Technology acquisition through licensing. Implications for firm strategy

Nowadays licensing practices have increased in importance and relevance driving the widespread diffusion of markets for technologies. Firms are shifting from a tactical to a strategic attitude towards licensing, addressing both business and corporate level objectives. The Open Innovation Paradigm has been embraced. Firms rely more and more on collaboration and external sourcing of knowledge. This new model of innovation requires firms to leverage on external technologies to unlock the potential of firms’ internal innovative efforts. In this context, firms’ competitive advantage depends both on their ability to recognize available opportunities inside and outside their boundaries and on their readiness to exploit them in order to fuel their innovation process dynamically. Licensing is one of the ways available to firm to ripe the advantages associated to an open attitude in technology strategy. From the licensee’s point view this implies challenging the so-called not-invented-here syndrome, affecting the more traditional firms that emphasize the myth of internal research and development supremacy. This also entails understanding the so-called cognitive constraints affecting the perfect functioning of markets for technologies that are associated to the costs for the assimilation, integration and exploitation of external knowledge by recipient firms. My thesis aimed at shedding light on new interesting issues associated to in-licensing activities that have been neglected by the literature on licensing and markets for technologies. The reason for this gap is associated to the “perspective bias” affecting the works within this stream of research. With very few notable exceptions, they have been generally concerned with the investigation of the so-called licensing dilemma of the licensor – whether to license out or to internally exploit the in-house developed technologies, while neglecting the licensee’s perspective. In my opinion, this has left rooms for improving the understanding of the determinants and conditions affecting licensing-in practices. From the licensee’s viewpoint, the licensing strategy deals with the search, integration, assimilation, exploitation of external technologies. As such it lies at the very hearth of firm’s technology strategy. Improving our understanding of this strategy is thus required to assess the full implications of in-licensing decisions as they shape firms’ innovation patterns and technological capabilities evolution. It also allow for understanding the so-called cognitive constraints associated to the not-invented-here syndrome. In recognition of that, the aim of my work is to contribute to the theoretical and empirical literature explaining the determinants of the licensee’s behavior, by providing a comprehensive theoretical framework as well as ad-hoc conceptual tools to understand and overcome frictions and to ease the achievement of satisfactory technology transfer agreements in the marketplace. Aiming at this, I investigate licensing-in in three different fashions developed in three research papers. In the first work, I investigate the links between licensing and the patterns of firms’ technological search diversification according to the framework of references of the Search literature, Resource-based Theory and the theory of general purpose technologies. In the second paper - that continues where the first one left off – I analyze the new concept of learning-bylicensing, in terms of development of new knowledge inside the licensee firms (e.g. new patents) some years after the acquisition of the license, according to the Dynamic Capabilities perspective. Finally, in the third study, Ideal with the determinants of the remuneration structure of patent licenses (form and amount), and in particular on the role of the upfront fee from the licensee’s perspective. Aiming at this, I combine the insights of two theoretical approaches: agency and real options theory.

Corporate Venture Capital: How established firms use external resources to create new competencies

This Doctoral Dissertation is triggered by an emergent trend: firms are increasingly referring to investments in corporate venture capital (CVC) as means to create new competencies and foster the search for competitive advantage through the use of external resources. CVC is generally defined as the practice by non-financial firms of placing equity investments in entrepreneurial companies. Thus, CVC can be interpreted (i) as a key component of corporate entrepreneurship - acts of organizational creation, renewal, or innovation that occur within or outside an existing organization– and (ii) as a particular form of venture capital (VC) investment where the investor is not a traditional and financial institution, but an established corporation. My Dissertation, thus, simultaneously refers to two streams of research: corporate strategy and venture capital. In particular, I directed my attention to three topics of particular relevance for better understanding the role of CVC. In the first study, I moved from the consideration that competitive environments with rapid technological changes increasingly force established corporations to access knowledge from external sources. Firms, thus, extensively engage in external business development activities through different forms of collaboration with partners. While the underlying process common to these mechanisms is one of knowledge access, they are substantially different. The aim of the first study is to figure out how corporations choose among CVC, alliance, joint venture and acquisition. I addressed this issue adopting a multi-theoretical framework where the resource-based view and real options theory are integrated. While the first study mainly looked into the use of external resources for corporate growth, in the second work, I combined an internal and an external perspective to figure out the relationship between CVC investments (exploiting external resources) and a more traditional strategy to create competitive advantage, that is, corporate diversification (based on internal resources). Adopting an explorative lens, I investigated how these different modes to renew corporate current capabilities interact to each other. More precisely, is CVC complementary or substitute to corporate diversification? Finally, the third study focused on the more general field of VC to investigate (i) how VC firms evaluate the patent portfolios of their potential investee companies and (ii) whether the ability to evaluate technology and intellectual property varies depending on the type of investors, in particular for what concern the distinction between specialized versus generalist VCs and independent versus corporate VCs. This topic is motivated by two observations. First, it is not clear yet which determinants of patent value are primarily considered by VCs in their investment decisions. Second, VCs are not all alike in terms of technological experiences and these differences need to be taken into account.

Eco-Management and Audit Scheme (EMAS): An evaluation of success factors in the agricultural sector. The case of Italy's Emilia Romagna region.

Different tools have been used to set up and adopt the model for the fulfillment of the objective of this research. 1. The Model The base model that has been used is the Analytical Hierarchy Process (AHP) adapted with the aim to perform a Benefit Cost Analysis. The AHP developed by Thomas Saaty is a multicriteria decision - making technique which decomposes a complex problem into a hierarchy. It is used to derive ratio scales from both discreet and continuous paired comparisons in multilevel hierarchic structures. These comparisons may be taken from actual measurements or from a fundamental scale that reflects the relative strength of preferences and feelings. 2. Tools and methods 2.1. The Expert Choice Software The software Expert Choice is a tool that allows each operator to easily implement the AHP model in every stage of the problem. 2.2. Personal Interviews to the farms For this research, the farms of the region Emilia Romagna certified EMAS have been detected. Information has been given by EMAS center in Wien. Personal interviews have been carried out to each farm in order to have a complete and realistic judgment of each criteria of the hierarchy. 2.3. Questionnaire A supporting questionnaire has also been delivered and used for the interviews . 3. Elaboration of the data After data collection, the data elaboration has taken place. The software support Expert Choice has been used . 4. Results of the Analysis The result of the figures above (vedere altro documento) gives a series of numbers which are fractions of the unit. This has to be interpreted as the relative contribution of each element to the fulfillment of the relative objective. So calculating the Benefits/costs ratio for each alternative the following will be obtained: Alternative One: Implement EMAS Benefits ratio: 0, 877 Costs ratio: 0, 815 Benfit/Cost ratio: 0,877/0,815=1,08 Alternative Two: Not Implement EMAS Benefits ratio: 0,123 Costs ration: 0,185 Benefit/Cost ratio: 0,123/0,185=0,66 As stated above, the alternative with the highest ratio will be the best solution for the organization. This means that the research carried out and the model implemented suggests that EMAS adoption in the agricultural sector is the best alternative. It has to be noted that the ratio is 1,08 which is a relatively low positive value. This shows the fragility of this conclusion and suggests a careful exam of the benefits and costs for each farm before adopting the scheme. On the other part, the result needs to be taken in consideration by the policy makers in order to enhance their intervention regarding the scheme adoption on the agricultural sector. According to the AHP elaboration of judgments we have the following main considerations on Benefits: - Legal compliance seems to be the most important benefit for the agricultural sector since its rank is 0,471 - The next two most important benefits are Improved internal organization (ranking 0,230) followed by Competitive advantage (ranking 0, 221) mostly due to the sub-element Improved image (ranking 0,743) Finally, even though Incentives are not ranked among the most important elements, the financial ones seem to have been decisive on the decision making process. According to the AHP elaboration of judgments we have the following main considerations on Costs: - External costs seem to be largely more important than the internal ones (ranking 0, 857 over 0,143) suggesting that Emas costs over consultancy and verification remain the biggest obstacle. - The implementation of the EMS is the most challenging element regarding the internal costs (ranking 0,750).

Authoring tools and management information systems: study of a generalizable architecture

The need to effectively manage the documentation covering the entire production process, from the concept phase right through to market realise, constitutes a key issue in the creation of a successful and highly competitive product. For almost forty years the most commonly used strategies to achieve this have followed Product Lifecycle Management (PLM) guidelines. Translated into information management systems at the end of the '90s, this methodology is now widely used by companies operating all over the world in many different sectors. PLM systems and editor programs are the two principal types of software applications used by companies for their process aotomation. Editor programs allow to store in documents the information related to the production chain, while the PLM system stores and shares this information so that it can be used within the company and made it available to partners. Different software tools, which capture and store documents and information automatically in the PLM system, have been developed in recent years. One of them is the ''DirectPLM'' application, which has been developed by the Italian company ''Focus PLM''. It is designed to ensure interoperability between many editors and the Aras Innovator PLM system. In this dissertation we present ''DirectPLM2'', a new version of the previous software application DirectPLM. It has been designed and developed as prototype during the internship by Focus PLM. Its new implementation separates the abstract logic of business from the real commands implementation, previously strongly dependent on Aras Innovator. Thanks to its new design, Focus PLM can easily develop different versions of DirectPLM2, each one devised for a specific PLM system. In fact, the company can focus the development effort only on a specific set of software components which provides specialized functions interacting with that particular PLM system. This allows shorter Time-To-Market and gives the company a significant competitive advantage.

Comunicazione d'impresa in Alto Adige: Indagine sulle strategie di gestione del multilinguismo nelle PMI insediate in un territorio di contatto linguistico

La ricerca sulla comunicazione e gestione multilingue della conoscenza in azienda si è sinora concentrata sulle multinazionali o PMI in fase di globalizzazione. La presente ricerca riguarda invece le PMI in zone storicamente multilingui al fine di studiare se l’abitudine all’uso di lingue diverse sul mercato locale possa rappresentare un vantaggio competitivo. La tesi illustra una ricerca multimetodo condotta nel 2012-2013 in Alto Adige/Südtirol. Il dataset consiste in 443 risposte valide a un questionario online e 23 interviste con manager e imprenditori locali. Le domande miravano a capire come le aziende altoatesine affrontino la sfida del multilinguismo, con particolare attenzione ai seguenti ambiti: comunicazione multilingue, documentazione, traduzione e terminologia. I risultati delineano un quadro generale delle strategie di multilinguismo applicate in Alto Adige, sottolineandone punti di forza e punti deboli. Nonostante la presenza di personale multilingue infatti il potenziale vantaggio competitivo che ne deriva non è sfruttato appieno: le aziende si rivolgono ai mercati in cui si parla la loro stessa lingua (le imprese a conduzione italiana al mercato nazionale, quelle di lingua tedesca ad Austria e Germania). La comunicazione interna è multilingue solo nei casi in sia imprescindibile. Le “traduzioni fai-da-te” offrono l’illusione di gestire lingue diverse, ma il livello qualitativo rimane limitato. I testi sono sovente tradotti da personale interno privo di competenze specifiche. Anche nella cooperazione con i traduttori esterni si evidenza la mancata capacità di ottenere il massimo profitto dagli investimenti. La tesi propone delle raccomandazioni pratiche volte a ottimizzare i processi attuali e massimizzare la resa delle risorse disponibili per superare la sfida della gestione e comunicazione multilingue. Le raccomandazioni non richiedono investimenti economici di rilievo e sono facilmente trasferibili anche ad altre regioni multilingui/di confine, come ad altre PMI che impiegano personale plurilingue. Possono dunque risultare utili per un elevato numero di imprese.

Patch selection by wintering white-tailed deer : consequences for eastern hemlock regeneration at local and landscape scales

Tsuga canadensis (eastern hemlock) is a highly shade-tolerant, late-successional, and long-lived conifer species found throughout eastern North America. It is most often found in pure or nearly pure stands, because highly acidic and nutrient poor forest floor conditions are thought to favor T. canadensis regeneration while simultaneously limiting the establishment of some hardwood species with greater nutrient requirements. Once a common species, T. canadensis is currently experiencing widescale declines across its range. The hemlock woolly adelgid (Adelges tsugae) is decimating the population across its eastern distribution. Across the Upper Great Lakes region, where the adelgid is currently being held at bay by cold winter temperatures, T. canadensis has been experiencing failures in regeneration attributed, in part, to herbivory by white-tailed deer (Odocoileus virginianus). Deer utilize T. canadensis stands as winter habitat in areas of high snow depth. Tsuga canadensis, once a major component of these forests, currently exists at just a fraction of its pre-settlement abundance due to historic logging and contemporary forest management practices, and what remains is found in small remnant patches surrounded by second- and third-growth deciduous forests. The deer population across the region, however, is likely double that of pre-European settlement times. In this dissertation I explore the relationship between white-tailed deer use of T. canadensis as winter habitat and the effect this use is having on regeneration and forest succession. For this research I quantified stand composition and structure and abiotic variables of elevation and snow depth in 39 randomly selected T. canadensis stands from across the western Upper Peninsula of Michigan. I also quantified composition and the configuration of the landscapes surrounding these stands. I measured relative deer use of T. canadensis stands as pellet group piles deposited in each stand during each of three consecutive winters, 2005-06, 2006-07, and 2007-08. The results of this research suggest that deer use of T. canadensis stands as winter habitat is influenced primarily by snow depth, elevation, and the composition and configuration of the greater landscapes surrounding these stands. Specifically, stands with more heterogeneous landscapes surrounding them (i.e., a patchy mosaic of conifer, deciduous, and open cover) had higher relative deer use than stands surrounded by homogenous deciduous forest cover. Additionally, the intensity of use and the number of stands used was greater in years with higher average snow depth. Tsuga canadensis regeneration in these stands was negatively associated with deer use and Acer saccharum (sugar maple) basal area. Of the 39 stands, 17 and 22 stands had no T. canadensis regeneration in small and large sapling categories, respectively. Acer saccharum was the most common understory tree species, and the importance of A. saccharum in the understory (stems < 10 cm dbh) of the stands was positively associated with overstory A. saccharum dominance. Tsuga canadensis establishment was associated with high-decay coarse woody debris and moss, and deciduous leaf litter inputs in these stands may be limiting access to these important microsites. Furthermore, A. saccharum is more tolerant to the effects of deer herbivory than T. canadensis, giving A. saccharum a competitive advantage in stands being utilized as winter habitat by deer. My research suggests that limited microsite availability, in conjunction with deer herbivory, may be leading to an erosion in T. canadensis patch stability and an altered successional trajectory toward one of A. saccharum dominance, an alternately stable climax species.

Drivers of RFID adoption in the automotive industry

The automotive industry is confronted with increasing competition, leading to higher cost pressures and the demand to optimize production processes and value chains. Here the RFID technology promises to improve a range of processes in logistics and manufacturing. Despite its promising potential in the automotive industry, RFID has not yet made a decisive step from pilots to real-life implementations in the supply chain. Building on existing models of technology adoption, we analyze RFID adoption dynamics in the automotive industry. Building on existing IOS adoption models tailored to RFID specifics and based on ten semi-structured interviews with OEMs and suppliers, we evaluate main drivers of RFID adoption in the automotive industry. Our key findings are that the use of a coercive approach by the OEM could be redundant because of the market-driven RFID adoption among many suppliers. Furthermore, suppliers implementing RFID can now gain an early mover competitive advantage by developing higher trust in their relationship with the OEM as well as accumulating unique expertise in this area.

Direct male-male competition can facilitate invasion of new colour types in Lake Victoria cichlids

The possibility that disruptive sexual selection alone can cause sympatric speciation is currently a subject of much debate. The initial difficulty for new and rare ornament phenotypes to invade a population, and the stabilisation of the resulting polymorphism in trait and preference make this hypothesis problematic. Recent theoretical work indicates that the invasion is facilitated if males with the new phenotype have an initial advantage in male-male competition. We studied a pair of sympatric incipient species of cichlids from Lake Victoria, in which the red (Pundamilia nyererei) and blue males (P. pundamilia) vigorously defend territories. Other studies suggested that red phenotypes may have repeatedly invaded blue populations in independent episodes of speciation. We hypothesised that red coloration confers an advantage in male-male competition, assisting red phenotypes to invade. To test this hypothesis, we staged contests between red and blue males from a population where the phenotypes are interbreeding morphs or incipient species. We staged contests under both white and green light condition. Green light effectively masks the difference between red and blue coloration. Red males dominated blue males under white light, but their competitive advantage was significantly diminished under green light. Contests were shorter when colour differences were visible. Experience of blue males with red males did not affect the outcome of a contest. The advantage of red over blue in combats may assist the red phenotype to invade blue populations. The apparently stable co-existence of red and blue incipient species in many populations of Lake Victoria cichlids is discussed.

How Firms Make Friends: Communities in Private-Collective Innovation

When firms contribute to open source projects, they in fact invest into public goods which may be used by everyone, even by their competitors. This seemingly paradoxical behavior can be explained by the model of private-collective innovation where private investors participate in collective action. Previous literature has shown that companies benefit through the production process providing them with unique incentives such as learning and reputation effects. By contributing to open source projects firms are able to build a network of external individuals and organizations participating in the creation and development of the software. As will be shown in this doctoral dissertation firm-sponsored communities involve the formation of interorganizational relationships which eventually may lead to a source of sustained competitive advantage. However, managing a largely independent open source community is a challenging balancing act between exertion of control to appropriate value creation, and openness in order to gain and preserve credibility and motivate external contributions. Therefore, this dissertation consisting of an introductory chapter and three separate research papers analyzes characteristics of firm-driven open source communities, finds reasons why and mechanisms by which companies facilitate the creation of such networks, and shows how firms can benefit most from their communities.

Effects of Strand Geometry on Selected Properties of Long-Stand Structural Composite Lumber Made from Northeastern Hardwoods

Structural composite lumber (SCL) products often possess significantly higher design values than the top grades of solid lumber, making it a popular choice for both residential and commercial applications. The enhanced mechanical properties of SCL are mainly due to defect randomization and densification of the wood fiber, both largely functions of the size, shape and composition (species) of the wood element. Traditionally, SCL manufacturers have used thin, rectangular elements produced from either moderate density softwoods or low density hardwoods. Higher density hardwood species have been avoided, as they require higher pressures to adequately densify and consolidate the wood furnish. These higher pressures can lead to increased manufacturing costs, damage to the wood fiber and/or a product that is too dense, making it heavy and unreceptive to common mechanical fastening techniques. In the northeastern United States high density, diffuse-porous hardwoods (such as maple, beech and birch) are abundant. Use of these species as primary furnish for a SCL product may allow for a competitive advantage in terms of resource cost against products that rely on veneer grade logs. Proximity to this abundant and relatively inexpensive resource may facilitate entry of SCL production facilities in the northeastern United States, where currently none exist. However, modifications to current strand sizes, geometries or production techniques will likely be required to allow for use of these species. A new SCL product concept has been invented allowing for use of these high density hardwoods. The product, referred to as long-strand structural composite lumber (LSSCL), uses strands of significantly larger cross sectional areas and volumes than existing SCL products. In spite of the large strand size, satisfactory consolidation is achieved without excessive densification of the wood fiber through use of a symmetrical strand geometric cross-section. LSSCL density is similar to that of existing SCL products, but is due mainly to the inherent density of the species, rather than through densification. An experiment was designed and conducted producing LSSCL from both large (7/16”) and small (1/4”) strands, of both square and triangular geometric cross sections. Testing results indicate that the large, triangular strands produce LSSCL beams with projected design values of: Modulus of elasticity (MOEapp) – 1,750,000 psi; Allowable bending stress (Fb) – 2750 psi; Allowable shear stress (Fv) – 260 psi. Several modifications are recommended which may lead to improvement of these values, likely allowing for competition against existing SCL products.

Fatty acids, alcohols and hydrocarbons of microbial mats from Lake 2A on Kiritimati Island

Modern microbial mats are widely recognized as useful analogs for the study of biogeochemical processes relevant to paleoenvironmental reconstruction in the Precambrian. We combined microscopic observations and investigations of biomarker composition to investigate community structure and function in the upper layers of a thick phototrophic microbial mat system from a hypersaline lake on Kiritimati (Christmas Island) in the Northern Line Islands, Republic of Kiribati. In particular, an exploratory incubation experiment with 13C-labeled bicarbonate was conducted to pinpoint biomarkers from organisms actively fixing carbon. A high relative abundance of the cyanobacterial taxa Aphanocapsa and Aphanothece was revealed by microscopic observation, and cyanobacterial fatty acids and hydrocarbons showed 13C-uptake in the labeling experiment. Microscopic observations also revealed purple sulfur bacteria (PSB) in the deeper layers. A cyclic C19:0 fatty acid and farnesol were attributed to this group that was also actively fixing carbon. Background isotopic values indicate Calvin-Benson cycle-based autotrophy for cycC19:0 and farnesol-producing PSBs. Biomarkers from sulfate-reducing bacteria (SRB) in the top layer of the mat and their 13C-uptake patterns indicated a close coupling between SRBs and cyanobacteria. Archaeol, possibly from methanogens, was detected in all layers and was especially abundant near the surface where it contained substantial amounts of 13C-label. Intact glycosidic tetraether lipids detected in the deepest layer indicated other archaea. Large amounts of ornithine and betaine bearing intact polar lipids could be an indicator of a phosphate-limited ecosystem, where organisms that are able to substitute these for phospholipids may have a competitive advantage.

Benthic foraminifera across the Cretaceous/Paleogene boundary in the Southern Ocean

The impact of an asteroid at the Cretaceous/Paleogene (K/Pg) boundary triggered dramatic biotic, biogeochemical and sedimentological changes in the oceans that have been intensively studied. Paleo-biogeographical differences in the biotic response to the impact and its environmental consequences, however, have been less well documented. We present a high-resolution analysis of benthic foraminiferal assemblages at Southern Ocean ODP Site 690 (Maud Rise, Weddell Sea, Antarctica). At this high latitude site, late Maastrichtian environmental variability was high, but benthic foraminiferal assemblages were not less diverse than at lower latitudes, in contrast to those of planktic calcifiers. Also in contrast to planktic calcifiers, benthic foraminifera did not suffer significant extinction at the K/Pg boundary, but show transient assemblage changes and decreased diversity. At Site 690, the extinction rate was even lower (~3%) than at other sites. The benthic foraminiferal accumulation rate varied little across the K/Pg boundary, indicating that food supply to the sea floor was affected to a lesser extent than at lower latitude sites. Compared to Maastrichtian assemblages, Danian assemblages have a lower diversity and greater relative abundance of heavily calcified taxa such as Stensioeina beccariiformis and Paralabamina lunata. This change in benthic foraminiferal assemblages could reflect post-extinction proliferation of different photosynthesizers (thus food for the benthos) than those dominant during the Late Cretaceous, therefore changes in the nature rather than in the amount of the organic matter supplied to the seafloor. However, severe extinction of pelagic calcifiers caused carbonate supersaturation in the oceans, thus might have given competitive advantage to species with large, heavily calcified tests. This indirect effect of the K/Pg impact thus may have influenced the deep-sea dwellers, documenting the complexity of the effects of major environmental disturbance.

Nematodes and meiofauna in sediments obtained from RRS Charles Darwin cruise CD179, Portuguese continental margin

Samples collected at two different depths (ca. 3200 and ca. 4200 m) in the Setúbal and Cascais canyons off the Portuguese coast, during the HERMES RRS Charles Darwin cruise CD179, were analysed for (1) sediment biogeochemistry (TOC, TN) and (2) composition, and structural and trophic diversity of nematode communities. Multivariate PERMANOVA analysis on the nematode community data revealed differences between sediment layers that were greater than differences between canyons, water depths, and stations. This suggests that biogeochemical gradients along the vertical sediment profile are crucial in determining nematode community structure. The interaction between canyon conditions and the nematode community is illustrated by biogeochemical patterns in the sediment and the prevalence of nematode genera that are able to persist in disturbed sediments. Trophic analysis of the nematode community indicated that non-selective deposit feeders are dominant, presumably because of their non-selective feeding behaviour compared to other feeding types, which gives them a competitive advantage in exploiting lower-quality food resources. This study presents a preliminary conceptual scheme for interactions between canyon conditions and the resident fauna.

Financing Small and Medium Enterprises in Myanmar

Small and medium enterprises (SMEs) share the biggest part in Myanmar economy in terms of number, contribution to employment, output, and investment. Myanmar economic growth is thus totally dependent on the development of SMEs in the private sector. Today, the role of SMEs has become more vital in strengthening national competitive advantage and the speedy economic integration into the ASEAN region. However, studies show that SMEs have to deal with a number of constraints that hinder their development potential, such as the shortage in power supply, unavailability of long-term credit from external sources and many others. Among them, the financing problem of SMEs is one of the biggest constraints. Such is deeply rooted in demand and supply issues, macroeconomic fundamentals, and lending infrastructure of the country. The government’s policy towards SMEs could also lead to insufficient support for the SMEs. Thus, focusing on SMEs and private sector development as a viable strategy for industrialization and economic development of the country is a fundamental requirement for SME development. This paper recommends policies for stabilizing macro economic fundamentals, improving lending infrastructures of the country and improving demand- and supply-side conditions from the SMEs financing perspective in order to provide a more accessible financing for SMEs and to contribute in the overall development of SMEs in Myanmar thereby to sharpen national competitive advantage in the age of speedy economic integration.

Chapter 7 Clusters of Modern and Local Industries in Vietnam

Since the introduction of the Doi Moi ('renovation') economic reform in 1986, Vietnam has experienced a transformation of its economic management, from a central planning economy to a market-oriented economy. High economic growth, created by the liberalization of activities in all sectors of the economy, has changed the economic structure of the country, and the once agriculture-based and poverty-stricken land now generates a midlevel income and possesses many industrial bases. Economic growth has also changed the landscape of the country. Business complexes have been built in metropolises like Ho Chi Minh City and Hanoi, and rice fields have been converted into industrial zones. As the number of enterprises increased, areas began to emerge where many enterprises agglomerated. Some of these 'clusters' were groups of cottage industry households, while many others were large-scale industrial clusters. As Porter [1998] argues, industrial clusters are the source of a nation's 'competitive advantage'. McCarty et al. [2005] indicate that in some key industries in Vietnam, some clusters of enterprises have been created, although the degree of agglomeration differs from one industry to another. Using industry census data from 2001, they include dot density maps for the 12 leading manufacturing industries in Vietnam. They show that most of the industries analyzed are clustered either in Hanoi or Ho Chi Minh City (or both). Among these 12 industries, the garments industry has the greatest tendency to cluster, followed by textile, rice, seafood, and paper industries. The fact that industrial clusters have begun to form in some areas could be a positive sign for Vietnam's future economic development. What is lacking in McCarty et al. [2005], however, is the identification of the participants in the industrial clusters. Some argue for the importance of small and medium enterprises (SMEs) in Vietnam's economic development (e.g. Nguyen Tri Thanh [2007], Tran Tien Cuong et al. [2008]), while others stress the impact of foreign direct investments (FDI) (for example, Tuan Bui [2009]). Adding information about the participants in the above cluster study (and in other studies of spatial patterns of location of enterprises) may broaden the scope for analysis of economic development in Vietnam. This study aims to reveal the characteristics of industrial clusters in terms of their participants and locations. The findings of the study may provide basic information for evaluating the effects of agglomeration and the robustness of the effects in the industrial clusters in Vietnam. Section 1 describes the characteristics of economic entities in Vietnam such as ownership, size of enterprise, and location. Section 2 examines qualitative aspects of industrial clusters identified in McCarty et al. [2005] and uses information on the size and ownership of clusters. Three key industries (garments, consumer electronics, and motor vehicle) are selected for the study. Section 3 identifies another type of cluster commonly seen in Vietnam, composed of local industries and called 'craft villages'. Many such villages have been developed since the early 1990s. The study points out that some of these villages have become industrialized (or are becoming industrialized) by introducing modern modes of production and by employing thousands of laborers.