Exploratory research on the mechanism of latecomer advantages in the Asian LCD industry

Abstract

This study proposes a new concept, 'production innovation'. In the capital-expenditure-intensive electronic device industry, latecomers from foreign countries often surpass the first mover. This paper explains the factors driving this latecomer advantage from the industry lifecycles. Several studies have adopted the Abernathy-Utterback model to understand industry lifecycles. This research aims to further this discussion through a reappraisal that focuses on innovation types based on the Abernathy-Utterback model, as well as the ideas of Schumpeter and Kirzner. This research observed that production innovation, as it relates to the global supply chain, emerges through product and process innovation and revealed that latecomers are always alert to opportunities to realise this type of innovation. We defined this production innovation as the process by which latecomers seize opportunities offered by newly standardised manufacturing processes to establish new customer markets, create large-scale, highly efficient plants, and reduce costs of materials and facilities.