Majella Giblin Edel Walshe Laura Martinez
description
Transcript of Majella Giblin Edel Walshe Laura Martinez
www.nuigalway.ie/cisc
The role of Knowledge Intensive Service Activities (KISAs) in building the innovative capacity of the Irish software sector
Majella Giblin
Edel Walshe
Laura Martinez
www.nuigalway.ie/cisc
Research Questions
• Are Irish software firms willing to cross company boundaries to access core activities externally?
• Do Irish software firms outsource innovative activities?
• What is the geographical scope of external linkages within the Irish software sector?
• Are public sector linkages with firms active in the Irish software sector?
www.nuigalway.ie/cisc
Innovation Systems
• An innovation system:“Set of institutions whose interactions determine the innovative
performance of… national firms” Nelson 1993 pp. 4
– Key institutions include private enterprises, universities, research centers, publicly funded research laboratories
– A network of individuals and organisations made up of complex business and social interactions
www.nuigalway.ie/cisc
KIBS vs. KISAs
• KIBS:private companies “performing, mainly for other firms, services encompassing a high intellectual value added” (Muller 2001 pp. 2)
– Two main categories of KIBS: traditional-based services and new technology-based services
– Role in innovation systems: producer, facilitator, carrier and source of innovation (Miles et al 1994, Muller and Zenker 2001, Den Hertog 2000)
• KISA:– Inclusion of internal capabilities and public institutes
– Services aimed at innovation in product, process or organisation
www.nuigalway.ie/cisc
Research Methodology
• Quantitative:– Postal questionnaire survey– Sample: 683 firms– Response rate: 40.1%
• Qualitative:– Semi-structured interviews– 16 companies (9 MNCs and 7 indigenous)
www.nuigalway.ie/cisc
Irish Software Sector Overview
0% 20% 40% 60% 80% 100%
100% Irish owned
100% Foreign owned
Joint Venture
Foreign Minority Holding
Micro Small Medium Large
www.nuigalway.ie/cisc
Firm activities: knowledge intensive & competitive positioning
0 20 40 60 80 100
DataManagement
Mining
SystemsSoftware
ProgrammingLanguage/Tools
Core Technologies
0 20 40 60 80 100
LocalisationSoftware
ApplicationSoftware
Bespoke
SoftwareServices
Non-Core Technologies
www.nuigalway.ie/cisc
Innovation Processes
0
20
40
60
80
100
Internal (within Ireland) Internal (abroad) External
New product creation New process creation Design & redesign of products
Adaptation of products Adaptation of processes
www.nuigalway.ie/cisc
IPR Challenges to innovation
0 10 20 30 40 50 60
Copyright
Registrationof design
Trademarks
Patents
Secrecy
Complexity ofdesign
Speed tomarket
Other
0 10 20 30 40 50 60 70
economic risk
High cost
Lack of finance
Lack ofqualified
personnel
Lack of marketinfo
Customerresponsiveness
Foreign owned Irish owned
www.nuigalway.ie/cisc
Role of KISAs in Innovation: Internal and External Sources
Internal (within Ireland)
Internal (Abroad)
External (Private sources)
New Technology-Based
R&D 88 19 12
Development advice 79 18 23
Management consultancy 65 12 23
Engineering consultancy 65 14 18
Technical Consultancy 72 15 22
Traditional-Based
Legal & accounting 68 9 45
Training services 59 15 30
Marketing 71 22 27
Job agency 50 9 27
www.nuigalway.ie/cisc
Internal KISAs:Core Technologies
“As the company will grow I expect that yes we will use more and more professional services, but you see, anything which is really vital for us, which is R&D, we want to keep that internally because that is really the core of the company.” (Company M, Indigenous)
“As regards our core skills and our understanding of the business and our understanding of the technology, that’s all in-house. There is no going out to buy it, people come to us to buy it.” (Company A, Foreign Minority Holding)
www.nuigalway.ie/cisc
External KISAs:Public vs. Private sources
Universities & PRIs Government agencies
Private sector
New Technology-Based
R&D 9 4 12
Development advice 3 11 23
Management consultancy 1 4 23
Engineering consultancy 5 0 18
Technical Consultancy 3 .5 22
Traditional-Based
Legal & accounting 1 2 45
Training services 4 5 30
Marketing 1 4 27
Job agency 2 1 27
www.nuigalway.ie/cisc
External KISAs:Geographical Scope
• Overall: KISAs mainly sourced at national level
• Reliance of foreign-owned firms on international sources for new technology based KISAs– R&D services: 43%– Development advice: 43%– Technical consultancy: 40%
www.nuigalway.ie/cisc
Integration of internal & external KISAs: Foreign-owned units
• Self sufficient corporations in terms of required KISAs– Proximity: to US & Europe
• When accessing external KISAs, the integration of these skills is generally not expected
“We don’t try to learn their [externally KISA suppliers] service because typically they are skilled in an area that we are not in. We are careful not to be contaminated so we don’t want to work with a company and then decide that’s an area that we would like to be in. So we have to be careful that we don’t learn things that we shouldn’t learn” (Company L, MNC)
www.nuigalway.ie/cisc
Integration of internal & external KISAs: Indigenous-owned units
• Access external KISAs as not available in-house– Traditional-based KISAs accessed from other indigenous
firms– New-technology based KISAs accessed from firms abroad– Involved in long-term relationships with suppliers based on
quality, reliability and trust– Only small number of companies reported learning from
KISA provider but benefits of sharing knowledge is acknowledged
www.nuigalway.ie/cisc
Importance of KISAs at different stages of software development
• 3 phases: innovation, maturing, standardised.
• Innovation phase: product conception – use of customers strategy & business development – use of internal units product development – use of internal units market testing – use of customers market release – use of internal units
• Maturing phase: Interaction with customers leading to incremental innovations
• Standardised phase: Use of internal units for reducing costs
www.nuigalway.ie/cisc
Discussion & conclusions
• Profile of innovative capacity of Irish software sector
• Addressing research questions:– Firms willing to cross company boundaries as long as core technology
is retained internally
– Firms don’t necessarily ‘outsource’ innovative activities but rather ‘coordinate’ with other firms, particularly customers
– Geographical scope of external linkages are international as well as national
– Public sector and private sector linkages are underdeveloped