Conference Agenda

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Session Overview
Session
21-PM1-01: ST5.3 - Company Innovation Management in Emerging Countries: Multiple Challenges for Corporate Governance
Time:
Friday, 21/Jun/2019:
1:00pm - 2:30pm

Session Chair: Dirk MEISSNER, Higher School of Economics, National Research University, Moscow
Location: Amphi Painlevé (Polytechnique)

Session Abstract

Emerging country firms have considerably heightened their profile in the global innovation landscape. On the one hand, this is to generate growth and globalize firms originating from such counties. On the other hand, foreign multinational corporations (MNC) have also contributed to this process, by enlarging innovation mandates and increasing R&D and innovation activities in subsidiaries located in such countries.

Such changes have required the building of substantial technological capabilities, but this is not the entire picture. In order to move up from production capabilities to advanced innovation capabilities as basis for competitive strategy and growth, firms in emerging economies need to undergo a process of organizational change which is an enabling factor for dealing with systemic innovation processes which accounts for state of the art processes employed already by other companies but still goes beyond. The change of business firms’ strategic focus from the sole operational excellence required from imitators to the cross-functional learning and creativity required from innovators is a process of transformation of their own organizational architecture: governance, strategies, structures, decision-making processes and management routines.

Moreover, the organizational change challenge has to be undertaken in an open innovation environment, in which innovation requires capabilities for collaboration and networking from firms, research institutions and customers. Furthermore, as digital transformation is a global phenomenon which affects most business sectors in all industrialized economies, emerging country firms and institutions willing to become innovators need to address the challenge of innovating new digital services and new business models.

The World Bank study on the “Innovation Paradox” argues that an important obstacle to developing countries’ innovation and technological catching up lies on their lack of managerial capabilities, which are an essential complement to investment on R&D and innovation activities. Yet, while there has been substantial research on innovation capabilities and technological catching up in emerging country firms, concern with the challenges they face in developing innovation management and related organizational skill s have received little attention.

The proposed Special Track aims at addressing the above mentioned gaps, by calling papers which would bring about empirical and theoretical research focused on distinctive aspects of innovation management capabilities in emerging country firms and institutions. This could comprise, on the one hand, elements which are rather "internal" to business firms and public institutions, such as the diffusion of particular innovation management and organizational practices, or the challenge of changing culture and allowing for more ambitious innovation strategies or even the difficulties arising with the need to innovate new business models based on digital platforms. Papers also could address elements of emerging country firms and institutions' experience with open innovation, such as the particular nature of industry-university collaboration in emerging economies, or the challenge of creating entrepreneurial universities in this context or even the challenge of governing corporative engagement with start-ups. Furthermore we encourage papers which look at recent innovation management paradigms such as co-creation for innovation and the meaning of digital tools for the organization and steering of the innovation process and research teams.


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Presentations

The long march of environmental new technologies in China

Joel Ruet, Edouard lanckriet

CNRS, France

Context

The breakthrough of the Chinese industries of environmental technologies - wind, solar - seemingly dazzling, is the result of a long-term state strategy. The central government has transformed into a "built industrial advantage" downstream (on technologies) its natural advantage previously built upstream: the global monopoly of production of rare earths.

Literature

Ru, P., Zhi, Q., Zhang, F., Zhong, X., Li, J., & Su, J. (2012). Behind the development of technology : The transition of innovation modes in China ’ s wind turbine manufacturing industry. Energy Policy, 43(January 2016), 58–69. http://doi.org/10.1016/j.enpol.2011.12.025

Xie, W. (2004). Technological learning in China’s colour TV (CTV) industry. Technovation, 24(6), 499–512.

De Lima, I. B., & Leal Filho, W. (2015). Rare earths industry: technological, economic, and environmental implications. Elsevier.

Balcet, G. & Ruet, J. (2012). From Joint Ventures to National Champions or Global Players? Alliances and Technological Catching-up in Chinese and Indian Automotive Industries, European Review of Industrial Economics, n°3

Richet, X. & Ruet, J. - The Chinese and Indian Automobile Industry in Perspective: Technology Appropriation, Catching-up and Development, pp. 447-465, Transition Studies Review. Volume 15 n°3, Springer:Wien, Autumn 2008.

Literature Gap

The acquisition of technological skills in emerging economies is often analyzed at the level of constrained value chain segments constrained. Hobday (1995), Kim (1997) and Xie (2004) analyze technological catch-up in different sequences of acquisition, assimilation, and improvement of technologies but not the forces behind these movements.

Research Questions

The analysis of time-bound and / or space-restricted value chain segments does not explain the emergence of the Chinese industrial system of new technologies. At the level of the national system of innovation, industrial structuring has been orchestrated according to a quadruple scientific, industrial, economic and diplomatic strategy.

Methodology

- Scientific policy of technological integration, defined very early

- Industrial policy of transforming a mining income downstream by calibrated quotas to attract the technologies chosen by the regime.

- Creation, sizing and control of the domestic market by the state to permanently fix foreign companies but gradually sinister the ecosystem,

- Support of economic diplomacy to establish a global competitive advantage.

Four sections take up these strategic times, explaining their management mechanisms. It is the progression and regular refinement of the tools mobilized in the service of this strategy that has allowed the industries that have emerged to dominate global "green capitalism".

Empirical Material

Through Field interviews on - Beijing's role in the emergence and then growth of a fabric of Chinese industrial players of new technologies through the example of the wind industry, to (i) detail the strategy of industrial economy "implementation leverage "and (ii) address the area of ​​cross-sectoral organizational learning. By putting in perspective the development of the downstream of the sector anchored with the upstream mining, by its inscription in the public piloting of the new energies, we point out the preponderant role of the State.

Results

A singularity of method has allowed the country to make a technological catch-up but especially a controlled industrial deployment still under-analyzed, to structure on its territory the national technological and industrial ecosystem which allows it today to capture a maximum of the added value from the resources it extracts from the soil.

The advent of the Chinese wind industry is one of the most comprehensive examples of the success of a state strategy. Beijing, through bodies such as ministries but also the National Development & Reform Commission has organized the technology transfer necessary for the development of each segment of the value chain, leveraging its monopoly on rare earths as well as access to its domestic market ...

Contribution to Scholarship

Should innovation in China be read by international trade and the market, or by the construction of domestic industries and the off-market?

The approach of the Chinese economy by international trade leads to a dead end even if the internal market is broad, and that the savings is still more, China would be stuck in the path of export, especially since its productive tool would remain largely controlled, at least in terms of capital and more importantly the appropriation of added value, by foreign firms.

Re-looking at the question in industrial terms: China capitalized on its industrial policy trajectory and has actively directed FDI to serve technological appropriation. The central thesis of this article is: on the basis of the mining sector that the central power has regained control of the industry and has managed to largely control the capture of technological know-how. This in two stages, both "off-market".

Contribution to Practice

The ex-post analysis shows that the interest of Beijing in the constitution of this monopoly was not rentier nor, as some authors have suggested, geostrategic confined to the upstream mining. The Chinese rare earth monopoly, purposefully and politically constructed, serves a multi-pronged industrial strategy targeting the transfer of technologies required for downstream rare earth industrial value chains to China.

Fitness

It is utterly relevant tp "Company Innovation Management in Emerging Countries: multiple challenges for corporate governance" as the challenges we depict impact both within and outside the company, hence "multiple". We identify 4 streams of intervention; hence again "multiple"

Bibliography

Banett, Seven, Alla Myrvoda, and Malhar Nabat (2012) Sino-Spending, Finance and Development 49, no. 3: 28-30.

Boyer, R. (2011). The Chinese Growth Regime and the World Economy. In R. Boyer, H. Uemura, & A. Isogai (Eds.), Diversity and Transformations of Asian Capitalisms. (pp. 184-205). Chapter 10. Abingdon: Routledge. (Routledge Studies in the Modern World Economy; No. 96).).

Boyer Robert and Saillard Yves (2001) Regulation Theory: The State of Art , Routledge.

Freeman, C. and C. Perez (1988), Structural crises of adjustment, business cycles and investment behavior, in Dosi et al., Technical Change and Economic Theory, Pinter Publishers, London, N.Y., 1988, pp. 38-66.

Oi Jean C. (1992), “Fiscal Reform and the Economic Foundations of Local State Corporatism in China”, World Politics, Vol. 45, N° 1, October, pp. 99-126.

Pei, Mingxin. (2012) The End Of China's Economic Miracle, Newsweek, July 9th, 2012. Https://ww.newsweek.com/end-chinas-economic-miracle-65591

Perez, C. (2002). Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Global Ages, Cheltenham, Elgar.

Perez, C. and L. Soete (1988), Catching up in technology: entry barriers and windows of opportunity, in Dosi et al., Technical Change and Economic Theory, Pinter Publishers, London, N.Y., 1988, pp. 458-479.

Porter, Michael E. (1998). The Competitive Advantage of Nations, London: Macmillan Press Ltd.

Ruffier, Jean (2010) The Knowledge of Industrial Development, Chinese Sociology and Anthropology, Vol. 42 No. 3, Spring 2010, pp. 74-86.

Zhao, W. and La Pira, F. (2013) Chinese Entrepreneurship: Institutions, Ecosystems and Growth Limits, Advances in Economics and Business, No. 1, pp. 72 - 88. doi: 10.13189/aeb.2013.010204.

Lüthje, B. (2019 forthcoming) ‘Regimes of Accumulation and Modes of Regulation in China’s Emergent Capitalism’ in R. Boyer (ed.) China Analyzed by Regulation Theory (Beijing: China Social Science Press).



 
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