The harnessing of biotechnology in India: Which roads to travel?

In India, as in most developing countries, biotechnology was ushered in through public policy rather than individual firm initiatives. Throughout the 1980s and until the mid-1990s the focus of public policy was on creation of scientific capabilities and building of awareness of the potential of biotechnology. With the adoption of economic liberalization in the 1990s, the Indian State also began to sponsor private initiatives in capacity building. Today, the leading Indian firms have commercialized generic versions of original innovations developed by US and Japanese firms, using the traditional route of re-engineering. A handful of firms are actively engaged in first order innovation and in addition, a number of start-ups have emerged to make use of opportunities to provide contract research services to Western and Japanese multinationals. But can a focus on bio-generics and contracting for multinationals be used as a route for competence building and as a stepping stone to become original innovators? The present article shows that while India has ‘strong scientific and technological capabilities’, it is constrained by weak ‘social capabilities’ of its labor force, lack of ‘institutional capabilities’ in regulation and financing, infrastructural constraints and absence of national programs to achieve concrete targets in terms of biotechnology innovations to promote a more inclusive development.     

Are regional systems greening the economy? Local spillovers,green innovations and firms’ economic performances

The adoption and diffusion of environmental innovations (EIs) is crucial to greening the economy and achieving win–win environmental/economic gains. A large and increasing literature has focused on the levers underlying EIs that are external to the firm, such as stakeholder and policy pressures. Little attention, however, has been devoted to the possible role of local spillovers of a sector/geographical nature as a factor that correlates with EIs and economic performances. A rich data set that covers the innovative activities and economic performances of firms in the Emilia-Romagna region in Italy, an area dense in manufacturing districts, is analysed. EIs’ drivers and effects on firms’ performance are investigated through a two-step procedure. First, we examine the relevance of spatial levers, namely, whether high rates of eco-innovators in a given local area induce the adoption of EIs in firms located in the same local area. The role of the ‘agglomeration lever’ turns out to be fairly local in nature: we find that spillovers are significantly inducing innovation within municipal boundaries. Second, we test whether EIs adoptions have significantly increased firms’ economic performances and find that some firms’ productivity performances are positively related to EI adoption.     

Which factors hinder the adoption of open innovation in SMEs?

The literature on open innovation (OI) is characterised by studies based both on large companies and small and medium-sized enterprises (SMEs). Among all, one of the less explored issues in SMEs is what impedes them to adopt OI. Thus, this paper has the threefold objective to identify which factors hinder the adoption of OI in SMEs, to investigate if different behaviours exist among SMEs in relation to these factors, and to understand if the same factors effectively influence the level of adoption of OI. Based on a survey on 157 Italian SMEs, we identified four main barriers (namely, ‘knowledge’, ‘collaboration’, ‘organisational’, and ‘financial and strategic’) and three profiles of firms, different in terms of innovativeness of the industries they belong to (knowledge intensive, medium-innovative, and less innovative) and hampering factors perceived (‘knowledge’, ‘financial and strategic’, and ‘collaboration’ and ‘organisational’ barriers). Moreover, we found that some of these factors effectively impede the adoption of the paradigm.     

Technological Expectations And The Diffusion Of ‘Intermediate’ Technologies

The concept of ‘technological expectations’ has established itself as a key one in the smdy of innovation adoption. The article suggests that it may help explaining not just the adopters' timing decisions, but also their decisions regarding the kind of innovation they adopt. Innova tions that set the technological frontier face the competitive diffusion of some ‘intemdiate’ technologies. These may be either old technologies or ‘midrange’ ones. which purposefully lag behind the frontier, in order to impose lower adoption costs to their users.

Taking into account midrange innovations casts new light on the supply side of the diffu sion process. in terms of technological variety and selection effects. Drawing examples from the electronic colour pre-press industry, we highlight the equipment suppliers' anxious quest for the successful midrange innovation, able to hit the right txade-off between proximity to the frontier and adoption costs.     

The Determinants Of The Adoption Of Advanced Manufacturing Technology

The paper investigates empirically the decision of firms to adopt ‘Advanced Manufacturing Technologies’ (AMT) based on a comprehensive specification of a ‘rank model’ of technology adoption using firm-level data for Swiss manufacturing. The explanatory variables include numerous dimensions of (anticipated) benefits from and costs of technology adoption allowing for uncertainty as well as for information and adjustment costs. Moreover, the effect of complementarities between various functional groups of AMT (design, fabrication, communication, etc.) as well as of learning from the use of previous technology vintages within such functional groups is analyzed, Finally, the size-dependence of the adoption decision is studied in detail. The model yields a quite robust pattern of explanation across estimates with different adoption variables (time period of introduction of AMT, intensity of use of AMT, etc.) with plausible differences of the results based on the alternative adoption measures used.     

The micro-firm health insurance hypothesis

The objective of this study is to investigate the ‘micro-firm health insurance hypothesis’, a hypothesis that the greater the percentage of domestic firms that are ‘very small’, i.e. have four or fewer employees, the greater the percentage of the US population that will be without health insurance. The focus of this study is based on the premise that very small firms (as defined), ‘micro-firms’, which constitute 58.6% of all private sector firms in the US, face bargaining-power, financial, and competitive constraints that tend to limit their ability to provide group health insurance benefits to their employees, with the result being that employees at very small firms are relatively more likely than employees at larger firms to be without a health insurance fringe benefit. Weighted Least Squares (WLS) estimates provide strong empirical support for the hypothesis.     

Technology diffusion and environmental regulation: the adoption of natural gas-fired combined cycle generating units

Even though environmental policy can affect the path of technology diffusion, the economics literature contains limited empirical evidence of this relationship. This paper provides insight into the technology adoption decisions of electric generating firms. Specifically, the diffusion of combined cycle (CC) generating units is examined. This technology is ‘environmentally friendly’ in that, it is cleaner and more efficient than alternative generating units. The empirical model explores the decision to adopt a CC generating unit and the extent to which the technology is adopted in response to environmental regulations imposed on producers. Zero-inflated models are used to evaluate adoption decisions at the plant-level as well as the firm-level. This research shows that environmental regulation has a significant effect on technology choice and the extent of adoption in this industry. Findings suggest that the stringency of regulations that control the building of new generating units is particularly influential for established power plants.     

IS THERE A CURSE OF RELOCATION? ANALYSING THE CAUSAL LINK BETWEEN OFFSHORING AND THE INNOVATION PERFORMANCE OF (SMALL) FIRMS

We analyse the empirical link between offshoring activities and different dimensions of innovation performance at the firm‐level. In order to identify causal effects running from offshoring to innovation, we use a quasi‐experimental comparison group approach by means of (conditional) difference‐in‐difference estimations applied to German establishment‐level data for firms that conducted offshoring activities in the period 2007–13. We find that the international relocation of business functions has a negative impact on the firms’ propensity to be innovative in terms of product and process innovations as well as product improvements. While for larger firms the reduction in process innovations is most striking, potentially due to a lack of resources, stagnation in expertise and a reduction in intra‐organizational learning‐by‐doing associated with the relocation of some business activities, for small and medium‐sized enterprises we particularly observe a reduction in product innovations after the offshoring activity has taken place. When interpreting this ‘pessimistic’ picture on the link between offshoring and the innovation performance of firms, the reader should note that our findings for German establishments have to be assessed through the lens of a global economy in economic recession after 2008, which may have intensified the negative impact of offshoring on the firms’ innovation performance.     

Employment Protection Versus Flexicurity: On Technology Adoption in Unionised Firms*

We analyse how different labour‐market institutions – employment protection versus ‘flexicurity’– affect technology adoption in unionised firms. We consider trade unions’ incentives to oppose or endorse labour‐saving technology and firms’ incentives to invest in such technology. Increased flexicurity – interpreted as less employment protection and a higher reservation wage for workers – unambiguously increases firms’ incentives for technology adoption. If unions have some direct influence on technology, a higher reservation wage also makes unions more willing to accept technological change. Less employment protection has the opposite effect, as this increases the downside (job losses) of labour‐saving technology.     

The sources of innovations – looking beyond technological opportunities*

The concept ‘technological opportunity’ has been coined to capture the vitality of the underlying sciences and technologies as the sources of technical progress that firms draw upon during innovation. Nonetheless, less attention has been paid to the fact that the commercialisation of technical progress through innovations also depends on the ability to assimilate a range of other sources of innovations, related less to the sciences and technologies and more to characteristics of the market and broader environment in which firms innovate. This paper focuses on the sectoral diversity in such sources, and on the ways in which they are assimilated and turned into commercialised innovations. The paper contributes to the extant literature by drawing on a unique survey data on Finnish innovations. The results both confirm and also challenge, and further elaborate on certain ‘stylised facts’ on the relationships between technological opportunities and the sources of innovation across sectors.     

Technology adoption in a differentiated duopoly: Cournot versus Bertrand

This paper shows that the cost as well as the effectiveness of technology has a differential impact on technology adoption under two alternative modes of competition. If the cost of the technology is high, Bertrand competition provides a stronger incentive to adopt technology than Cournot competition unless the effectiveness of the technology is very low. On the contrary, if the cost of the technology is low, Cournot competition fares better than Bertrand competition in terms of technology adoption by firms. This demonstrates that the commonly subscribed assumption of ‘positive primary outputs’ restricts (inflates) the scope of higher degree of technology adoption under Bertrand (Cournot) competition. Moreover, in contrast to standard welfare ranking, it shows that Cournot competition leads to higher social welfare than Bertrand competition under certain situations.     

Consumer foresight,customer data,and investment in targeting technology

We analyze competing firms’ incentives to adopt a technology that allows making refined targeted offers to returning customers. Consumer foresight is crucial for firms’ decisions. Although our setup is symmetric, when consumers are myopic, the unique equilibrium is asymmetric in firms’ technology adoption decisions. Contrary to conventional wisdom, consumers may be better off being myopic than sophisticated. Light privacy policy may benefit consumers if it reduces the costs of handling customer data and avoids strict obligations on firms to inform consumers about data use, which would erode investment incentives into targeting technology.     

Information Provision by Interest Groups

We investigate interest groups’ incentives to inform consumers about the damaging practices of firms and the impact such an IG has on firms’ technology choices. The IG aims to reduce the production of some bad, say pollution. It can at a cost investigate firms’ production practices and inform consumers about its findings. Since consumers care about the environment, revealing differences in pollution levels between firms leads to vertical product differentiation. The information, by shifting sales from ‘dirty’ towards ‘clean’ firms, reduces pollution. We show that the IG is most inclined to investigate firms in relatively competitive industries and that the threat of being unmasked as a polluter prompts dirty firms to adopt a clean technology.     

Possible suboptimal diffusions of technological innovations in clustered scale-free networks

Many inter-firm networks take a skewed power-law- or scale-free distribution in which one or a few central actors are connected to numerous peripheral actors. Research argues that central actors can act as early adopters and catalysts for the adoption of technological innovations, but studies are inconclusive regarding central actors’ de facto role in this matter. Peripheral actors in scale-free networks tend to cluster, which implies that they are structurally embedded and mutually dependent. A major thesis in this paper is that clustered peripheral actors in scale-free networks may restrict central actors’ propensity to adopt innovations, and as a result impede their diffusion. The paper discusses which implications this may have for stakeholders in the private and public sector domain and practitioners of strategic management.     

Two-stage adoption of different types of pollution prevention (P2) activities

Pollution prevention (P2) remains the key pollution reduction strategy in the US despite its limited success in improving environmental performance. To aid the targeting of policies to promote the types of P2 that achieve environmental goals, this study investigates the intricate nature of P2 adoption by (1) distinguishing among three types of P2: procedural changes, input and material changes and equipment and product changes, (2) disentangling the adoption decision into a binary and a count decision, and (3) analyzing benefit- and cost-related factors. Using a sample of facilities of S&P 500 firms, I employ NB hurdle models to analyze how facilities respond to these factors in making P2 adoption decisions. I find that facilities that have lower cost of adoption due to past P2 experience have higher likelihood of adoption and higher rates of adoption of all types of P2. However, those exposed to greater threat of enforcement action find limited scope for P2 in achieving environmental compliance objectives. Some regulatory threat variables even have a negative effect. Facilities also adopt P2 to enjoy market-related benefits: final good producers are more likely to adopt P2 that appeal to consumers (input and material changes), while intermediate good producers are more likely to adopt P2 that is valued by its supply chain (procedural changes). Community characteristics and other knowledge sources are not always positively associated with the likelihood of adoption nor with the rate of adoption.     

Fiber in the backbone! The impact of broadband adoption on firm growth in network markets

This article examined the relationship between the adoption of technology, via the deployment of broadband, on revenue growth, which is an important measure of financial performance, of the deploying firms using panel data for all of the major local exchange carriers in the US telecommunications industry from 1988 to 2001. The sector is an important network market context where the implications of deployment have substantial salience. The results show a positive relationship between broadband deployment and carriers’ revenue growth. This result implies that encouraging the adoption and deployment of broadband technologies in addition to the benefits of the consumers and firms at the receiving end of the new technology create the potential for better financial performance for the deploying firms. These results also imply that steps that can be taken to provide incentives that will hasten the further deployment of broadband will result in gains in financial performance within the sector.     

Nature of Competition and New Technology Adoption

The incentives to adopt cost‐reducing technology by firms in a horizontally‐differentiated duopoly are analysed in the present paper. Cost reduction depends on the ‘quality’ of the ‘new technology’. A firm has to procure such technology in a ‘scoring auction’. When the quality offered by the suppliers of this technology lies in the interior of the feasible range, both firms adopt the new technology regardless of the nature of competition (Cournot or Bertrand). However, when there is a corner solution, there are equilibria where only one firm (or no firm) adopts the new technology. With a corner solution the nature of competition affects the equilibrium outcomes.     

On the diffusion of toilets as bottom of the pyramid innovation: Lessons from sanitation entrepreneurs

There is an emerging body of literature on product innovations for the poor at the bottom of the income pyramid. However, there is little on why delivery systems succeed or fail in this context and the present paper attempts to fill this void by examining why and how sanitation entrepreneurs are succeeding in India to diffuse toilets — an innovation for rural households, which never had access to one before. The literature is analyzed and confronted with the actual field practices. We demonstrate that the common thread that unifies progressive sanitation entrepreneurs is their adoption of a ‘market based approach’. There are market failures stemming from the demand side due to problems in expression of demand and its mismatch with the perceived value of the innovation. In response, sanitation entrepreneurs go beyond the standard linear model of assessing need and appropriateness of technology. They create innovations in ‘technological design’ as well as in the ‘delivery platforms’ to include practices for ‘accompaniment’, ‘sustainable maintenance’ and ‘generation of knowledge'. Thus, they make-up for sluggish or missing markets and informational asymmetries to ensure sustained use of toilets.     

Persistence of product innovation: comparing breakthrough and incremental product innovation

In this paper we examine whether and to what extent breakthrough and incremental product innovation is persistent at the firm level. Drawing on a panel database created from the Community Innovation Survey (CIS) we find that lagged breakthrough product innovation ‘new to the market’, has a significant and positive influence on firms’ ability to develop current breakthrough innovation, while this is not the case for incremental-product innovation ‘only new to the firm’. Our findings show that the dynamics of innovation persistence differ across types of (product) innovations.     

Managing the transition to sustainable supply chain management practices: Evidence from Dutch leader firms in Sub-Saharan Africa

Abstract

Governance literature identifies so-called ‘leader firms’ as the directors of global value chains. But in what direction are they leading? Some leader firms actively try to make a transition towards sustainable supply chain practices, but how can this be assessed? Supply chain management literature provides fragmented insights into the antecedents of transition processes. They adopt a largely ‘top-down’, ‘inside-out’ perspective rather than (also) take a ‘bottom-up’ and ‘outside-in’ perspective in which the consequences for the business models of supplying firms at the bottom of the supply chain are rarely taken into account. This contribution develops a more integrated eclectic approach on sustainable supply business models. We conceptualise antecedents of change along consecutive stages of management that combines different supplier ‘upgrading’ approaches with different ways in which leader firms integrate suppliers in their purchasing strategies. We apply this model to the strategies of 10 leading Dutch companies active in Africa, but with different supply chain positions.