Ferran Vendrell-Herrero

Music business models and piracy

Purpose – The purpose of this paper is to estimate the scale of illegal file‐sharing activity across ten countries and to correlate this activity with country revenues. The work aims to elucidate an under‐explored business model challenge which exists in parallel with a music piracy challenge.Design/methodology/approach – The study data are drawn from a number of sources, including a data set of a survey of more than 44,000 consumers in ten different countries undertaken in 2010. Following analysis, all findings are validated by a panel of industry experts.Findings – Results show that non‐legitimate file‐sharing activity is a heterogeneous issue across countries. The scale of activity varies from 14 per cent in Germany to 44 per cent in Spain, with an average of 28 per cent. File‐sharing activity negatively correlates to music industry revenue per capita. This research finds many consumers are not engaging with online business models. Almost one fourth of the population claim that they do not consume digi...

Servitization for territorial competitiveness: taxonomy and research agenda

Building a taxonomy for servitization research There is currently around 10 per cent annual growth of the industrial US rental industry. This growth is attracting experienced investors, and rental fleets/inventories are growing exponentially[1]. Why are we observing this preference in the use over the ownership of equipment, vehicles or machinery? This question is reflective of the broader inspiration for a growing literature analysing the value of including service business models in manufacturing firms (Cusumano et al., 2015; Vendrell-Herrero et al., 2014; Wise and Baumgartner, 1999). Manufacturing and services have been traditionally conceptualized as largely independent economic activities, but evidence seems to suggest that there are potential synergies between manufacturing and services to enhance both firm-level competitiveness and consumer satisfaction, a business strategy known as servitization (Vandermerwe and Rada, 1988). What is more, such strategies fit well with the argument that manufacturing business models exclusively focused on exploiting economies of scale have become unsustainable at the turn of the century with the rapid rise of Asia’s engagement in the global economy. Advanced economies – such as Europe and the USA – are characterised by high wages, high skills, high disposable income and developed welfare systems. These conditions require a better understanding of what drivers and bottlenecks can enable Western manufacturing sectors to transit to more innovation-intensive and difficultto-imitate business models based on services that will sustain their competitiveness in the medium and long term. This realisation is driving much practice around regional competitiveness policy, which is increasingly focused on supporting interaction between different agents as a route to more sophisticated and wider-reaching innovation (Aranguren et al., 2010). Indeed, place-based concepts such as regional innovation systems, clusters and smart specialisation strategies have become popular in part due to recognition that interactions between agents with different types of knowledge are capable of generating strong innovation outcomes. In this sense, there are interesting questions around the specific requirements at the territorial level for fostering the development of servitization strategies, which are likely to require a mixture of knowledge that exist outside any one firm. This is particularly the case in regions that are strongly reliant on traditional manufacturing activities, and where policy may have an important role to play in encouraging linkages that support the transition to service-based economic models. It is with these challenges in mind that this issue of The Competitiveness Review looks at the phenomenon of service implementation and competitiveness and posits a research agenda that needs to be explored at the territorial level. The issue brings together papers from across the spectrum of current servitization debates, as a stimulus to think about the link with territorial competitiveness and related public policy. The four contributions can be positioned within the taxonomy presented in Figure 1, which is constructed from two axes. Whilst the vertical axis differentiates between mainstream and alternative approaches to CR 27,1

Nested Methodological Approaches for Cluster Policy Evaluation: An Application to the Basque Country

Aranguren M. J., de la Maza X., Parrilli M. D., Vendrell-Herrero F. and Wilson J. R. Nested methodological approaches for cluster policy evaluation: an application to the Basque Country, Regional Studies. This paper explores the evaluation of cluster policies designed to support cooperation and networking. It examines the case of the long-running Basque policy, where support is provided for ‘cluster associations’. It first examines empirically the effects of the cluster associations on firm productivity performance, alongside other variables including agglomeration and firm behavioural characteristics. The results provide some weak evidence for the existence of additionality associated with the policy. This empirical work is complemented with context-specific knowledge of the policy in question to show that the nesting of both empirical and contextual approaches is crucial for effectively evaluating such policies.

Why do university spin-offs attract more venture capitalists?

This paper provides empirical evidence that young university spin-offs are more likely to receive venture capital than other technological start-ups. In addition, this fact is explained mainly by the lack of managerial skills among the founders of certain university spin-offs. The data used have been obtained from a questionnaire answered by 64 Spanish technological firms founded between the years 1993 and 2005. Forty of the firms are university spin-offs; the remainder are independent technology-based start-ups. The results support the complementary-assets view that academic entrepreneurs use venture capitalists as a means of gaining access to managerial skills. These results are maintained even when we control for financial constraints, levels of debt and intellectual property protection. Although these latter variables explain why certain high-tech firms are more likely to receive venture capital, we do not find statistical evidence that they explain the differences between university spin-offs and technological start-ups in terms of being backed by venture capitalists. The results therefore suggest that universities and policy makers can stimulate the creation and growth of university spin-offs by facilitating contact and trust between venture capitalists and academic entrepreneurs, mostly with respect to those cases in which there is a severe lack of managerial skills.

Product–service innovation and performance: the role of collaborative partnerships and R&D intensity

Treating the intersection of the strategic partnerships, R&D intensity and servitisation literatures, this study explores empirically whether external collaborative service development and provision and industrial R&D intensity help to unpack the complex relation between product–service innovation (servitisation) and performance. We argue that manufacturing firms implementing services benefit from strategic partnerships with Knowledge-Intensive Business Service (KIBS) firms. KIBS partnering provides opportunities for downsizing, externalising risks and sharing knowledge. Additionally, manufacturers in R&D-intensive industries are more likely to benefit from implementing service provision than firms in other sectors because of industry dynamics and reduced customer uncertainty. The study surveys executives in 370 large manufacturers worldwide. Results reinforce the importance of concentric strategic partnerships to successful product–service innovation in high R&D industries.

Network positioning and risk perception in servitization: evidence from the UK road transport industry

For manufacturing firms, the integration of advanced services into their customer offerings has become a crucial decision. Such commercial decisions require weighting the risks and rewards of implementing a business model based on advanced services. While academic experts acknowledge uncertainty of returns on investment despite potential advantages, research generally fails to address the challenge of calculating the actual risks involved in ‘servitization’. This paper seeks better understanding of managers’ risk perception and of servitization implications for strategic partnerships and network positioning, while considering the impact of factors such as entry barriers, technological knowledge and position in the supply chain (SC). Qualitative evidence is drawn from an industrial case study involving firms in the UK’s road transport industry: 14 in-depth interviews with senior executives from seven companies (manufacturers, operators, technology providers). During interviews, a payment card exercise measured risk perception and willingness to take strategic ‘make-or-buy’ decisions. Results suggest that implementing advanced services is perceived as a high-risk strategy, especially when firms lack in-house technological knowledge. However, collaborative strategic partnerships within supply chain networks can mitigate this risk and prove crucial to building entry barriers against external competitors. Based on these findings, implications for network positioning are developed.

Copyright and creation: repositioning the argument

Purpose – This paper highlights the challenges and key arguments for digital copyright protection legislation for creative industries. Design/methodology/approach – This briefing is prepared by independent academics who place the arguments in context based upon literature and market data. Findings – Many of the arguments used against copyright protection laws draw upon flawed analysis. Artistic creators should be treated fairly and their work should be afforded the same protection as other property. Practical implications – Digital legislation warrants review, but not for the frequently cited reasons of “stifling innovation” or “restriction” of others using the work. Rather, artists need better protection for their work and fairer treatment with regards their property rights. Originality/value – The paper provides context and practical insights into the data used to influence policy decision makers, providing a stronger case for legislative review.

Testing the self-selection theory in high corruption environments

Purpose: Whilst substantial evidence from low corruption, developed market environments supports the view that more productive firms are more likely to export, there has been little research into analysing the link between productivity and exports in high corruption, developing market environments. The purpose of this paper is twofold. First, to test the premise of self-selection theory whether the association between productivity and export is maintained in high corruption environments, and second to identify other variables explaining export activity in high corruption contexts, including cluster networks and firms’ competences. Design/methodology/approach: The authors draw on the World Bank Enterprise survey to undertake a cross-section analysis including 1,233 SMEs located in nine African countries. The advantage of this database is that it contains information about the level of perceived corruption at firm-level. Logistic regressions are performed for the full sample and for subsamples of firms in high and low corruption environments. Findings: The findings demonstrate that the self-selection theory only applies to low corruption environments, whereas in high corruption environments, alternative factors such as cluster networks and outward looking competences, exert a stronger influence on the exporting activity of African SMEs. Research implications/limitations: This research contributes to theory as it provides evidence that contradicts the validity of self-selection theory in high corruption environments. Our findings would benefit from further longitudinal investigation. Practical implications: African SMEs need to consider cluster networks and outward looking competences as important strategic factors that might enhance their international competitiveness. Originality/value: Our criticism of the self-selection theory is distinctive in the literature and has important implications for future research. We show that the contextualisation of existing theories matters and this opens a research avenue for further more sensitive contextualisation of existing theories in developing economies.

Technological capabilities, resilience capabilities and organisational effectiveness

Abstract Previous research has defined resilience as a desirable characteristic for an organization and its members to possess when circumstances adversely change. Resilience is analysed through different perspectives as organizational responses to external threats, organizational reliability or employee strengths. However, the role of resilience in enhancing organizational effectiveness is not fully understood. Grounded in organizational ambidexterity, the current research tests the value of resilience capabilities developed through specific Human Resource Practices (HRPs) in the context of ever-changing market conditions. This paper argues that as well as technological capabilities, HRPs that build resilience within an organization are needed to successfully implement technological change. Resilience capabilities are a mediating factor between technological capabilities and organizational effectiveness, whilst environment dynamism and competitive intensity are moderators of this relationship. Using a primary sample of 205 manufacturing firms, a model is presented and tested using Structural Equation Modelling. The results reinforce the importance of HRPs in building resilience which helps firms to continuously adjust to change and subsequently enhance their organizational effectiveness.

Digital dark matter within product service systems

Purpose The unobserved benefits of digital technologies are described as digital dark matter. Product service systems (PSSs) are bundles of products and services that deliver value in use, which is unobserved but generates benefits. This paper aims to empirically quantify digital dark matter within PSSs and correlates that measure with national competitiveness. Design/methodology/approach A novel methodology establishes the link between customer needs and a product and digital service portfolio offered across ten developed economies. The case context is the music industry where product and services are often substitutes – a cannibalistic PSS. Consumer information is obtained from a unique database of more than 18,000 consumer surveys. Consumer demand for digital formats is modelled and predicted through logistic regressions. Findings The work provides inverse estimations for digital dark matter within PSSs by calculating the gap between supply and demand for digital offers – described as the business model challenge. The USA has the lowest business model challenge; the home of major companies developing digital technologies. Digital dark matter is shown to be positively correlated with national competitiveness and manufacturing competitiveness indices. Practical implications The success of a cannibalistic PSS requires good understanding of market demand. Governments embarking on soft innovation policies might incentivise the development of service-orientated business models based on digital technologies. Originality/value Work expands theory on the concept of digital dark matter to the PSS literature. Empirically, a novel method is proposed to measure digital dark matter.