The organisational decomposition of innovation and global distribution of innovative activities: insights and research agenda

International Journal of Technological Learning, Innovation and Development

Volumn 2, Issue 4, 2009, Pages 231-249

  Schmitz, Hubert ^a   Strambach, Simone ^b  

^a UNIVERSITY OF SUSSEX   (United Kingdom)

^b PHILIPPS UNIVERSITY MARBURG   (Germany)

Author keywords

global; global value chain; GVC; innovation; innovation system; knowledge; organisational decomposition; outsourcing

Indexed keywords

EID: 78650993364     PISSN: 17531942     EISSN: 17531950     Source Type: Journal    
DOI: 10.1504/IJTLID.2009.026816     Document Type: Article

References (93)

1. Altenburg, T., Schmitz, H. and Stamm, A. (2008) ‘Breakthrough? China’s and India’s transition from production to innovation’, World Development, Vol. 36, No. 2, pp.325–344.
2. Amin, A. and Cohendent, P. (2004) Architectures of Knowledge: Firms, Capabilities and Communities, Oxford/New York: Oxford University Press.
3. Antonelli, C. (2005) ‘Models of knowledge and systems of governance’, Journal of Institutional Economics, Vol. 1, No. 1, pp.51–73.
4. Antonelli, C. (2006) ‘The business governance of localized knowledge: an information economics approach to the economics of knowledge’, Industry and Innovation, Vol. 13, pp.227–261.
5. Arora, A. and Gambardella, A. (1994) ‘The changing technology of technological change: general and abstract knowledge and the division of innovative labour’, Research Policy, Vol. 23, pp.523–532.
6. Arora, A., Gambardella, A. and Rullani, E. (1997) ‘Division of labour and the locus of inventive activity’, Journal of Management and Governance, Vol. 1, No. 1, pp.123–140.
7. Asheim, B.T. and Gertler, M.S. (2005) ‘The geography of innovation: regional innovation systems’, in J. Fagerberg, D.C. Mowery and R.R. Nelson (Eds.) The Oxford Handbook of Innovation, Oxford/New York: Oxford University Press, pp.291–317.
8. Bazan, L. and Navas-Aleman, L. (2004) ‘The underground revolution in the Sinos Valley: a comparison of upgrading in global and national value chains’, in H. Schmitz (Ed.) Local Enterprises in the Global Economy: Issues of Governance and Upgrading, Cheltenham: Edward Elgar.
9. Beise, M. and Belitz, H. (1996) ‘Internationalisation of R&D in multinational enterprises: the German perspective’, in R. Barell and N. Pain (Eds.) Innovation, Investment and the Diffusion of Technology in Europe – German Direct Investment and Economic Growth in Postwar Europe, Cambridge, pp.89–119.
10. Bell, M. (2006) ‘Time and technological learning in industrialising countries: how long does it take? How fast is it moving (if at all)?’, International Journal of Technology Management, Vol. 36, Nos. 1–3, pp.25–39.
11. Bell, M. and Albu, M. (1999) ‘Knowledge systems and technological dynamism in industrial clusters in developing countries’, World Development, Vol. 27, No. 9, pp.1715–1734.
12. Beyers, W.B. and Lindahl, D.P. (1996) ‘Explaining the demand for producer services: is cost driven externalization the major factor?’, Papers in Regional Science, Vol. 75, No. 3, pp.351–374.
13. Brusoni, S. (2005) ‘The limits of specialization: problem solving and coordination in “modular networks”’, Organization Studies, Vol. 26, No. 12, pp.1885–1907.
14. Brusoni, S., Prencipe, A. and Pavitt, K. (2001) ‘Knowledge specialization, organizational coupling and the boundaries of the firm: why do firms know more than they make?’, Administrative Science Quarterly, Vol. 46, No. 4, pp.597–621.
15. Bryson, J., Daniels, P. and Warf, B. (2004) Service Worlds: People, Organisations, Technologies, New York/London: Routledge.
16. Cantwell, J. and Janne, O. (1999) ‘Technological globalisation and innovative centres: the role of corporate technological leadership and locational hierarchy’, Research Policy, Vol. 28, No. 3, pp.119–144.
17. Cantwell, J.A. and Mudambi, R. (2005) ‘MNE competence-creating subsidiary mandates’, Strategic Management Journal, Vol. 26, No. 12, pp.1109–1128.
18. Chatterji, D. and Manuel, T. (1993) ‘Benefiting from external sources of technology’, Research Technology Management, Vol. 36, No. 6, pp.21–26.
19. Chesbrough, H. (2003) Open Innovation: The New Imperative for Creating and Profiting from Technology, Boston: Harvard Business School Press.
20. Chesbrough, H. (2006) ‘Open innovation: a new paradigm for understanding industrial innovation’, in H. Chesbrough, W. Vanhaverbeke and J. West (Eds.) Open Innovation: Researching a New Paradigm, Oxford/New York: Oxford University Press, pp.1–14.
21. Chesbrough, H. (2007) ‘Why companies should have open business models’, MIT Sloan Management Review, Winter, Vol. 48, No. 2, pp.22–28.
22. Civaregna, L. (2006) ‘Turin’s automotive cluster: fiat crisis and the threat of delocalization’, mimeo, SEMEQ, University of Eastern Piedmont.
23. Cooke, P. (2001) ‘Regional innovation systems, clusters and the knowledge economy’, Industrial and Corporate Change, Vol. 10, pp.945–974.
24. Cooke, P. (2005) ‘Regionally asymmetric knowledge capabilities and open innovation’, Research Policy, Vol. 34, No. 8, pp.1128–1149.
25. Coombs, R., Harvey, M. and Tether, B.S. (2003) ‘Analysing distributed processes of provision and innovation’, Industrial and Corporate Change, Vol. 12, No. 6, pp.1125–1155.
26. Cowan, R., David, P.A. and Foray, D. (2000) ‘The explicit economics of knowledge codification and tacitness’, Industrial and Corporate Change, Vol. 9, No. 2, pp.211–253.
27. De la Mothe, J. and Link, A. (Eds.) (2002) Networks, Alliances and Partnerships in the Innovation Process, Kluwer Academic Publishers.
28. Edquist, E. (Ed.) (1997) Systems of Innovation: Technologies, Institutions and Organisations, London: Pinter.
29. Ernst, D. (2002) ‘Global production networks and the changing geography of innovation systems: implications for developing countries’, Economics of Innovation and New Technology, Vol. 11, No. 6, pp.497–523.
30. Ernst, D. (2005) ‘Limits to modularity: reflections on recent development in chip design’, Industry and Innovation, Vol. 12, No. 3, pp.303–335.
31. Eurostat (2000) Business Services in Europe, Luxemburg.
32. Eurostat (2006) European Business: Facts and Figures. Data 1995–2005, Luxemburg.
33. Figueiredo, P.N. (2007) ‘What recent research does and doesn’t tell us about rates of latecomer firms’ capability accumulation’, Asian Journal of Technology Innovation, Vol. 15, No. 2, pp.161–195.
34. Freeman, C. (1991) ‘Networks of innovators: a synthesis of research issues’, Research Policy, Vol. 20, No. 5, pp.499–514.
35. Frost, T.S., Birkinshaw, J.M. and Ensign, P.C. (2002) ‘Centers of excellence in multinational corporations’, Strategic Management Journal, Vol. 23, No. 11, pp.997–1018.
36. Fuchs, M. (2005a) ‘Borders and the internationalisation of knowledge. Two examples from the automobile components supply sector in Poland’, in G. van Vilsteren and E. Wever (Eds.) Borders and Economic Behaviour in Europe – A Geographical Approach, Assen: Royal van Gorcum.
37. Fuchs, M. (2005b) ‘Internal networking in the globalising firm: the case of R&D allocation in German automobile component supply companies’, in C.E. Alvstam and E.W. Schamp (Eds.) Linking Industries Across the World – Processes of Global Networking, Aldershot/Burlington: Ashgate.
38. Gallouj, F. (2002) ‘Knowledge-intensive business services: processing knowledge and producing innovation’, in J. Gadrey and F. Gallouj (Eds.) Productivity, Innovation and Knowledge in Services, Cheltenham: Edward Elgar, pp.268–284.
39. Gereffi, G. (1999) ‘International trade and industrial upgrading in the apparel commodity chain’, Journal of International Economics, Vol. 48, No. 1, pp.37–70.
40. Gereffi, G., Humphrey, J. and Sturgeon, T. (2005) ‘The governance of global value chains’, Review of International Political Economy, Vol. 12, No. 1, pp.78–104.
41. Gertler, M. (2003) ‘Tacit knowledge and the economic geography of context, or the undefinable tacitness of being (there)’, Journal of Economic Geography, Vol. 3, pp.75–99.
42. Gerybadze, A. (2003) Knowledge Management and Transnational R&D Projects: The Role of Asymmetric Understanding and Group Cognition Processes in Distributed Work, University of Hohenheim, Center for International Management and Innovation.
43. Gerybadze, A. and Reger, G. (1999) ‘Globalization of R&D: recent changes in the management of innovation in transnational corporations’, Research Policy, Vol. 28, Nos. 2–3, pp.251–274.
44. Henderson, J., Dicken, P., Hess, M., Coe, N. and Yeung, H.W. (2002) ‘Global production networks and the analysis of economic development’, Review of International Political Economy, Vol. 9, No. 3, pp.436–464.
45. Humphrey, J. (2003) ‘Globalization and supply chain networks: the auto industry in Brazil and India’, Global Networks, Vol. 3, No. 2, pp.121–141.
46. Humphrey, J. and Schmitz, H. (2004) ‘Chain governance and upgrading: taking stock’, in H. Schmitz (Ed.) Local Enterprises in the Global Economy: Issues of Governance and Upgrading, Cheltenham: Edward Elgar.
47. Iammarino, S. (2005) ‘An evolutionary integrated view of regional systems of innovation: concepts, measures and historical perspectives’, European Planning Studies, Vol. 13, No. 4, pp.497–519.
48. Jürgens, U. (2001) ‘Approaches towards integrating suppliers in simultaneous engineering activities: the case of two German automakers’, Journal of Automotive Technology and Management, Vol. 1, No. 1, pp.61–67.
49. Jürgens, U. (Ed.) (2000) New Product Development and Production Networks: Global Industrial Experience, Berlin: Springer.
50. Kishimoto, C. (2004) ‘Clustering and upgrading in global value chains: the Taiwanese personal computer industry’, in H. Schmitz (Ed.) Local Enterprises in the Global Economy: Issues of Governance and Upgrading, Cheltenham: Edward Elgar, pp.233–264.
51. Linder, J., Jarvenpaa, S. and Davenport, T. (2003) ‘Toward an innovation sourcing strategy’, MIT Sloan Management Review, Vol. 44, No. 4, pp.43–49.
52. Loasby, B. (1999) Knowledge, Institutions and Evolution in Economics, New York/London: Routledge.
53. Lundvall, B-A. (1988) ‘Innovation as an interactive process: from user-producer interaction to the national system of innovation’, in G. Dosi, C. Freeman, R. Nelson, G. Silverberg and L. Soete (Eds.) Technical Change and Economic Theory, London: Pinter.
54. Lundvall, B., Johnson, B., Andersen, E.S. and Dalum, B. (2002) ‘National systems of production, innovation and competence building’, Research Policy, Vol. 31, No. 2, pp.213–231.
55. Malerba, F. (2002) ‘Sectoral systems of innovation and production’, Research Policy, Vol. 31, No. 2, pp.247–264.
56. Malerba, F. and Orsenigo, I. (2000) ‘Knowledge, innovation activities and industrial evolution’, Industrial Corporate Change, Vol. 9, No. 2, pp.289–214.
57. Malmberg, A. and Maskell, P. (2006) ‘Localised learning revisited’, Growth and Change, Vol. 7, No. 1, pp.1–18.
58. Meyer-Krahmer, F. and Reger, G. (1999) ‘New perspectives on the innovation strategies of multinational enterprises: lessons for technology policy in Europe’, Research Policy, Vol. 28, No. 7, pp.751–776.
59. Miles, I. (2007) ‘Knowledge-intensive services and innovation’, in J.R. Bryson and P.W. Daniels (Eds.) The Handbook of Service Industries, Cheltenham: Edward Elgar, pp.277–294.
60. Narula, R. and Zanfei, A. (2005) ‘Globalization of innovation: the role of multinational enterprises’, in J. Fagerberg, D. Mowery and R.R. Nelson (Eds.) The Oxford Handbook of Innovation, Oxford/New York: Oxford University Press.
61. Navas-Aleman, L. (2006) ‘Opportunities and obstacles for industrial upgrading of Brazilian footwear and furniture firms: a comparison of global and national value chains’, Doctoral thesis, Brighton: Institute of Development Studies, University of Sussex.
62. Paterson, S. and Brock, D. (2002) ‘The development of subsidiary-management research: review and theoretical analysis’, International Business Review, Vol. 11, No. 2, pp.139–163.
63. Pavitt, K. (2005) ‘Innovation processes’, in J. Fagerberg, D.C. Mowery and R.R. Nelson (Eds.) The Oxford Handbook of Innovation, Oxford/New York: Oxford University Press, pp.86–114.
64. Powell, W.W. and Grodal, S. (2005) ‘Networks of innovators’, in J. Fagerberg, D.C. Mowery and R.R. Nelson (Eds.) The Oxford Handbook of Innovation, Oxford/New York: Oxford University Press, pp.56–85.
65. Prencipe, A. (1997) ‘Technological competencies and product’s evolutionary economics: a case study from the aero-engine industry’, Research Policy, Vol. 25, No. 8, pp.1261–1276.
66. Quadros, R. (2003) ‘TRIMs, TNCs, technology policy and the Brazilian automobile industry’, Technology Policy Briefs, Vol. 2, No. 1, pp.10–12.
67. Quadros, R. and Consoni, F. (2009) ‘Innovation capabilities in the Brazilian automobile industry: a study of car assemblers’ technological strategies and policy recommendations’, International Journal of Technological Learning, Innovation and Development, Vol. 2, Nos. 1–2, pp.53–75.
68. Rentmeister, B. (2001) ‘Vernetzung wissensintensiver Dienstleister in der Produktentwicklung der Automobilindustrie’, in E. Schamp and J. Esser (Eds.) Metropolitane Region in der Vernetzung. Der Fall Frankfurt/Rhein Main, Frankfurt: Campus Forschung, pp.154–180.
69. Schmitz, H. (2006) ‘Learning and earning in global garment and footwear chains’, European Journal of Development Research, Vol. 18, No. 4, pp.546–571.
70. Simmie, J. and Strambach, S. (2006) ‘The contribution of Knowledge-Intensive Business Services (KIBS) to innovation in cities: an evolutionary and institutional perspective’, Journal of Knowledge Management, Vol. 10, No. 5, pp.26–40.
71. Steinmueller, W.E. (2002) ‘The European software sectoral system of innovation’, in F. Malerba (Ed.) Sectoral Systems of Innovation: Concepts, Issues and Analysis of Six Major Sectors in Europe, Cambridge: Cambridge University Press, pp.193–242.
72. Strambach, S. (2001) ‘Innovation processes and the role of Knowledge-Intensive Business Services (KIBS)’, in K. Koschatzky, M. Kulicke and A. Zenker (Eds.) Innovation Networks - Concepts and Challenges in the European Perspective, Heidelberg/New York: Physica Verlag, pp.53–68.
73. Strambach, S. (2002) ‘Germany: knowledge-intensive services in a core industrial economy’, in P. Wood (Ed.) Consultancy and Innovation: The Business Service Revolution in Europe, London: Routledge, pp.124–151.
74. Strambach, S. (2004) ‘Wissensökonomie, organisatorischer Wandel und wissensbasierte Regionalentwicklung. Herausforderungen für die Wirtschaftsgeographie’, Zeitschrift für Wirtschaftsgeographie, Vol. 48, No. 1, pp.1–18.
75. Strambach, S. (2008) ‘Knowledge-Intensive Business Services (KIBS) as drivers of multi-level knowledge dynamics’, International Journal of Service and Technology Management, Vol. 10, Nos. 2–4, pp.152–174.
76. Sturgeon, T. (2002) ‘Modular production networks: a new American model of industrial organisation’, Industrial and Corporate Change, Vol. 11, No. 3, pp.351–495.
77. UNCTAD (2005) TNCs and the Internationalization of R&D: World Investment Report 2005, Geneva.
78. Von Tunzelmann, N. (2005) ‘Regional capabilities and industrial regeneration’, mimeo, Brighton: SPRU, University of Sussex.
79. Wood, P. (1991) ‘The flexible accumulation and the rise of business services’, Transactions of the Institute of British Geographers, Vol. 16, No. 2, pp.160–172.
80. Wood, P. (Ed.) (2002) Consultancy and Innovation: The Business Service Revolution in Europe, London: Routledge.
81. Zander, I. (2002) ‘The formation of international innovation networks in the multinational corporation: an evolutionary perspective’, Industrial and Corporate Change, Vol. 11, No. 2, pp.327–353.
82. Zanfei, A. (2000) ‘Transnational firms and the changing organisation of innovative activities’, Cambridge Journal of Economics, Vol. 24, No. 5, pp.515–541.
83. The distinction between vertical and horizontal knowledge domains is explained more fully in Strambach (2008). Integrative KIBS draw on vertical and horizontal knowledge domains, combining and reconfiguring knowledge units flexibly, and producing high-level customised ‘knowledge products’.
84. The above examples were provided by Ruy Quadros and Rasmus Lema, based on their research in Brazil and India respectively.
85. Coombs et al. (2003), in their review of ‘distributed processes of provision and innovation’, stress the importance of asymmetric power relationships between contributors to the innovation process.
86. Arora et al. (1997) suggest that the modularisation of technology leads to the dispersal of innovation to where the users of this technology are located. This and related work on modularity (Arora and Gambardella, 1994) has attracted a lot of criticism (Brusoni et al., 2001; Ernst, 2005) stressing that modular technology per se does not translate into modular organisation - and by implication - geographical dispersal.
87. If ‘system’ (or ‘systemic’) means anything it is presumably about mutual reinforcement.
88. The same conclusion can be drawn from the literature on ‘localised learning’ (Malmberg and Maskell, 2006) which avoids the term innovation system but is in substance very close to the regional innovation systems literature.
89. The key regional capability seems to be the capability of aligning different networks (von Tunzelmann, 2005).
90. A dynamic approach would in particular look to the role of a new generation of managers in existing enterprises. And, especially relevant in clusters, to the spin-offs. Often they feel less constrained by the bonds with existing powerful customers and are more able to take new initiatives.
91. The term ‘global production network’ is also used by Henderson et al. (2002). They criticise the global value chain approach for being too linear and vertical. We agree with them that there are important relationships with other actors outside the chain which are important for competitiveness and innovation and which are not adequately captured by the GVC approach. The strength of their analysis lies in bringing to the fore the full range of institutional and actor constellations which influence economic development. We doubt however the analytical value of packing all these relationships and constellations into the concept of ‘GPNs’. We believe it is more useful to draw out the strengths of the GVC approach and then deal with the weaknesses by complementing it with other approaches. This seems to offer a better chance of exposing analytical connections or gaps.
92. For example, in the case of the Sinos Valley footwear cluster (Brazil), an ‘underground revolution’ happened after two decades of domination by global lead firms (Bazan and Navas-Aleman, 2004). In the biotechnology industry some multinational companies have changed their innovation strategies due to failed internal big pharma research; some have started to work with or in distant regions with high KIBS density, in order to overcome uneven knowledge capabilities in their home region (Cooke, 2005).
93. For exceptions, see Figueiredo (2007).