Innovating global value chains : creation of the netbook market by Taiwanese firms

This paper explores the process of creation of the netbook market by Taiwanese firms as an example of a disruptive innovation by latecomer firms. As an analytical framework, I employ the global value chain perspective to capture the dynamics of vertical inter-firm relationships that drive some firms in the chain to change the status quo of the industry. I then divide the process of the emergence of the netbook market into three consecutive stages, i.e. (1) the launch of the first-generation netbook by a Taiwanese firm named ASUSTeK, (2) the response of the two powerful platform leaders of the industry, Intel and Microsoft Intel, to ASUSTeK’s innovation, and (3) the market entry by another powerful Taiwanese firm, Acer, and explain how Taiwanese firms broke the Intel-centric market and tapped into the market-creating innovation opportunities that had been suppressed by the two powerful platform leaders. I also show that the creation of the netbook industry was an evolutionary process in which a series of responses by different industry players led to changes in the status quo of the industry.

Exploiting the Modularity of Value Chains: Inter-firm Dynamics of the Taiwanese Notebook PC Industry

This paper explores the inter-firm dynamics that govern the rise of capabilities of latecomer firms operating in global value chains. By extending and modifying the model proposed by Gereffi, Humphrey and Sturgeon [2005], I present a framework in which the rise of supplier capabilities is determined by interactions among the strategies of the firms. Based on a case study of the Taiwanese notebook PC industry, the paper will explore how the interactions among outsourcing strategies by lead firms from the developed countries, the learning strategies of Taiwanese suppliers, and the product strategy of powerful component vendors have driven the explosive growth of the industry after the 1990s. By so doing, the paper attempts to highlight the active roles firms play in determining the speed and direction of the rise in supplier capabilities.

Local Firms in Latecomer Developing Countries amidst China's Rise -The case of Vietnam's motorcycle industry-

This paper examines the impact of China's recent rise on the development of local firms in latecomer developing countries. Based on a detailed analysis of Vietnam's motorcycle industry, the paper argues that China's impact may go beyond what a trade analysis suggests. Indeed, China's rise induced a dynamic transformation in the structure of value chains within Vietnam's motorcycle industry, bringing about far-reaching consequences on the development and upgrading trajectories of local firms. The implications of the case study for the wider "global value chain" approach is also discussed.

Cooperation, interaction and learning in local production systems: Evidence in Brazilian firms

In a local production system (LPS), besides external economies, the interaction, cooperation, and learning are indicated by the literature as complementary ways of enhancing the LPS's competitiveness and gains. In Brazil, the greater part of LPSs, mostly composed by small enterprises, displays incipient relationships and low levels of interaction and cooperation among their actors. The size of the participating enterprises itself for specificities that engender organizational constraints, which, in turn, can have a considerable impact on their relationships and learning dynamics. For that reason, it is the purpose of this article to present an analysis of interaction, cooperation, and learning relationships among several types of actors pertaining to an LPS in the farming equipment and machinery sector, bearing in mind the specificities of small enterprises. To this end, the fieldwork carried out in this study aimed at: (i) investigating external and internal knowledge sources conducive to learning and (ii) identifying and analyzing motivating and inhibiting factors related to specificities of small enterprises in order to bring the LPS members closer together and increase their cooperation and interaction. Empirical evidence shows that internal aspects of the enterprises, related to management and infrastructure, can have a strong bearing on their joint actions, interaction and learning processes.

A technological and organisational explanation for the size distribution of firms

This paper combines insights from the literature on the economics of organisation with traditional models of market structure to construct a theory of equilibrium firm size heterogeneity under the assumption of a homogenous product industry. It is possible that configurations consisting entirely of small firms (run by entrepreneurs with limited attention) and with larger firms (using managerial techniques to substitute away these limits to allow increasing returns technologies to become profitable) can arise in equilibrium. However, there also exist equilibrium configurations with the co-existence of large and small firms. The efficiency properties of these respective equilibria are discussed. Finally, the implications of an expanding market size are considered.

Economic performance of Brazilian manufacturing firms: a counterfactual analysis of innovation impacts

This article assesses if innovators outperform non-innovators in Brazilian manufacturing during 1996-2002. To do so, we begin with a simple theoretical model and test the impacts of technological innovation (treatment) on innovating firms (treated) by employing propensity score matching techniques. Correcting for the survivorship bias in the period, it was verified that, on an average, the accomplishment of technological innovations produces positive and significant impacts on the employment, the net revenue, the labor productivity, the capital productivity, and market share of the firms. However, this result was not observed for the mark-up. Especially, the net revenue reflects more robustly the impacts of the innovations. Quantitatively speaking, innovating firms experienced a 10.8-12.5 percentage points (p.p. henceforth) higher growth on employment, a 18.1-21.7 p.p. higher growth on the net revenue, a 10.8-11.9 p.p. higher growth on labor productivity, a 11.8-12.0 p.p. higher growth on capital productivity, and a 19.9-24.3 p.p. higher growth on their market share, relative to the average of the non-innovating firms in the control group. It was also observed that the conjunction of product and process innovations, relative to other forms of innovation, presents the stronger impacts on the performance of Brazilian firms.

Labour flexibility and gender in the service sector: A study of employment practices in law and accounting firms

In seeking to increase the flexibility of their use of employee time, employers can pursue strategies based on the employment of casual and part-time workers (numerical flexibility) or strategies based on ad hoc variation of the working hours of permanent employees (working time flexibility). Patterns of flexibility strategies and their implications are examined in the context of a highly feminised sector of work-clerical and administrative employment in law and accounting firms. We consider whether, as is often assumed, working time flexibility strategies are generally better for employees because they avoid the substitution of core, high quality jobs with the peripheral, relatively insecure employment often associated with casualisation. Analysing data drawn from a survey of law and accounting firms, we argue that there are three distinct flexibility strategies adopted by employers, and that the choice of strategy is influenced by the size of the firm and the extent of feminisation. The quality of employment conditions associated with each strategy is investigated through an analysis of the determinants of training provision for clerical and administrative workers. Rather than an expected simple linear relationship between increasing casualisation and decreasing training provision, we find that firm size and feminisation are implicated. Larger firms that tend to employ at least some men and use a combination of working time and numerical flexibility strategies tend to provide more training than the small, more fully feminised firms that tend to opt for either casualisation or working time flexibility strategies. This suggests that, from an employee perspective, working time flexibility may not be as benevolent as is often thought.

What is the value of firms' prior knowledge? Building organisational knowledge capabilities

A firm's prior knowledge facilitates the absorption of new knowledge, thereby renewing a firm's systematic search, transfer and absorption capabilities. The rapidly expanding field of biotechnology is characterised by the convergence of disparate sciences and technologies. This paper, the shift from proteinbased to DNA-based diagnostic technologies, quantifies the value of a firm's prior knowledge and its relation to future knowledge development. Four dimensions of diagnostic and four dimensions of knowledge in biotechnology firms are analysed. A simple scaled matrix method is developed to quantify the positive and negative heuristic values of prior scientific and technological knowledge that is useful for the acquisition and absorption of new knowledge.

Innovation in Queensland firms: implications for the smart State

The challenges in the business environment are forcing Australian firms to be innovative in all their efforts to serve customers. Reflecting this need there have been several innovation policy statements both at Federal and State government level aimed at encouraging innovation in Australian industry. In particular, the innovation policy statement launched by the Queensland government in the year 2000 primarily intends building a Sman State through innovation. During the last few decades the Australian government policy on innovation has emphasized support for industry R&D. However industry stakeholders demand a more firm-focused policy of innovation. Government efforts in this direction have been hindered by a lack of a consistent body of knowledge on innovation at the firm level. In particular the Australian literature focusing on firm level antecedents of innovation is limited and fragmented. This study examines the role of learning capabilities in innovation and competitive advantage. Based on a survey of manufacturing firms in Queensland the study finds that both technological and non·technological innovations lead to competitive advantage. The findings contribute to the theory competitive advantage and firm level antecedents of innovation. Implications for firm level innovation strategies and behaviour are discussed. In addition, the findings have important implications for Queensland government's current initiatives to build a Smart State through innovation.