The innovation value chain in new technology-based firms:evidence from the U.K.

Innovation is central to the survival and growth of firms, and ultimately to the health of the economies of which they are part. A clear understanding both of the processes by which firms perform innovation and the benefits which flow from innovation in terms of productivity and growth is therefore essential. This paper demonstrates the use of a conceptual framework and modeling tool, the innovation value chain (IVC), and shows how the IVC approach helps to highlight strengths and weaknesses in the innovation performance of a key group of firms-new technology-based firms. The value of the IVC is demonstrated in showing the key interrelationships in the whole process of innovation from sourcing knowledge through product and process innovation to performance in terms of the growth and productivity outcomes of different types of innovation. The use of the IVC highlights key complementarities, such as that between internal R&D, external R&D, and other external sources of knowledge. Other important relationships are also highlighted. Skill resources matter throughout the IVC, being positively associated with external knowledge linkages and innovation success, and also having a direct influence on growth independent of the effect on innovation. A key benefit of the IVC approach is therefore its ability to highlight the roles of different factors at various stages of the knowledge-innovation-performance nexus, and to show their indirect as well as direct impact. This in turn permits both managerial and policy implications to be drawn. © 2012 Product Development & Management Association.

The innovation value chain and export performance:a study of Taiwanese manufacturing industries

This thesis involves the secondary data of 1806 innovative manufacturing firms derived from the database of 2nd Taiwanese Innovation Survey. Three topics are researched. The first topic investigates the innovation value chain (IVC) in Taiwanese manufacturing firms. Previous IVC studies are all done in developed countries such as UK, Ireland, Northern Ireland and Switzerland, and it leaves the gap of those non-developed countries. The result shows the overall knowledge sourcing pattern of Taiwanese manufacturing firms presenting a complementary relationship which is consistent to the previous IVC studies. The main innovation input is still derived from internal R&D which suggests more utilisation of external knowledge may boost innovation outcome. Product innovation does enhance firm growth while process innovation reduces a firm’s productivity. The second topic uses the lens of IVC to investigate the difference of the innovation process from knowledge linkages to value added between high-tech and low- tech sectors. The findings indicate (1) there are significant differences in the IVC between high- and low-tech sectors, however these are defined; (2) how you define ‘sector’ matters i.e. the nature of the high-tech and low-tech differences varies depending on whether the technology definition is carried out at the industry or firm level; and (3) the high uncertainty of innovation cause the difficulty to predict firm performance especially for those firms with high intensity of innovation. The third topic investigates the innovation-exporting relationship and explores the determinants of export performance. Product innovation enhances export performance once a firm enters international markets while process innovation affects negatively on a firm’s likelihood of being an exporter. Furthermore, IP protection is found to affect directly export performance positively.

Identifying (territorial) tensions in the servitization value chain

Purpose: To understand the tensions that servitization activities create between actors within networks. Design/methodology/approach: Interviews were conducted with manufacturers, intermediaries and customers across a range of industrial sectors. Findings: Tensions relating to two key sets of capabilities are identified: in developing or acquiring (i) operant technical expertise and (ii) operand service infrastructure. The former tension concerns whom knowledge is co-created with and where expertise resides. The latter involves a territorial investment component; firms developing strategies to acquire greater access to, or ownership of, infrastructures closer to customers. Developing and acquiring these capabilities is a strategic decision on the part of managers of servitizing firms, in order to gain recognized power and control in a particular territory. Originality/value: This paper explores how firms’ servitization activities involve value appropriation (from the rest of the network), contrasting with the narrative norm for servitization: that it creates additional value. There is a need to understand the tensions that servitization activities create within networks. Some firms may be able to improve servitization performance through co-operation rather than competition, generating co-opetitive relationships. Others may need to become much more aggressive, if they are to take a greater share of the ‘value’ from the value chain.

Servitization and competitive advantage:the importance of organizational structure and value chain position

Servitization represents a business-model change and organizational transformation from selling goods to selling an integrated combination of goods and services. Competitive advantage is one outcome of this shift. During servitization, companies follow stages to realize services as an opportunity to differentiate from goods and achieve higher customer satisfaction. This study analyzes this transition from base, intermediate, and advanced services by presenting results from 102 senior executives in multinational companies. Our results suggest increasing interest in service-led strategies in manufacturing companies. The results also show that increasing differentiation and high customer satisfaction are fundamental to achieving competitive advantage and superior performance with services. The analysis also indicates the importance of a company’s position in the value chain and the organizational structure it selects to support services in successful servitization.

China in Global Value Chains: Implications for Industrial Policy and Development

Rapid technological advances and liberal trade regimes permit functional reintegration of dispersed activities into new border-spanning business networks variously referred to as global value chains (GVCs). Given that the gains of a country from GVCs depend on the activities taking place in its jurisdiction and their linkages to global markets, this study starts by providing a descriptive overview of China’s economic structure and trade profile. The first two chapters of this paper demonstrate what significant role GVCs have played in China’s economic growth, evident in enhanced productivity, diversification, and sophistication of China’s exports, and how these economic benefits have propelled China’s emergence as the world’s manufacturing hub in the past two decades. However, benefits from GVC participation – in particular technological learning, knowledge building, and industrial upgrading – are not automatic. What strategies would help Chinese industries engage with GVCs in ways that are deemed sustainable in the long run? What challenges and related opportunities China would face throughout the implementation process? The last two chapters of this paper focus on implications of GVCs for China’s industrial policy and development. Chapter Three examines how China is reorienting its manufacturing sector toward the production of higher value-added goods and expanding its service sector, both domestically and internationally; while Chapter Four provides illustrative policy recommendations on dealing with the positive and negative outcomes triggered by GVCs, within China and beyond the country’s borders. To the end, this study also hopes to shed some light on the lessons and complexities that arise from GVC participation for other developing countries.

Analytical strategies for the early quality and safety assurance in the global feed chain. Approaches for nitrogen adulterants in soybean meal and mineral and transformer oils in vegetable oils.

In the past decade, several major food safety crises originated from problems with feed. Consequently, there is an urgent need for early detection of fraudulent adulteration and contamination in the feed chain. Strategies are presented for two specific cases, viz. adulterations of (i) soybean meal with melamine and other types of adulterants/contaminants and (ii) vegetable oils with mineral oil, transformer oil or other oils. These strategies comprise screening at the feed mill or port of entry with non-destructive spectroscopic methods (NIRS and Raman), followed by post-screening and confirmation in the laboratory with MS-based methods. The spectroscopic techniques are suitable for on-site and on-line applications. Currently they are suited to detect fraudulent adulteration at relatively high levels but not to detect low level contamination. The potential use of the strategies for non-targeted analysis is demonstrated.

Essential scientific mapping of the value chain of thermochemical converted second-generation bio-fuels

As the largest contributor to renewable energy, biomass (especially lignocellulosic biomass) has significant potential to address atmospheric emission and energy shortage issues. The bio-fuels derived from lignocellulosic biomass are popularly referred to as second-generation bio-fuels. To date, several thermochemical conversion pathways for the production of second-generation bio-fuels have shown commercial promise; however, most of these remain at various pre-commercial stages. In view of their imminent commercialization, it is important to conduct a profound and comprehensive comparison of these production techniques. Accordingly, the scope of this review is to fill this essential knowledge gap by mapping the entire value chain of second-generation bio-fuels, from technical, economic, and environmental perspectives. This value chain covers i) the thermochemical technologies used to convert solid biomass feedstock into easier-to-handle intermediates, such as bio-oil, syngas, methanol, and Fischer-Tropsch fuel; and ii) the upgrading technologies used to convert intermediates into end products, including diesel, gasoline, renewable jet fuels, hydrogen, char, olefins, and oxygenated compounds. This review also provides an economic and commercial assessment of these technologies, with the aim of identifying the most adaptable technology for the production of bio-fuels, fuel additives, and bio-chemicals. A detailed mapping of the carbon footprints of the various thermochemical routes to second-generation bio-fuels is also carried out. The review concludes by identifying key challenges and future trends for second-generation petroleum substitute bio-fuels.

Value chain transformation: Taking stock of WorldFish research on value chains and markets

The goal of WorldFish’s research on markets and value chains is to increase the benefits to resource-poor people from fisheries and aquaculture value chains by researching (1) key barriers to resource-poor men, women and other marginalized groups gaining greater benefits from participation in value chains, including barriers related to the availability, affordability and quality of nutrient-rich fish for resource-poor consumers; (2) interventions to overcome those barriers; and (3) mechanisms that are most effective for scaling up of value chain interventions. This paper aims to promote and document learning across WorldFish’s value chain research efforts in Asia and Africa. It has three main objectives: (1) to take stock of WorldFish’s past and ongoing research on value chains; (2) to draw out commonalities and differences between these projects; and (3) to provide a synthesis of some learning that can guide future work.

Foreign direct investment determinants revisited in the context of global value chains

In this paper, we aim at contributing to the new field of research that intends to bring up-to-date the tools and statistics currently used to look to the current reality given by Global Value Chains (GVC) in international trade and Foreign Direct Investment (FDI). Namely, we make use of the most recent data published by the World Input-Output Database to suggest indicators to measure the participation and net gains of countries by being a part of GVC; and use those indicators in a pooled-regression model to estimate determinants of FDI stocks in Organization for Economic Co-operation and Development (OECD)-member countries. We conclude that one of the measures proposed proves to be statistically significant in explaining the bilateral stock of FDI in OECD countries, meaning that the higher the transnational income generated between two given countries by GVC, taken as a proxy to the participation of those countries in GVC, the higher one could expect the FDI entering those countries to be. The regression also shows the negative impact of the global financial crisis that started in 2009 in the world’s bilateral FDI stocks and, additionally, the particular and significant role played by the People’s Republic of China in determining these stocks.

Value chain supply procurement strategies in international construction: cases of foreign constructors in China

Purpose – Firms compete using a variety of strategies. Typically they aim to provide something different, to be better, or simply cheaper. In the construction industry, the performance characteristics, quality and cost of the final delivered project will be the outcome of the interplay of capabilities of all the firms involved in the project. Consequently, in order to improve competitiveness, firms must pay attention to not only their own competitive advantage but to those of the firms, both up-stream and down-stream, on whom they depend in delivering their projects. For foreign constructors in China, those competitive considerations will be informed by circumstances different from home. How then do foreign constructors adapt themselves to the problem of sourcing competitively when located within a China-based supply chain? The paper aims to discuss these issues.

Design/methodology/approach – In this study 60 foreign enterprises operating within the Chinese construction sector were investigated by using a comparative case study approach.

Findings – Four generic procurement strategies were identified. First, firms adapt themselves in the search for optimal supply sources by replicating home-based suppliers, controlling local suppliers, or by remaining agile and non-aligned. Second, firms develop niche supply monopolies through market dominance, uniquely differentiated offerings, or by integration with down-stream providers. Third, firms find opportunities to bring in off-shore technology intensive procurements, where that technology is either protected, improved upon, or sold. Finally, firms also seek to transit to China as a procurement base in order to reduce local supply cost, service world-wide operations, or as part of a total strategy of China relocation.

Originality/value – The identification of this rich range of procurement approaches will be of interest to internationalization strategists, as well as to industry practitioners looking to find appropriate business models for off-shore operations.

Changes in Work from the Global Value Change Perspective The Case of Transformation Economies: Bulgaria and Hungary

The core aim of this paper is to evaluate to what extent were companies able to join to the global value chains (GVCs) through some selected company case studies.