Comments for Identify the sources of innovations: beyond R&D

ADANT Aurore, CALCUS Sophie, CLOQUET Nelson, VANDEN HERREWEGEN Géraldine, VIDREQUIN Charles

Acs, Z. et al (2009) The knowledge spill over theory of entrepreneurship.

The aim of the article is, in addition to make a clear link between knowledge spillovers and entrepreneurial activities, to establish how those new opportunities are exploited. The theory is based on individual agent with new knowledge endowments. It’s said that those agents pursue the exploitation of such knowledge which spills over and creates a strong link between knowledge spillover…
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The aim of the article is, in addition to make a clear link between knowledge spillovers and entrepreneurial activities, to establish how those new opportunities are exploited. The theory is based on individual agent with new knowledge endowments. It’s said that those agents pursue the exploitation of such knowledge which spills over and creates a strong link between knowledge spillover and entrepreneurial activities.
The first insight of the article is that universities are the largest invention of mankind for knowledge spillover. Even if in the past, the role of university knowledge sharing was neglected, it has been demonstrated that universities have a huge role in developing regions by sharing their knowledge. In order to transform knowledge into economic knowledge there must be a local proximity to this source of knowledge, a set of skills and insights is not enough. As a result, the economic activities of a country are influenced by spatial units such as the geographic proximity and the regions.
Secondly, tacit knowledge is bound to the individual as the source of knowledge. Indeed, there are two kinds of knowledge: codified knowledge which is easy to transmit over long distances (for example books, patents, academic articles, etc) and tacit knowledge which is bound to the individual (for example, experience, insights, individual learning, etc). Tacit knowledge is useful because it allows to grab the spillover benefits that you can get from an informal conversation. In order to do so, you must have a geographic proximity to the spillover source. And finally, entrepreneurial activities are greater in spatial context if the investments in new knowledge are high.
Some insights of the article are focused on the context in which entrepreneurial activities will tend to happen. That implicates that new entrepreneurs have to be looking for knowledge. Therefore, they have to be in a context in which investments in knowledge are high and where they have access to it, for example within range of universities.
Furthermore, an entrepreneur should develop its absorptive capability that is his ability to understand new knowledge, recognize its value and commercialize it by creating a firm. Finally, as tacit knowledge represents value to managers, they should develop it by investing in research and development. More especially, they should invest in developing both R&D and entrepreneurial skills through investment in talent attraction or employee’s training.
While keeping those implications in mind, managers should pay attention to the fact that excessive investment in R&D can have the negative effect to strengthen companies with a dominant position. Indeed, intellectual property rights regulation is a balance between the patent owner and the society. The first wants to extend the duration to enjoy a longer monopoly profit while the society wants to make a cumulative effect out of the knowledge produced.
Further references:
• For a comparison of the proficiency of new and incumbent firms: Acs, Z., Plummer, L., Sutter, R., 2009b. Penetrating the knowledge filter in “rust belt” economies. The Annals of Regional Science 43 (4), 989–1012
• For more insights on how commercialization efficiency of incumbent firms affects entrepreneur’s incentives to exploit opportunities: Plummer, Lawrence A. and Acs, Zoltan J. (2014) Localized competition in the knowledge spillover theory of entrepreneurship. Journal of Business Venturing, 29 (1). pp. 121-136.
• Kirzner on Entrepreneurship : https://www.youtube.com/watch?v=q7QG6bnsVXA
• Are Entrepreneurs Modern Day Heroes? : https://www.youtube.com/watch?v=ChEImWVj_kY

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Claire Jonet

(Article) Zhou, K. Z., Yim, C. K., & Tse, D. K. (2005). The effects of strategic orientations on technology-and market-based breakthrough innovations. Journal of Marketing, 69(2), 42-60.

Executive summary The article The Effects of Strategic Orientations on Technology- and Market-Based Breakthrough Innovations provides and explains the existing links between strategic orientation and the kind of breakthrough innovation. It distinguishes the incremental innovations which slightly improve the performance of the product and breakthrough innovations which are novel, unique or state-of-the-art technological…
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Executive summary
The article The Effects of Strategic Orientations on Technology- and Market-Based Breakthrough Innovations provides and explains the existing links between strategic orientation and the kind of breakthrough innovation. It distinguishes the incremental innovations which slightly improve the performance of the product and breakthrough innovations which are novel, unique or state-of-the-art technological advances. The last kind can be divided in two categories: tech-based innovations which are strong improvements of a product due to advanced technologies and market-based innovations which bring new criteria to products that are built for new customers and new markets.
Moreover, the article allows to distinguish three strategic orientations that can generate competitive advantages: market orientation, technology orientation and entrepreneurial orientation. The first one is particularly a customer-oriented approach which aim to create customer value. It is committed to understand the latent and expressed needs of customers. The second one promotes state-of-the-art technologies and revolutionary innovations. Finally, the entrepreneurial orientation is based on the proactivity, the tolerance of risk and the reception to innovations.
According to these key insights coming from the paper, several managerial implications have been relieved in order to promote an efficient management of innovations. Developing the organizational learning process, which includes information acquisition, information dissemination, shared interpretation and organizational memory, seems to be a relevant step in the elaboration of breakthrough innovations. Therefore, firms should develop and encourage it. Depending on the subject, some strategic orientations are more appropriate. Members of project team have to be flexible about these strategies. They must be able to know in which cases what strategy should be applied and the firm has to contribute at this flexibility. More specifically, at the different strategic orientations, implications, as putting in place effective systems to generate data about latent and expressed needs of customers, have been also identified. Or again, encouraging employees to share and develop “crazy ideas” via allocation of working time to develop personal project, might be an efficient implication.
In some cases, the theory learned could not bring the expected results. Three limitations have been identified on the concerned topic. Firstly, the competitiveness could slow the innovation. To remain viable in a competitive environment, reducing costs remains a good solution but not suitable with the technology orientation. Moreover, some troubles could appear when we focus on a specific strategy because firms tend to have a restricted vision. They should have a large and complete view on this strategy and take into consideration all factors including those that could negatively influence their business. Lastly, the concerned strategic orientations are easier applied in B2C than in B2B. In fact, while private consumers could easily change their habits, firms have more precise and less variable expectations.
Further references:
Karakaya, A., & Gürel, S. (2015). STRATEGIC ORIENTATION IN BUSINESS: A RESEARCH ON KARDEMIR CO. INC./ISLETMELERDE STRATEJIK YÖNELIM: KARDEMIR A.S. ÜZERINE BIR ARASTIRMA. International Journal of Management Economics & Business, 11(26), 97-113
Martinette, L. A., & Obenchain-Leeson, A. (2012). The relationship between learning orientation and business performance and the moderating effect of competitive advantage: A service organization perspective. Journal of Service Science (Online), 5(1), 43

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GELDERS Alice, DINIS FERNANDES João, LEDENT Louise, VAN DAMME Loïc

Kedia, B. L., & Bhagat, R. S. (1988). Cultural constraints on transfer of technology across nations: Implications for research in international and comparative management.

The authors aim to assess the impact of cultural differences on the effectiveness of technological transfers through a model that takes into account the characteristics of the technology Involved, differences in organizational cultures, societal culture-based differences and the absorptive capacity of the recipient organization. By characteristics, the model assesses whether the technology involved is product-, process- or person-embodied. Secondly, differences in…
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The authors aim to assess the impact of cultural differences on the effectiveness of technological transfers through a model that takes into account the characteristics of the technology Involved, differences in organizational cultures, societal culture-based differences and the absorptive capacity of the recipient organization.
By characteristics, the model assesses whether the technology involved is product-, process- or person-embodied. Secondly, differences in the way negotiations are conducted are used to measure differences in organizational cultures between the transitioning organizations. For this, the authors make use of the works developed by Fine (1984), Strauss (1982), and Strauss, Schatzman, Ehrlich, Bucher, & Sabshin (1963) on Negotiated Orders. These two points are referred to as casual antecedents.
Societal culture-based differences are mapped under the framework of Hofstede’s (1980) uncertainty avoidance, individualism vs. collectivism, power distance, and masculinity vs. femininity, and Glenn and Glenn’s (1981) Abstractive vs. associative. Finally, the absorptive capacity of the recipient is measured by the local VS cosmopolitan mapping, how sophisticated is a firm’s technical core and the same firm’s strategic management. These last two points are indicated as influences that will presumably moderate the effectiveness of a transfer.
We found that this article’s findings imply:
1) Differences in business cultures: Transfer of technology is more effective if there is a flow of skills between the supplying and the receiving company. Managers must accept that each party takes cultural values with it. The project should be clear to everyone and roles and responsibilities for both companies should be defined.
 Limitation: From the organizational culture point of view, not all firms are compatible. Even with the utmost caution, the transfer of technology may still fail. Managers must know when to stop to avoid a costly failure.
2) M&As: Global managers that find competition in geographies that are less compatible to effectively export a technology could acquire firms that are well positioned in those markets to attenuate crucial points of divergence.
 Limitation: Higher administrative burden; Potential credit issues; Potential brand damages.
3) Firm’s collaboration with locals: Managers should understand that the cultures with higher risk of ineffective technology adoption and diffusion do not foster innovation, creativity, variety or diversity. To export to these countries, they should collaborate with local firms, institutions and authorities who can better convince its people to accept newness than a foreign entity.
 Limitation: Having to collaborate and eventually share technology with local firms in new countries that do not deviate from established norms and may have poor legal and political regulation, increases the risk of technology theft. When China (highly centralized country) opened the doors to international trade in the 1980’s, many firms saw the risk of technology expropriation and nationalization of local branches to be too high to move to that market.

References:
 Cagnol, R. (2013). The differences between work cultures found in eleven countries. Deskmag. [online] Available at: http://www.deskmag.com/en/steelcase-maps-work-cultures-among-11-countries [Accessed 29 Nov. 2017].
 Daft, R., Kendrick, M. and Vershinina, N. (2010). Management. Andover, Hampshire: Cengage Learning EMEA, p.803.
 Gaba, V., Pan, Y. and Ungson, G. (2002). Timing of Entry in International Market: An Empirical Study of U.S. Fortune 500 Firms in China. Journal of International Business Studies, 33(1), pp.39-55.
 Kedia, B. L., & Bhagat, R. S. (1988). Cultural constraints on transfer of technology across nations: Implications for research in international and comparative management. Academy of Management Review, 13(4), 559-571.
 London, M., Cheney, L. A., & Tavis, R. L. (1977). The relationship between cosmopolitan–local orientation and job performance. Journal of Vocational Behavior, 11(2), 182-195.
 Nurin, T. (2016). It’s Final: AB InBev Closes On Deal To Buy SABMiller. Forbes. [online] Available at: https://www.forbes.com/sites/taranurin/2016/10/10/its-final-ab-inbev-closes-on-deal-to-buy-sabmiller/#55e891ed432c [Accessed 29 Nov. 2017].
 Rubin, E. (1994). The importance of culture for the effectiveness of technology transfer across nations (Doctoral thesis). Carleton University, Ontario.
New sources identified:
 For further and newer insights on topic of that was article presented (including firm performance):
Nguyen, N. T. D., & Aoyama, A. (2014). Impact of Corporate Culture on the Relationship between Efficient Technology Transfer and Business Performance. Global Business Review, 15(4), 637-661.
 For a hypothesis on how to realize an efficient technology transfer (the article that was presented mentioned the factors that affect transfers but did not offer potential solutions):
Nguyen, N. T. D., & Aoyama, A. (2014). Achieving efficient technology transfer through a specific corporate culture facilitated by management practices. The Journal of High Technology Management Research, 25(2), 108-122.
 For an analysis of the causes of failure of projects involving technology transfer:
Kebede, K., Ndegwah, D. and Kroesen, J. (2013). Successful Contextual Technology Transfer and Determinants of Culture.
From the book:
Kauffman, J. (2013). Handbook of Sustainable Engineering: Successful Contextual Technology Transfer and Determinants of Culture. [895-919]. Netherlands: Springer Science + Business Media Dordrecht.
 For a report on firm diversity in recent years and the benefits of embracing it (risk posed by technology transfers to different cultures can be minimized if the firms has human capital that relates to those cultures):
Hunt, V., Layton, D. & Prince, S. (2015) Diversity Matters, McKinsey and Company

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