Dynamics of a Technological Innovator Network and Its Impact on Technological Performance

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ABSTRACT

This paper examines the dynamics of a technological innovator network (TIN) of a state-owned textile company in underdeveloped southwest China. It addresses two research questions: how the structure of the TIN evolved in the past 10 years; and what impact it had on the technological performance of the firm. The case study reveals that the general structure of the TIN and the positioning of the actors influence not only the amount of technological innovations but also the predominant type (product versus process innovations). TINs that are adequate for process innovation may not be as efficient for product innovation.

Keywords: Technological innovator network; technological innovation performance; product and process innovation; network structure; network dynamics; China

1. INTRODUCTION

It is now generally accepted that innovation is the result of an interactive process. Innovation is not an isolated process of individuals or firms but is the outcome of the interaction of firms, customers, suppliers, competitors and various other private and public organisations in a system (Lundvall, 1988, 1992). Through a complex web of interactions, individuals and organisations exchange the knowledge needed for the development of new products or processes or the improvement of existing ones. Understanding the drivers of innovation requires an in-depth analysis of the social relationships and organisational structures supporting the exchange of knowledge and information across the different actors in an innovation system (Lundvall, 2004).

Consequently innovation studies scholars have largely analyzed the role of networks in the generation of ideas and their transformation into new products or processes (Powel and Grodal, 2005). Broadly speaking, an innovator network can be defined as a web of individuals or organisations whose interaction supports the emergence and development of innovations. While some authors have been mainly concerned with the geographical location of innovator networks or its stickiness (Beccatini, 1990; Camagni, 1991; Cooke, 1996, 1998; Marshall, 1930; Piori and Sabel, 1984; Storper, 1997; Asheim and Gertler, 2005), others have largely studied how the intrinsic characteristics of the network in terms of structure (Das and Teng, 2002), governance (Pietrobelli and Rabellotti, 2009; Gereffi, 2005; Sturgeon and Van Biesebroeck, 2008), cognitive distance between the participants of the network (Gilsing et al., 2008) or the strength of the ties (Granovetter, 1973) affect the transfer of knowledge and consequently the emergence or development of innovations (Nooteboom, 2004). While these studies have been extremely helpful in understanding how networks might support the emergence and development of innovation, they still are rather limited.

Most scholars have focused on the role of inter-organisational networks in shaping innovation (DeBresson and Arnesse, 2001; Freeman, 1991; Hagerdoorn, 1990, 1993; Nooteboom, 2004; Powell et al, 1996; Soh and Roberts, 2003) and innovation systems (Giuliani and Bell, 2005; Kastelle et al., 2009). There are not yet many empirical studies on the role of intra-firm networks on innovation and organisational learning (Dantas, 2006; Jensen et al., 2007) and even fewer on the interplay between intra- and extraorganisational networks shaping innovation.

Furthermore, most of the studies conducted hitherto are based on qualitative methods of analysis. When quantitative analysis has been performed, authors have mainly focused on formal networks as the independent variable and patents as the dependent variable, thus neglecting other forms of networks as well as other measures of innovative output like new products, services, organisations, etc. (Powell and Grodal, 2005). Hitherto most of the studies on intrafirm networks are at the individual level in which individuals are taken as nodes of the network. Networks of groups and organisations are not very common. …