Yap, Xiao Shan (2014) Technological transitions, resource acquisitions and organizational capability building: A study of latecomer strategies in the integrated circuit industry / Yap Xiao Shan. PhD thesis, University Malaya.
Abstract
The extant literature on technological catch-up by scholars like Nelson, Winter, Amsden, Mathews and Cho has provided lucid accounts of the critical role of institutions. However, the successful catch-up stories of latecomers like Taiwan have not been easily replicated. This study developed three analytical frameworks to examine three research questions. Firstly, the research seeks to understand how technological transitions affect latecomers’ catch-up strategies, and vice versa, in a technology-intensive manufacturing industry. Second, the research seeks to examine how latecomer resource acquisition strategies vary as the industry experiences structural change. Thirdly, the study aims to understand the mechanisms of how a firm could transform from a technology follower to a technology leader, and sustain its leading technological capabilities. The study uses Taiwan’s integrated circuit industry as the empirical anchor of its in-depth case studies. Critical examples are also drawn from the experience of the integrated circuit industry in other countries. To answer the first research question, the study explains the mechanisms behind the industry’s transitional process after the emergence of the world’s first contract manufacturer in wafer fabrication. The study found that the relationships among technological regimes, driving forces of upstream and downstream firms in the industry, choices of organizational boundaries, and network boundaries evolve through different points in time. The dynamic forces in the industry can collectively create feedback loops to technological regime. Technological transitions provide different conditions for latecomers to catch up or to leapfrog incumbents. In addition, the thesis provides a six-dimensional framework to analyze the dynamic value systems that latecomers face, as the industry experiences structural change. Using this framework, the analysis shows how Taiwanese foundries deployed successful iv resource acquisition strategies to catch up and lead the creation of frontier technologies despite remaining as contract manufacturers. Through the incorporation of resource-based view and open innovation concept, the findings show how latecomer firms can strategize their business model to move up the value chain as they progress from one dimension to the other. Lastly, the findings show that a firm can skip or break away from internal path dependence through coevolutionary lock-ins with the industry to launch new technological paths to sustain its technological leadership. Through a virtuous circle of vision constructions, organizational endogenous strategies, and higher intensity of research and development, firms accumulate higher absorptive capacity for learning that is carried through to subsequent phases. This study strengthens our understanding of technological transitions, which is fundamental to analyze innovation patterns of technology-intensive industries. Understanding the complex relationships between upstream and downstream firms and the industry’s innovation patterns can help policymakers to identify industry segments that can be targeted for catch-up and to identify the types of business models that can be promoted. This study posits that the catch-up process in a technology-intensive industry like the integrated circuit industry requires innovative business models and strategic resource acquisitions as the industry progresses through different phases. Finally, this study provides managerial implications of organizational learning as the study analyzes firm-level endogenous strategies and coevolutionary lock-in with industry.
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