i have attached the intro and literature review of the dissertation which has already been done, just want to get the rest done with secondary data collections.
The difference in R&D collaboration strategies and technology competencies in large firms and SMEs
Introduction
In the past, a trend of decentralization of R&D funds together with the control of Strategic Business Units (SBUs) was common which attempted to ensure that the R&D was market-driven (SBA, 2010). It also ensured that innovation success rate would increase. However, extreme decentralization in the recent past has debilitated long lasting amassment of technology and at the same time minimized effectiveness in the shift of technology talents between SBUs. As a result, an emerging interest in reclaiming business control of some aspects of technology management has been witnessed. Notably, growth and survival have been the two main themes in companies’ development. While organizations compete in today’s business world on their core competencies, they also boast of and develop technological areas which they are less competitive at (Nieto & Santamaria, 2010). They do so either as novel technology changes which may assist them to react to regular transformations in the dynamic setting, or as background knowledge advocating for their core technology competencies.
Most up-to-date practices indicate that many organizations open up their territories and engage in R&D collaboration strategies in their core or non-core technological areas (Arranz& De Arroyabe, 2008). Businesses are now under pressure to increase the worth of their technology by speeding up the rapidity of its development and intensifying its profitable application. The pressure is also driving key transformations in sourcing activities and strategies. Organizations are focusing internal R&D collaborations on core competencies and technologies while establishing relations with external partners to implement technologies collaboratively to novel systems and products. Those that have been unwilling or unable to create firm technological positions through internal R&D may find alternative opportunities as technology-intensive organization search for novel partners (Altomonte, Aquilante&Ottaviano, 2013). Most organizations are yet to achieve anything close to the desired of leveraging of their investments. That is why most organizations’ technology management activities and cultures have shifted their concentration to improve the efficiency of R&D collaborations.
Collaborative technology growth together with external technology sourcing has generally evolved in an unplanned manner, with no single individual or company having the obligation to manage the activities for total corporate advantage (Cassiman&Golovko, 2011). Organizations that choose to outsource technologies without necessarily strengthening and maintaining their core technology competencies are said to be looking for trouble. This is because, without such capabilities, they would not be in a position to make favorable deals with technology associates or even satisfactorily evaluate external technologies. Therefore, for both large and small organization to balance the need to maintain core technology competencies with the need to keep off the not-invented-here disorder, they need to value these competencies and evaluate the extension and maintenance costs (Child & Hsieh, 2014). They also need to determine effective external sources of technology, determine core capabilities and technologies while assessing their competitive positions, and encourage researchers to labor collaboratively.
R&D collaboration strategies in large firms
Companies are regularly organizing R&D collaborations among different units. These are in an effort to promote knowledge flows while bringing novel knowledge to local communities (Filatotchev &Piesse, 2009). Unlike collaborations within SMEs, R&D collaborations in large firms are more routinized and minimize the need for interpersonal relations. They also increase the dependence on organizational framework. From a management point of view, collaborations allow firms to obtain know-how knowledge incorporating information about what is known and what is to be done, and the social competence to communicate and work together with different partners. Large firms have come to accept that technological progress cannot occur without the systematic involvement in R&D (Halilem, Amara & Landry, 2014). They tend to come up with routines that are linked to constructive performances, and are copied and perpetuated without quick transformations. Eventually, these lead to path dependency in the firms’ strategy and behavior.
Innovation is described as an activity that involves both high risks and high costs, and is in most cases the outcome of the confrontation of distinct areas of knowledge. Eventually, large firms seem to be more innovative compared to SMEs since they possess both fiscal strengths to take more risks and an internal knowledge pool of massive size, combined with a scope to come up with novel concepts (OECD, 2008). This also means that an industry that has larger firms tend to have speedy technological advances on innovations attempts that are being pursued. Today’s R&D technologies are more complex though the significant resource allocation and risk management examples in place at most large firms remain embedded in the past. However, public research institutions and customers remain the most luring partners with regards to product innovation capability.
Research studies point out that it is more difficult for large firms to carry out purely individual strategies in an effort to be innovative. That is why they need to collaborate with partners so as to gain access to particular knowledge or the resources they do not possess internally (Kumar &Siddharthan, 2013). R&D collaboration strategies in large firms are more successful compared to those in SMEs simply because large firms are treated better than their counterparts. They also boast of greater economic legitimacy, having more resources to commit to the formalization of agreements or look for public support. Large firms have concentrated on how to leverage partner competencies. From their point of view, collaborating with SMEs is quite profitable in that the enterprises have individuals with the suitable combination of specialized talent to develop novel products, thus enabling the large firms to keep an eye on the development of novel equipment and technology.
Experts have noted that R&D collaboration strategies among asymmetric partners are common despite there being natural limitations. Large firms which opt for asymmetric partnership may not have much to lose, and have better chances of keeping away from opportunism (Sun & Kim, 2012). They also have more resources to introduce legal action, and can deny further transactions, finding other partners as a substitute.
Technology competencies in large firms
Different studies have determined that large firms are the most pervasive competencies in terms of technology, having evolved over time. This is attributed to the fact that they tend to invest heavily in technology, unlike their SMEs counterparts who may have fewer fiscal resources to do so (Schonrok, 2010). Keeping in mind the current worldwide setting, most organizations are utilizing the Internet technology to carry out some of their day to day business. Notably, it is much easier for SMEs to participate in innovation compared to large firms because they have the capacity to make quick decisions due to less bureaucracy. As observed in the recent past, one key aspect of the transforming business environment for large firms has been the propensity for specialized technological knowledge and novel entities of understanding to come up in SMEs. Large firms are thus forced to put more emphasis on the adaptive or dynamic, extrovert or open and systems integration sides of their technological competencies (Foss & Robertson, 2007).
Large firms have proven to be quite stable and differentiated in terms of composition, with both the path of localized search and technology mix firmly affected by the organizations’ principal products. As already indicated, most amazing characteristic of the technology competencies of large firms is the diversity of technological areas in which they function. Such organizations tend to have substantial technology capabilities outside what would seem to be their main areas. For instance, both chemical and electrical organizations possess about two-thirds of their capabilities in their noticeable core regions. However, each possesses about 15% in nonelectrical machinery (Malerba& Mani, 2009). Recently, experts have discovered that technology intensity tends to influence an organization’s technological competencies. Home country features also influence the organization’s level of technological diversity.
Large firms happen to be technologically diverse in addition to their diversity being transformed over time. Notably, these organizations together with the products they manufacture rely on various areas of technological competence, the position of which is shifting over time given the expanding variety of technological changes that come from improved science-based and computing technologies (SBA, 2010). To incorporate this variety of upcoming technologies, large firms have learnt to concurrently increase their internal capabilities and establish associations with external sources while increasing their general R&D expenditures. These firms have also realized that competence tends to reflect the relative significance of the area in the organization’s overall portfolio. Clearly, they do not change around fast in their areas of technological capabilities.
Considering that an organization’s competencies and paths of search are determined by what it manufactures, and that technological chances are not equal across fields, organizations have differing capacities to discover opportunities, thus the varying rates of accumulation (Yoon & Song, 2014). The large organizations’ sector of activity is quite wide and mostly international. This means that its rate of technological accumulation is greater compared to that of SMEs. The stability, differentiation, and variety of large firms’ technology competencies, the localized nature of their technological hunt, and the firms’ close connections to the products they manufacture, are evidence of the significance of technological complication with regards to constraining the processes of technological hunt (Shin & Lee, 2013). Therefore, qualitative research is necessary to fully comprehend the dynamics of competence building and management in large firms.
R&D collaboration strategies in SMEs
The interest for R&D collaboration among Small-Medium Enterprises and innovation has recently been the focus of attention given the accelerated technological transformations and increased international competitiveness. Organizations are being reminded that collaboration strategies and technology competencies are at the core of competitive performance (Arranz& De Arroyabe, 2008). These are today considered to be a significant change process that is able to sustain business growth in increasingly self-motivated markets. During the 1980s, R&D collaboration assisted in the revitalization of key industries. Today, a novel generation of collaborative contracts can be seen, ones that are aimed at focusing more on technology competencies. As earlier mentioned, collaboration tends to encourage organizations to maintain constant quality improvement and innovation necessary to compete worldwide, and to reinforce market position. Given that transformations in a setting often create possibilities for future innovations, collaborative strategies usually allow SMEs to advance in a well-timed manner, and provide the most favorable time to come up with a new product (Perez-Cano, 2013).
R&D collaboration strategies have proved to be quite beneficial to SMEs from the utilization of innovative activities, to the utilization of technology or other talents transfer. It would be considered wise for SMEs to opt for relationships that assist them to strengthen their core technology competencies and come up with others useful for their market focus. Clearly, collaborative strategies are evolving resulting in SMEs joining the value chains of larger companies. Arguments cite that such organizations need to internationalize their activities, particularly their sales, given the worldwide and restricted nature of the technological market niche in which they battle (Revilla & Fernandez, 2012). Innovative SMEs are characterized by the ability to react quickly to transforming environments and needs, in addition to being flexible. The increased significance of these businesses in networks as leaders in technology has also brought about implications for industrial innovation.
Improving the chances of triumphant collaborations is quite significant to the expansion and progress of SMEs. These enterprises are considered as important sources of job establishment given that they constitute the majority of firms across nations. Notably, SMEs find R&D collaborations to be a rather attractive strategy for the internalization of their activities (Sawers, Pretorius &Oerlemans, 2008). However, they do not gain from public R&D collaboration strategies because the connections with innovative studies are weak. Furthermore, concepts that are developed are not usually commercialized. Since SMEs tend to lack R&D resources, they possess a strong incentive to participate in R&D networks and industry collaborations that provide quick outcomes such as the creation of a novel product, thus conquering the methodical hurdles of networking.
Collaboration with SMEs has so far been identified as a key strategy aimed at delivering corporate innovation (Nieto & Santamaria, 2010). The enterprises are often hesitant of collaborating with others to innovate, even though there is proof suggesting that such collaborations boost innovation success. There have been criticisms that SMEs are excessively focused on R&D, which may not be quite relevant to other forms of businesses. Moreover, the preoccupation with R&D may be stimulating a misperception among managers that it is dangerous to collaborate with others if one has not officially safeguarded their innovation. Business firms are known to spend a third more on SME collaboration strategies than on development and study (Altomonte, Aquilante&Ottaviano, 2013).
A popular concept of R&D collaboration strategies has been in progress, which states that if a business has a capability gap, it needs to find another business partner with similar capabilities and participate in collaborative innovation. However, it was discovered that the most triumphant strategy for growing organizations is to invest in internal capabilities initially through training, and progress to build them while collaborating externally (Cassiman&Golovko, 2011). Given the fact that SMEs tend to have a constraint on fiscal and human management resources, they happen to be more in need to participate in R&D collaboration activities within a shorter time period than large firms. Moreover, they also experience a more severe limitation on management resources than their larger counterparts. This means that there is a greater risk in participating in such activities. Obviously, greater awareness of the advantages related to R&D collaborations in SMEs is needed in order to create platforms that promote these collaborations.
Technology competencies in SMEs
SMEs readily promote innovation by acting as a medium through which novel concepts are brought to the market, and by maximizing on novel technologies (Child & Hsieh, 2014). While technological competencies in large firms tend to concentrate on activities that gain from scale economies, SMEs often chase innovation strategies that concentrate more on customization, product flexibility, and specialization. These features are also determined by a regular interaction between organizations and their customers. Notably, the ability to make use of information technology for business process enhancement in the facilitation of collecting information for better decision making, has for a long time been the territory of large firms (Filatotchev &Piesse, 2009). However, following waning costs, faster internet connectivity, and improved computing power, SMEs are now able to develop and create an efficient technology competence.
Information technology has been identified as a significant element of SME operation in today’s aggressive business setting. According to recent studies, an estimated 66% of SMEs managers or owners are making use of the Internet in their businesses while 85% are likely to recommend other SMEs to utilize this particular technology (Halilem, Amara & Landry, 2014). From what has been observed in the recent past, technological investments in SMEs tend to be different from those in large firms because fewer individuals are responsible for decision making, there is more reliance on external technological experts, long lasting planning is restricted, and standard procedures are not instituted in SMEs (OECD, 2008). Even so, technology competencies may allow the long term survival of SMEs in various ways. For instance, they may provide admission to external knowledge and fiscal resources, create more social network ties, and establish authenticity and trust through extensive information distribution.
SMEs are not only recognized as key contributors to the international trade and economy, but are a driving force of innovation, playing an important role in worldwide markets that have so far employed two-thirds of the global workforce. The challenge that is now being experienced is the ability to remain innovative and aggressive as these small businesses grow. Additionally, foretelling upcoming technologies is also considered a challenging task given the little or no availability of recorded information (Kumar &Siddharthan, 2013). SMEs have learnt to utilize their own networks for their technological observations, depending on changing circumstances, strategic needs, and requirements. Those that have technology competencies mainly have four main advantages which include being able to assimilate external knowledge in similar area and more effective in integrating extra talents, engaging in search tasks that enhance effectiveness and producing dependable results, having more exploitation of existing know-how, and being able to amass technical expertise (Sun & Kim, 2012).
Varied arguments state that firm R&D collaboration strategies could protect the innovation rate and product aggressiveness in SMEs, whereas resource allotment competence would encourage the sales growth in smaller organizations. SMEs that boast of organizing abilities are able to change the innovative concepts into commercial goods, resulting in outstanding organization performance (Schonrok, 2010). An excellent and creative R&D output cannot in itself result in positive innovation performance and that is why it must be developed by manufacturing in the improvement process.
Historically, R&D collaborations have been on the increase since the 60s following the increasing level of complication of Research and Development projects in the recent past. It has always been presumed that the advantages of R&D collaboration strategies increases the efficiency of such efforts, providing more flexibility to the adaptation of technological transformations, and gets rid of wasteful duplication. One important outcome of using R&D collaborations is that large firms are more likely to achieve outcomes more easily, and incur in the separation of innovative activities compared to SMEs. This, however, does not necessarily mean that such collaborations have no influence on SMEs. From the discussions outlined above, the management of innovation is rapidly transforming. The development and pursuit of new concepts is no longer the focus of large R&D departments within vertically integrated organizations. Instead, such innovation has brought to the market new technologies and networks in firms that improve functioning in a coordinated way.
Notably, in the past, many organizations gave little thought to strategy and did not move from utilizing worldwide partners to lower costs even after carrying out numerous projects. R&D collaboration strategies thus received little or no senior management attention. However, large firms and SMEs learnt to develop an explicit collaboration strategy that was fashioned to advocate for their business goals. Minimizing R&D costs was the first priority for firms that made use of partners to innovate. The firms have eventually understood the need to transform the way they organize and capitalize on the value of collaborative efforts. On the other hand, technology is considered to be the legal tender of the new millennium. Organizations that are able to acquire or develop proprietary positions in cutting edge technologies get to establish a firm foundation for growth. This chapter critically analyzes the significance of R&D collaborations and technology competencies in both large firms and SMEs. These collaborations have become the focused matching services which assist innovative organizations to not only collaborate with, but also establish technology partnerships.
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