AMT adoption and innovation : an investigation of dynamic and complementary effects

The ability to innovate successfully is a key corporate capability, depending strongly on firms’ access to knowledge capital: proprietary, tacit and embodied. Here, we focus on one specific source of knowledge – advanced manufacturing technologies or AMTs – and consider its impact on firms’ innovation success. AMTs relate to a series of process innovations which enable firms to take advantage of numerical and digital technologies to optimise elements of a manufacturing process. Using panel data for Irish manufacturing plants we identify lengthy learning-by-using effects in terms of firms’ ability to derive innovation benefits from AMT adoption. Disruption effects are evident in the short-term while positive innovation benefits occur six-plus years after adoption. Strong complementarities between simultaneously adopted AMTs suggest the value of disruptive rather than incremental AMT implementation strategies

Manufacturing Agrarian Change - Agricultural production, inter-sectoral learning and technological capabilities

The aim of this paper is to investigate how industrial development, manufacturing in particular, has been contributing to agrarian change. In order to address this issue, it analyzes the technical bases and structural specificities – i.e. time and scale constraints – of agricultural production. Technical change in agriculture involves both improvements in organic transformation processes – i.e. biological production – and in the mechanical functions that have to be performed for obtaining a certain output – i.e. agricultural work. The paper shows how in-farm technological capabilities building as well as inter-sectoral learning are necessary in order to acquire and adapt biological-chemical innovations and mechanical technologies. The analysis of agrarian technical change – both in-farm learning and inter-sectoral learning – is developed by integrating peasant studies with evolutionary approaches to economic development. The relationship between agrarian change and manufacturing development is highly context specific, thus comparative historical analysis is adopted in order to shed light on the abovementioned processes of learning. Building on the analysis of technological change in agriculture, the last part of the paper will focus on those transformative policies such as innovative ‘extension services’ which facilitate inter-sectoral learning and, in turn, allow the emergence of inter-sectoral commons. This concept identifies that specific bundle of technological capabilities which concentrate in certain areas of strong inter-sectoral interdependence as a result of inter-sectoral learning.

How innovative are UK firms? Evidence from the Fourth UK Community Innovation Survey on synergies between technological and organizational innovations

Using data from the Fourth UK Community Innovation Survey this paper explores the diffusion of a range of innovative activities (encompassing process, product, machinery, marketing, organization, management and strategic innovations) across 16,383 British companies in 2004. Building upon a simple theoretical model it is shown that the use of each innovation is correlated with the use of all other innovations. It is shown that the range of innovations can be summarized by two multi-innovation factors, labelled here `organizational' and `technological', that are complements but not substitutes for each other. Three clusters of firms are identified where intensity of use of the two sets of innovations is below average (56.9% of the sample); intermediate but above average (23.7%); and highly above average (19.4%). Distinctive characteristics are found to be common to the companies in each cluster. Finally, it is shown that innovativeness tends to persist over time

Outsourcing when investments are specific and complementary.

Using the universe of large Canadian manufacturing firms in 1988 and 1996, we investigate to what extent outsourcing decision can be explained by a simple property rights model. The unique availability of disaggregate information on outputs as well as inputs permits the construction of a very detailed measure of vertical integration. We also construct five different measures of technological intensity to proxy for investments that are likely to be specific to a buyer-seller relationship. A theoretical model that allows for varying degrees of investment specificity and for complementarities---an externality between buyer and supplier investments---guides the analysis. Our main findings are that (i) greater specificity makes outsourcing less likely; (ii) complementarities between the investments of the buyer and the seller are also associated with less outsourcing; (iii) property rights predictions on the link between investment intensities and optimal ownership are only supported for transactions with low complementarities. High specificity and a low risk of appropriation strengthen the predictions in the model and in the data.

ICT, corporate restructuring and productivity

Stronger productivity growth in the US than the EU over the late 1990s is widely attributed to faster, more widespread adoption of information and communication technology (ICT). The literature has emphasised complementarities in production between ICT and internal restructuring as an important mechanism. We investigate the idea that increased use of ICT has facilitated outsourcing of business services, and that these are complementary activities in production because they allow firms to focus on their core competencies. This is consistent with evidence from the business literature and aggregate trends, and we show evidence from microdata that is consistent with this idea

Synergistic effects of organizational innovation practices and firm performance

Organizational innovation has been shown to be favourable for technological innovation. However, the question of which organizational practices should be combined ? and thus of their compatibility ? remains unanswered. We here empirically investigate the complementarities between different organizational practices (business practices, knowledge management, workplace organization and external relations). Firm-level data were drawn from the Community Innovation Survey (CIS) carried out in 2008 in Luxembourg. Supermodularity tests provide evidence of the impact of complementary asset management to raise firms? innovative performance. The organizational practices? combinations differ according to whether the firm is in the first step of the innovation process (i.e. being innovative) or in a later step (i.e. performing as far as innovation is concerned). When adopting organizational practices, managers should therefore be aware of their effects on technological innovation. These results also have implications for public policies in terms of innovation support.Complementarities; Organizational innovation; Technological innovations; Supermodularity; Innovative performance

Outsourcing when Investments are Specific and Complementary

Using the universe of large Canadian manufacturing firms in 1988 and 1996, we investigate to what extent firms' outsourcing decision can be explained by a simple property rights model. A novel aspect of the data is the availability of component level information on outputs as well as inputs which permits the construction of a very detailed measure of vertical integration. Moreover, we construct five different measures of technological intensity to proxy for investments that are likely to be specific to a buyer-seller relationship. Our main findings are that (i) greater specificity makes outsourcing less likely; (ii) complementarities between the investments of the buyer and the seller are also associated with less outsourcing; (iii) only when we focus on the range of transactions with low complementarities do we find support for several nuanced predictions of the property rights model.Property rights theory, complementarity, asset specificity, vertical integration

Outsourcing when investments are specific and complementary.

Using the universe of large Canadian manufacturing firms in 1988 and 1996, we investigate to what extent firms’ outsourcing decision can be explained by a simple property rights model. A novel aspect of the data is the availability of component level information on outputs as well as inputs which permits the construction of a very detailed measure of vertical integration. Moreover, we construct five different measures of technological intensity to proxy for investments that are likely to be specific to a buyer-seller relationship. Our main findings are that (i) greater specificity makes outsourcing less likely; (ii) complementarities between the investments of the buyer and the seller are also associated with less outsourcing; (iii) only when we focus on the range of transactions with low complementarities do we find support for several nuanced predictions of the property rights model.

Restructuring Production and Work

The paper analyzes the contemporary organizational restructuring of production and work and derives some salient implications for the labor market. The analysis focuses on the switch from occupational specialization at “Tayloristic” organizations to multi-tasking at “holistic” organizations. The restructuring process is shown to create demands for new combinations of skills and thereby resegment” the labor market, raising the wages and job opportunities of some workers relative to others.Restructuring of firms; technological change; information flows; employment; labor market segmentation