A pattern of enhancing innovative knowledge capabilities: Case study of a Chinese telecom manufacturer

Abstract

During the 1990s Chinese telecommunication (telecom) manufacturing firms attempted to enhance their innovative knowledge capabilities by concentrating efforts on technological importation and assimilation. In order to improve indigenous technological innovation capability, Chinese firms enhanced their capabilities by accumulating and reactivating firm-specific knowledge. This paper attempts to explore the growth trajectory of some Chinese telecom firms' technological capabilities. Often the catching-up of a firm's technological capability is a trade-off process between the frequent accumulation of technical knowledge and the infrequent leapfrogging of the comprehensive technological capability. To explain the catching-up trajectory of technological evolution the Chinese telecom manufacturing sector was selected. A conceptual framework of the catching-up of technological capabilities is proposed. The framework and the implicit logic of technological catching-up are analyzed through a theoretical lens. A detailed empirical study of a Chinese telecom manufacturer is then presented to validate the capability catching-up pattern.

Acknowledgements

We would like to thank the managers of Eastern Communications Co. who helped in the interviews. We also appreciate the assistance of research group members who helped to draft the investigation report. We are especially grateful to the China–Canada University Industry Partnership Program (CCUIPP) and the National Natural Science Foundation of China (NSFC) who financed the research.

Notes

1. See e.g. M. Fransman & K. King, Technological Capability in the Third World (London, Macmillan, 1989); G. Dosi, Technological paradigm and technological trajectories, Research Policy, 11(3), 1982, pp. 147–162; N. Sharif, Project evaluation framework for industrial technology capability enhancement, Technology Analysis & Strategic Management, 6, 1994, pp. 151–167.

2. M. Fontes & R. Coombs, Contribution of new technology-based firms to the strengthening of technological capabilities in intermediate economies, Research Policy, 30, 2001, pp. 79–97.

3. R. Garud & P. R. Nayyar, Transformative capability: continual structuring by intertemporal technology transfer, Strategic Management Journal, 15, 1994, pp. 365–395.

4. W. M. Cohen & D. A. Levinthal, Absorptive capacity: a new perspective on learning and innovation, Administrative Science Quarterly, 35, 1990, pp. 128–152.

5. K. Lee & C. Lim, Technological regimes, catching-up and leapfrogging: findings from the Korean industries, Research Policy, 30, 2001, pp. 459–483.

6. For example, see K. Arrow, The economic implications of learning by doing, Review of Economic Studies, 29, 1962, pp. 155–173; L. Kim, Imitation to Innovation: The Dynamics of Korea's Technological Learning (Boston, MA, Harvard Business School Press, 1997); D. Leonard-Barton, Wellsprings of knowledge: Building and sustaining the sources of innovation (Boston, MA, Harvard Business School Press, 1995); J. C. Spender, Making knowledge the basis of a dynamic theory of the firm, Strategic Management Journal, 17 (Winter Special Issue), 1996, pp. 45–62.

7. Fransman & King, op. cit., Ref. 1.

8. H. Panda & K. Ramanathan, Technological capability assessment of a firm in the electricity sector, Technovation, 16(10), 1996, pp. 561–588.

9. R. Dawson, Knowledge capabilities as the focus of organizational development and strategy, Journal of Knowledge Management, 4(4), 2000, pp. 320–327.

10. J. Wei, Firm's Technological Capability: A New Perspective on Technological Innovation (Beijing, Science Press, 2002) [in Chinese].

11. F. Malerba & S. Torrisi, Internal capabilities and external networks in innovative activities: evidence from software industry, Economics of Innovation and New Technology, 2, 1992, pp. 49–71.

12. Q. R. Xu & J. Wei, Concept, structure and assessment of a firm's technological capability, Science of Science and Scientific & Technological Management, 16(9), 1995, pp. 29–33 [in Chinese].

13. M. Ingham & C. Mothe, How to learn in R&D partnerships?, R&D Management, 28, 1998, pp. 249–261.

14. K. Malik, Capturing market value in technological value: a case from the optical fibre cables industry, Strategic Change, 10(5), 2001, pp. 259–266.

15. For example, see Kim, op. cit., Ref. 6; Leonard-Barton, op. cit., Ref. 6; Spender, op. cit., Ref. 6; Fontes & Coombs, op. cit., Ref. 2.

16. N. Rosenberg, Inside the Black Box (Cambridge, Cambridge University Press, 1982).

17. D. Crane, Invisible College: Diffusion of Knowledge in Scientific Communities (Chicago, IL, The University of Chicago Press, 1972).

18. L. Kim, Stages of development of industrial technology in a developing country: a model, Research Policy, 9, 1980, pp. 254–277.

19. Garud & Nayer, op. cit., Ref. 3.

20. M. Hobday, Innovation in East Asia: The Challenge to Japan (Cheltenham, Edward Elgar, 1995).

21. Garud & Nayer, op. cit., Ref. 3.

22. M. H. Meyer & J. M. Utterback, The product family and the dynamics of core capability, Sloan Management Review, 34(3), Spring 1993, pp. 29–47.

23. C. K. Prahalad & G. Hamel, The core competence of the corporation, Harvard Business Review, 68(3), May–June, 1990, pp. 79–90.

24. G. Haour, Stretching the knowledge-base of the enterprise through contract research, R&D Management, 22, 1992, pp. 177–182.

25. Lee & Lim, op. cit., Ref. 5.

26. J. Tidd & M. Trewhella, Organizational and technological antecedents for knowledge creation and learning, R&D Management, 27, 1997, pp. 359–375.

27. B. Kogut & U. Zander, Knowledge of the firm, combinative capabilities, and the replication of technology, Organization Science, 3, 1992, pp. 83–397.