Low-tech Companies Research Articles

Enhancing value creation of operational management for small to medium manufacturer: A conceptual data-driven analytical system

This paper aims to explore the challenges and opportunities for Small and Medium-sized Manufacturing Enterprises (SMMEs) in implementing data-driven techniques in their operations. SMMEs are often considered to be low and medium–low tech companies, even if they have machinery, as they still rely on traditional processes and manpower and lack any digital technology. Previous research has shown that medium–high and high-tech companies perform better, with higher rates of growth, than low and medium–low ones by a sustainable and significant margin. Therefore, there is a need for further research on the implementation of data-driven analytical methods and technologies in SMMEs that are both cost-effective and easy to use. This study proposes a conceptual analytical system that combines Integration Definition for Function Modeling 0 (IDEF0) and the Cross Industry Standard Process for Data Mining (CRISP-DM) business analytics method to develop a practical and widely applicable framework for data-driven techniques in manufacturing. We then developed a case study of an Indonesian company, where we collected real and direct information about specific objects, events, and activities related to particular aspects, including showing their key performance indicators (KPIs) through data dashboards, to evaluate the effectiveness of the proposed conceptual analytical system in improving operational management in SMMEs. The findings of this study provide valuable insights that can be used to develop effective solutions for SMMEs to leverage data-driven techniques and improve their operations. We also highlight implications of the findings for future research and practical applications. The final framework can be converted into a system that can be continuously and flexibly updated and customized, based on specific needs.

Digital transformation enablers in high-tech and low-tech companies: A comparative analysis

Digital transformation (DT) is a complex, socio-technical, strategic, and often radical change influenced by various aspects, among which non-technological, organizational factors play significant roles. The literature on DT enablers suggests sensitivity to the organizational context, especially to the technology intensity of companies. This article analyzes the variations in non-technological DT enablers in high-tech and low-tech manufacturing companies. Through a systematic literature review, using coding techniques and cluster analysis, we created 20 aggregated enabler categories. With the Decision Making Trial and Evaluation Laboratory (DEMATEL) method, clustered DT enablers in high-tech and low-tech companies were compared. High-tech companies enable DT with the factors related primarily to organizational flexibility and dynamism. In contrast, low-tech firms propel DT with the enablers connected to more stable, traditional, managerial practices. JEL Classification: 031 and 032

FDI and Performance: An Investigation of EU Manufacturing Industries

This paper investigates the impact of foreign direct investment (FDI) on the performance of companies in low- and high-technologically intensive industries in the manufacturing sector in EU member countries, using datasets covering the period between 2010 and 2020. The industries were selected according to the EU High-tech classification of manufacturing industries based on NACE Rev.2 at 2-digit codes. The performance of companies in our study was measured based on turnover. We used a set of independent variables, such as inward and outward FDI stocks, imports and exports of goods and services, gross domestic product (GDP) at market prices, real effective exchange rate, gross domestic expenditure on research and development, and gross fixed capital formation. On applying the panel data methodology, our findings indicated that inward FDI stocks, imports of goods and services, and real effective exchange rates have a significant impact on the performance of companies in high-technologically intensive industries. For low-tech companies, exports of goods and services are important driving factors behind their performance.
 Keywords: high-tech industries, low-tech industries, foreign direct investment, performance, European Union

Do innovation and financial constraints affect the profit efficiency of European enterprises?

This paper investigates the relationship between profit efficiency, finance and innovation. By adopting stochastic frontiers, we pioneer the use of a novel dataset merging firm level survey data with balance sheet information for a large sample of European companies. We find that firms having difficulties in access to finance as well as firms introducing product innovation display an incentive to improve their efficiency. While innovation produces benefit for firms’ profitability, financial constraints impose a discipline to the firms forcing them to cut unproductive costs that reduce the profitability. We document nuanced differences between firms in industry and services, while they are more pronounced when we look at disaggregation across High-Tech and Low-Tech companies. From a policy perspective, our results enrich the understanding on the link between innovation, financial constraints and efficiency, which goes beyond the idea that easier access to finance is the panacea to get higher performance.

The role of network relations and previous knowledge in the ACAP of low-tech intensity clusters

PurposeThe mainstream research on knowledge transfer and absorptive capacity (ACAP) in clusters was conducted in high-technology industries in developing countries. However, low technology intensity clusters present a different scenario that might affect this external knowledge transfer and ACAP. This study aims to understand the role of network relations and previous knowledge in the ACAP of a low-technology intensity cluster.Design/methodology/approachThe authors analyzed companies from a low-technology industry in an emerging country. The authors collected 109 questionnaires from companies in the Brazilian footwear manufacturing cluster. Factor analysis led the independent variables to be regrouped into eight variables. This data set was analyzed using regression techniques.FindingsIn a low-tech cluster prevalently populated by small companies, companies have access to novelties and knowledge that influence their products and production through the frequency and stability of the network’s relational ties with the supplier. The quality of relationships with clients may provide access to products, materials, technologies and learning. Small companies consider intra-cluster competition because of limitations in accessing external competition. Although low-tech companies need to exchange knowledge and technology with suppliers and clients outside the cluster, most companies are limited in size because of liabilities. In a low-tech cluster dominated by small companies, access to better purchasing costs, new technologies or innovations is an expected weakness. Intra- and extra-cluster ties positively influenced ACAP, as did organizational capabilities, whereas employees’ skills did not.Originality/valueIndividual skills are not related to ACAP in low-technology intensity clusters. The level of ACAP in small and medium enterprises (SMEs) can be explained by the scope of individuals’ knowledge and other individual capabilities.

Leverage, R&D expenditures, and accounting conservatism: Evidence from technology firms

We examine whether U.S. high-tech firms are more or less conditionally conservative compared to low-tech firms. We anticipate high-tech firms to display lower conditional conservatism because they are more financially constrained and feature lower level of asset tangibility. In line with our predictions, we show that high-tech companies are less conditionally conservative relative to low-tech companies. We also show that this negative relationship between conditional conservatism and tech-sector membership is attributable to low leverage and high R&D expenditures since SFAS No. 2 allows U.S. companies to expense R&D costs.

Patent Signals of IPO Performance: Evidence from High- and Low-Tech Industries in Japan

Abstract: Prior studies pointed to evidence that startups and venture capital (VC) companies tended to use different measures to provide signals to outsiders. This study adds to those previous insights by focusing on established firms’ patenting behaviors and their effect on the amount of money raised at the initial public offering (IPO). Since technology intensity may differ considerably between high and low-tech companies, our main interest in this paper lies on whether the significance of pre-IPO patenting activities as a predictor of IPO performance also varies between these two industry categories. Using cross-sectional data representing 308 Japanese industrial firms’ IPO commitments between 2000 and 2015, we find a robust positive correlation between patent applications and IPO performance. Contrary to the conventional wisdom proposing that high-tech firms with more patenting activities achieve better IPO performance, we show that the signaling power of patenting is stronger for the low-tech companies in our sample: While the high-tech firms do not seem to have significantly benefited from a patent signal, the low-tech firms seem to have attracted external investors more easily due to patenting at the IPO. Keywords: Patent, signal, initial public offering (IPO), high-tech industries, low-tech industries

Сравнительный анализ инновационной активности компаний высокотехнологичного и низкотехнологичного секторов

The level of innovation activity has not changed for a large number of years, despite the measures taken by the state. Based on empirical data, the article examines the dynamics of the following components of companies’ innovative activity in high-tech and low-tech sectors of the manufacturing industry: introduction of product and other types of innovations; activities to improve the qualifications of personnel; purchase of licensed foreign technologies and intangible assets. We also tested the statistical significance of differences in the levels of innovation activity of high-tech and low-tech companies in different economic conditions using the t-criterion. The analysis showed a decrease in the share of companies engaged in any kind of innovative activity. During the period of economic growth, both high-tech and low-tech companies made equal use of opportunities to increase innovation activity. It was found that the level of innovation activity among high-tech companies declines to a lesser extent than among low-tech companies during the crisis. In these conditions, high-tech companies are more actively using "internal reserves": they are working more to improve the skill level of staff and implementing innovation processes. During periods of high and low rates of economic growth, high-tech companies often buy new technology, but it does not lead to greater innovation activity; companies are only updating their technological base. During the period of weak economic growth, companies in both sectors continued to reduce their innovative activity in all areas. The resumption of growth trends in innovative activities is possible only when companies see the prospects from the implementation of innovative activities.

COMPARATIVE ANALYSIS OF THE BEHAVIOR OF RUSSIAN HIGH-TECH AND LOW-TECH MANUFACTURING COMPANIES

The high-tech sector is considered to be innovatively active, but its contribution to GDP does not change, despite the measures taken by the government. This may be due to the same behavior patterns of high- and low-tech companies. The analysis of the behavior of high- and low-tech companies was carried out according to the data of surveys of heads of domestic manufacturing enterprises. The approach for testing hypotheses about possible differences in the behavior of high- and low-tech companies in different economic conditions is based on a statistical comparison of the average values of indicators for companies in these sectors. It was found that the level of innovation activity among high-tech companies declines to a lesser extent than among low-tech companies during the crisis. In these conditions, high-tech companies are more actively using "internal reserves": they are working more to improve the skill level of staff and implementing innovation processes. During periods of high and low rates of economic growth, high-tech companies often buy new technology. The rest of the patterns of behavior of high- and low-tech companies do not differ.

Анализ характеристик высокотехнологичности компаний

High-tech sector is recognized as an important long-term priority for the development of any economy; therefore, purposeful support and encouraging the development of this sector requires highlighting the specificities of high-tech and knowledge-intensive companies. This study provides an empirical test of the existence of differences in some parameters between the companies in high-tech and traditional sectors of the economy with BEEPS microeconomic data base by the following characteristics: level of research and development intensity; level of personnel qualification; technological and financial capabilities; business orientation to the global market. The test is based on the Student’s t-test, i.e. statistical comparison of the average values of the parameters for the companies in the specified sectors. For verification, the data from direct surveys of domestic manufacturing and production service companies, the data from the surveys of companies from the EAEU countries and some Eastern European countries were used. It has been revealed that in Eastern European countries, high-tech companies of any sectors more heavily invest in R & D. In Russia, this is true only for the production sector. At the same time, the level of innovative activity for domestic production companies is generally consistent with the level of the companies in other countries under study. Like in many European companies, a significantly large proportion of domestic high-tech companies pays attention to the introduction of new methods f production, management, and product promotion. The need to acquire or rent equipment is equally important for high-tech and low-tech companies, and there are no significant differences in access to financial resources. It has been also revealed that the Russian high-tech production companies are more focused on the national market, whereas the low-tech companies are orientated to the local one. At the same time, the high-tech business is still characterized by a higher share of products shipped for export as compared to the average level of industrial exports.

Innovation capability maturity in non-R&D performers: a reference model

Highlights: The prevalence of Research and Development (R&D) as an inducing factor for innovation has been questioned, and studies show that low-tech companies are able to innovate. Innovation capability is essential to increase productivity and improve competitiveness. However, when formal R&D is considered as the main parameter in its evaluation, it tends to underestimate it. The extent and heterogeneity of studies on innovation in non-R&D practitioners is a relevant problem and, despite theoretical and empirical advances, it is not satisfactorily resolved yet.
 Goal: This article presents a reference model for innovation capability maturity in low-technology, non-R&D performing companies, oriented to guide decision makers and the institutions supporting these organizations.
 Design / Methodology / Approach: The method used to construct the model is based on the proposition of Ahlemann and Gastl (2007) for the construction of reference models based on empirical evidence.
 Results: The model is based on ten organizational dimensions and their effects on the organization's performance. Five maturity levels are defined, synthesizing the fundamental characteristics of innovation capability in non-R&D practitioners or low technology companies.
 Limitations of the investigation: Although the model has been tested and validated, more applications and tests may still be required.
 Practical implications: The model is an important tool for decision-making, at the management level, in low-tech companies that aspire to broaden their innovation capability.
 Originality / Value: The model has significant potential academic repercussions, in terms of the expansion of knowledge, as well as for the industry, since it can contribute to the increase of the competitive performance of companies.

Eco-Innovation Influencers: Unveiling the Role of Lean Management Principles Adoption

This study analyzes the determinant factors of eco-innovation, considering business units with different levels of technological intensity (high technology versus low technology). It aims, in the first instance, to complement the approach on the determinants of eco-innovation in the existent literature by incorporating the novelty related to the analysis of the effects arising from the adoption of the lean management principles. Specifically, it aims to analyze the effects of the previously referred to determinant factors both on the economic performance and on the innovative performance of Portuguese industrial and service companies with different levels of technological intensity (high-tech versus low-tech). The conceptual model presented is of an innovative nature, since it includes four groups of determinant factors present in the literature, namely technology, market, public policies, and cooperation relationships, and adds a fifth group of determinant factors still to be explored empirically concerning the adoption of lean management principles. In the empirical approach, five research hypotheses arising from the literature review are tested, using secondary data collected from the Community Innovation Survey (CIS)—CIS 2010 for a total sample of 334 companies, made up of 95 high-tech companies and 239 low-tech companies. The conceptual model is tested using a logistic regression method, which indicated a suitable accuracy and reliability for the purposes of empirical tests. The empirical evidence confirms that most of the groups of determinants previously identified in the literature have a significant influence on eco-innovation. In addition, the empirical evidence obtained here indicates a positive and significant effect of lean management principles on eco-innovation.

Knowledge management strategies, intellectual capital, and innovation performance: a comparison between high- and low-tech firms

Purpose This study aims to analyse the complementary role of structural and relational capital (as the outcomes of codification and personalisation knowledge management strategies) in renewal capital and innovation in high- and low-tech companies. Design/methodology/approach The primary data, which were collected through a structured questionnaire from 180 Spanish companies, are analysed using structural equation modelling based on partial least squares. Findings Overall, the study offers three fundamental findings. First, it demonstrates the outstanding role of renewal capital as an intellectual capital (IC) component; second, it provides a conceptual analysis of the connection between knowledge management strategies and IC; and third, it highlights the necessity of considering the technological level of the firm as a contingency variable affecting the IC–innovation relationship. Research limitations/implications The study has three apparent limitations: The sample of firms is restricted to Spanish companies, data concerning the main study variables were collected from only one person at each firm, and not all of the possible components of IC were included in the research model. Practical implications Business practitioners can find useful guidelines for making efficient use of knowledge resources when boosting innovation performance, depending on the technological level of their firms. Originality/value Although many studies have tried to disentangle the IC–innovation connection, this study is unique, as it considers knowledge management strategies, a novel combination of IC components and the level of technological sophistication in the same analysis.

Knowledge Management, Knowledge Creation, and Open Innovation in Icelandic SMEs

The aim of this article is to present findings on knowledge management (KM) and knowledge creation, as well as open innovation in small and medium-sized enterprises (SMEs) in Iceland. Two SME company case studies are presented in the form of a case study involving semistructured interviews with managers and selected employees and in-field observation. Company Alpha is a software company, whereas Company Beta is a family company which produces drinks and snacks. Knowledge creation and innovation is a learning process in both companies. The two companies show very different open-innovation models in practice. The findings regarding the two companies are in accordance with the arguments of Chiaroni et al., where they state that high-tech companies tend to prefer inside-out strategies of open innovation, whereas low-tech companies prefer outside-in strategies. Company Alpha relates to customers late in the process, whereas Company Beta relies on knowledge from customers and suppliers and for new knowledge early on in the process.

Do political connections enhance or impede corporate innovation?

We establish a comprehensive political connection index based on manually collected personal profiles of top firm managers or board members to examine the contribution of political connections to corporate innovation and the channels of this relation. Our results indicate that politically connected firms tend to have more innovation than non-connected firms, and government subsidies mediate this relation. Moreover, the innovation-enhancing value of political connections is especially important for firms that receive less government support, such as non-SOEs and low-tech companies.

Absorptive capacity and innovation in low-tech companies in emerging economies

Innovation capacity is on the focus of policy makers in emerging economies. Although some studies show the antecedents of innovation capacity for developed economies and high technological industries, scant research outcomes exist for different settings. This study tries to shed some light on the drivers of innovation capacity for low technological companies in emerging economies. Using the absorptive capacity as a driver of technological and non-technological innovation capacity, this study proposes a SEM model to contribute to the literature of innovation capacity including technological and non-technological innovation, and the relationship between them, in low-techonology industries in an emerging economy. A sample of 706 manufacturing companies from Peru is used. The academic contribution of this study states that absorptive capacity favors technological and non-technological innovation capacity and that non-technological innovation affects technological one. Accordingly, managerial contribution suggests improving absorptive capacity levels to internal R&D activities but also to organizational and marketing innovation activities.

Production technologies and low-technology knowledge-intensive venturing

PurposeThe purpose of this paper is to explore how low-technology corporate ventures use knowledge from multiple and often trans-sectoral fields to intensively create and deploy innovative production technologies in order to sustain significant competitive advantages.Design/methodology/approachThe paper primarily draws evidence from an exploratory case study of a low-tech private enterprise operating in the wood processing industry in Greece.FindingsLow-technology firms appear to invest mainly in process innovation and therefore production technologies, in order to secure a position within mature markets. Within the notion of knowledge-intensive entrepreneurship (KIE), a creative bricolage of knowledge based on research work and industrial practice results in innovative products and processes covering technologies from a wide range, including high-tech industries. The case indicates that low-tech companies may be something more than just “borrowers” of technology.Research limitations/implicationsThe limitations regard the single case study research design and the focus on the wood industry in Greece. Future research may pursue more case studies in different traditional sectors and national contexts.Practical implicationsEntrepreneurs and managers of low-technology firms should focus on technological innovation and more specifically on co-creation of novel production technologies in order to sustain strong competitive advantages and enhance performances.Originality/valueThe analysis challenges the established opinion of common entrepreneurial processes in low-tech sectors. It adds to the ongoing discussion of low-tech, KIE and it contributes to the literature of industrial dynamics since there are only a handful of studies that probe the role of production technologies within a low-tech but knowledge-intensive context.

Absorptive capacity in low-tech industry: Case Study of Indonesian Manufacturing Companies

Innovation has widely recognized as an important factor for driving competitiveness of many firms. In order to generate innovative performances, firms need to improve their capabilities in absorbing knowledge and technology from external sources, which is so called absorptive capacity. This paper will analyze what kind of sources of innovation in manufacturing sectors especially for low tech industries. Focusing on innovation activities, this paper aims to identify what kind of determinants in influencing the difference of absorptive capacity in low tech industries. The source of data is derived from Innovation Survey 2011 held by Center for Science and Technology Development Studies. The survey conducted for 1360 firms in manufacturing sector, in which most of the distribution is mainly consisted of low technology sectors. Instead of quantitative approach, the result is also supported by in depth interview from selected firms observed in 2013. This paper addresses multiple case studies as the qualitative approach, including firms in food and beverages, and jewelry art and design. According to the results, most of low tech companies searched their external sources of knowledge from their market, and customers were the main driver for their innovation output. In respond to this situation, this paper proposes an idea of open innovation for enhancing industrial competitiveness. As policy insights, the sources of competitive advantage in an open innovation setting will encourage the firm to the internal organizational processes that allow a firm to recognize, assimilate and exploit knowledge.

The impact of directors’ high-tech experience on innovation in low-tech firms

This study investigates whether, and if so, how, the presence of directors with experience in high-tech industries influences firm innovation in low-tech firms. Based on a sample of 1,095 listed U.S. firms with 10,327 directors for the period 2008–2012, our results suggest that the level of firm innovation in low-tech companies is positively related to directors’ experience stemming from simultaneously sitting on the board of a high-tech company. This relationship is accentuated for smaller, less financially leveraged, and faster growing firms. Our findings have implications for the literature on cross-sectoral board experience and innovation outcomes in low-tech firms and can inform practice, particularly with respect to the selection of board members.

Exploring the role of human capital, renewal capital and entrepreneurial capital in innovation performance in high-tech and low-tech firms

According to past research, intellectual capital (IC) is a key driver of innovation performance and subsequent competitive advantage. Given the human nature of innovation activities (i.e. human beings produce innovations), human capital (HC) deserves special attention. Although researchers in the past have analysed the HC–innovation linkage, we still do not have a detailed understanding of how specific human capabilities affect innovation. Furthermore, the technology level of the firm could generate major differences in the HC–innovation relationship as it influences both the type of knowledge prevalent within the company and the radicalness of the innovations developed. Nevertheless, former literature has largely omitted technology level when studying the IC–innovation linkage. To fill this research gap, this study examines the role of human attributes, including knowledge, skills and motivation (i.e. traditional HC), learning capability (i.e. renewal capital) and entrepreneurial attitude (i.e. entrepreneurial capital) on innovation in high-tech versus low-tech companies. To that end, survey data from 180 Spanish companies were analysed by means of structural equation modelling based on partial least squares. The results obtained confirm that the influence of HC, renewal capital and entrepreneurial capital on innovation differs depending on the technology level.