or acquire an existing domestic firm depends not only on factor cost differences but also on differences in institutional environment between the host and source countries.

Collaborative alliances and organisational innovation : a study of the innovation process

Despite the voluminous studies written about organisational innovation over the last 30-40 years our understanding of this phenomenon continues to be inconsistent and inconclusive (Wolfe, 1994). An assessment of the theoretical and methodological issues influencing the explanatory utility of many studies has led scholars (e.g. Slappendel, 1996) to re-evaluate the assumptions used to ground studies. Building on these criticisms the current study contributes to the development of an interactive perspective of organisational innovation. This work contributes empirically and theoretically to an improved understanding of the innovation process and the interaction between the realm of action and the mediating effects of pre-existing contingencies i.e. social control, economic exchange and the communicability of knowledge (Scarbrough, 1996). Building on recent advances in institutional theory (see Barley, 1986; 1990; Barley and Tolbert, 1997) and critical theory (Morrow, 1994, Sayer, 1992) the study aims to demonstrate, via longitudinal intensive research, the process through which ideas are translated into reality. This is significant because, despite a growing recognition of the implicit link between the strategic conduct of actors and the institutional realm in organisational analysis, there are few examples that theorise and empirically test these connections. By assessing an under researched example of technology transfer; the government's Teaching Company Scheme (TCS) this project provides a critique of the innovation process that contributes to theory and our appreciation of change in the UK government's premier technology transfer scheme (QR, 1996). Critical moments during the translation of ideas illustrate how elements that are linked to social control, economic exchange and communicability mediate the innovation process. Using analytical categories i.e. contradiction, slippage and dysfunctionality these are assessed in relation to the actions (coping strategies) of programme members over a two-year period. Drawing on Giddens' (1995) notion of the duality of structure this study explores the nature of the relationship between the task environment and institutional environment demonstrating how and why knowledge is both an enabler and barrier to organisational innovation.

Manufacturing organisation in developing countries with particular reference to Iraq

Industrially developed countries are able to absorb modern techniques of science and technology quite readily; this is not the case for less-developed countries. Attempts made by developing countries have been ineffective due to factors not readily admitted. This thesis highlights the areas that need to be developed by under-developed countries, and covers economic, scientific and technological, and social aspects as well as technology transfer. Economic areas considered acknowledge that within any one country there should be proper procedures for planning economic and industrial projects (plant design) supported by efficient economic development strategy. Scientific and technological factors considered include the major areas that need to be developed in order to produce and/or deal with scientific and technological issues for the interest of the national development. Technology transfer areas considered include the necessity of building up a national body (system) responsible for dealing with activities and tasks of transferring foreign-made technology so that it can be employed effectively within the environment of the country. Social factors considered include the need to develop human resources which can be employed efficiently into the whole process of development, and particularly for the above proposed systems. Education and training are the major elements that ought to be tackled to produce skilled manpower and to overcome the social and cultural values and traditions that are inherited by the society. This thesis highlights the above areas in an attempt to plan and organise the development of science and technology, and their implementation into the development as a whole. Whilst recognising the problems of creating this sort of development in developing countries, the author considers the benefits to be obtained are much greater in the long run.

Determinants of entry mode choice of MNCs in emerging markets:evidence from South Africa and Egypt

It is now stylized that the importance of foreign direct investment for developing countries and emerging markets arises from the impact of the presence of multinational corporations (MNCs) in the host country on the productivity of local firms, by way of technology diffusion and competition. There is also general agreement that the extent of technology transfer by an MNC to a developing country affiliate depends on the extent of its control on the local affiliate and that, in turn, the extent of this control depends on the mode of entry of the MNC into the host country. However, the existing literature is based on the experience of developed countries and as such does not contribute to the literature on development economics. This article addresses this lacuna using unique firm-level data from South Africa and Egypt. Our results indicate that the determinants of entry mode choice not only differ between developed and developing countries, but also among developing countries. They also bring into question the role of MNCs in fostering productivity growth in developing countries.