Does the intensity in R&D generate start-up's growth?

The role of R&D investment on firm's performance is not clear from a theoretical perspective. While the effort in R&D activities conducted internally helps firms to develop the ability to identify, assimilate and apply external knowledge successfully (Cohen and Levinthal, 1990), such activities are costly (Nonaka, Toyama and Nagata, 2000) and take long time to produce new knowledge results (Zahra and Nielsen, 2002). Moreover, the uncertain economic value of new knowledge (Arrow, 1962) may delay the firm's growth. Accordingly, empirical evidence in this regard is mixed (Le, Bruce and Kroll, 2006; Díaz-Díaz; Coad and Rao, 2008; Kotabe, Srinivassan and Aulakh, 2002; Carayannis and Alexander, 2002; Lin, Lee and Hung, 2006). We argue that R&D activities do not have a direct effect on growth since not all new knowledge is economically relevant (Arrow, 1962). To be concise, the indirect relationship between R&D intensity and growth may be mediated by valuable and protected knowledge assets such as patents. We aim to contribute to the literature stream on innovation strategy and new venture growth by analyzing empirically these issues (i.e. direct effect of R&D intensity, and indirect effect of R&D intensity through the mediation of patents, on employment growth of new ventures). In doing so, we build on theoretical notions from the literature on resource-based view (Barney, 1991; Wernerfelt, 1984; Rumelt, 1984) and knowledge production function (Griliches, 1979). Data were collected in a cross sectional setting between February and April of 2008, through a survey addressed to 87 start-ups located in the Basque Country (Spain). According to our results, patents significantly and positively mediate the relation between R&D intensity and new venture growth. In particular, an increment of 1% of R&D intensity indirectly enhances new ventures' employment annual growth in a rate ranging from 0.22% to 0.36%. However, the direct effect of R&D intensity on growth is not significant. This empirical evidence provides entrepreneurs, promoters and policy-makers with an important implication: R&D activities require the mediation role of non-tradable knowledge assets such as patents or other modes of intellectual property in order to appropriate value from knowledge in terms of growth

Treble innovation firms: Antecedents, outcomes, and enhancing factors

Drawing on the interplay between strategic ambidexterity, resource-based view, and digital servitization, we conceptualize how the rise of digitalization and service business models in industrial settings have materialized in a distinctive category of innovation-oriented manufacturing firms, labeled as treble innovation firms. We propose that said firms are characterized by simultaneously developing the three types of technological innovation —process, product, and digital service. We use a random and representative survey of 423 Spanish manufacturing firms to analyze antecedents, outcomes, and enhancers of digital service innovation adoption in firms that already possess process and product innovations (i.e., dual innovation firms). We report several findings. First, treble innovation firms epitomize the new norm (rather than the exception), representing 21.7% of all manufacturing firms. Second, product leadership and open innovation breadth increase the probability that dual innovation firms implement digital service innovation. Third, treble innovation firms achieve considerably greater profit margins than dual innovation firms. Finally, treble innovation firms can enhance said profit advantage by adopting resource retrenchment and value migration practices.Spanish GovernmentGovernment of Andalusia A-SEJ-196-UGR20Portuguese Foundation for Science and TechnologyEuropean Commission UID/ECO/00124/2013 LISBOA-01-0145FEDER007722Social Sciences Data Lab 2220

Entry mode diversity and closing commercial deals with international customers:The moderating role of advanced servitization

As the importance of servitization and service-augmented solution delivery grows into a mainstream phenomenon for manufacturers, offering theoretically founded avenues to solve their specific internationalization challenges is necessary. The study addresses the internationalization paradox faced by servitized manufacturers generated by the specific hybrid nature of their product-service offering. As such, this research is meant to understand the entry mode diversity for the internationalization of advanced servitization providers. Our primary research deal-level data follows 1,885 potential sales negotiations for servitized products closed in 2018 by a Poland-based multinational high-tech optics firm offering product-service systems. The results of the study support the idea that manufacturers of advanced servitization could benefit from the implementation of entry mode diversity. It is found that the sales deal success when entry mode diversity is implemented in a foreign market is positively moderated when knowledge-intensive advanced servitization is included in the negotiation.<br/

Make-or-buy configurational approaches in product-service ecosystems and performance

This research examines firm boundary configurations for manufacturers' product-service offerings. We argue that the building of a product-service ecosystem through collaboration with service providers in certain types of business services can increase performance as a result of the superior knowledge-based resources coming from specialized partners. By using fuzzy set qualitative analysis on a sample of 370 multinational manufacturing enterprises (MMNEs), the results reveal that effective servitization is heterogeneous across manufacturing industries and across business service offerings. The findings indicate that most industries achieve their highest performance through collaborations with value-added service providers in two out of three of the service continuum stages (Base and Intermediate services); while keeping the development of Advanced services in-house. The results help to contextualize the best practices for implementing service business models in MMNEs by detailing which service capabilities should be retained in-house and which should be outsourced to specialized partners in various industrial contexts.Peer ReviewedPreprin

Assessment of industrial pre-determinants of territories with active product-service innovation ecosystems

There has been growing interest in service-augmented products and the subsequent formation of product-service innovation (PSI) ecosystems. Hence, the objective of this paper is to empirically address an unexplored aspect of PSI ecosystems research by offering answers as to whether territories develop more performant PSI ecosystems in terms of manufacturing employment growth when they arise from an existing industrial base. Running a fixed-effects model on a sample of all 17 Spanish autonomous communities in the period from 2006 to 2012, the importance of territories having a strong incumbent manufacturing sector before developing PSI ecosystems is revealed. Specifically, it is found that PSI ecosystems will generate greater industrial employment growth in manufacturing-led territories. Our model and findings suggest various implications for scholars, managers, and policymakers alike.Peer ReviewedPostprint (published version

Servitización territorial: conceptualización, cuantificación y agenda de investigación

Territorial servitization is the analysis of how manufacturing firms and knowledge-intensive business service (KIBS) sectors collaborate in working towards a renaissance of manufacturing competitiveness within regions of developed economies. This editorial note provides four insights. First, it sums up the existing body of knowledge on the topic. Second, it quantifies and maps the territorial servitization activity in Spanish regions. Third, it presents and reflects on the collection of five papers in this special issue, which bring new insights into how geographical proximity, innovation systems, and KIBS heterogeneity benefit our understanding of territorial servitization. Finally, the study provides a number of yet unresolved topics that deserve further academic attention.La servitización territorial es el análisis de cómo las empresas manufactureras y de servicios intensivos en conocimiento (KIBS) colaboran para el desarrollo de nuevos modelos de negocio basados en el servicio que llevan al renacimiento de la competitividad industrial de las regiones ubicadas en países desarrollados. Esta nota editorial proporciona cuatro ideas. Primero, resume el cuerpo de conocimiento existente sobre la servitización territorial. En segundo lugar, cuantifica y mapea la actividad de servitización territorial en las comunidades autónomas españolas. En tercer lugar, presenta los cinco trabajos originales publicados en este número especial. Dichos trabajos aportan nuevos conocimientos sobre cómo la proximidad geográfica, los sistemas de innovación y la heterogeneidad de KIBS benefician nuestra comprensión de la servitización territorial. Finalmente, el estudio proporciona una serie de temas aún no resueltos que merecen más atención académica

Service implementation in manufacturing:An organisational transformation perspective

The topic of servitization of manufacturing continues to gain attention from both the engineering and business research communities. As a consequence, the conceptual foundations of servitization are now becoming better established, and attention is focusing on the processes through which manufacturers go to develop innovative service capabilities that enable them to successfully compete through services. This Special Issue sets out to focus on these transformation processes. In this introductory article we review the selected articles that comprise this Special Issue. We provide a framework to contextualize and understand the research findings reported in the Special Issue and reflect on the contributions of the research to the theory and practice of servitization. Through this process we seek to consolidate the state-of-the-art in this area and identify important, challenging, but potentially fruitful topics for future studies