By TA News Bureau:
A researcher in innovation and technological change, Dr Jane Bourke says CEOs should strive for innovation success by simultaneously adopting advanced manufacturing technologies (AMTs) rather than pursuing an incremental implementation approach. In the hyper-competitive business world of today, it is important that CEOs should be cognisant of the value of successfully acquiring and managing technologies. Investing in innovation activity will help the firm to expand and strengthen not only its knowledge base but also turn the enterprise competitive, she says in an interview to Tyre Asia. R&D investment and engaging with external knowledge sources have been identified as influential drivers of innovation activity. Dr Bourke is a Senior Lecturer in Economics at University College Cork, Ireland
Often questions are raised how CEOs can encourage innovation in their organisations to turn them into competitive enterprises. What are the challenges that they should be prepared for while preparing to launch initiatives in Advanced Manufacturing Technology (AMT)? Dr Jane Bourke has the answers.
Research by Dr Bourke, who has been studying innovation and technology impact, highlights in this interview the importance of the enterprise leadership in absorbing technology and subsequent management of change.
“It is important that CEOs know the value of successfully managing change. This is crucial for organisations to survive and succeed in highly competitive markets,” she told Tyre Asia.
“R&D investment and engaging with external knowledge sources have been identified as influential drivers of innovation activity. Investing in such activities will increase an organisation’s stock of knowledge, thus encouraging innovation.”
CEO’s also need to consider embodied knowledge within the firm with respect to their innovation strategy. Embodied knowledge can include proprietary knowledge (e.g. patents) and tacit or un-codified knowledge (e.g. workforce skills).
The importance of proprietary and tacit knowledge is well stablished in the innovation research literature. However, less attention has been paid to the knowledge embodied in firms’ capital equipment and its impact on innovation, says Dr Bourke, who teaches Economics at University College Cork, Ireland.
Her study has focused on AMTs and their impact on firms’ innovation success. It reveals that firms considering the adoption of AMTs may choose either an incremental strategy or a discontinuous strategy. An incremental approach involves adopting AMTs sequentially, while a discontinuous approach involves adopting AMTs simultaneously.
“Our evidence suggests that both strategies will generate innovation benefits but that a discontinuous strategy is likely to be most beneficial. In fact, the benefits of the simultaneous adoption of AMTs prove stronger than any learning-by using effects.”
This is not of course to overlook the difficulties of AMT adoption – particularly where multiple AMTs are being adopted simultaneously. There is no fail-safe approach for firms successfully using AMTs as skilled use of AMT depends on several contingencies.
“Indeed, our evidence suggests that it may be some years after the initial adoption of AMTs before their full performance benefits are realised,” she explains.
When asked how a flexible/dynamic organisational culture that is amenable to AMT could be developed, Dr Bourke said that this is often the main concerns of CEOs.
“Understandably, CEOs may have concerns as to the difficulties in implementing new technologies into manufacturing processes. While our study did not examine the process for firms in terms of adopting AMTs, other studies have found positive links among workforce skills levels and flexible organisational cultures and AMT adoption.”
She says exporting firms, firms who invest in R&D and bring part of a business group, are more likely to use technology and adopt AMTs.
Explaining the key findings of her research on Irish manufacturing plants, which has relevance to enterprises across the world, Dr Bourke mentioned about the lengthy learning-by-using effects on the firms’ ability to derive innovation benefits from AMT adoption.
“Disruption effects are evident in the short-term while positive innovation benefits occur six-plus years after adoption. We find strong complementarities between simultaneously adopted AMTs, suggesting the value of disruptive rather than incremental AMT implementation strategies.”
Drawing from her research experience she has a few suggestions for CEOs to consider. The ability to innovate successfully is a key corporate capability and this ability is strongly dependent on firms’ access to knowledge capital.
In her study, like many before it, she has seen the positive impact of workforce skills, R&D, linkages with suppliers, etc on innovation success. CEOs are no doubt aware of the importance of accessing these knowledge sources, internal and external to the firm.
“Of particular interest in this study is the importance of embodied knowledge in a firm’s capital equipment for innovation. Our study finds the initial disruption effect for firms that adopt AMTs is subsequently offset, albeit a number of years later.”
Interestingly, her research has found a strong complementary relationship for AMTs that are adopted simultaneously. This suggests that firms which desire innovation success should consider simultaneously adopting AMTs rather than an incremental implementation approach.