Technology Competitiveness in Emerging Markets: The Case of the Brazilian Polymer Industry

The Brazilian polymer industry (plastics, rubbers, fibers, adhesives, paints, and varnishes) is the fastest growing segment of the Petrochemical Chain. Since the polymer industry is characterized as science based, the capacity to create technology is vital for its long-range survival in the market. This paper analyzes how Brazilian polymer firms maintain their technological competitiveness, explains the main modes of technology transfer, and evaluates the degree of technological dependence of this industry. The methodology consisted of a database built with data from the Brazilian Patent Office. To confirm the findings, interviews were conducted with staff members from seven Brazilian polymer firms. The data base analysis and the interviews reveal that, in spite of the fact that Research and Development (R&D) and technological innovation have a fundamental role in their competitiveness, the firms are technologically dependent upon foreign suppliers.     

How firms organize for successful innovation in a hostile environment

Managers in a business environment marked by rapid technological change face major challenges when making strategic decisions. A risk-averse, conservative strategy may be a safe route, but might lead to missing marketplace opportunities. This paper investigates whether a hostile business environment adversely affects either a firm's rate of technological innovation or its rate of success with new product launches. It also examines what successful innovating firms do, in terms of strategic posture and organizational structure, to adapt to hostile conditions. A model depicting relationships between environmental conditions, firm responses, innovation rates, and new product success was constructed and tested in an empirical study of 142 U.S. firms involved in technological innovation. The final section discusses managerial implications of the findings.     

Multiplicative-innovation synergies: tests in technological acquisitions

Technological innovations enjoy synergies that vary in their speed and magnitude of impact, depending upon whether they are additive or multiplicative in nature. Additive-innovation synergies build incrementally on familiar technologies (as is reflected in the technologies built upon within their patents’ respective antecedents) and the duration of their effect is shorter-lived. Multiplicative-innovation synergies arise from combining greater proportions of diverse technologies and their effects have longer duration. The most-effective organizational-learning processes accompanying exposure to exotic technology streams via technological acquisition will occur if firms have properly invested in adaptive capacity to synthesize inventions using the unfamiliar knowledge. In the first tests of innovation synergies on firm performance, we find that technological novelty in patent content improves return on assets for firms that consistently invested in R&D. Using patent-content scores to characterize whether inventors have integrated greater proportions of exotic technological antecedents into their inventions (or not), we test the impact of innovation synergies on firms’ performance after technological acquisitions. Diversification posture (which could be an alternative explanation for performance differences) is negatively-correlated with innovation synergies in our results.     

Technology proximity between firms and universities and technology transfer

This paper investigates the technological orientation of firms and universities and their propensity to have knowledge and technology transfer (KTT) activities. This study looks at the technological potential for KTT and how it is used, emphasizing differences between smaller and larger firms. To this end we collected information about the technology activities of firms (patent statistics) and the technology activities of universities. Furthermore, we used survey data on technology transfer activities. We combined the three datasets and found??especially for smaller firms??that great technology proximity fosters transfer activities with different universities (case 1). The same is true if proximity is low and expertise is considerable at universities in the respective technology field (case 2). In both cases additional transfer potential exists. In the second case firms engage in transfer activities in order to update and modify their knowledge base and as a consequence improve ??competitiveness?? in certain technology fields. Furthermore, firms show a tendency to diversify their contacts with universities in order to avoid knowledge lock-in.     

Measuring the economic impact of research joint ventures supported by the EU Framework Programme

The objective of this paper is to analyse the effects of international R&D cooperation on firms?? economic performance. Our approach, based on a complete data set with information about Spanish participants in research joint ventures supported by the EU Framework Programme during the period 1995?C2005, establishes a recursive model structure to capture the relationship between R&D cooperation, knowledge generation and economic results, which are measured by labour productivity. In the analysis we take into account that the participation in this specific type of cooperative projects implies a selection process that includes both the self-selection by participants to join the consortia and the selection of projects by the European Commission to award the public aid. Empirical analysis has confirmed that: (1) R&D cooperation has a positive impact on the technological capacity of firms, captured through intangible fixed assets and (2) the technological capacity of firms is positively related to their productivity.     

Not searching,but finding: how innovation shapes perceptions about universities and public research organisations

Previous research about firms’ perceptions on the usefulness of public research has not distinguished between technological innovators and non-innovators. With the exception of openness of search, we find that factors shaping such perceptions differ in both types of firms. Non-innovators need market power and the presence of an R&D department to profit from public knowledge. Innovators need less sheltered environments and lesser R&D effort, though the availability of resources and absorptive capacity is necessary. Using a sample of 1,031 Spanish manufacturing firms, we conclude that practical experience in technological innovation enhances firms’ perceptions on the usefulness of public research, not directly but by enabling certain internal changes, i.e. it produces encounters between corporate choices and public research.     

FDI spillovers on firm survival in Italy: absorptive capacity matters!

The aim of this paper is to explore the effects of spillovers driven by competition and forward and backward linkages between foreign firms and Italian firms. We adopt the firm dynamics framework, which allows us to test the impact of foreign firms’ activity on the probability that local firms will exit. The empirical analysis relies on continuous survival models (Cox proportional hazard models) and uses a representative firm level database from the period of 2002–2010 with data concerning more than 4,000 Italian manufacturing firms. Our estimates regarding the whole sample show that horizontal and vertical linkages have no impact on firm survival. To further test this finding, we perform a more disaggregated analysis that allows for heterogeneity across firms and sectors. We obtain evidence that the effects of FDI spillovers on firm survival follow specific patterns at both the intra- and inter-industry levels based on differences in productivity between Italian firms and foreign firms and on the technological intensity of the industry. Foreign firms’ activity reduces the exit probability of competitors and of downstream local customers (through forward linkages) with low productivity gap but has no impact on high productivity gap firms. Firms in high technology intensive sectors do not benefit from horizontal FDI while in low and medium technology sectors they do. Differences in absorptive capacity may explain these results. However, we also find that vertical linkages with foreign firms in the upstream supplying industries spur firm duration in medium and high tech sectors.     

Linking technological and educational level diversities to innovation performance

In this study, we explore the extent to which diversity of educational levels among research scientists and engineers (RSEs) in the context of a firm’s level of technological diversity influences innovation performance. We used data from the 2004–2008 National R&D Survey in Singapore. The results from 366 firms across different industries indicate that when a firm’s technological domains are heterogeneous, those firms with an RSE workforce comprising similar educational levels have positive innovation performance, measured as the number of patent applications, while those comprising diverse educational levels have negative innovation performance. Our further exploration of the positive interaction between technological domain heterogeneity and similarity of educational levels suggests that firms that had a high ratio of RSEs with lower educational levels had more positive patent outcomes compared to those that had a high ratio of RSEs with higher educational levels. The results show that there are limits to the strength of technological diversity in a firm’s absorptive capacity as explained by organizational demography.     

Managing technological dependence in the developing countries: Analysis at the firm level

This paper explores the strategies pursued by the firms in the Developing Countries to cope with technological dependence. It is proposed that the firms in the Developing Countries are showing trends toward developing an organizational infrastructure to facilitate technological innovations in order to reduce their technological dependence to the foreign suppliers of technology. This proposition is tested by utilizing the data collected from 61 Turkish firms. The implication of the emerging trends for the practicing managers are also offered.     

Patent cross-licensing,the influence of IP interdependency and the moderating effect of firm size

This paper analyzes technological interdependency as the key factor for companies’ motivation to engage in cross-licensing transactions. It gives evidence on how the incentive effects for mutual technology transfers vary by firm size and the degree to which a firm has to rely on its competitors’ intellectual property (IP dependency). Even though IP dependency exists also among smaller firms, cross-licensing has previously only been analyzed for large firms. This paper fills this gap in the empiric literature using original survey data among German manufacturing companies. Findings suggest that the influence of firm size and IP dependency on the use of cross-licensing can not be regarded separately. While the effect of IP dependency on the relevance of cross-licensing itself has a clear positive effect this seems to be true to a higher extent for small firms and decrease for larger companies. A possible reason for the interaction effect between these two factors is that larger firms have better odds of achieving a technological workaround which can serve as an alternative to in- or cross-licensing; furthermore small high tech firms might need to explicitly use cross-licensing to secure the freedom to operate while a large firm’s patent portfolio itself can serve as an implicit insurance by posing a threat which prevents other technology holders to file patent infringement cases.     

Firm innovation in policy-driven parks and spontaneous clusters: the smaller firm the better?

Mixed evidence has been found regarding how locating in a cluster or a park affects firms?? performance. This paper investigates how locating in different types of clusters and parks interacted by firm size or in-house R&D capability affects a firm??s innovation. Empirically testing the research hypotheses by the data of 165 Taiwan??s manufacturing firms in the information and communication technology sector and taking policy-driven parks (e.g., science parks and industrial parks) and spontaneously clusters as examples, we find that in emerging economies, firms with inferior in-house R&D capability gain more innovation benefits by locating in a science park or a spontaneous cluster while smaller firms gain more innovation benefits by locating in an industry park or a spontaneous cluster. Moreover, our findings also suggest that locating in a science park, smaller firms benefit more than larger firms in terms of innovation performance whereas larger firms benefit more than smaller firms in terms of market performance. The findings suggest that in emerging economies, compared to larger firms, smaller firms are less influenced by negative spillover effect when locating in clusters or parks.     

Sustainability of patent-based competitive advantage in the U.S. communications services industry

Patents have long been assumed to provide firms with competitive advantage, but longitudinal results suggest that some types of patent content provide more enduring advantage than others do. The duration of advantage appeared to wane with time in the highly-dynamic U.S. communications-services industry during a period when technological changes occurred rapidly within it (1998–2012). Results suggest patents integrating technology streams that were different from the technologies of focal-patents’ grants contributed more to sustaining firms’ profit margins during this period than did focal patents that exploited extant technological knowledge. We found that firms who continually pushed their organization’s knowledge envelope outward to incorporate more unknown technologies sustained higher profit margins for a longer duration of time than did firms whose patented inventions were predominantlyincremental—even within difficult settings where competition grew so intense that firms’ average operating margins were deteriorating.     

Growing the Linköping Technopole—A Longitudinal Study of Triple Helix Development in Sweden

In the context of successful examples of regional development in Sweden, the Linköping region is often named. Whilst maintaining a historical reputation for culture and learning, Linköping has developed, during the last thirty years, as a major centre within Sweden for technological growth, especially in the creation and development of new technology-based firms. This high technology environment has been further enhanced by the presence of a growing international university, a number of significant multinational high-technology companies and the location of several public sector research establishments. Previous research on regional development suggests that this milieu could be characterised as a ‘technopole,’ namely an arena where these organisations co-operate with each other in a formal or informal way to develop the technological capability of the region. This paper sets out to examine and describe the different ‘actors’ that have contributed to the recent development of Linköping as one of the fastest growing technological regions in Europe. The linkages between the actors are examined in detail. The results of the study indicate that one of the most important actors behind the positive development is the university. In addition, the development that has taken place over the last thirty years can be likened to a spiral where success begets success to foster a positive entrepreneurial climate.     

Absorptive capacity and post-acquisition inventor productivity

Inventors often experience a low productivity after their company has been subject to a merger or acquisition (M&As). It is of central managerial interest to identify factors facilitating the integration of new inventive staff and thereby counteracting innovation declines after M&As. This paper provides empirical evidence into the role of acquiring firms?? absorptive capacity for the post-merger patent productivity of the acquired inventors. Based on a sample of 544 inventors employed by European acquisition targets in the period 2000?C2001 it is shown that the post-merger productivity of acquired inventors is significantly higher within acquiring firms with a distinct absorptive capacity. It can be concluded that absorptive capacity is a firm capability that enhances the integration of inventors after firm takeovers.     

The technological gatekeeper: Evidence in three industries

Previous studies have developed the concept of the “technological gatekeeper” as one who is integral in the diffusion of scientific and technical information from the environment into the R&D firm. Gatekeepers have been found in firms operating in environments with rapidly changing technology. Using data from six firms in three industries, the present study found the gatekeeper phenomenon extends to firms with less rapidly changing environments. Thus, the gatekeeper construct becomes important to any firm with a R&D mission. Additionally, many of the sociometric and demographic characteristics of gatekeepers were validated in new research settings.     

The Role of University Spinout Companies in an Emerging Technology: The Case of Nanotechnology

This study examines the role of university spin-out (USO) companies in the emergence of a new technology, in our case nanotechnology. Three unique data-sets based on patents, co-publications, and firm data pertaining to the unfolding field of nanotechnology in the UK were developed. Subsequent analysis suggests that USOs play an important though not a dominant role. Furthermore, the results indicate that USOs in certain subfields of nanotechnology do not have a strong and growing proprietary technology base, raising questions about the commercial sustainability of these ventures. Overall, we observed that USOs are important contributors to technological change in specific subfields of nanotechnology, but that other actors, notably, large firms and (non-university affiliated) new technology-based firms are even more significant agents of technological change.     

The impact of technology transfer contract on a firm’s market value in Korea

Technology transfer has been evaluated as a driving force of economic growth as well as one way to create new innovation. In order to make a successful technology transfer, both additional emission efforts by the supplier and absorption efforts by the recipient are required, because it is not as simple as the acquisition of a capital good. This study seeks to better understand the nature of successful technology transfer in Korea. We empirically analyzed the impact of the supplier’s characteristics (cultural distance, relationship type, form of technology transfer, and licensing type) and the recipient’s characteristics (absorptive capacity) on the market value of firms in Korea using the event study methodology. We found that technology transfer announcements significantly increase the market value of firms in Korea, and market responses to the recipient firms are significantly greater than those to the supplier firms. Our results showed that the effect of alliances with complementors (e.g., university, government laboratory) is greater than that of alliances with industry players, and the effect of an exclusive license as a method of technology transfer is greater than that of a non-exclusive license. However, we were not able to determine whether the impact of high levels of absorptive capacity is significantly different from that of low levels of absorptive capacity. Our study will not only complement and extend research on technology transfer, but also provide firms with various methods to decrease the risks related to technology transfer.     

The utilization of technology assistance by small manufacturers

This paper examines the extent to which small manufacturers in the Nashville metropolitan area have installed the latest technology and used external public and private sources of technical information. A mail survey of 404 manufacturing firms was conducted with 123 firms responding. Results indicate that small manufacturers in Nashville need technological assistance and that the existing assistance network (e.g., federal and state assistance agencies) is not effectively serving this need.     

Inward international licensing by US-based firms: Trends and implications

This paper reviews US statistics on international transactions in royalties and license fees to provide insights into the inward international licensing of technology by US-based firms. The data and their limitations are described. Trends in the data suggest that a change is occurring in the balance between outward and inward licensing of technology by US-based firms. The statistics are consistent with the idea that such firms have a diminishing technological lead and that technology importing, in addition to technology exporting, is becoming important to them. The new situation raises issues for corporate strategy and technology management, as well as for government policy. Mary Ellen Mogee is president of Mogee Research & Analysis Associates, a consulting firm in Great Falls, VA. She established the firm in 1985, after 15 years in policy-analysis positions at the National Science Foundation, the Congressional Research Service, the National Bureau of Standards, and the Patent and Trademark Office. She also teaches in the Management of Science, Technology, and Innovation program in the School of Business and Public Management at the George Washington University. Mogee received her Ph.D. in political science and an MA in science, technology, and public policy from George Washington University.     

Technology utilization — The new corporate challenge

Technology transfer and utilization is a process that has a profound impact on the survival of the firm, particularly in today's high technology market where technological changes are rapid and often dramatic. The market place both locally and internationally is replete with business failures resulting from the inability of firms to maintain a competitive edge in technology utilization and/or transfer. We contend that many such failures could be avoided by establishment of in-house programs developed specifically to address the utilization and transfer of technologies associated with the firm. This paper proposes a general methodology to identify and establish such an in-house program regardless of the technology area of interest. Once implemented such program can be used as engines of technological innovation by working in an active versus reactivemode.