The Impacts of  Knowledge Management Practices on Innovation Activities in High- and Low-Tech Firms

The Impacts of Knowledge Management Practices on Innovation Activities in High- and Low-Tech Firms

Kris M. Y. Law, Antonio K. W. Lau, Andrew W. H. Ip
Copyright: © 2021 |Pages: 25
DOI: 10.4018/JGIM.20211101.oa41
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Abstract

This paper presents an empirical study on how knowledge management practices and innovation sources affect product innovation performance, among the 152 manufacturers in the low- and high- tech industries in China. The results indicate that external innovation sources are positively correlated with innovation activities and new product performance. Intellectual Property (IP) and knowledge management practices (KMP) are positively correlated with innovation activities, and KMP is positively correlated with innovation sources. The dual effect of KMP shows its indispensable effect on the new product development for both high-tech and low-tech firms, but for low-tech firms, such effect is relatively weak. This empirical study shows that IP management is critical to high-tech but not low-tech firms. We also found that, for innovation activities, low-tech depends on the external sources of innovation whilst high-tech firms do not.
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1. Introduction

Sourcing and managing knowledge are critical for product innovation (Law, Lau, & Ip, 2019; Hernandez-Vivanco, Bernardo, & Cruz-Cázares, 2016). Knowledge for innovation in both tacit or explicit forms can come from different sources through internal and external innovation activities, such as up-to-date publications, databases or information from business partners (Cassiman & Veugelers, 2006). Innovation relevant studies have focused on the economic outcomes, innovation actors, the quantitative measurement of innovation performance, and the effectiveness of funded initiatives (Yam, William, Tang, & Lau, 2011).

Literature about product innovation is generally focusing on high-tech industries (Chai, Yap, & Wang, 2011), and not much on low-tech industries or the comparison between those (Martinez, Zouaghi, & Garcia, 2017). Innovation activities can be found in high-tech and low-tech industries; however, the global trend focuses on high tech developments. Non-high tech industries are mostly ignored in these innovation activities though they contribute significantly to the market (Abbate et al., 2020; Law, Lau, & Ip, 2019; Brookfield, Liu, & MacDuffie, 2008). High-tech companies involve higher technological complexity levels and extensive R&D activities and are characterized by product innovations. In contrast, low-tech companies are characterized by the process, organizational and marketing innovations with weaker internal innovation capabilities and dependent on external embodied knowledge acquisitions (Pavitt, 1984). Scholars reported that they have distinctive contexts for internal and external knowledge capabilities and collaboration (Buenechea-Elberdin et al., 2018; Berchici et al., 2013; Bender 2008; Heidenreich, 2009). To improve innovation performance, low-tech firms, for example, look for R&D human capital, while high-tech firms invest in R&D expenditures (Zouaghi et al., 2018). Due to low R&D investment, low-tech firms usually lack the absorptive capacity to take advantage of external scientific knowledge for product innovation effectively but are good to acquire other types of external knowledge (e.g. social science knowledge from local universities) for process and marketing innovations (Abbate et al., 2020; Flor et al., 2021). In view of this, the knowledge management for high-tech and low-tech firms should be different, but there is less attention to their differences in literature (Flor et al., 2021; Trott and Simms, 2017).

Due to the lack of understanding of the low-tech innovation processes, it is essential to study the innovation activities for both types of industries for offering the proper instruments to support their industrial development in terms of innovation activities and knowledge management practices (KMP) (Martinez, Zouaghi, & Garcia, 2017; Jensen, Johnson, Lorenz, & Lundvall, 2007; Hirsch-Kreinsen, 2008; Heidenreich, 2009). Cooperating with internal and external parties is commonly seen among firms to create new knowledge (Cassiman & Veugelers, 2006). Especially, a high-tech firm usually uses sophisticated information management systems to facilitate knowledge sharing and acquisition (Lyu & Zhang, 2017; Xi, Zhao, & Na, 2019). Thus, the KMP for low-tech firms may be different from that of high-tech firms. However, to our best knowledge, a comparative empirical analysis of KMP and sources of innovation for high-tech and non-high-tech firms is a few in China manufacturing.

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