The organisational decomposition of the innovation process

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The organisational decomposition of the
innovation process

• What does it mean for the global distribution of
  innovation activities?

2
Global distribution of capabilities

• Massive and rapid dispersal of production
  capabilities
• Continuing concentration of
• innovation capabilities

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Why is the global distribution of innovation
activities changing?

• Return migration of engineers
• Big investment in education
• Low wages of highly educated workers
• Insertion of local firms in global chains
• Co-location of firms support institutions
• Significance of lead markets in Asia LA
• Trading market access for technology

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Why ?

• Reasons in the new innovative regions
• Reasons in the old innovative regions

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ODIP

• Organisational decompositon of innovation
  processes

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• What is ODIP? What forms does it take?
• How does it affect the global distribution of
  innovation activities?

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Drivers of organisational decomposition

• Pressure to focus on core competence
• From corporate control to strategic flexibility

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Types of ODIP

• Externalising specific parts of the innovation
  process to specialist service providers KIBS.
• Externalising innovation of components to the
  manufacturers of these components.

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Types of ODIP

• Our focus the externalisation of innovation
  activities
• What about intra-organisational decomposition?

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Dynamics

• What are the connections between the different
  types of ODIP?
• Do they reinforce each other?
• Is ODIP accelerating?

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Implications for global distribution

• Starting point organisational decomposition
  makes geographical dispersal easier in
  principle.
• Question Is this geographical dispersal
  happening? Due to ODIP?

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Two scenarios

• Major dispersal of innovation activities.
• - to where?
• - what kind of activities?
• Continuing concentration
• - where?
• - dynamic stability?

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Theory of knowledge production

• Tacit
• Cumulative
• Path dependent

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Innovation System Approach

• Central proposition innovative capability
  depends on the density and quality of the
  relationships between actors. Geographical/cultur
  al proximity enhances these relationships.

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Global value chain approach

• Static analysis has concentrated on production
  capabilities
• Dynamic analysis provides insights on innovation
  capabilities
• Dispersal of non-strategic innovation
  capabilities
• Concentrated dispersion

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Research Agenda Old Innovating Regions

• What are connections between the various forms of
  ODIP?
• Are they reinforcing each other?
• Is ODIP accelerating?

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Research Agenda New Innovating Regions

• Are they managing the transition from production
  to innovation capabilities?
• Is there a causal relationship between ODIP and
  the speed of this transition
• How significant is the local innovation system?
  Relative importance of local KIBS, multinational
  KIBS, public agencies.
• What are the relationships between KIBS and lead
  firms of global value chains?

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Time scale

• What time scale needs to be considered to
  capture these processes?
• - In the old innovating regions
• - In the new innovating regions