Horizontal Innovation Research Articles

Integrating innovation life cycle concept and innovation mapping technique to model industries' innovations

To assess the future development of a technology and make decisions whether to invest in it or not, entrepreneurs need to know the current stage of technology innovation's life cycle. S-curve is the dominant approach to analyse innovation life cycle. However, using this alone oversimplifies the situation. The objective of this research is to develop and implement innovation model that is capable of identifying the life cycles, their radical and incremental innovations, their types and dates for any industry. An integrated model that combines innovation mapping and life cycle was developed. A database was designed and a computerised vertical and horizontal innovation models were developed and linked to the database. The music industry was then used to implement and validate the model. The results showed that model were effective in tracing and presenting the innovation changes over the years to understand the details of the innovations of this industry).

Analisis Swot Sebagai Landasan Dalam Menentukan Strategi Pemasaran Pada Rameyza Tour & Travel Bondowoso

This study aims to determine alternative marketing strategies and their implications for marketing Rameyza Tour & Travel Branch Bondowoso. Analytical method used is SWOT analysis. Internal factor analysis (IFAS) and external factors (EFAS) are used to determine the firm's position through the quadrant table. IE Metrics and SWOT Metrics are used to determine marketing strategic formulations that are appropriate to current corporate conditions. The results showed that Rameyza Tour & Travel Bondowoso Branch is in quadrant V, this means marketing strategy that must be done is horizontal innovation strategy that is in applying its strategy focused on the addition or improvement to the implementation of the function of each activity in the business unit of Tour & Travel service . In the description of SWOT metrics, there are several alternative marketing strategies such as: 1) Improving partnership with institutions and schools, 2) Increasing online promotion to expand market, 3) Promoting promotion especially service for private tour and attracting foreign tourists. 4) Maintaining continuous service quality, 5) Expanding the market by adding products sold, such as aircraft ticketing service, and railways as a productdiversified form. Keywords: SWOT, Marketing, Strategies

The magic cube: towards a theoretical framework to explain the disruptive potential of additive manufacturing

Additive manufacturing (AM) is an umbrella term for various layer-based manufacturing processes which are often portrayed as a new technological revolution. Despite impressive AM process developments the revenue of the AM industry is still a fraction of that of other manufacturing processes. This AM based revenue discrepancy raises many questions. They include: (1) What makes AM so special? and (2) How could the disruptive potential of AM be unlocked? We seek to add to the literature by providing an answer to elements of these questions through the development of a framework we call the ‘Magic Cube’. We utilize the concept of vertical and horizontal innovation theory as one basis for this framework. Further we adopt a tension perspective on automation and individualisation drawn from operations research to develop a theoretical framework. The result is the ‘Magic Cube’, a tool that is designed to support researchers and practitioners in demonstrating the unique strengths of AM and its potential areas of application.

Deindustrialization and the technological intensity of manufacturing subsystems in the European Union

This paper provides new and deeper evidence on the extent and the main characteristics of the deindustrialization process in the EU27 over the period 1995‒2011. This evidence is linked to the debate on the “manufacturing imperative” and the need for a renewed approach to industrial policy in the European Union. To investigate the issue, we adopt a subsystem approach, based on input‒output tables from the World Input‒Output Database, and decompose subsystems according to three different technological taxonomies. The analysis shows that the deindustrialization process affecting the EU27 is not homogeneous. Great differences exist between the EU15 and the other EU countries and among the technological classes of manufacturing. This evidence confirms and better delimits the effects of the hierarchical reorganization of the EU’s industrial structure and of the processes of intra-European offshoring described in the literature. The general result is that the horizontal industrial policies, and in particular the horizontal innovation policies promoted since the early 1990s, appear to have failed to achieve the objective of strengthening the influence of high-technology production on economic growth across the European economies.

Hierarchical growth: Basic and applied research

We develop a model that incorporates salient features of growth in modern economies. We combine the expanding-variety growth model through horizontal innovations with a hierarchy of basic and applied research. The former extends the knowledge base, while the latter commercializes it. Two-way spillovers reinforce the productivity of research in each sector. We establish the existence of balanced growth paths. Along such paths the stock of ideas and the stock of commercialized blueprints for intermediate goods grow with the same rate. Basic research is a necessary and sufficient condition for economic growth. We show that there can be two different facets of growth in the economy. First, growth may be entirely shaped by investments in basic research if applied research operates at the knowledge frontier. Second, long-run growth may be shaped by both basic and applied research and growth can be further stimulated by research subsidies. We illustrate different types of growth processes by examples and polar cases when only upward or downward spillovers between basic and applied research are present.

Environmental Policy in an Endogenous Growth Model with Expanding Variety

Dans ce papier, nous analysons l’impact à long-terme d’une politique environnementale sur la croissance, la pollution et le bien-être. Pour ce faire, nous modifions un modèle standard avec innovation horizontale en incluant de la pollution provenant de l’utilisation des biens intermédiaires. La taxation de la pollution réduit le profit du producteur du bien final et celui du producteur de bien intermédiaire. Dans ce cadre, les gains sont expliqués par la réallocation du travail du secteur des biens intermédiaires vers le secteur de R&D qui améliore l’innovation, la croissance et le bien-être et réduit la pollution.

ENDOGENOUS GROWTH AND STRUCTURAL CHANGE THROUGH VERTICAL AND HORIZONTAL INNOVATIONS

This paper combines horizontal and vertical innovations to generate an endogenous growth model allowing for structural change as an endogenous phenomenon. Older technologies are continuously replaced by newer ones due to creative destruction, and new technologies appear as a result of horizontal innovations and due to the consumers' preference for variety. We assume fixed operational costs for the manufacturing sector and an endogenously defined patent price for every new technology. Every industry is profitable only for a limited period of time, making the effective time of existence of the technology endogenous and finite. We find that in such an economy endogenous structural change is the source of ongoing economic growth. Furthermore, the range of existing sectors as well as growth rates stays constant as long as the technologies are symmetric.

Factor income taxation in a horizontal innovation model

We consider the optimal factor income taxation in a standard R&D model with technical change represented by an increase in the variety of intermediate goods. In the model there are externalities both to working and to saving, due to market power by firms, incomplete appropriability of the benefits of inventions and the cost of economic activity in terms of public expenditures. Redistributing the tax burden from labor to capital will increase employment but, in most cases, reduce the rate of growth, with conflicting effects on the deadweight loss from the externalities. Under plausible calibrations of the model, the optimal tax rate on capital will be sizable.

The Impact of Social Capital on Economic Growth

Comprehensively and accurately exploring the impact of social capital on the long-term economic growth is of great practical significance to the enhancement of the status of social capital in the regional economic development. However, traditional endogenous growth model ignores the effect of time allocation on social capital accumulation and residents' utility. This paper introduces social capital into horizontal innovation growth model by using endogenous accumulation of social capital, and comprehensively considers the non-monotonicity impacts of social capital and leisure time on economic growth. Numerical simulations show that social capital plays a promotion role with a diminishing marginal effect in economic growth, but there is an inverse U-shape relationship between leisure time and economic growth, namely the appropriate increase in leisure time is beneficial to the accumulation of social capital. In order to verify the attribute of production factor of social capital, this paper constructs the measurement indexes of social capital at prefecture-level city level based on the network embeddedness feature of structural social capital. The empirical results show as follows: firstly, social capital has a significantly positive impact on economic growth, and its promotion role strengthens as urban economic development within regions increases; secondly, the output efficiency of social capital in the central and western regions is higher than the one in the eastern region, indirectly reflecting the current situation of excessive accumulation of social capital in the eastern region; thirdly, investment level and technological progress are two important ways to affect economic growth by social capital. These conclusions above provide useful reference for clarifying the economic attribute of social capital, stimulating the economic benefits of social capital, promoting the coordinated development of urban clusters and reducing regional differences.

Horizontal differentiation and economic growth under non-CES aggregate production function

We present a model of economic growth driven by horizontal innovation in which, unlike the existing literature, the final output sector employs a non-specified, non-CES, additive production function. Our motivation in conducting such analysis is based on the recognition that the use of a CES aggregate production function in the final output sector leads to the unrealistic conclusion that the gross markup of price over marginal costs set in the monopolistically-competitive intermediate sector is constant. We derive necessary and sufficient conditions for an equilibrium with perfect competition in the final output market to exist even in the presence of a non-CES technology. These conditions generalize the usual properties of the CES case. We also analyze the long-run relation between economic growth and variable markups.

Patent claims and economic growth

This study introduces a blocking patent on horizontal R&D into the endogenous growth model of Chu et al. (2012), which features a blocking patent on vertical R&D. Results show that strengthening patent protection on horizontal R&D promotes vertical innovation (quality improvement) but hinders horizontal innovation (variety expansion). This effect of a horizontal blocking patent on directionality of innovation is opposite to that of the vertical blocking patent analyzed by Chu et al. (2012). Results also show that under mild conditions, strengthening a blocking patent on horizontal innovation as well as on vertical innovation can increase economic growth and social welfare.

Research Progress on Synergic Innovation Theory - A Literature Review

Synergic innovation is a new paradigm, and a new progress of innovation system theory. We reviewed the evolution of innovation theory, analyzed the background of synergic innovation theory. The study on synergic innovation has been expanded from inside to outside, covered three fields, which was synergic innovation within enterprise, vertical synergic innovation inter-enterprise, horizontal synergic innovation within multi-agents. Horizontal synergic innovation is the main form of synergic innovation. Factors of synergic innovation expanded from the “University-industry-government”. Different methods have been developed to measure the synergic innovation effect and synergic degree. Furthermore influential factors and decision mechanism of synergic innovation behavior has been studied.

Development of small and medium-sized enterprise horizontal innovation networks: UK agri-food sector study

Within the management literature, there is an emergent discourse on horizontal collaboration among small and medium-sized enterprises (SMEs), whereby individual rivalries are overcome by the need for more resources and innovation, leading to increased competitiveness through joint product development. In particular, a number of these horizontal collaborations between SMEs have occurred within the agri-food sector. As a consequence, this article aims to explore the longitudinal development of horizontal innovation networks within an artisan bakers’ network as part of the UK SME agri-food sector. An interpretivist research approach was used, whereby the development and evolution of an artisan bakers’ horizontal network was studied over a 27-month period. The findings, as summarised in conceptual models which draw upon knowledge-based open innovation and social network constructs, illustrate that a complex three-stage life cycle development occurred within the bakers’ horizontal network.

Heterogeneous consumption in OLG model with horizontal innovations

The paper develops a general equilibrium endogenous growth model involving heterogeneous consumption by an age-structured population with uncertain but limited life span and balanced life-time budget without bequests. The heterogeneity is introduced via weights which the individuals attribute in their utility function to consumption of different goods depending on the vintage of the good. The goods are produced by monopolistically competitive firms and the variety of available goods/technologies is determined endogenously through R&D investments. A competitive bank sector provides financial resources for investments, secured by agents’ savings and future firms profits. The general equilibrium is characterized by a system of functional equations and is analytically or numerically determined for several particular weight functions. It is shown that the investments by agents alone may be insufficient to sustain growth, while additional investments provided by the bank sector may lead to growth. The resulting imbalance between agents’ assets and the total value of firms can grow unboundedly in the case of homogeneous consumption. The results exhibit the qualitative difference between the dynamics of the model with heterogeneous versus homogeneous consumption. In particular heterogeneous consumption (when old goods are discounted) reduces the additional investments by the financial sector so that the values of firms become balanced by the assets of agents in the long run.

Entrepreneurial finance and economic growth

This paper incorporates the process of entrepreneurial finance into an endogenous growth model with horizontal innovation (Romer J Polit Econ 98:S71–S102, 1990; Jones J Polit Econ 103(4):759–784, 1995b). To capture the market frictions existing in the financing of innovation, entrepreneurial finance is described as a process of “search and matching” between entrepreneurs proposing their innovative ventures and capitalists selecting and financing the most valuable projects. We determine the amount of resources devoted to innovation along the balanced growth path. The welfare analysis highlights the sub-optimality of the equilibrium innovative efforts due to search and bargaining frictions. We analyze the role of the policy maker to restore the optimality of investments in innovation.

Different Argentine Rural Extensionists' Mindsets and Their Practical Implications

Purpose: This paper reflects upon the practice of Argentine rural extensionists working in the extension public system through the process of identifying different rural extensionists' types of mindsets and comparing them with transfer of technology extension approach, dialogical processes of horizontal knowledge exchange, participatory perspectives and innovation system approach.Design/Methodology/approach: A quali-quantitative investigation was conducted. Surveys containing closed and open questions were sent via email to rural extensionists. This allowed the researcher to identify their beliefs about different issues connected to extension practice. The sample was incidental (n = 219; 143 men, 76 women). Qualitative data was categorized and quantified. Finally, a two-steps cluster analysis was implemented.Findings: Two types of rural extensionists' mindsets were identified, one of which relates to the transfer of technology approach and other to the dialogical/horizontal model, yet neither of them fitting the ideal of the most important extension institution of the country, which supports an innovation system approach.Practical implications: Extensionists' practices and institutional ideals do not coincide. Reflexive training processes are required to make beliefs about rural extension explicit in order to build a contextually suitable extension proposal. Originality/Value: Through a quali-quantitative approach to the issue of rural extensionists' mindsets, this paper contributes to a better understanding of Argentine rural extensionists' practices.

Shale Gas Development Environmental Impacts and Consideration

Shale gas as one of the clean energy gradually cuts a striking figure in energy market, and has been commercially and widely developed in U.S. Chinese economic development demand for clean energy is so urgent that shale gass exploration and development has been put in agenda. In this paper, through the study on American shale gas development situation, new techniques of shale gas development and its effects on the environment, with the comprehensive analysis of domestic shale gas resources, water resources and the environment which should be faced and be solved during the broad development of shale gas. We point out that shale gas development should employ the new technology of horizontal drilling and fluid management innovation to protect the environment which is facing gradually worse challenge, and provide some suggestion of environmental protection to Chinese government and energy corporation (Operator), which want to make decisions about how to manage the challenges that may accompany shale gas development.

Endogenous Growth and Structural Change Through Vertical and Horizontal Innovations

This paper combines horizontal and vertical innovations to build an endogenous growth model that allows for structural change. Older technologies are continuously replaced by newer ones due to creative destruction and new technologies appear as a result of horizontal innovations and as a result of consumers’ preferences for variety. We assume fixed operational costs for the manufacturing sector and an endogenously determined price of the patent for each new technology. The duration of a patent is not limited but every industry is profitable only for a certain period of time, thus making the effective time of existence of the technology endogenous and finite. We demonstrate that such an economy exhibits constant growth rates that are proportional to the average productivity growth, despite the ongoing disappearance of older technologies from the industry.

The Rise of the Machines: Automation, Horizontal Innovation and Income Inequality

Persistently increasing wage inequality, polarization of the wage distribution, and stagnating real wages for low skill workers are some of the most salient features of modern labor markets, but are difficult to reconcile with the theoretical literature on economic growth. To better understand the mechanisms driving these phenomena, we construct an endogenous growth model of directed technical change with automation (the introduction of machines which replace low-skill labor and complement high-skill labor) and horizontal innovation (the introduction of new products, which increases demand for both types of labor). The economy endogenously follows three phases: First, both low-skill wages and automation are low, while income inequality and the labor share are constant. Second, increases in low-skill wages stimulate investment in automation, which depresses the growth rate of future low-skill wages (potentially to negative), and reduces the total labor share. Finally, the share of automated products stabilizes and low-skill wages grow at a positive but lower rate than high-skill wages. Adding middle skill workers allows the model to generate a phase of wage polarization after one of uniform increase in income inequality. We show that this framework can quantitatively account for the evolution of the skill premium, the skill ratio and the labor share in the US since the 1960s.

Factor Income Taxation in a Horizontal Innovation Model

We consider the optimal factor income taxation in a standard R&D model with technical change represented by an increase in the variety of intermediate goods. Redistributing the tax burden from labor to capital will in most cases increase the employment rate in equilibrium. This has opposite effects on two distortions in the model, one due to monopoly power, the second to the incomplete appropriability of the benefi ts of inventions. Their relative momentum determines the sign of the welfare effect of the redistribution. We show that, for parameter values consistent with available estimates, the optimal tax rate on capital will be sizable.