Andrew Tylecote

Corporate Governance, Innovation Systems and Industrial Performance

The effective corporate governance of innovating firms calls for a capacity to deal with novelty, visibility and appropriability. Such capacities are found to vary among sectors, in terms of industry-specific expertise, firm-specific perceptiveness, and (sometimes) stakeholder enfranchisement. They also vary between countries, according to their corporate governance systems, as outlined in the paper for the cases of Germany, France, Britain and the United States. The paper shows how the differences described can help to explain the propensity for national industrial specialization in these countries, and describes the results of statistical tests of the hypothesis.

A healthy hybrid: The technological dynamism of minority-state-owned firms in China

Abstract Since its economic reform began in 1979 Chinas economy has grown rapidly but its dynamism has not been shared by the state-owned enterprises (SOEs) at its core. Although some progress has been made, a large proportion of SOEs remain inefficient and uncompetitive, failing to exploit their advantages in scale, experience and resources. In contrast there has been rapid growth first of the collective and township enterprises, and then of the private sector, now the largest ownership type. However, private businesses continue to be handicapped by poor access to finance and other resources. These have however been made freely available to firms with only a minority state shareholding and otherwise owned by private shareholders and employees. This paper, focussing on the telecoms manufacturing sector, compares minority-state-owned hybrids favourably with other ownership types and argues that in the Chinese setting they can and should play a key role in future development.

Industrial innovation, corporate governance and supplier‐customer relationships

Purpose – The purpose of this paper is to explore the linkage among three factors – shareholder‐manager relationships (or corporate governance), customer supplier relationships, and innovation, for two groups of UK firms in the speciality chemicals and electrical equipment industries.Design/methodology/approach – This research was exploratory. In total, 12 companies were studied in depth. The level of innovation was measured through a questionnaire and interviews were carried out with managers, important customers and suppliers. A comparison of management practices was established between the more and the less innovative companies.Findings – This research finds a close connection between shareholder‐manager relationships, customer and supplier relationship management and innovation. The firms subject to arms‐length relationships with shareholders (as UK‐based public limited companies) had more distant relationships with suppliers and customers and poorer innovative performance.Research limitations/implica...

Twin innovation systems, intermediate technology and economic development: History and prospect for China

Summary This paper argues that less developed countries (LDCs) need twin national systems of innovation: systems with one, ‘upper’ level or sub-system to engage with advanced technology and develop industries which use it; and (cooperating with the upper level) a ‘lower’ level to help to improve the economy’s existing, traditional technology. The focus is on the lower level. The process there should involve the development and use of intermediate technologies. These are much better suited to the LDC’s factor endowment, and maximise opportunities for learning by doing. Most LDCs lack such a lower level, and lose much from this; Brazil is an example. Japan and Taiwan developed twin NSIs and gained accordingly, until success caused the levels to merge. 19th Century Denmark and Malaysia are other cases in point recently. Mainland China failed to build on its 1950s beginnings and the lower level of its NSI is now weak.

Breaking Out of Lock-In: Insights from Case Studies into Ways Up the Value Ladder for Indian Software SMEs

Small and medium enterprises in the Indian software development industry, like their larger counterparts, are mostly low on the value ladder. This paper examines the difficulties confronting them in moving up the ladder and the strategies and circumstances conducive to success, drawing on three case studies. Human resource development emerges as central. Though SMEs have meager resources for moving up, compared to large firms, they have a greater incentive to do so, and this organizational interest accords with the interests and motivations of their employees for career development. It is found that the keys to success are to treat employees as co-investors in their own human capital in order to form an effective community of practice across the firm and to find market opportunities that stretch the firm in the right direction and to the right extent. For the last of these, the main contribution is made by existing clients, but an important role may be played by venture capitalists, particularly those that are US-based.

National Competitive Advantages And Microeconomic Behaviour

The purpose is to describe and explain the pronounced and changing specialisations of six European countries in terms of both trade and technology. The explanation starts from Pavitts categorisation of technological families, showing how it can be refined to describe sub-families and how the categories evolved. The task is (a) to define what are the requirements for success in innovation in each category, (b) to assess each countrys capacity to meet those requirements. Six behavioural requirements are postulated: two types of inter-functional coordination; external interaction; and three types of vertical interaction. There are also three external requirements: science base, technical manpower, and patient money, of various types. It is shown how these requirements appear to vary among families, sub-families and sectors, and how countries appear to vary in their ability to meet them. This explains satisfactorily the pattern of specialisation, and direction of change, which is described.

Hybrid Corporate Governance and its Effects on Innovation: A Case Study of AstraZeneca

This case study looks at the relationship between the UK/Swedish pharmaceutical firm, AstraZeneca, and its shareholders from the point of view of its effects on innovation. It uses a theoretical framework on corporate governance and innovation that differentiates sectors according to the novelty, visibility and appropriability of technological change. High novelty requires a corporate governance system with strong industry-specific expertise; low visibility requires good firm-specific perceptiveness. High appropriability favours shareholder supremacy as against stakeholder inclusion. The pharmaceutical industry appears to be high in all three, and this (according to accepted stereotypes) should favour the outsider-dominated corporate governance system of the UK as against the insider-dominated Swedish system. It is found that the corporate governance that resulted from the merger could indeed be described as hybrid, but that (following the building up of one major US shareholding) it was a UK/Swedish/US hybrid. In spite of the apparent similarity of the UK and US ‘outsider-dominated’ systems, the US element made a crucial difference, in giving engagement by a strong and well-informed shareholder who had some influence on other shareholders. This in turn helped to protect the firm to a significant extent from short-term pressures within the UK stock market, and thus to allow it to maintain its emphasis on long-term innovation.

History as a forecasting tool: the future of the European economy in a long-wave/long-cycle perspective ∗

Long wave theory posits cycles of c.50 years in the world economy.Long–cycle theory posits cycles of c.120 years in international relations (with economic consequences). However the historical reco...

Innovation, Growth and Entrepreneurship

Entrepreneurship is a key to economic development, because it has to do with the combination of new or old resources in new ways in order to create a business opportunity. These new ideas and innovations are often created by newly founded and small firms that engage in rapid growth. These firms even create new industries (Storey, 1994). Therefore, entrepreneurship, small firm growth and innovations are closely connected to each other.

Institutions matter: but which institutions? And how and why do they change?

Both political and economic institutions matter for economic growth and development, and are indissolubly connected: sustained economic growth requires far-reaching opening up of the economy and polity to wide participation. This review essay draws on three books which share this view of institutions, to develop an argument on which institutions matter most, and how and why they change. Like them, it uses history as laboratory. North et al. (2009) in Violence and Social Orders focus on Britain, France and the United States, in which change was generally progressive, to study such change from the medieval to the modern period. Jan van Zanden in The Long Road to the Industrial Revolution looks at Europe, 1000–1800, in particular the Netherlands and England, finding regressive as well as progressive change. Acemoglu and Robinson also examine both directions of change, in Why Nations Fail: they range widely in space, but little before the 16th century. All three offer powerful tools of analysis. All have implications for policy-makers in advanced societies who wish to promote the development of ‘inclusive’ institutions elsewhere. Two striking surprises emerge, and one prime mover – an institution with particular power to change others – the medieval Catholic church.