The Garment Industry in Cambodia: Its Role in Poverty Reduction through Export-Oriented Development

Cambodia's export-oriented garment industry has contributed greatly to poverty reduction in the country through employment of the poor. This paper provides a statistical verification of this contribution based on firm-level data from 164 sampled companies collected in 2003. Its main conclusions confirm the substantial impact that employment in the garment industry has had on poverty reduction in Cambodia. Firstly, entry-level workers receive wages far above the poverty line. Secondly, females make up the predominant share of the main category jobs in the industry. Thirdly, barriers to employment and to promotions up to certain job categories are not high in terms of education and experience. Another important finding is that a typical sample firm exhibited high profitability, although there was wide variation in profitability among firms. This average of high profitability could be a good predictor of Cambodia's viability in the intensified competition since the phase out of the Multi-Fiber Arrangement (MFA) at the beginning of 2005. A point of note is that Cambodia's pattern of industrial development led by a labor-intensive industry is similar to that of neighboring countries in East Asia which earlier went through the initial stage of industrial development, except that Cambodia has lacked a strong government industrial promotion policy which characterized the earlier group.

Slow and steady wins the race : how the garment industry leads industrialization in low-income countries

This paper investigates how the garment industry escapes this vicious cycle and argues for the validity of labor-intensive industry as a starting point for full-fledged industrialization, even though it might at first seem to be a digression from the path to an innovation-led economy. By examining original firm-level data on garment-producing firms collected in 2002 and 2008 in Bangladesh, Cambodia, Kenya and Madagascar, the following conclusions are drawn: (1) low wages, though still sufficient for poverty reduction, are the main source of competitiveness in low-income countries; (2) after the successful initiation of industrialization causes wages to begin to rise, there is still a possibility for productivity enhancement; and (3) skill bias in technological progress is not yet a major factor, implying that the garment industry is still a labor-intensive industry. In sum, labor-intensive industry should not be discounted as a part of the development strategy of low-income countries.

Towards a New Industrial Policy for Europe. EPC Issue Paper No. 78, November 2014

An ambitious rhetoric has been adopted both at the European and national level towards industrial policy. Along with rhetoric, sweeping action plans to revive our industrial base and reverse off-shoring trends have been attempted. However, concrete measures undertaken have been inconsistent and weak compared to the magnitude of the challenges faced by European manufacturing as well as the policies implemented by our competitors. At the same time the economic and financial crisis has shed light on the risks of an excessive reliance on the service and financial sector and the necessity to look for new sources of growth. As a response, this Issue Paper, by Claire Dhéret, Senior Policy Analyst and Martina Morosi, Programme Assistant, argues that fostering a more innovative, knowledge-intensive, new technology-oriented and resource-efficient manufacturing industry in Europe is the right way to go. To this end, a new EU strategic vision on industrial policy, based on the operationalisation of European cooperation, is urgently required. The paper presents a toolkit for implementing the vision and a series of policy recommendations.

Analysing the Contribution of Business Services to European Economic Growth. Bruges European Economic Research (BEER) Papers 9/February 2007

The sector business services contributes directly and indirectly to aggregate economic growth in Europe. The direct contribution comes from the sector’s own dynamism. Though the business-services industry appears to be characterised by strong cyclical volatility, there was also a strong structural growth. Business services actually generated more than half of total net employment growth in the European Union since the second half of the 1990s. Apart from this direct growth contribution, the sector also contributed in an indirect way to economic growth by generating knowledge and productivity spill-overs for other industries. The knowledge role of business services is reflected in its employment characteristics. The business-services industry created spill-overs in three ways: original innovations, knowledge diffusion, and the reduction of human capital indivisibilities at firm level. The share of knowledge-intensive business services in the intermediate inputs of the total economy has risen sharply in the last decade. Firm-level scale diseconomies with regard to knowledge and skill inputs are reduced by external deliveries of such inputs, thereby exploiting positive external scale economies. The process goes along with an increasingly complex social division of labour between economic sectors. The European business-services industry itself is characterised by a relatively weak productivity growth. Does this contribute to growth stagnation tendencies à la the socalled “Baumol disease”? The paper argues that there is no reason to expect this as long as the productivity and growth spill-overs from business services to other sectors are large enough. Finally, the paper concludes by suggesting several policy elements that could boost the role of business services in European economic growth. This might to achieve some of the ambitious Lisbon goals with respect to employment, productivity and innovation.

Explaining variations in the knowledge economy in three small wealthy countries

At a broad level, it has been shown that different institutional contexts, policy regimes and business systems affect the kinds of activities in which a nation specialises. This paper is concerned with the way in which different national business systems affect the nature of participation of a nation in the knowledge economy. The paper seeks to explain cross-national variations in the knowledge economy in the Australia, Denmark and Sweden with reference to dominant characteristics of the business system. Although Australia, Denmark and Sweden are all small wealthy countries, they each have quite distinctive business systems. Australia has been regarded as a variant of the competitive business system and has generally been described as an entrepreneurial economy with a large small firm population. In contrast Sweden has a coordinated business system that has favoured large industrial firms. The Danish variant of the coordinated model, with its well-developed vocational training system, is distinguishable by its large population of networked small and medium size enterprises. The three countries also differ significantly on two dimensions of participation in the knowledge economy. First, there is cross-national variation in patterns of specialisation in knowledge intensive industries and services. Second, the institutional infrastructure of the knowledge economy (or the existing stock of knowledge and competence in the economy, the potential for generation and diffusion a new knowledge and the capacity for commercialisation of new ideas) differs across the three countries. This paper seeks to explain variations in these two dimensions of the knowledge economy with reference to characteristics of the business system in the three countries.

Comparing the conditions for small business and entrepreneurship in Sweden and Australia: Lessons for the European Charter for Small Enterprises

A growing body of literature is concerned with explaining cross-national performance of small business and entrepreneurs in advanced economies. This literature has considered a range of policy and institutional variables which create an environment supportive of small firms and entrepreneurial activities including macroeconomic variables such as taxation, labour market regulation, social security and income policy; regulatory factors such as establishment legislation, bankruptcy policy, administrative burdens, compliance costs, deregulation and competition policy; and cultural factors such as social and cultural norms that support entrepreneurship. However, this literature has not always distinguished between the policy environment of small firms operating in different industry sectors. The purpose of this paper is to examine the institutional and policy environment of small firms in knowledge intensive sectors. The characteristics of the business environment of particular relevance to knowledge intensive firms are somewhat different from the conditions for entrepreneurship and small business success more generally. This paper compares the science, technology and industry infrastructure of Australia, Denmark, Sweden with other OECD countries. The purpose of the paper is to identify cross-national differences in the business environment of small knowledge intensive firms. The paper seeks to explore whether particular institutional environments appear to be more supportive of small firms in knowledge intensive sectors.

Addressing the project implementation challenges in the Saudi Arabian power supply industry: an investigative approach towards improving project delivery

For many decades, the Kingdom of Saudi Arabia has been widely known for being a reliable oil exporter. This fact, however, has not exempted it from facing significant domestic energy challenges. One of the most pressing of these challenges involves bridging the widening electricity supply-demand gap where, currently, the demand is growing at a very fast rate. One crucial means to address this challenge is through delivering power supply projects with maximum efficiency. Project delivery delay, however, is not uncommon in this highly capital-intensive industry, indicating electricity supplies are not coping with the demand increases. To provide a deeper insight into the challenges of project implementation and efficient practice, this research adopts a pragmatic approach by triangulating literature, questionnaires and semi-structured interviews. The research was conducted in the Saudi Arabian power supply industry – Western Operating Area. A total of 105 usable questionnaires were collected, and 28 recorded, semi-structured interviews were conducted, analysed and synthesised to produce a conceptual model of what constitutes the project implementation challenges in the investigated industry. This was achieved by conducting a comprehensive ranking analysis applied to all 58 identified and surveyed factors which, according to project practitioners in the investigated industry, contribute to project delay. 28 of these project delay factors were selected as the "most important" ones. Factor Analysis was employed to structure these 28 most important project delay factors into the following meaningful set of 7 project implementation challenges: Saudi Electricity Company's contractual commitments, Saudi Electricity Company's communication and coordination effectiveness, contractors' project planning and project control effectiveness, consultant-related aspects, manpower challenges and material uncertainties, Saudi Electricity Company's tendering system, and lack of project requirements clarity. The study has implications for industry policy in that it provides a coherent assessment of the key project stakeholders' central problems. From this analysis, pragmatic recommendations are proposed that, if enacted, will minimise the significance of the identified problems on future project outcomes, thus helping to ensure the electricity supply-demand gap is diminished.

Bridging the gap? Corruption, knowledge and foreign ownership

We argue that in addition to host corruption per se, as accounted for by the existing literature, an explanation of inter-country variation in FDI needs to account for the distance between the host and home corruption, which we call relative corruption. We use a large matched home-host firm-level panel data-set for 1998-2006 from CEE transition countries. Year-specific selectivity corrected estimates suggest that, ceteris paribus, higher relative ‘grand’ corruption lowers foreign ownership as the returns to investment tends to be lower in more corrupt environment. However, after controlling for the selectivity bias, knowledge-intensive parent firms are found to hold controlling ownership, as the difficulty of successful joint venture looms large in more corrupt environment. Results are robust to alternative specifications.

Supply chain management diffusion among firms in the Republic of Ireland

The changing business environment has sharpened the focus on the need for robust approaches to supply chain management (SCM) and the improvement of supply chain capability and performance. This is particularly the case in Ireland, which has the natural disadvantage of a location peripheral to significant markets and sources of raw materials which results in relatively high transport and distribution costs. Therefore, in order to gain insights into current levels of diffusion of SCM, a survey was conducted among 776 firms in the Republic of Ireland. The empirical results suggest that there is a need for more widespread adoption of SCM among Irish firms. This is particularly the case in relation to the four main elements of SCM excellence reported in this paper. The design of supply chain solutions is a highly skilled, knowledge-intensive and complex activity, reflected in a shift from 'box moving' to the design and implementation of customised supply chain solutions. Education and training needs to be addressed by stimulating the development of industry-relevant logistics and SCM resources and skills.

ICT adoption by logistics service providers:developing a learning agenda

Recent years have seen innovations in the logistics and freight transport industry in relation to Information and communication technologies (ICT) diffusion. The implementation of such technologies by third party logistics providers (3PLs) allows the real-time exchange of information between supply chain partners, thereby improving planning capability and customer service. However, the logistics and freight transport industry is lagging somewhat behind other sectors in ICT diffusion. In relation to the latter point, it is important to note that the dissemination of ICT in logistics and supply chain management (SCM) is shifting the 3PL industry to an increasingly knowledge-intensive approach. In this process, the role of learning becomes more central and an assessment of the impact of future ICT learning needs for the logistics providers is a strategic imperative. The aim of this paper is to assess the impact of ICT on logistics and freight transport industry in Italy and Ireland, and to identify learning needs for more effective ICT adoption in 3PLs.

Coordinating expertise across knowledge boundaries in offshore-outsourcing projects:the role of codification

The coordination of effort within and among different expert groups is a central feature of contemporary organizations. Within the existing literature, however, a dichotomy has emerged in our understanding of the role played by codification in coordinating expert groups. One strand of literature emphasizes codification as a process that supports coordination by enabling the storage and ready transfer of knowledge. In contrast, another strand highlights the persistent differences between expert groups that create boundaries to the transfer of knowledge, seeing coordination as dependent on the quality of the reciprocal interactions between groups and individuals. Our research helps to resolve such contested understandings of the coordinative role played by codification. By focusing on the offshore-outsourcing of knowledge-intensive services, we examine the role played by codification when expertise was coordinated between client staff and onsite and offshore vendor personnel in a large-scale outsourcing contract between TATA Consultancy Services (TCS) and ABN AMRO bank. A number of theoretical contributions flow from our analysis of the case study, helping to move our understanding beyond the dichotomized views of codification outlined above. First, our study adds to previous work where codification has been seen as a static concept by demonstrating the multiple, coexisting, and complementary roles that codification may play. We examine the dynamic nature of codification and show changes in the relative importance of these different roles in coordinating distributed expertise over time. Second, we reconceptualize the commonly accepted view of codification as focusing on the replication and diffusion of knowledge by developing the notion of the codification of the “knower” as complementary to the codification of knowledge. Unlike previous studies of expertise directories, codification of the knower does not involve representing expertise in terms of occupational skills or competences but enables the reciprocal interrelating of expertise required by more unstructured tasks.

Towards a multilevel model of the high performance work systems–workplace safety relationship

Human Resource (HR) systems and practices generally referred to as High Performance Work Practices (HPWPs), (Huselid, 1995) (sometimes termed High Commitment Work Practices or High Involvement Work Practices) have attracted much research attention in past decades. Although many conceptualizations of the construct have been proposed, there is general agreement that HPWPs encompass a bundle or set of HR practices including sophisticated staffing, intensive training and development, incentive-based compensation, performance management, initiatives aimed at increasing employee participation and involvement, job safety and security, and work design (e.g. Pfeffer, 1998). It is argued that these practices either directly and indirectly influence the extent to which employees’ knowledge, skills, abilities, and other characteristics are utilized in the organization. Research spanning nearly 20 years has provided considerable empirical evidence for relationships between HPWPs and various measures of performance including increased productivity, improved customer service, and reduced turnover (e.g. Guthrie, 2001; Belt & Giles, 2009). With the exception of a few papers (e.g., Laursen &Foss, 2003), this literature appears to lack focus on how HPWPs influence or foster more innovative-related attitudes and behaviours, extra role behaviors, and performance. This situation exists despite the vast evidence demonstrating the importance of innovation, proactivity, and creativity in its various forms to individual, group, and organizational performance outcomes. Several pertinent issues arise when considering HPWPs and their relationship to innovation and performance outcomes. At a broad level is the issue of which HPWPs are related to which innovation-related variables. Another issue not well identified in research relates to employees’ perceptions of HPWPs: does an employee actually perceive the HPWP –outcomes relationship? No matter how well HPWPs are designed, if they are not perceived and experienced by employees to be effective or worthwhile then their likely success in achieving positive outcomes is limited. At another level, research needs to consider the mechanisms through which HPWPs influence –innovation and performance. The research question here relates to what possible mediating variables are important to the success or failure of HPWPs in impacting innovative behaviours and attitudes and what are the potential process considerations? These questions call for theory refinement and the development of more comprehensive models of the HPWP-innovation/performance relationship that include intermediate linkages and boundary conditions (Ferris, Hochwarter, Buckley, Harrell-Cook, & Frink, 1999). While there are many calls for this type of research to be made a high priority, to date, researchers have made few inroads into answering these questions. This symposium brings together researchers from Australia, Europe, Asia and Africa to examine these various questions relating to the HPWP-innovation-performance relationship. Each paper discusses a HPWP and potential variables that can facilitate or hinder the effects of these practices on innovation- and performance- related outcomes. The first paper by Johnston and Becker explores the HPWPs in relation to work design in a disaster response organization that shifts quickly from business as usual to rapid response. The researchers examine how the enactment of the organizational response is devolved to groups and individuals. Moreover, they assess motivational characteristics that exist in dual work designs (normal operations and periods of disaster activation) and the implications for innovation. The second paper by Jørgensen reports the results of an investigation into training and development practices and innovative work behaviors (IWBs) in Danish organizations. Research on how to design and implement training and development initiatives to support IWBs and innovation in general is surprisingly scant and often vague. This research investigates the mechanisms by which training and development initiatives influence employee behaviors associated with innovation, and provides insights into how training and development can be used effectively by firms to attract and retain valuable human capital in knowledge-intensive firms. The next two papers in this symposium consider the role of employee perceptions of HPWPs and their relationships to innovation-related variables and performance. First, Bish and Newton examine perceptions of the characteristics and awareness of occupational health and safety (OHS) practices and their relationship to individual level adaptability and proactivity in an Australian public service organization. The authors explore the role of perceived supportive and visionary leadership and its impact on the OHS policy-adaptability/proactivity relationship. The study highlights the positive main effects of awareness and characteristics of OHS polices, and supportive and visionary leadership on individual adaptability and proactivity. It also highlights the important moderating effects of leadership in the OHS policy-adaptability/proactivity relationship. Okhawere and Davis present a conceptual model developed for a Nigerian study in the safety-critical oil and gas industry that takes a multi-level approach to the HPWP-safety relationship. Adopting a social exchange perspective, they propose that at the organizational level, organizational climate for safety mediates the relationship between enacted HPWS’s and organizational safety performance (prescribed and extra role performance). At the individual level, the experience of HPWP impacts on individual behaviors and attitudes in organizations, here operationalized as safety knowledge, skills and motivation, and these influence individual safety performance. However these latter relationships are moderated by organizational climate for safety. A positive organizational climate for safety strengthens the relationship between individual safety behaviors and attitudes and individual-level safety performance, therefore suggesting a cross-level boundary condition. The model includes both safety performance (behaviors) and organizational level safety outcomes, operationalized as accidents, injuries, and fatalities. The final paper of this symposium by Zhang and Liu explores leader development and relationship between transformational leadership and employee creativity and innovation in China. The authors further develop a model that incorporates the effects of extrinsic motivation (pay for performance: PFP) and employee collectivism in the leader-employee creativity relationship. The papers’ contributions include the incorporation of a PFP effect on creativity as moderator, rather than predictor in most studies; the exploration of the PFP effect from both fairness and strength perspectives; the advancement of knowledge on the impact of collectivism on the leader- employee creativity link. Last, this is the first study to examine three-way interactional effects among leader-member exchange (LMX), PFP and collectivism, thus, enriches our understanding of promoting employee creativity. In conclusion, this symposium draws upon the findings of four empirical studies and one conceptual study to provide an insight into understanding how different variables facilitate or potentially hinder the influence various HPWPs on innovation and performance. We will propose a number of questions for further consideration and discussion. The symposium will address the Conference Theme of ‘Capitalism in Question' by highlighting how HPWPs can promote financial health and performance of organizations while maintaining a high level of regard and respect for employees and organizational stakeholders. Furthermore, the focus on different countries and cultures explores the overall research question in relation to different modes or stages of development of capitalism.

Understanding innovation in outsourcing services

Recent years have witnessed an expansion in service industries such as finance, travel and retail. Firms in the services have shifted their traditional occupation with products to consider how value can be created and appropriated in the service industry [1]. In particular, information technology (IT) and IT-enabled business services have become central to a firm's ability to deliver value to its customers, driving firms to seek ways to improve their services and maintain their competitive position. In this regard, the last ten years have witnessed significant growth in the outsourcing industry which shifted from focus on low cost simple tasks such as coding to end-to-end delivery of services that range from IT services and customer services to more complex business services such as Finance and Accounting, Human Resources, Procurement, and knowledge-intensive services such as customer analysis and research services [2]. © 2012 Springer-Verlag.

To what extent and in what manner do Chinese and Indian contract research organisation learn and upgrade with the unbundling the global pharmaceutical R&D value chain?

The paper applies the GVC framework to analyse the organisational and geographical reconfiguration of the global R&D function of leading US and European pharmaceutical MNCs. Though pharmaceutical MNCs have been outsourcing clinical trial activities since the mid-1990s, the outsourcing of discovery research tasks is a phenomenon of the 2000s (Ramirez 2013). Moreover, in the context of a crisis of R&D productivity and increasing pressure from shareholders, a number of US and European pharmaceutical MNCs are breaking up their R&D function in an attempt to increase flexibility and reduce risk as well as costs and are thereby restructuring the global architecture of their R&D function. This break-up, or unbundling (Sako 2006), of the R&D function is particularly interesting given the prevalence of market failure in innovation (Howells et al 2008), the non-modular nature of the R&D process in this industry (Pisano 2006) and the strategic important of this activity to the core competence and long-term competitive advantage of firms in this sector. The focus of this paper is on the outsourcing of R&D activities to Chinese and Indian independently-owned contract research organisations (CROs) and the way these firms are becoming integrated as service providers into the global R&D function (or R&D value chain) of pharmaceutical MNCs. Above all the paper is concerned with the development of capabilities of CROs from these two countries and the dynamics of upgrading in GVCs in knowledge-intensive functions. The paper therefore discusses the role of both knowledge flows within global pharmaceutical R&D value chains as well as national innovation systems on the development of capabilities of Chinese and Indian CROs. Our analysis is based on data from semi-structured interviews collected from senior R&D managers from a sample of ten US and European pharmaceutical MNCs and owners and senior R&D managers from five Chinese and five Indian CROs who are providing research services to MNCs in this industry. We discuss the emergence of R&D outsourcing in this industry and the nature and mechanisms of knowledge flows within R&D value chains. The embeddedness of CROS in the national innovation systems of their home countries is also discussed.

Methodological and Technological Support for the Coordination of Smart Networks of SMEs

Part 2: Behaviour and Coordination