Sector innovation capacity determinants: modelling and empirical evidence from Spain

Studies about the variables that determine the ability to innovate at sectoral level are scarce and present a series of limitations. This paper tries to bridge this gap by building a model of sector innovation capacity based upon existing approaches related to the study of sectoral innovation (lifecycles of industries, evolutionary theory and the sectoral innovation systems approach) and a model of determinants for national innovation capacity. The empirical analysis is based upon data from the Survey on Innovation of Firms for Spain and the methods used comprise the application of panel data, factor analysis and ordinary least squares regression analysis. The main findings of the paper are the confirmation of the relevance of all the variables in determining sector innovation capacity, the formulation of the sector innovation capacity determinants model, the consistency of the proposed model confirming both the validity and appropriateness of the variables identified and, therefore, the value of using the variety of approaches selected.     

Resource-constrained product development: Implications for green marketing and green supply chains

While academic debates and practical approaches to green marketing have matured over the past few decades, one central conundrum that has remained unresolved has been the trade-off between the higher prices of green products and the objectives of environmental sustainability. In general, it has been observed that green products are priced at a premium to account for their environmentally friendly consumption and use. We argue that resource-constrained product development approaches (alternatively labeled jugaad) that are observed in emerging countries such as China and India have the potential to change the traditional models of green product development. In addition to the competitive advantage that resource-constrained product development approaches provide, we suggest that these practices have sustainability and supply chain benefits. We show that the innovation process relies primarily on frugal engineering that reduces material use (thereby reducing burden on supply chain) and meets green marketing objectives at much lower, and therefore, more affordable prices. We draw out several implications for theory and practice.     

The front end of innovation in an era of industry convergence: evidence from nutraceuticals and functional foods

Industry convergence, defined as a 'blurring' of boundaries between industries, induced by converging value propositions, technologies and markets, appears to be a pervasive phenomenon leading to the emergence of inter-industry segments. A current example of convergence can be witnessed in the nutraceuticals and functional foods sector, emerging at the boundary between the food and pharmaceutical industries. Not only technologies blur, but there is also a convergence of demand structures: consumers try to satisfy different needs in one transaction. In this context, this paper explores how actors from different industry-specific resource backgrounds can engage in an innovative activity requiring new technological and marketing competences. Given that absorptive capacity is limited by existing competences, this paper asks how organizations with different R&D competences are able to seize opportunities for innovation emerging from convergence. Empirical findings based on primary data collected from 54 R&D projects of a nutraceutical cluster show that there are different approaches of front end decision making: while some firms follow existing processes for front end decision making, others leave existing paths and need partners to fill in gaps already identified at the front end of innovation.     

The selected determinants of manufacturing postponement within supply chain context: An international study

Modern supply chains focus on an ultimate consumer satisfaction and often require essential dynamic reconfiguration. Manufacturing companies constitute important central nodes in supply chains, where almost all physical flows are concentrated.Postponement is the operating concept, which aims at delaying activities until a customer’s order has been received. The growth of interest in the postponement concept partially results from the increased demand for customized products.Data for the analysis has been collected through the survey carried out by researchers in several countries. The main research instrument used for this research was a questionnaire developed by the Global Manufacturing Research Group (GMRG). The conclusions formulated on the basis of data analysis proved that market and demand characteristics do not seem to be important for the choice between postponement and speculation strategy. The research showed that assembly postponement depends mostly on managerial decisions about the goals of company and the level of acceptance of an assembly postponement strategy on the market. Full postponement strategy is dictated mainly by the level of product customization and capacities of manufacturing and logistics systems. Production postponement has to be accepted on the market and should be associated with excellent forecasting techniques.     

Roadmapping for innovation management: evidence from Pirelli

Despite the growing interest of practitioners and scholars in technology roadmapping (TRM), our knowledge regarding how TRM can be embedded into the overall innovation process of a firm and used to enhance this process is relatively limited. This study aims to fill this gap. We describe an action research project conducted with Pirelli and the innovative approach to TRM this company developed during the 2010s to cope with the increasing complexity and dynamism of the tire industry. We show that TRM is currently fully integrated into the firm’s R&D activities and contributes to increasing the effectiveness of new product development. TRM supports the systematic gathering, sharing, and elaboration of information across the different functions and business units of Pirelli from the basic research to the commercialization of new products.     

Knowledge and information flows in supply chains: A study on pharmaceutical companies

A great deal of attention in the supply chain management literature is devoted to study material and demand information flows and their coordination. But in many situations, supply chains may convey information from different nature, they may be an important channel companies have to deliver knowledge, or specifically, technical information to the market. This paper studies the technical flow and highlights its particular requirements. Drawing upon a qualitative field research, it studies pharmaceutical companies, since those companies face a very specific challenge: consumers do not have discretion over their choices, ethical drugs must be prescribed by physicians to be bought and used by final consumers. Technical information flow is rich, and must be redundant and early delivered at multiple points. Thus, apart from the regular material channel where products and order information flow, those companies build a specialized information channel, developed to communicate to those who need it to create demand. Conclusions can be extended to supply chains where products and services are complex and decision makers must be clearly informed about technology-related information.     

The determinants of office cap rates: The international evidence

We examine commercial office cap rates in 89 large cities in 33 developed and developing countries in the 2000–2019 period. We find that cap rates decline throughout the world over this period, reflecting a corresponding decline in the real rate of interest. In the cross-city analysis our most robust findings are that office cap rates are lower in wealthier cities, especially those that are either considered gateway cities or financial centers. In addition, cap rates tend to be higher in countries with lower credit ratings and higher inflation rates. We find that cap rates in suburban office markets are higher than in central business districts, and for a given metropolis, suburban cap rates are lower in suburbs with better public transport connections to the central business district. Finally, evidence from regressions with city fixed effects reveal that cap rates rise as the discount rate and vacancy rates increase and fall as cities get wealthier.     

Product variety arising from hedging in the fashion supply chains

Consider a well-defined fashion apparel category, where the variants are distinguished by style and colour, and are subject to two equally likely states of the world: State1 when some variants become popular and others unpopular, and State2 when the reverse takes place. We analyse the optimal portfolio and variety arising from hedging against uncertainty triggered by the states, by integrating the Markowitz and the Newsboy models, while carefully considering demand correlations. We show that due to the complex structure of the uncertainty, building hedging portfolios with competing items is necessary for optimality. We also show how mis-specifying the distributions can lead to very bad trade-offs between risk and expected profit, caused by a lack of proper hedging.     

Strategic marketing in global supply chains: Four challenges

Supply chain management has emerged as a critical arena in which firms can find significant cost reduction opportunities, giving them a cost advantage over competitors. When supply chain management orientations are adopted by several firms in a supply chain, together they can significantly reduce supply chain costs pitting supply chain against supply chain. However, the pursuit of cost savings opportunities is not the only objective of supply chain management. Superior supply chain management can facilitate marketing strategy and lead to the creation of superior customer value, satisfaction, and loyalty, which in turn lead to improved product profit margins, overall firm profitability, and overall corporate growth. However, marketing strategy is problematic in global supply chains. Specifically, four significant strategic marketing challenges exist that relate to the development and execution of marketing strategy in global supply chains. This article draws attention to these challenges to stimulate managerial and research efforts that will move marketing strategy through the 21st century.     

Inventory management in supply chains: A bargaining problem

This paper is focused on supply chain management from the perspective of inventory management. The coordination of order and production policies between buyers and suppliers in supply chains is of particular interest. When a buyer of an item decides independently, he will place orders based on his economic order quantity (EOQ). However, the buyer's EOQ may not lead to a favorable policy for the supplier. A cooperative order and production policy can reduce total cost significantly. Should the buyer have the dominant position to impose his EOQ on the supplier, then consequently no incentive exists for him to deviate from his EOQ in order to choose a cooperative policy. To induce the buyer to order in quantities more favorable to the supplier, the supplier could offer a cooperative policy associated by a side payment to the buyer. The research presented in this paper provides several bargaining models depending on alternative production policies of the supplier. With these bargaining models the offered cooperative policy and the offered side payment can be derived.     

Open innovation ecosystem organizing from a process view: a longitudinal study in the making of an innovation hub

This paper uses process theory as a theoretical lens to analyze AstraZeneca's enactment of an open innovation initiative with the purpose of strengthening the firm's surrounding innovation ecosystem. Based on empirical data collected over 7 years, we develop a process model of open innovation enactment and explain how the initiative gradually transformed while maintaining its guiding principles, which were set from the start. In applying a process perspective, we highlight open innovation initiatives as dynamic and evolutionary – but not deterministic – developments. As such, we provide a comprehensive and more nuanced understanding of not only what open innovation is but also how it becomes. This study also contributes to the innovation ecosystem literature by theorizing how firms orchestrate innovation ecosystems through open innovation initiatives over time.     

Aligning the sustainable supply chain to green marketing needs: A case study

The research explores the challenges facing organisations in aligning sustainable procurement requirements and marketing needs and the attendant shifts in supply chain management practices. Whilst external influences are readily understood (e.g. regulation and customer demand), less is understood about the implications for suppliers trying to meet sustainable procurement requirements and the organisational challenges of aligning marketing with sustainable supply chain management. An exploratory case study of a UK University catering department has been undertaken, to explore the strategies, processes and relationships associated with synthesising sustainable supply chain and green marketing needs. The empirical findings illustrate the divergence between organisational perspectives on sustainability and procuring sustainable products with marketing demands. Thus, the findings extend the theoretical discussion on sustainable supply chains by providing empirical data based on real-life implementation and from this an emergent aligned supply chain model is proposed, which confirms two drivers for alignment, ‘lean and resource efficient’ and ‘local and seasonal’ — contingent on market demand. The findings emphasise the benefits of a reverse information flow, the importance of intermediaries, and relationships in its fulfilment, while indicating the resurgence of a supply ‘push’ of sustainable products into core markets. Future research directions are also posited.     

The role of institutional arbitrage in the search for product innovation: Firm level evidence from Norway

Evolutionary theorizing conceptualizes the discovery of new products as a successful outcome from searching for innovation in which firms combine new and old knowledge and resources. Prior research has shown that the propensity for discovering new products is greatest when firms cross a technological and/or organizational boundary in the search for new knowledge. In this paper, we add a new dimension to this literature: we examine whether, and to what extent, crossing a national boundary, as when firms use knowledge from network partners in foreign countries, influences the likelihood that firms will introduce new products into the market. Drawing on theorizing on institutional arbitrage in the literature on national innovation systems (NIS) and varieties of capitalism (VOC), we propose that companies that cross a national boundary in searching for innovation are significantly more likely to introduce new products. Detailed survey data on firms; data on their network partners, including their location; and regression analysis show that the use of knowledge from actors in foreign NIS has a positive influence on product innovation.     

Food beliefs and food supply chains: The impact of religion and religiosity in Israel

This paper demonstrates that religion and religiosity affect norms, which affect food consumption patterns and production. Heterogeneity and asymmetric information lead to multiple certification channels as well as multiple supply chains. Major supply chains may address multiple constituencies that are secular or less religious. Technological change affects norms and thus the food system. We obtain these results by analyzing the food systems for meat products in Israel where there are three religions – Jews, Muslims, and Christians – and people assign themselves three levels of religiosity – secular, conservative, and orthodox. Israel has multiple Kosher and Halal certifiers and several specialized supermarket chains for orthodox groups. Its main supermarket chains serve secular and some conservative segments. The immigration of secular Jews from Russia led to the proliferation of non-Kosher supply chains and products, and increased consumption of pork. New technologies and higher incomes led to emergence of fast food chains serving orthodox Jews that had previously tended to eat at home.     

Impact of funding sources on innovation: evidence from Brazilian software companies

This paper aims to investigate the impacts of different sources of innovation funding on company performances in the context of an emerging economy. Brazilian software companies are selected as a case for this investigation. Data – related to the types of funding support received and eight types of company performances measured in binary scales – was collected through an online survey from 188 companies located across Brazil. A multivariate probit model was estimated to assess the impacts of different funding schemes on company performances – controlling for other confounding effects. The findings confirmed the critical importance of public innovation funding, and revealed that companies that: (1) Used public funds were more likely to become nationally competitive; (2) Used loans from commercial banks were less likely to become nationally and internationally competitive; (3) Reinvested revenues were more likely to gain market share, and help in increasing the number of employees; (4) Not aware of public funding schemes were less likely to invest on research, development, and innovation. The overall findings suggest the positive impacts of innovation funds on company performance. They can serve as a policy guide to develop targeted performance strategy to determine which funding scheme would be effective to foster what outcomes.     

Environmental determinants of open innovation in Dubai SMEs

This study examines a number of environmental determinants (government supported developments, financial resources, academic-industry collaborations and market dynamics) in supporting innovation in small and medium-sized enterprises in the emerging Dubai market in the United Arab Emirates. The results from a survey of 200 senior managers highlight the importance of government supported developments and market dynamics on innovation in these firms, although do not support the expected influence of financial resources and academic and industry collaborations. The implication is that innovation should be linked to the local economic development and supported by specific policies and programs.     

Evolution and challenges of dairy supply chains: Evidence from supermarkets,industries and consumers in Ethiopia

In developing countries the demand for products of animal origin is expected to grow rapidly in the coming years. Using data collected from 200 urban households this study examines the evolution of the dairy market in Ethiopia. In particular, this study suggests that although the Ethiopian dairy market remains extremely thin and volatile, the commercialization of processed dairy products through supermarkets is expanding and is expected to keep doing so in the foreseeable future. Increasing urbanization and corresponding changes in consumer preferences, behaviour and purchasing power are the identified causes for the rise of supermarket-processor dairy chains. This study shows also that emerging dairy chains provide new market opportunities to Ethiopian farmers, but the existence of retail-industrial monopolies and monopsonies jeopardize farmers’ economic benefits to a great extent. The study concludes with some implications for policy and further research.     

The determinants of academic spin‐off creation by Italian universities

The aim of this work is to investigate the university level determinants of academic spin‐off (ASO) firm creation in Italy. We are interested in particular in the relationship between university funding and the university propensity to create spin‐offs, and test the effect of public and third‐party funds on this tendency. We estimate the effect of several variables for the characteristics of the university and the context. In contrast to our expectations, results indicate that third‐party funding does not exert an effect on the propensity of the university to generate ASO firms. Similarly, and in contrast to what the literature suggests, scientific productivity, context innovativeness and patenting experience also do not have a positive and significant effect on the propensity to generate spin‐offs. We find that ASO creation is influenced by the amount of public income, by past experience in creating spin‐offs and by the presence of a technology transfer office. This work contributes to our understanding of the differences between Italy and the Anglo‐Saxon countries in relation to the phenomenon of ASO creation and has some important implications for policy.     

Submission quality in open innovation contests - an analysis of individual-level determinants of idea innovativeness

The digital age allows for integration of dispersed groups into the innovation process. These heterogeneous groups of individuals varying in size and knowledge distribution, also referred to as crowds, build the basis for open innovation contests (OIC), one of the most common forms of crowdsourcing innovation. Different from more focused forms of open innovation, at OIC innovation managers often do not identify or evaluate participants ex-ante. Instead, innovation managers often make use of open calls for participation and assume efficient self-selection of participants i.e., that only motivated and qualified participants will volunteer and engage in the innovation contest. This behavior reflects one of the key assumption of crowdsourcing in participatory innovation settings. However, not every self-selected member is in the position to solve the contest task appropriately. Hence, innovation contests often result in large numbers of submissions, covering a wide range of quality levels, causing decision biases and significant workloads for innovation managers to select ideas. This problem is referred to as “crowding”. In order to reduce “crowding”, open innovation researchers are interested in understanding which types of individuals make the “best” contributions and therefore should be preferably encouraged to participate in in OIC. In this paper, we are assessing what characterizes those participants who submit innovative ideas to OIC, in particular those who submit incremental ideas vs. those who have more radical ideas. Drawing on the componential model of creativity and data generated in innovation contest held by chocolate producer Ritter Sport, we analyze the effect of participants‘ creativity, domain knowledge, and several motivational factors on the innovativeness of their contributions. We find all of these factors to affect the innovativeness of an idea. However, regarding generating incremental or radical innovations, some factors have opposing roles. Our findings imply for practice that innovation managers must decide which type of innovations they intend to generate and then design contests to attract participants with the required characteristics, if they want to increase the number of appropriate ideas and reduce the problems of “crowding”.