Knowledge that Transforms

Recent research on employee-level innovation focuses on scientists’ ability to source advanced knowledge and use it to create new ideas and innovation within a firm. The present paper introduces a new dimension to this literature: functional departments. We argue that functional centrality, namely the extent to which a functional department is central in the intra-organizational network, affects employees’ innovation intensity. We make use of a rich novel dataset at the employee-level for the Telenor Group, based on a large-scale survey among nearly 16,000 employees in all business units and functions of the company. The empirical results point out that employees’ innovation intensity is higher in departments that are centrally positioned in the company’s internal network. Task characteristics such as quality orientation, entrepreneurial attitude and result pressure moderate the relationship between centrality and innovation.

Access to affordable lifesaving medicines is considered a human right. This leads to a question largely understudied in the catch-up literature on accumulation of industrial capabilities. Can the need to improve access to an essential commodity impact the sectoral catch-up trajectory of the corresponding industry? In 1996, Brazil initiated a policy of universal and free access to highly-active ARV therapy, which put an enormous pressure on the Brazilian Ministry of Health (MoH). In order to ensure an adequate supply of ARVs in the public healthcare system with a limited budget, MoH started negotiating price reductions for high-cost patented drugs, often deploying the threat of using compulsory licensing. Through a scoping review of the literature and construction of the Brazilian case study, the paper explores how the need to access is impacted by prior catch-up in the pharmaceutical sector and triggers in turn future sectoral catch-up. It shows that price negotiations may or may not impact both catch-up and access positively. Catch-up can provide bargaining strength in price negotiations and have a positive inter-temporal impact on both future catch-up and access. However, results suggest that only successful catch-up can lead to long term access, as the capabilities accumulated in aborted catch-up are not sufficient for large scale production of low cost essential medicines. Thus, industrial policy and health policy can impact one another and twining between catch-up and access can be helpful.

This article examines how the excise tax affects firms’ R&D investment, performance, and market strategy in the US medical device industry. The Affordable Care Act imposed a 2.3% excise tax on medical devices beginning in January 2013, and thus this study compares the medical device firms with other high-tech firms before and after the tax incidence. Using COMPUSTAT data from 2006 to 2015, the author finds that the excise tax reduced R&D investment, sales revenue, gross margins, and earnings for medical device firms. In addition, the excise tax increased their global market sales intensity, global market diversification, and customer diversification in the US domestic market.

This study investigates whether country-level technological disparities influence individual scientists’ choice of research agenda and, if so, how the effect of country-level technological disparities on individuals’ research activities differs before and after technology commercialization. To address these research questions, we use research proceedings published from the International Electric Vehicle Symposium (EVS) from 1990 to 2009. We find that a country’s technological capabilities tend to prevent its scientists from studying electric vehicles (defined as a disruptive technology) but encourage them to study hybrid vehicles (defined as a sustaining technology) before electric and hybrid vehicles are launched in the automobile market. We also find that a country’s technological capabilities do not subsequently help its scientists shift their research activities to the technologies that have received positive initial feedback from automobile markets.

This paper explores a case of knowledge-intensive consumer services (KICS). Services have become less neglected in the economics of technical change and innovation studies in general; nevertheless, the advance of this agenda has been uneven. A significant emphasis has been on knowledge-intensive business services (KIBS). Despite their direct impact on social needs and individual desires, innovation in consumer-oriented services continues to be relatively under-theorized and under-researched. This paper brings into focus the sources and patterns of innovation in those innovative services that target human satisfaction and well-being as a final goal. We show evidence from a little-explored health industry, oral care. We address Malo Clinic, a company specialized in the most complex patient situations and a rare instance of an internationalized firm in the health services business. On the basis of a 20-year thread of corporate history, we find that a wide array of qualitative (interviews, newspaper coverage, marketing material) and quantitative evidence (papers, patents, trademarks) illuminates some of the features that may characterize a particular class of dynamic activities tending to consumers’ needs, expectations and quality of life. We argue that these key characteristics may be on course to become more general as the learning economy spreads to fully embrace the realm of the service sphere. One conclusion is that both the technological and non-technological capabilities underpinning more types of innovation are increasingly becoming coupled in consumer-relevant services.

A current challenge for the scientific community is the choice of appropriate policies to reduce the rate of false positives. Existing proposals differ in whether to prioritize tackling omission through transparency requirements, punishing more severe transgressions, or possibly both. We use a formal model to evaluate these possible solutions. We find that a policy that prohibitively increases the cost of ‘misdemeanor’ types of questionable research practices robustly decreases the overall rate of researcher misconduct, because the rate of ‘felonies’, such as fabrication, also decreases. Therefore proposals that aim to prevent lying by omission by enforcing reporting guidelines are likely to be effective in reducing researcher misconduct, but measures such as government audits (purported to counteract pure fraud) can backfire. Moreover, we find that an increase in the rewards of publication need not increase overall misconduct.

Reducing inequality and social exclusion is a challenging task that will require a joint effort by all societal stakeholders, including not-for-profit and for-profit organizations. In order to develop and evaluate policy actions in this area, monitoring the contribution of these for-profit and not-for-profit organizations to a more inclusive society becomes crucial. This research note describes the development, cognitive pretesting, and large-scale empirical testing of a module that can be included in (inter)national innovation surveys. The module measures whether not-for-profits’ and for-profits’ innovation activities improve vulnerable groups’ access to basic provisions. It also provides insights in the main drivers for improving beneficiaries’ access to basic provisions through innovation and in the types and numbers of beneficiaries reached. The module was tested in the context of the Community Innovation Survey in Flanders, Belgium.

We explore how a firm’s knowledge structure characteristics and market identity—as reflected in its position in the industry value chain and market status—influence knowledge-based alliance (KBA) formation. We propose that a firm’s propensity to form KBAs is affected by the congruence (or misalignment) between its knowledge structure characteristics (i.e., knowledge depth and scope) and the role it plays in the industry, as demanded by its position in the value chain. We further argue that while a firm’s market status can amplify the positive effect of the congruence, thereby enhancing a firm’s proclivity to form KBAs, being prominent can also hurt a firm when it faces a misalignment between its knowledge structure characteristics and externally induced expectations related to its value chain position. We validate our arguments using panel data on 1051 firm-year observations for 197 firms patenting in the global fuel cell industry for the period 1999–2009. By developing a richer understanding of the relationship between a firm’s knowledge-based resources and KBA formation, we answer the call for a better understanding of how and when firms can leverage their internal knowledge configurations to improve their proclivity to form alliances.

We investigate how host country R&D influences ownership decisions made by technology-intensive multinational enterprises (MNEs) as they internationalize. We draw from institutional and resource based theories, as well as literature on agglomeration and clusters, and construct a unique dataset of 1324 foreign investments recorded by German automobile manufacturers between 2005 and 2012 for our empirical tests. We find that in host countries that are cluster-abundant there will be a greater likelihood that technology-intensive MNEs will adopt joint ventures over wholly-owned subsidiaries, and will more likely use a lower equity stake in any joint venture. We find partial support for the influence of other aspects of host country R&D, including innovation output and inward technology FDI. Various robustness tests and insights from selected cases provide further support. Importantly, findings demonstrate the importance of multi-dimensional characteristics of host country R&D over and above those such as market size, political stability and cultural distance that are more commonly utilized and discussed in the entry strategy literature. The findings have implications for host country policy as well as strategy-makers in MNEs seeking to compete on the basis of globalized R&D.