What Permits Small Firms to Compete in High-Tech Industries? Inter-Organizational Knowledge Creation in the Taiwanese Computer Industry

This paper addresses a puzzle related to firm size and competition. Since Stephen Hymer´s pioneering contribution (Hymer, 1960/1976), theories of the firm implicitly assume that only large, diversified multinational enterprises can compete in industries that combine high capital intensity, high knowledge-intensity and a high degree of internationalization. Small firms, by definition, have limited resources and capabilities and are unlikely to possess substantial ownership advantages. They also have a limited capacity to influence and shape the development of markets, market structure and technological change. One would thus expect that they are ill-equipped to compete in a knowledge-intensive industry that is highly globalized. Taiwan’s experience in the computer industry tells a different story: despite the dominance of small- and medium-sized enterprises (SMEs), Taiwan successfully competes in the international market for PC-related products, key components and knowledge-intensive services. The paper inquires into how this was possible. It is argued that organizational innovations related to the creation of knowledge are of critical importance. Taiwanese computer firms were able to develop their own distinctive approach: due to their initially very narrow knowledge base, access to external sources of knowledge has been an essential prerequisite for their knowledge creation. Such “inter-organizational knowledge creation” (Nonaka and Takeuchi, 1995) was facilitated by two factors: active, yet selective and continuously adjusted industrial development policies; and a variety of linkages with large Taiwanese business groups, foreign sales and manufacturing affiliates and an early participation in international production networks established by foreign electronics companies. A novel contribution of this paper is its focus on inter-organizational knowledge creation. I first describe Taiwan´s achievements in the computer industry. The dominance of SMEs and their role as a source of flexibility is documented in part II. Part III describes some policy innovations that have shaped the process of knowledge creation. The rest of the paper inquires how inter-organizational knowledge creation has benefited from a variety of linkages with large domestic and foreign firms; I also address some industrial upgrading requirements that result from this peculiar type of knowledge creation.knowledge creation; learning; small firms; networks; firm strategy; industrial policies;

Investigating innovation capability and organizational performance in service firms

In the service firm, innovation capability influences both financial and nonfinancial performance. It is crucial for businesses to address key challenges anticipated by the changes in socioeconomic and environmental issues. Innovation capability is largely seen as a vital source for generating sustainable competitive advantage. This article investigates the determinants of innovation capability and their relationship with organizational performance in the Jordanian banking sector

The development of subsidiary technological capability: network linkages and subsidiary autonomy

This research contributes to the literature on subsidiary evolution by exploring the developments of subsidiary technological capabilities. It has been widely acknowledged that subsidiaries have unique in-house capabilities that are embedded in two contexts: 1) the internal technology sources including the headquarter ("HQ") and affiliated-units, such as the research and development ("R&D") centres; 2) the external technology sources comprised of local, regional or global entities, such as local universities. This study examines the relationship between subsidiary capability and autonomy and the mediating effects of communication systems, by linking internal and external networks through which the subsidiary both exploits and creates particular technological capabilities, and through which the parent company HQ, exercises its control. Through a synthesis of the international business and innovation management literature review, a set of measures of technological capability, autonomy and communication have been drawn. A capability taxonomy configured for the semiconductor industry by Ernst et al. (1998) was adapted to specifically examine integrated circuit ("IC") design, production and marketing capabilities amongst five different Taiwan-based foreign wholly-owned subsidiaries in the electronics industry (particular in the integrated circuits sector). These are compared using quantitative and qualitative measures on factors such as the types and levels of technological capabilities, the degree of autonomy and the intensity of communication they have developed. The findings demonstrated that the heart of subsidiary technological-capability creating lies in exploiting the parent company's core- competitive assets and capabilities and creating its capability development using local knowledge systems, and regional and global cooperative partners. The extent to which such developments of subsidiary technological capabilities are dispersed throughout and leveraged on the multinational enterprise ("MNE")'s differentiated network, depends on the intensity of internal and external communication systems for assimilating information or knowledge. Moreover, single subsidiaries have different degrees of decision-making autonomy, which influence both the nature of the internal NINE network, and the extent of influence of the internal and external network linkages on the developments of subsidiary technological capabilities. Overall, this research concludes that subsidiary autonomy is a cyclical process between the parent company and subsidiary, which is affected by the development of a subsidiary's technological capability. The capability- creating of a subsidiary is driven by the interactions between internal and external leverages which broaden the level and types of technological capabilities (namely, marketing-, design-and production-related) in terms of the scope of responsibility, in-house capability and the capacity for assimilation and creation of 4new' technology

Impact of Technological Innovation Capabilities on the Market Value of Firms

In the era of globalisation and with the advent of knowledge economies, organisational innovation has assumed a critical role in enhancing economic performance of firms. Proponents of the Resource Based View of the firm and its more recent extensions such as the Knowledge Based View and Dynamic Capabilities Theory have suggested that generation, diffusion and application of organisational knowledge could be the source of sustained competitive advantage and superior performance of firms. While there is near unanimity in accepting the vital role of innovation in a firm\u27s performance, consensus on what constitutes organisational innovation and how to measure it has proven to be elusive so far. Most previous research in this area has conceptualised innovation through one or more dimensions of a firm\u27s innovative capability using R&D of a firm only. The measurement of the construct has thus reflected this narrow conceptualisation with a single measure of R&D expenditure being the most often used proxy. This study utilises a broader de¯nition of organisational innovation capabilities that includes the generation, dissemination and strength of innovative activity in a firm. The unique features of this study is that it uses multiple indicators of a firm\u27s innovation pro¯le along with lagged measures of market value using fixed effects panel data analysis

A Knowledge-Based Innovation for High Technology Industries and Applying to Cross Strait Marketplaces

The study discusses after China and Taiwan has finally cleared all the hurdles to gaining World Trade Organization (WTO) membership, joining in November 2001. However, foreign investors in China are increasingly embroiled in disputes with Chinese companies due to innovation barriers. Besides, after China and Taiwan joint WTO, high tech industrial competition faces globalization and digitalization two big problems Therefore, this paper examines the notion that China’s and Taiwan’s entry into the WTO and their innovation reforms in line with globalization and digitalization have a significant impact on the entire system of knowledge-based innovation management. Firstly, the study reviews innovation through a knowledge-based theory lens in the innovation supporting processes to construct a research framework. Internally, the supporting innovation processes include knowledge and technology innovation, Managing & organizing innovation. Externally, the supporting innovation processes include inter-organization networks, innovation networks and eknowledge networks and cooperation innovation. Secondly, the study through case studies critically investigates the supporting processes of innovation management in China and Taiwan in the context of their WTO entry, and puts forward exploratory ideas that may assist in creating a blueprint for deepening China’s and Taiwan’s innovation reforms. Under knowledge based and digital economy, how to overcome barriers of knowledge based innovation over the cross-strait and global markets are the most key factors for firm’s survival. To answer these questions, in this paper, a more complete integrated innovation model and knowledge based innovation supply chain (KISC) for exploring and determining innovative supporting process in high tech industries and applying to cross strait (China and Taiwan) marketplace is presented. The results of the study will benefit not only the construction of knowledge based innovation framework, but also the business model transformation of competitive advantage

An investigation of the potential for enhancing innovation within the Taiwanese woodworking industry.

An investigation of the potential for enhancing innovation within the TWMMI Due to political, economic, social and technological changes, traditional manufacturers of the TWMMI are facing a fight for survival. An effective strategy is urgently required to help manufacturers to tum these threats into opportunities. One strategy is increasing scope in order to compete with international rivals through creativity, combined with increasing productivity through technology in order to create competitive advantage. This study investigates how SMEs within the TWMMI can improve their competitive advantage. It examines the impact on company performance of creativity and ICT based manufacturing technology. A semi-structured questionnaire with open-ended and closed-ended questions was designed based on a SWOT assessment and literature review to find a positive correlation between creativity and ICT based manufacturing technology and improved business performance. Thus the questionnaire investigates how the TWMMI are dealing with the fact that they are no longer competing effectively in the woodworking machinery market as identified in the SWOT and whether they have implemented any strategic solutions, which are classified in the literature review to solve the problem. From interviews with 30 respondent companies and 18 international customers conducted, results show that: (1) Companies that implement of a high level of creative function achieve a greater level of creative success. (2) It is not always the case that implementing a higher level ofFMS combined with ICT is necessary to gain a greater level of improved business performance. Competitive advantage can be gained through outsourcing manufacturing of component parts to suppliers. (3) The implementation of a higher level of creative function combined with some level ofFMS and ICT or outsourcing may allow the TWMMI to achieve a greater level of improved business performance The strategy recommended to follow includes individual companies co-operating together by investing capital in research and development promoting creativity. Furthermore, promotion of innovation in creativity and ICT based manufacturing technology is also required along with strategic promotion of creative skills in education and society to facilitate creativity in the business environment within Taiwan as a whole.EThOS - Electronic Theses Online ServiceGBUnited Kingdo

Innovation Policies for Small and Medium Size Enterprises in Asia: An Innovation Systems Perspective

The point of departure for this chapter is that in developing countries SMEs2 are responsible for the largest part of employment and a significant share of added value. And that innovation policy supporting the particularities of SMEs has been widely ignored (occasionally SMEs have even been discriminated). This chapter aims at shedding soe light on the immensely complicated issue of innovation policy for SMEs in developing countries, or more specifically Asian SMEs. The chapter applies the so-called regional innovation systems approach. In this paper, we analyze four clusters of SMEs that have been especially successful in entering the global market; special attention is paid to the so-called soft infrastructure, the industry specific needs for cluster (e.g. interaction) and RIS dynamics/polices (e.g. needs for devolution; industry specific needs for building knowledge creating institutions).The chapter is structured as follows. After introducing stylized facts on SMEs innovative performance attention is turned to the theoretical framework. Taking into account the localized nature of SMEs economic activity, our level of analysis is the regional system of innovation (RIS). We provide a general introduction, contextualize this to Asian situation, and introduce the industry differences (inspired by Pietrobelli and Rabelotti’s typology). Then we turn to the empirical section where special attention is paid to the four cases. Finally, we turn to drawing general conclusions on innovation policies and need for restructuring of Asian innovation systems (the accent is on the former).Innovation Policy; Developing countries; Innovation systems

Innovation Capability and Organisational Performance

Innovation is crucial for businesses to address key challenges anticipated by the changes in socioeconomic and environmental issues. Innovation capability is largely seen as a vital source for generating sustainable competitive advantage. The paper investigates the determinants of innovation capability, and their relationship with organisational performance in service organisation context. The study contributes to the limited knowledge on the innovation capabilities in developing countries by providing empirical evidence from the Jordanian banking sector.N/