Does Multinationality Affect the Propensity to Innovate? An Analysis of the Third UK Community Innovation Survey

The paper is developed at the interface between internationalization and innovation studies. It utilizes data on innovation from the UK Community Innovation Surveys 3 and 2 (CIS3 and CIS2) to assess whether multinationality affects the innovation propensity of surveyed enterprises. The indicators of innovation propensity—our dependent variables—are taken from the following CIS sets of variables: innovation outputs; innovation inputs; innovation outcomes (patent applications); innovation continuity/sustainability. The latter element is considered to be the ability of the enterprise to sustain innovation over a long period of time and the relevant variable is derived from both CIS3 and 2 data. This allows the paper to introduce dynamic elements into the analysis. Four hypotheses are developed and tested. Our main hypothesis states that multinationality per se (i.e. being part of a multinational company network) affects the propensity to innovate. We also test for three sub‐hypotheses related to characteristics of multinationality: belonging to a group vs being independent; degree of multinationality; being part of a foreign vs domestic multinational. The results show that all those CIS enterprises that belong to a multinational corporation—whether UK or foreign—are more likely to exhibit innovation propensity; they are also more likely to engage in innovation activities on a continuous basis.     

A network experiment in continuous time: The influence of link costs

In recent work on non-cooperative network formation star-shaped networks play an important role. In a particular theoretical model of Bala and Goyal (2000) center-sponsored stars are the only strict Nash networks. In testing this theoretical model, Falk and Kosfeld (2003) do not find experimental evidence that players select the center-sponsored star. Based on a slight modification of Bala and Goyal’s model, we design a network formation experiment in which, depending on link costs, periphery-sponsored stars and the empty network are the only strict Nash networks. We observe that almost all groups not only reach a strict Nash network once but also switch the center player in periphery-sponsored stars several times. The main innovation in our experiment is to use a continuous time framework which we believe to be a more realistic setting to study behavior in network formation situations and which makes coordination on stars much easier than simultaneous strategy adaptation in discrete time. Electronic Supplementary Material Supplementary material is available in the online version of this article at http://dx.doi.org/10.1007/s10683-006-9125-1. JEL Classification C72 · C92 · D81     

The Value of Crowdsourcing: Can Users Really Compete with Professionals in Generating New Product Ideas?

Generating ideas for new products used to be the exclusive domain of marketers, engineers, and/or designers. Users have only recently been recognized as an alternative source of new product ideas. Whereas some have attributed great potential to outsourcing idea generation to the “crowd” of users (“crowdsourcing”), others have clearly been more skeptical. The authors join this debate by presenting a real‐world comparison of ideas actually generated by a firm's professionals with those generated by users in the course of an idea generation contest. Both professionals and users provided ideas to solve an effective and relevant problem in the consumer goods market for baby products. Executives from the underlying company evaluated all ideas (blind to their source) in terms of key quality dimensions including novelty, customer benefit, and feasibility. The study reveals that the crowdsourcing process generated user ideas that score significantly higher in terms of novelty and customer benefit, and somewhat lower in terms of feasibility. However, the average values for feasibility—in sharp contrast to novelty and customer benefit—tended to be relatively high overall, meaning that feasibility did not constitute a narrow bottleneck in this study. Even more interestingly, it is found that user ideas are placed more frequently than expected among the very best in terms of novelty and customer benefit. These findings, which are quite counterintuitive from the perspective of classic new product development (NPD) literature, suggest that, at least under certain conditions, crowdsourcing might constitute a promising method to gather user ideas that can complement those of a firm's professionals at the idea generation stage in NPD.     

Evaluating drug cost per responder and number needed to treat associated with lixisenatide on top of glargine when compared to rapid-acting insulin intensification regimens on top of glargine,in patients with type 2 diabetes in the UK,Italy, and Spain

Objectives: This study investigated the cost per responder and number needed to treat (NNT) in type 2 diabetes mellitus (T2DM) patients for lixisenatide compared to insulin intensification regimens using composite endpoints in the UK, Italy, and Spain.

Methods: Efficacy and safety outcomes were obtained from GetGoal Duo-2, a 26-week phase 3 trial comparing lixisenatide vs insulin glulisine (IG) once daily (QD) and three times daily (TID). Response at week 26 was extrapolated to 52 weeks, assuming a maintained treatment effect, based on long-term evidence in other T2DM populations. Responders were defined using composite end-points, based on an HbA1c threshold and/or no weight gain and/or no hypoglycemia. The HbA1c threshold was varied in sensitivity analyses. Annual treatment costs were estimated in euros (1 GBP?=?1.26 EUR), including drug acquisition and resource use costs. Cost per responder was computed by dividing annual treatment costs per patient by the proportion of responders.

Results: Lixisenatide was associated with the lowest cost per responder for all composite end-points that included a weight-related component. For the main composite end-point of HbA1c ≤7.5% AND no weight gain AND no symptomatic hypoglycemia, cost per responder results were: UK: 6,867€, 8,746€, and 12,410€; Italy: 7,057€, 9,160€, and 12,844€; Spain: 8,370€, 11,365€, and 17,038€, for lixisenatide, IG QD, and TID, respectively. The NNT analysis showed that, for every 6.85 and 5.86 patients treated with lixisenatide, there was approximately one additional responder compared to IG QD and TID, respectively.

Limitations: A limitation of the clinical inputs is the lack of 52-week trial data from GetGoal Duo-2, which led to the assumption of a maintained treatment effect from week 26 to 52.

Conclusions: This analysis suggests lixisenatide is an efficient economic resource allocation in the UK, Italy, and Spain.     

New Product Development Practices and Early‐Stage Firms: Two In‐Depth Case Studies

New product development practices (NPD) have been well studied for decades in large, established companies. Implementation of best practices such as predevelopment market planning and cross‐functional teams have been positively correlated with product and project success over a variety of measures. However, for small new ventures, field research into ground‐level adoption of NPD practices is lacking. Because of the risks associated with missteps in new product development and the potential for firm failure, understanding NPD within the new venture context is critical. Through in‐depth case research, this paper investigates two successful physical product‐based early‐stage firms' development processes versus large established firm norms. The research focuses on the start‐up adoption of commonly prescribed management processes to improve NPD, such as cross‐functional teams, use of market planning during innovation development, and the use of structured processes to guide the development team. This research has several theoretical implications. The first finding is that in comparing the innovation processes of these firms to large, established firms, the study found several key differences from the large firm paradigm. These differences in development approach from what is prescribed for large, established firms are driven by necessity from a scarcity of resources. These new firms simply did not have the resources (financial or human) to create multi‐ or cross‐functional teams or organizations in the traditional sense for their first product. Use of virtual resources was pervasive. Founders also played multiple roles concurrently in the organization, as opposed to relying on functional departments so common in large firms. The NPD process used by both firms was informal—much more skeletal than commonly recommended structured processes. The data indicated that these firms put less focus on managing the process and more emphasis on managing their goals (the main driver being getting the first product to market). In addition to little or no written procedures being used, development meetings did not run to specific paper‐based deliverables or defined steps. In terms of market and user insight, these activities were primarily performed inside the core team—using methods that again were distinctive in their approach. What drove a project to completion was relying on team experience or a “learn as you go approach.” Again, the driver for this type of truncated market research approach was a lack of resources and need to increase the project's speed‐to‐market. Both firms in our study were highly successful, from not only an NPD efficiency standpoint but also effectiveness. The second broad finding we draw from this work is that there are lessons to be learned from start‐ups for large, established firms seeking ever‐increasing efficiency. We have found that small empowered teams leading projects substantial in scope can be extremely effective when roles are expanded, decision power is ground‐level, and there is little emphasis on defined processes. This exploratory research highlights the unique aspects of NPD within small early‐stage firms, and highlights areas of further research and management implications for both small new ventures and large established firms seeking to increase NPD efficiency and effectiveness.     

Country‐Specific Profiles of Performance Management in China,Germany, and the United States—An Empirical Test

The vast majority of the literature on performance management (PM) chooses a contextual perspective, focusing on the cross‐country comparison of single elements of the PM system. Simultaneously, a conceptual basis and an encompassing comprehension of country‐specific peculiarities are lacking. Based on a suggested conceptualization of the elements of PM (criteria, actors, methods, purposes, feedback) and hypotheses developed from an encompassing literature review, the authors present empirical findings from a quantitative study including 167 managers from multinational enterprise (MNE) subsidiaries in three culturally and institutionally diverse major economies (Germany, United States, and China). Contrary to what the literature suggests about the local peculiarities of PM, the results of the present study show significant country‐specific differences in only 6 out of 16 investigated PM features. Furthermore, the analytical categorization of “Western” countries versus China cannot be empirically confirmed. In contrast, more similarities between China and Germany than between Germany and the United States are identified. © 2014 Wiley Periodicals, Inc.