Beyond
technological
catch-up:
An
empirical
investigation
of
further
innovative
capability
accumulation
outcomes
in
latecomer
firms
with
evidence
from
Brazil
Paulo
N.
Figueiredo
*
BrazilianSchoolofPublicandBusinessAdministration(EBAPE),GetulioVargasFoundation(FGV),Brazil
ARTICLE INFO JELclassification: M16 O32 Q16 Q18 Keywords:
Innovativecapabilityaccumulation Latecomerfirms
Catch-up
Competitiveperformance Brazil
ABSTRACT
This article examines outcomes thatare achievedbylatecomer firms by accumulating innovative capabilities. By drawing on fieldworkevidencefrompulpandpaperfirmsinBrazilfrom1950to 2010, it was found that (1) firms accumulated innovative capabilities that allowedthem to become world leaders in the eucalyptusforestrysegmentoftheglobalpulpandpaperindustry; (2)inadditiontotechnologicalcatch-up,theaccumulationofthese innovative capabilities resulted in outcomes that generated benefits within these firms suchas (i) implementinginventive and innovative activities, (ii) consistently improving several parametersofoperationalandenvironment-relatedperformance, and(iii)creatingvariouspatternsofcorporategrowth;and(3)these outcomeswereachievednotjustbyresearch-basedand patent-relatedcapabilitiesbutmainlybyamixofinnovativecapability levels that have varyingdegrees of noveltyand complexity for diverse technological functions.Therefore, accumulating awide rangeoftypesandlevelsofinnovativecapabilitiesdoespayofffor innovative firms, their industries and (ultimately) for their economies. By combining a novel approach to examining firm capabilities with findings from inductive fieldwork, this article generatesnewempiricalandmethodologicalinsightsforthe long-standing debateaboutinnovativecapabilities asa fundamental sourceofafirm’scompetitiveperformance.Thisarticleshoulddraw
*Correspondenceaddress:BrazilianSchoolofPublicandBusinessAdministration(EBAPE),GetulioVargasFoundation(FGV), PraiadeBotafogo,190,22253-900RiodeJaneiro,RJ,Brazil.Tel.:+5502137995742.
E-mailaddress:pnf@fgv.br.
ContentslistsavailableatScienceDirect
Journal
of
Engineering
and
Technology
Management
journalhomepage:www.elsevier.com/locate/jengtecman
0923-4748/$–seefrontmatterß2013ElsevierB.V.Allrightsreserved. http://dx.doi.org/10.1016/j.jengtecman.2013.10.008
Introduction
Thisarticlereportsonanempiricalinvestigationofoutcomesachievedbyfirmsindevelopingand emergingeconomies (knownas latecomers)that arerelated totheir accumulationof innovative capabilities.Unlikemostpreviousstudies,thisarticleexploresoutcomesinadditiontotechnological catch-up. The accumulation of innovativecapabilities has been a central topic in the study of latecomerfirmssince theearly1970swhen Cooper (1970)examined themechanismsbywhich internationaltechnology transfer influenced thelong-term accumulation of thesecapabilities in technology-importingfirmsfromdevelopingeconomies.
ResearchoninnovativecapabilitiesinlatecomerfirmsmovedforwardwiththeworkofaLatin AmericangroupledbyJorgeKatzthatinitiatedthefirstsystematicresearchprogramontheseissues inthemid-1970s.Drawingondetailedfirm-levelstudies,thisgroupunveiledsignificanttechnological capabilitiesthatpermittedfirmstoundertakediverseinnovativeactivitiesacrossdifferentindustries (for a compilation see Katz, 1987). In so doing, they challenged contemporaneous prevailing argumentsthattechnologicalactivitiesinlatecomerfirmslackedcreativityandwerebasedmerelyon theuseoftechnologygeneratedinadvancedeconomies.Thisinitiativeinfluencedtheemergenceof otherstudiesinAsia(e.g.,Belletal.,1982;Lall,1987)thateventuallygaverisetoaresearchfield devotedtounderstandingtheprocessoftechnologicalcapabilityaccumulationinlatecomerfirmsand industries(foranalyticaloverviews,seeBellandPavitt,1993;Bell,2006;BellandFigueiredo,2012). Followingtheriseofseveraldevelopingeconomiesintheearly1990s,therehavebeenasteadily growing number of studies on innovative capability accumulation in latecomer firms, including studiesonitssources,underlyinglearningmechanisms,andconsequences.However,whenstudies examinetheconsequencesofaccumulatinginnovationcapabilities,theyfocusprimarilyontheways inwhichlatecomerfirmsclosetheirinnovativecapabilitygapswiththeircounterpartsinadvanced economiesorengageintechnologicalcatch-up.Consequently,thereisapaucityofempiricalresearch onthetypesofoutcomes,otherthantechnologicalcatch-up,thatareachievedbylatecomerfirmsthat areaccumulatinginnovativecapabilities.Althoughpriorresearchsuggeststhatthemannerinwhich thesecapabilities areaccumulatedhaspositiveand/ornegativeimplications forlatecomer firms’ competitiveperformance(e.g.,Belletal.,1982;Katz,1987;Figueiredo,2002),thereisadearthof empirical studies over the past ten years that would help extend our understanding of the consequencesofinnovativecapabilityaccumulationinlatecomerfirms.
Thisstudyisintendedtocontributetofillingthisresearchgapbyexploringcertainoutcomesof innovative capability accumulation (beyond technological catch-up) that latecomer firms have achievedbydrawingoninnovativecapabilitiesaccumulatedduringtheirlifetimes.Tothatend,this articleis based on an inductivemultiple-case studyof homogenous innovativelatecomer firms utilizingfirst-handandlong-termempiricalevidencegatheredinarecursivefieldworkprocess.This studyalsobuildsonpreviousrelatedempiricalresearchoninnovativecapabilityaccumulationin latecomerfirmsandcombinesconceptualinsightsfromtheliteratureoninnovationinlatecomer firms and the strategic management literature. Thus, this article contributes to extending our understandingoftheroleofinnovativecapabilitiesasasourceoffirms’competitiveperformance.This topichasdrawntheattentionofresearchersfromdifferentresearchtraditions,includingstrategic managementandinnovativecapabilitybuildinginfirmsfromemergingeconomies.
Theremainderofthispaperisstructuredasfollows.Thesection‘‘Studybackgroundandresearch question’’presentsthestudy’sbackgroundleadingtothearticle’sresearchquestion,andthesection
the attention of managers to the importance of having a multiplicityoftypesandlevelsofcapabilitiestoachievedesired outcomes; in addition, it should encourage policy makers in developingeconomiestoadoptacomprehensiveviewof innova-tive activities and place firm-centered innovation capability accumulationatthecenterofindustrialinnovationpolicies.
‘‘Accumulationofinnovativecapabilitiesand theiroutcomesinlatecomer firms’’outlinescertain conceptualperspectivesoninnovativecapabilityaccumulationanditsoutcomesinlatecomers.The section‘‘Researchsetting’’outlinestheresearchcontext,followedbytheresearchdesignandmethods inthesection‘‘Researchdesignandmethods’’.Thesefindingsarepresentedinthesection‘‘Findings’’ anddiscussedinthesection‘‘Discussion’’.
Studybackgroundandresearchquestion
Several studies have examined latecomer firms from different industries that have attained innovative capabilities near or at the international innovation frontier, including producers of automobilesandsemiconductorsinSouthKoreaandTaiwan(e.g.,Kim,1997;SherandYang,2005); glassinMexico(e.g.,Dutre´nit,2000);consumerelectronics,telecomandtelecom-equipmentinSouth Korea,Taiwan,MalaysiaandChina(e.g.,LeeandLim,2001;AmsdenandTschang,2003;Hobdayetal., 2004;Choungetal.,2006;Fan,2006;Ariffin,2010);thin-filmtransistorliquidcrystaldisplay (TFT-LCD) panelsin Taiwan(e.g.,Zhang et al.,2008);electronics in Mexico(Iammarino et al.,2008); pharmaceuticalsinIndia(e.g.,KaleandLittle,2007);shipsinSouthKoreaandTaiwan(e.g.,Sohnetal., 2009);oilandgasinBrazil(e.g.,DantasandBell,2009;SilvestreandDalcol,2009);pulpandpaperin Brazil(e.g.,Figueiredo, 2010); metals,ceramics,composites andpolymersin Turkey(e.g.,Yoruk, 2011);andfirmslocatedinclusters(e.g.,GiulianiandBell,2005).However,latecomerfirmsmay accumulatecapabilitiesattheleveloftheinternationalproductionfrontierbutnotattheinternational innovationfrontier,suchasinthepulpandpaperindustryinIndonesia(e.g.,DijkandBell,2007). Intertwinedwiththeexaminationofinnovationcapabilityaccumulationinthesestudiesistheissue oftechnologicalcatch-upasanimmediateoutcomeofaccumulatingcapabilities.
Withrespecttofactorsinfluencingtheaccumulationofinnovativecapabilities,therehavebeen severalrelevantstudiesontheroleofunderlyinglearningmechanisms(forareviewseeBell,2006; BellandFigueiredo,2012).Otherstudieshavesoughttoexaminetheroleoffactorsotherthanlearning in latecomer firms’current capabilities (not accumulationprocess), such asfirm-specific factors, includingageandsize(e.g.,Romijn,1999),leadership(e.g.,Kim,1997),ownership(e.g.,Boehe,2007), industry-specificfactors(e.g.,JungandLee,2010)andeconomy-wideconditions(e.g.,Lall,1992;Arza, 2005).
However,inrelationtoinvestigatingtheoutcomesofinnovativecapabilityaccumulationbeyond technologicalcatch-up,therehasbeenapaucityofempiricalstudies,althoughthereareexceptions. Firm-levelstudieshavefoundthatafirm’scurrentcapabilitieshaveeitherpositivelyornegatively influenced theachievementof specificperformanceoutcomes, suchasenergy performance(e.g.,
Piccinini,1993),productivitygrowth(e.g.,Tremblay,1994),andpatents(JooandLee,2010)butdid not examineinnovativecapabilityaccumulation. Movingfurther inrelationtothesestudies and building on past research(e.g., Bell et al., 1982; Katz, 1987), Figueiredo (2002) foundinterfirm differencesincompetitiveperformancebasedonawiderangeofperformanceparametersassociated withthemannerinwhichfirmsaccumulateddifferenttypesandlevelsoftechnological(production andinnovative)capabilities.Sincetheearly2000s,therehasbeengrowingresearchinterestinthe effects of innovative capabilities on latecomer firm performance. However, both ‘innovative capability’and‘performance’havebeendefinedandmeasuredindifferentwaysinvariousstudies, whichprecludesasystematiccumulativebodyofevidenceandleadstoinconclusiveresults.
For instance, using a definitionof technological capability similar to Figueiredo’s (2002)but operationalizingthisconstructonthebasisoffirms’currentyields,Jonkeretal.(2006)foundapositive correlationbetween capabilitiesand economic performance(measured asvalueadded)in paper machinesinWestJava.Basedonacross-sectionalstudyof275firmsinTanzania,Goedhuysetal. (2008) found a weak associationbetween technological capabilities (proxiedas R&D and other innovativeactivities)andlaborproductivity.Drawingonobservationsof15firmsover15yearsinthe globalintegratedcircuitmanufacturingindustry,Bapujietal.(2011)foundthatexternalknowledge acquisitionandinnovativeactivities(measuredaspatentgrants)didnotalwaysleadtopositivefirm performance(measuredassales).Bycontrast,inasampleof215firmsintheChineseinformation technology (IT) industry, Shan and Jolly (2012) founda positive relationship among innovative capabilities (as defined in the Oslo Manual and substantiated with manager perceptions) and
innovative performance (number of commercialized products), sales performance and product competitiveness.Drawingonobservationsfrom174firmsinTaiwan’sITindustryinastudybasedon managerperceptions,ChenandTsou(2012)foundthatcustomerservicemediatestheinfluenceofIT capability on firm performance (measured by financial performance, market performance, and customersatisfaction/loyalty).
Insummary,althoughtherehavebeenmanystudiesofinnovativecapabilitiesinlatecomerfirms, mosthavefocusedonthedifferentwaysinwhichlatecomerfirmsmovefromproduction-based businessesinto progressivelyhigherlevels of innovativecapabilitiesandontheroleof certain factors—particularly learningmechanisms—in influencingprocesses of capabilityaccumulation. Studieshavepaidlessattentiontotheoutcomesattainedbylatecomerfirmsthathaveaccumulated innovativecapabilities.Thesepreviousstudiesfocusontechnologicalcatch-upasanimmediate outcome.Bybuildingonpreviousstudies,thispaperseekstocontributetofillingthisresearchgapby examiningthefollowingresearchquestion:Whatoutcomes,inadditiontotechnologicalcatch-up, do latecomer firms achieve by accumulating innovative capabilities? This article empirically addressesthisresearchquestioninfirmsoperatingintheBrazilianforestry-derivedpulpandpaper industryduringthe 1950–2010period. Priorresearch andthe technical literaturesuggest that Brazil’sforestry-derived pulp andpaper industry offers a richempirical settingfrom which to investigatethisresearchquestion(e.g.,Scott-Kemmis,1988;Dalcomuni,1997;WRI,1999;Evans andTurnbull,2004).
Accumulationofinnovativecapabilitiesandtheiroutcomesinlatecomerfirms Latecomerfirmsandinnovativecapabilities
Asopposedtotypicallateentrants,latecomerfirmsareatahistoricallydetermined—ratherthana strategicallychosen—positionoflateentrance(Mathews,2002);theyaretypicallycharacterizedbya lowlevel(orevenanabsence)ofinnovationcapabilitiesandbybeing‘initiallyimitative’,regardlessof howill-positionedtheymaybewithrespecttomarketsandtechnologysources.However,theymay movefrommerelyusingorimitatingtechnology—basedontheirlimitedinnovativecapabilities—to deeper levels of technological engagement and technological capabilities that enable them to undertakedifferenttypesofinnovativeactivities(BellandFigueiredo,2012).Afirm’stechnological capabilityreferstoastockofknowledge-relatedresourcesthatareaccumulatedinits‘humancapital’ (specialistprofessionals,knowledgebasesandskills/talentsthatareformallyandinformallyallocated within specific organizational units, projects and teams), ‘organizational’ systems (a firm’s organizationalarrangements,suchasitsroutinesandprocedures,linkages,andmanagerialsystems) and techno-physical systems (hardware,software, database,laboratories, equipment, etc.) (Katz, 1987;Lall,1992;BellandPavitt,1993;Leornard-Barton,1995;Kim,1997;Dutre´nit,2000).
Theliteraturedistinguishesbetweenproductionandinnovativecapabilities(BellandPavitt,1993, 1995).Theformerreferstothosecapabilitiestouseoroperatecurrenttechnologiesandproduction systemswithgivenlevelsofefficiency,andthelatterreferstoafirm’sabilitiestoassimilate,adaptand changecurrenttechnologiesthatenablefirmstocreatenewtechnologiesanddevelopnewproducts andprocesses(Kim,1997;Choungetal.,2000;Dutre´nit,2000).Thisanalyticaldistinctionisimportant becauselatecomerfirmsgenerallybeginastechnologyusersand/orimitators,andthisdistinction helpsdeterminewhethertheircapabilitiesgrowovertimeintomoreinnovativelevels.Althoughthis paperisconcernedwithinnovativecapabilities,thedistinctionbetweenthetwotypesofcapabilities maybeblurredinpractice,andproductioncapabilitiesmayevencontributetotheaccumulationof innovativecapabilities(Figueiredo,2002;BellandFigueiredo,2012).
Technologicalcatch-upandfurtheroutcomesfrominnovativecapabilityaccumulation
Byaccumulatingtechnologicalcapabilities,latecomerfirmsmayachievetwotypesofcatch-up (BellandFigueiredo,2012):(a)latecomerfirmsmaynarrowthegapbetweenthetechnologytheyuse inproductionandthoseofglobalindustrialleadersattheinternationalproductionfrontier,whichis calledcatch-upinproductionand(b)latecomersmaycatchupwithglobalinnovationleadersinterms
ofcapabilitiestogenerateandmanagechangeintheirtechnologiesandmaythenengagedirectlyin innovativeactivitiesattheinternationalfrontier,whichisreferredtointhisarticleastechnological catch-up.
There are different routes by which latecomer firmsachieve technological catch-up, such as followingthetechnologicalpathspreviouslypursuedbygloballeaders(technologyfollowing),skipping stagesalongthosepaths(stage-skipping)orevenbycreatingtheirownpaths(pathcreating;Leeand Lim, 2001). In thelatterroute,withwhich thisarticle isconcerned, latecomerfirms accumulate capabilitiesthat enablethemtotake differentdirectionsintechnological developmentfromthose previouslypursuedbyglobalindustryleaders.Thisaccumulationofinnovativecapabilitiesdoesnot necessarilystopatpre-determinedend-pointsoncurrenttechnological trajectories.Instead,such innovativecapabilitiesmayenablefirmstodeveloptechnologies,productsandprocessesthatare differentfromthosedevelopedbygloballeaders(BellandFigueiredo,2012),whichreflectsthefluidity of the international technological innovation frontier that can be explored by any latecomer (Figueiredo,2010).
When latecomer firms attain the capability level of undertaking world-leading innovative activities,thatis,whentheycatchuptechnologicallywithgloballeaders,theirtechnologicalbehavior becomes similar to global innovative firms from advanced economies. The latecomers become concernedwithhowtouse,sustain,andexpandtheirinnovativecapabilitiestore-buildandre-create newanddistinctivepositionsofstrategiccompetitiveadvantage,perhapsevenbychanging,oratleast addingto,theareasoftechnologywithinwhichtheyinnovate,whichisanissueofconcerninthe strategicmanagementliterature(e.g.,Pavitt,1991;Leornard-Barton,1995;EisenhardtandMartin, 2000;Teece,2007a,b).Therefore,itisimportanttodrawonthisliteraturetoexplorethisstageofthe accumulatedinnovativecapabilitiesinlatecomerfirms.Indeed,thebodiesofliteratureofcapability buildingandofstrategicmanagementseemtoconvergeonacommonconcern,i.e.,theoutcomesthat firmsachievefromtheirinnovativecapabilities.
Therefore,ontheonehand,ithasbeenarguedinthelatecomerliteraturethattheabilityoffirmsto implementinnovativeactivitiesandachievedistinctiveperformancesreflectsthenatureanddepthof theirtechnologicalcapabilities(e.g.,Dosi,1988;Lall,1992;BellandPavitt,1993).Thisargumenthas beensupported byempiricalinsightsthatshowthatfirmcapabilitiespermitinnovativeactivities (thatarenotalwaysR&D-based)tobeimplementedwithdifferingdegreesofnoveltyandcomplexity with importantpositive operational economic impacts (e.g., Enos, 1962; Hollander, 1965). Firm innovativecapabilitiesmaygeneratenotableimprovementsinoperationalperformance(e.g.,Patel and Pavitt,1994; Laestadius, 1998; Piccinini,1993; Tremblay,1994; Figueiredo, 2002)andtheir absencemightnegativelyimpactperformance(e.g.,Belletal.,1982).
Ontheotherhand,severalstudiesinthestrategicmanagementliteraturehaveassumedthat innovativecapabilitiesoperate asasourceofcompetitiveperformance.Followinginsightsfrom classicalstudies(e.g.,Penrose,1959;Chandler,1962),therehasbeenasteadilygrowingdebateover the past decades on innovative capabilities as the fundamental source of a firm’s sustainable competitiveadvantageandsuperiorperformance,whichhasbeenreflectedindifferentsubsetsof theliteraturesuchasthe‘resource-basedview’(e.g.,Peteraf,1993)andthe‘dynamiccapabilities’ perspective(e.g.,Hittetal.,2000;EisenhardtandMartin,2000;Teece,2007a;Helfatetal.,2007). However, previous studies have produced inconclusive, contradictory and inconsistentresults (ZahraandSapienza,2006;AdegbesanandRicart,2007;Helfatetal.,2007).Amongthereasonsfor thisproblem,ithasbeenargued,isthefactthatmoststudiesinthatbranchoftheliteraturehavebeen dominated by theoretical discussions, relatively weak empirical support (Newbert, 2007; Protogerou et al., 2011) and by a multiplicity of metrics for both innovative capability and performance (Coombs and Bierly, 2006). Indeed, it has been argued that there has been an overemphasisontheidiosyncraticnatureofsuchinnovativecapabilitiesandthatthesecapabilities are not a guarantee of sustainable competitive performance because firms are subject to unpredictable and uncontrolled influences from within and without (Eisenhardt and Martin, 2000;ZahraandSapienza,2006;Costaet al.,2013)—although thesestatementslack firm-level empiricalsubstantiationthemselves.Theaboveperspectivesconstituteanimportantconceptual basis that helped form the researchdesign of this study, particularly the data collection and analyticalprocessesoutlinedbelow.
Researchsetting
PulpandpaperfirmsbasedonforestryrefertoindustriesclassifiedbytheInternationalStandard IndustrialClassificationofAllEconomicActivities(ISIC)assilvicultureandotherforestryactivities (ISICclass0210)thatproducefeedstockforforest-basedmanufacturing,suchaspulpandpaper(ISIC class1701).Pulpmakingrequirestheseparationofcellulosefibersfromnon-cellulosematerialsand impurities(e.g.,lignin)tocreatewoodpulp.Papermakinginvolvesprocessessuchaspulprefiningand screening,themixingofadditives,sheetforminganddrying.Thepulpandpaperindustryis process-intensiveandnormallylarge-scale(Pavitt,1984).Forestryisconsideredpartofthepulpandpaper industry because90% of paperpulp is currentlygenerated from wood,and pulp is increasingly manufacturedinthesamecountryinwhichtheplantationsarelocated;inaddition,woodrepresents 55%oftheaveragetotalcostofmakingpulp.
Sincethe1990s,ithasbeenrecognizedthattreesthatyieldmorecellulosegenerategainsacross theentireproductionchainintheformofsavingsfromtreeharvestingandtransportation,which minimizestheexpansionofforestsandreduceseffluentwaste(Grattapaglia,2004).Afterrealizing thatthe‘pulpfactory’isactuallythetree(GrattapagliaandKirst,2008),pulpandpaperfirmshave shiftedtheireffortsfromwoodvolumetowoodquality.Theobjectiveistoreducethecubicmetersof woodnecessaryfortheproductionofonetonofpulp,i.e.,todecreasewood-specificconsumption (WSC)(GrattapagliaandKirst,2008).Usingdifferenttypesofbiotechnologicalprocesses,theseforests havebecomeanimportantsourceofbiomassandfunctionasaplatformfornewproductssuchasfiber cement,biofuels,biochemicals,bio-plastic,bio-materials,andcarbonfibers,inadditiontoservices such as CO2 sequestration (Bracelpa, 2012; www.wbcsd.com). To achieve and sustain a global
competitivepositioninthisindustry—andtotakeadvantageoftheseinnovationopportunities—firms mustmasterinnovationcapabilitiesatornearworld-leadinglevels,particularlyinplantedforestry researchthatisfocusedondevelopingnewgeneticmaterial.
In2011,Brazilrankedastheworld’sfourth-largestpulpproducer,theworld’slargestproducerof hardwoodpulp(‘eucapulp’),andtheninth-largestpaperproducer.Ofthepulpandpaperproducedin Brazil,100%isderivedfromplantedforests,whicharerenewableresources.Brazilhas2.2million hectaresoffullycertifiedplantedareaforindustrialuse.In2011,therevenuefromBrazil’spulpand paperindustryapproachedUS$17billion,yieldingexportsofUS$7.2billionandatradebalanceofUS$ 5.1billion.In2011,thisindustrygenerated128,000directjobs,575,000indirectjobsinBrazilandUS$ 1.75billionintaxes.From1970to2011,Brazil’soutputofpulpandpapergrewbyanaverageof6.8% and5.4%peryear,respectively.Duringthesameperiod,Brazil’spulpandpaperexportsincreasedby anaverageof13.6%and18.8%annually,andthevalueofsuchexportsbyanaverageof17.3%(pulp) and22.7%(paper)annually,respectively.Althoughthereare220firmsengagedinthisindustryin Brazil,sixlargepulpmakerswereresponsiblefor85%ofthepulpoutputin2010;thesefirmshave theirownforests.Thesamesixfirmsalsorepresent55%ofthepaperoutput.Thishighconcentrationof outputfromasmallnumberofintegratedfirmsistheresultofthesubstantialinvestmentinvolvedin forestryandlarge-scalemanufacturingactivities(Bracelpa,2011).
Researchdesignandmethods
Thisarticleisbasedonabroadfive-yearstudyaboutinnovativecapabilityaccumulationanditscauses andconsequencesinpulpandpaperfirmsderivedfromBrazilianforestryduringthe1950–2010period. ConsistentwithPettigrew(1990)andgiventhepaucityofempiricalworkregardingtherelationship betweentheseissues,thedecisionwasmade toundertakeaqualitativeinductivestudybasedonmultiple casestudiesandlong-termevidencefromfirms ina similarindustrial sector.Thismethodological approach is appropriate for addressing gaps in the literature and the general researchquestion; moreover,it facilitates a betterunderstanding ofwhat liesbehind a subtle and under-researched phenomenon,thedetailsandnuancesofwhichmightnotbecapturedbyothermethods,including,in particular,anaggregatedanalysisderivedfrompurelyquantitativemethods(Eisenhardt,1989;Yin, 2003). This methodological approach was implemented over three stages of fieldwork, namely exploratory,pilotandmainstages,whichinvolvedaniterativeprocessofdatacollectionandanalysis withconstantreturnstotheliteratureforconceptual clarificationin achievingsolidconstructand
internalvalidity(Eisenhardt,1989).Table1providesanoverviewofthefieldresearchprocess.During thatprocess,thisauthorworkedcloselywithtworesearchassistants.Alltheactivitiesthroughoutthe fourmajorphaseswerefarfromlinear;instead,theyweresomewhatrecursiveandintertwined. Casesselection
Therationaleforselectingthecasesforthisstudyinvolvedapurposefulchoiceoffirms(Milesand Huberman,1994)that(i)providedrelevantevidencetosubstantiatetheresearchquestionandrelated constructsand(ii)werelikelytobothgeneraterichinformationabouttheissuesunderstudyand enhancetheanalyticalgeneralizabilityofthefindings.Therefore,arelativelyhomogenoussampling
(Patton, 2002) was used that provided powerful examples of the phenomenon under study
(Siggelkow, 2007), as shown in Table 2. Certain details relative to data collection and analysis processesareprovidedintheAppendix.
Operationalizingtheresearchconstructs
Theoperationalizationoftheseresearchconstructsrequiredarecursiveprocess,includingseveral roundsofdatacollectionandanalysiswithliteratureconsultations,whichresultedintheemergence
Table1
Overviewofthefieldresearchprocess. Research
elements/ stages
Exploratory Pilot Main Post-fieldwork
Focusand purpose
Teststudyfeasibility Selectcasesandtestof interviewprotocol
Collectionofbulkofdata andimplementationof correspondentanalysis
Fulloperationalization ofconstructsanddata validation
Gettingtoknowthe technology,industry, keypotential respondentsandtips tonegotiateaccess Datasources Industryexpertsat businessassociations andrelatednon-firm organizationsand firms
Firmprofessionals (e.g.,CEOsand industrialdirectors andmanagers) Firmprofessionals (directors,managers, engineers,researchers, technicians,consultants, humanresourcesand engineering
departments,R&Dunits, labs,shop-floor,and retiredstaff)
Targetedfirm professionals
Firmarchivalrecords andpublicdocuments
Non-firmprofessionals (e.g.,universities, researchinstitutes) Firmactivitiesand events
Firmarchivalrecords Datacollection
techniquesa
8informalinterviews 13formalinterviews andfiveinformal meetings 155formalinterviews and12informal meetings Follow-up questionnaires Consultationto industryliterature Consultationwith firms’archivalrecords andpublicdocuments
Siteobservationsand tours
Doubleand triple-checksviae-mailand/ orphonecalls Consultationoffirm
archivalrecords Dataanalysis Simpledescriptionand
organizationof evidenceintoshort textsrelatedto industryandfirms Identificationof specificconstruct categories(e.g.,15–20 categoriesfor ‘outcomes’) Reductionofoverlaps andredundanciesin constructcategories(to 10–12)
Identificationoffinal constructcategories
a
ofcategories related totheresearchconstructs as follows: innovationcapabilities (asa scale of innovationcapabilitylevels)andoutcomesofinnovationcapabilityaccumulation(innovation-related performance,improvingoperationalandenvironment-relatedperformanceandpatternsofcorporate growth).
Innovativecapabilityaccumulation
In theoperationalizationoftheinnovativecapabilityconstructdevelopedduringthepastfew decades in advanced economies, assessing innovation capabilities has been mainly based on quantitativemeasuressuchasR&Dexpendituresand/orpatentgrants(HagedoornandCloodt,2003). Thesecapabilitiesmayonlybecomeusefuloncefirmshavebuiltuptheirinnovativecapabilitiestothe pointatwhichtheyinvolvemeasurableR&Dactivitiesorrecordedpatenting.Thesecapabilitiesreflect onlyafractionofafirm’sinnovativecapabilityandnoneofitwithrespecttofirmsthathaveonly non-R&D-basedinnovativecapabilities(BellandPavitt,1993;BellandFigueiredo,2012).Thelimitationof relyingononeaggregatemeasureofafirm’sinnovationcapability(e.g.,R&Dexpenditures)isthatit neglectsarangeofmixedtechnologicalactivitiesthatarenecessarytodevelopandproduceparticular products (Patel and Pavitt, 1994; Laestadius et al., 2005) and does not capture the process of technological transformation that involves a spectrum of activities rangingfrom incremental to radicaltypesthatcanhaveasignificantperformanceimpactonpulpandpaperfirms(Laestadius, 1998).
Thatlimitationhasbeenovercomebyacomprehensiveapproachthathasbeentheprimarybasisof researchinthisareasincetheearlieststudiesofinnovationcapabilitiesoflatecomerfirms,i.e.,using qualitativeassessmentsatthescaleoftechnologicalcapabilitylevels(Katz,1987;Belletal.,1982;Lall,
1992; Bell and Pavitt, 1993, 1995; Bell and Figueiredo, 2012). Such an approach has been
operationalized through a typology of approaches based on ‘revealed capability’. Rather than specificallyidentifyingcapability levelsin terms of particularquantitiesand qualities of human resources,skills,knowledgebases,etc.,suchapproacheshaveidentifiedlevelsofincreasingnovelty and significance of innovativeactivity and then inferredthat differentcapability levelsunderlie differenttypesofinnovativeactivities(BellandFigueiredo,2012).Theuseofsuchatypologycaptures whatfirmsareabletodointechnologicaltermsbyusinganuancedperspectiveofthe‘levels’of capabilitiesrequiredtoundertakeinnovativeactivitieswithdifferentdegreesofnovelty.Consistent withthenatureofthefieldevidence,thispaperdrawsonamodifiedversionofthetypologydeveloped inLall(1992)and furtherrefinedinBelland Pavitt(1995).Themodifiedversionofthistypology identifies‘levels’ofinnovativecapabilitythatrangefrom‘basic’to‘world-leading’andareconsistent withthecharacterizationofinnovationintermsofdegreesofnoveltyandcomplexityintechnological activities;thus,theselevelsareconsistentwiththeOsloManual(seeOECD,2005).
Suchatypologyhasbeenusedintensivelyandsuccessfullyinstudieswithdifferentdegreesof capability-leveldisaggregationthathavecoveredthehistoriesofcapabilitybuildingoverconsiderable timeperiods(e.g.,Dutre´nit,2000;Figueiredo,2002,2010;DantasandBell,2009)andinamuchlarger numberoffirmsovershorterperiods(e.g.,Hobdayetal.,2004;Iammarinoetal.,2008;Ariffinand Figueiredo, 2004; Ariffin, 2010; Yoruk, 2011; Peerally and Cantwell, 2012). Table 3 presents a condensedversionofthetypologyusedinthisstudy.Thefirstcolumnshowsfourlevelsofinnovative
Table2
Theselectedcases.
Selectedcases Start-upyear Ownership Businesslines
Forestry Pulp Paper
Suzano 1941 Brazilian H H H
Klabin 1945 Brazilian H H H
Rigesa 1974 Foreigner H H H
Aracruz 1967 Brazilian H H None
VCP-Jacareı´ 1988 Brazilian H H H
VCP-LuizAntonioa 1988 Brazilian None H H
a
capabilitiesthatextendfrom‘basic’to‘worldleading’,andthesecondcolumnprovidesillustrative examplesofthesecapabilitylevels.
Theapplicationofthisframeworktothisstudywasachievedafterapproximatelysixmonths’work andinvolvedseveralconsultationswithexpertsintheforestryandpulpandpaperindustries.These interactive and iterative consultations were used to adapt and validate the taxonomy to the technological specificsofthese industries. AlthoughTable3 condensesthelevels of technological capabilitiesforforestry,pulpandpaper,theoriginalframeworkthatwasappliedduringourfieldwork involvedtheuseofa specificmatrixforforestry,pulpand paper.Eachmatrixidentifiedlevels of technological capabilities for specific technological functions in forestry (silviculture, harvesting, logistics,andsocio-environmentalmanagement)andpulpandpaper(projectmanagement,processand production organization, process equipment, and product-centered). Project management in the frameworkusedhereinisequivalenttothe‘projectexecution’capabilitiesinAmsdenandHikino(1994). Outcomesofinnovativecapabilityaccumulation
Innovativeperformancereferstotheimplementationofcreativeactivitieswithconcretebenefitsfor firmsinvolving(i)implementedinventiveactivities,whicharemeasuredbythequantityandqualityof patentsand(ii)implementedinnovativeactivitiesandtheirbenefitsconsistentwithEnos(1962)and
Hollander(1965).Creativeorinnovativeactivitiesmayvaryintermsofthedegreeofinnovationin theirtechnological/market‘novelty’ortheextenttowhichtheydifferfromcurrenttechnologies, whichallowsinnovationstorangefromthosethatareclosetobeingpureimitationstothosethatare fundamentallydifferentfromanythingcurrentlyexisting(OECD,2005).Thistypeofdifferentiation hasbeenwidelyused,particularlyforinnovationanalysesoflatecomerfirms.
Operational andenvironment-related performance improvement refers totechnical performance parametersrelatedtothepulpandpaperfirmsderivedfromforestry.Throughtherecursiveprocesses ofdatacollectionandanalysisandinconsultationwithpreviousrelatedstudiesinthepulpandpaper industry(e.g.,Laestadius,1998;Dalcomuni,1997;Jonkeretal.,2006;DijkandBell,2007),thestudy identified two types ofcountry-level forestryparameters, six types of firm-levelparameters for forestry(yield,basicdensityofwood,density,cut-offage,woodvolumeperamountofpulpproduced, plantingdensity),15typesofpulpmakingparameters(e.g.,specificconsumptionofsteam,electricity, waterandfiberlosses,inadditiontoliquid,solidandaireffluents)andsixtypesofparametersfor papermaking(e.g., specificconsumption of steam, electricity,water plus industrial effluents), in additiontoproductionandcommercializationcostsofshortfiberpulp.
Patterns of corporate growth. During the data collection and analysis processes, there was a recurrenceofcategoriessuchas‘integration’,‘expansion’,‘merger/acquisition’,and‘diversification’.A consultation oftheliteratureledtoclassifying thesecategoriesunder ‘patternsofgrowth’. Prior studieshavepointedtothecontributionofinnovativecapabilitiestofirmgrowth(e.g.,Penrose,1959; Chandler,1962;AmsdenandHikino,1994;Yang,2012).BydrawingonTorres-Vargas(2006),firms’ growthpatternsaremeasuredintermsrelatedto(i)horizontalintegration,(ii)verticalintegration, and(ii)diversification,whichisfurtherdisaggregatedinto‘direct’diversificationbythefirm and
Table3
Taxonomyforassessingfirminnovativecapabilities(condensedversion). Levelsofinnovative
capabilities
Illustrativeexamplesofactivitiesthatexpressthesecapabilitylevels Worldleading Capableofundertakinginnovativeactivitiesbasedonworld-classR&Dand/or
experimentationthatadvancesthetechnologicalfrontierand/orestablishesnew directionsintheinternationaltechnologyfrontier
Advanced Capableofundertakinginnovativeactivitiesclosetothetechnologicalfrontier,withina giventechnologicaltrajectory,and/orbasedonafast-followertypeofstrategy Intermediate Capableofundertakinginnovationsthataremostlyadaptationstocurrenttechnologies,
notformalR&D,differenttypesofengineering-basedand/orcreativeexperimentation Basic Capableofundertakingminorinnovationactivitiesthataremostlyexperience-basedthat
arenoveltothefirm Productioncapabilities
‘indirect’diversification(spin-offsandspillovers).Thelattermaytaketheformofnewenterprise creationthroughtheuseofmoreorlessformallyorganizedspin-offmechanisms(BellandFigueiredo, 2012)withpositiveimplicationsforindustrialdevelopment(NelsonandPack,1999).
The recursive processes of datacollection and analysis with constant consultationswith the literatureledtothecreationofthisstudy’sconceptualframework(Fig.1).Inthecontextofthisstudy, theframeworkidentifiesatleastthreetypesofoutcomes(componentC)thatcanbeachievedby latecomersfromtheirinnovativecapabilityaccumulation(componentA)beyondtechnological catch-up (component B). This framework recognizes that achieving these outcomes may be affected indirectlyand/ordirectlybyotherfactors(componentsDandE).Suchotherfactorsremainoutsidethe scopeofthisarticle.
Findings
This section presents the article’s empirical findings. The section ‘‘Innovation capability accumulation’’presentsevidenceofaccumulatedinnovativecapabilities,andthesection‘‘Outcomes ofinnovativecapabilityaccumulation’’exploressomeoftheoutcomesthatwereachievedbythecases withaccumulatedinnovativecapabilities.Thisstudyexaminestheseissuesoveraslongaperiodas possibletocapturealargepartofthelifetimeofthesefirms(1950–2000s).
Innovationcapabilityaccumulation
In contrast withprior reports on innovativecapability buildingin latecomer firms,thecases examinedheredidnotfollowtheimitationtoinnovationpath,i.e.,atrajectorybasedonaccumulating
progressively highercapabilitiesfromproduction adaptationtoduplicativeimitation upto R&D-basedinnovation(e.g.,Kim,1997).AsdescribedinFigueiredo(2010),becauseofseveralconstraints, firmscouldnotsimplycopyrecognizedgloballeadersbutwereinsteadforcedtodeveloptechnologies more suited totheir own somewhatdifferentoperations. Thisdevelopment involved the useof differentrawmaterials(eucapulp)anddevelopinganeffectivemeanstodothis;thesefirmshadto innovateintheirdownstreampulpandpapermakingprocessesbecauseoftheinnovationsthathad developedupstreaminforestry.Thesefirmscouldnotsimplyimitatebecausetheyweredeveloping along a different trajectory; thus, the capability accumulation process of these firms can be summarized as moving fromnon-imitation to innovation.In light of theframework presented in
Table3,Table4showstheresultinglevelsofinnovativecapabilityaccumulatedbythesecasesforeach businessline.
Thefindingssuggestthattheseinnovativecapabilitiesreflectthesefirms’proprietaryresources thatunderlietheirtechnologicalleadership.Concurrently,certainfeaturesofthesecapabilitieswere commonacrossthesefirms(e.g.,commonpracticesof undertakingresearchactivities,innovative activitiesinpulpandpaperproductionprocess,etc.)thatwillbediscussedbelow.Forexample,these firmssoughttodeepentheirworld-leadinginnovativecapabilitiesbyre-organizingtheirresearch activities duringthe early2000s. For example,VCP integrated its previously dispersedresearch activitiesintotheCentreforPulpTechnologicalDevelopment,Klabinre-configureditsresearchcenter basedonareviewofroutinesandprocedures,documentationandanalyticalprocessesandAracruz mergeditsresearchonforestryandpulpandpaperintoastrongerresearchcenter.From2002to2008, along with other firms and universities under the coordination of the Brazilian Agricultural Corporation (EMBRAPA), these firms engaged in a nation-wide project called Genolyptus (the Brazilian Network of Eucalyptus Genomics Research). This project characterized the complete phenotypesrequiredtostudythefunctionsofthegenesinquestionandemployedamultidisciplinary approach involving researchers in genetics, biochemistry, molecular biology, breeding, phyto-pathology, wood technology and industrial process engineering. Theirworld-leading capabilities permittedthesefirmstoactivelycollaboratewithpartners inadvancedeconomies. Forexample, SuzanocollaboratedwiththegenomeprojectledbytheJointGenomeInstitute(JGI)intheUSby donating a germplasm base (designated as BRASUZ1) for the complete genomic sequencing of eucalyptus(Grattapaglia,2011).
Outcomesofinnovativecapabilityaccumulation Innovativeperformance
Inventiveactivities:quantityandqualityofpatents. Table5showstheevolutionofpatentsgrantedto thesefirms.Thequantityincreasedby40%inthe2000scomparedwiththe1990s.Duringthe1990s, Aracruzscoredthehighestnumberofpatentsinforestry;Suzanoreceivedthehighestnumberduring the2000s.KlabinandSuzanohadthehighestnumberofpaperpatentsovertheentireperiod.The
Table4
Levelsofinnovationcapabilityaccumulatedintheresearchedfirms. Levelsofinnovationcapability Businesslinesandfirms
Forestry Pulp Paper
Worldleading VCP-Jacareı´ VCP-Jacareı´ VCP-Jacareı´
Aracruz VCP-LuizAntonio VCP-LuizAntonio
Klabin Aracruz Klabin
Rigesa Klabin Suzano
Suzano Suzano
Advanced Allfirms Allfirms,exceptRigesa Rigesa
Intermediate Allfirms Rigesa Allfirms
Basic Allfirms Allfirms Allfirms
evidenceinTable5reflectsthetangibleoutcomeofthefirms’differenttypesandlevelsofinnovative capabilitiesandabasisforimplementinginnovativeactivities.
Implementedinnovativeactivitiesinforestryandpulpandpaper
Withrespecttoforestry,Table6contains24observationsofimplementedinnovativeactivitiesand theirrelatedbenefitsfromthe1970stothe2000s.Theworld’sfirstlarge-scalepaperproductionbased oneucalyptuspulprepresentedanimportantinnovativeactivitythatemanatedfromSuzano’snewly developedinnovativecapabilityinthe1960s,whichpavedthewayfortheintroductionofthe so-called ‘new pulp’ in the international market. The second major disruptive innovation was implementedbyAracruz(mid-1970stoearly-1980s),whichreflecteditsresearchcapabilitiesinthe
Table5
Evolutionofpatentingactivitiesinthestudyfirms. Firmsandbusiness
lines
1990s 2000s
Quantity Qualification Quantity Qualification Aracruz Forestry 7 Protectionoftreesagainst
insectsandimprovementin plantingandharvesting equipment.Methodfor preventingorcontrollingthe occurrenceofstainsonwood
3 Controlofplantsprouting,seeds andseedlingprotectionand fertilizerformulation
Pulp 9 Treatment,bleaching,refining andtestofpulp
1 Formulationofcompound appliedtopulpproduction Klabin Forestry 1 Irrigationofseedlings None
Paper 12 Refiningprocessofpulp, packagingdesigns,displaysfor packages,devicesforstacking packagesandtowelracksand papertowel
22 Packagingdesign;palletof corrugatedcardboard;display packagingdesignandproduction processofdevicesbasedon corrugatedpaper.Finishapplied totissuepaper
Rigesa Paper 5 Packagingdesign,development oftestdevicesanddevicefor absorbinggases
24 Changesindesignofpackaging, palletsandcardboardboxes. Packagingdesign
Suzano Forestry 2 Methodforgenetic
transformationofwoodytrees. Delignificationofwood
8 Changesintreecharacteristics; processofextracting hemicellulosefromwood, methodsforobtaininghybrids andmethodsofgenetic transformation
Methodforgeneticmodulation ofhemicelluloses,celluloseand uronicacidbiosynthesisinplant cellsusinggeneexpression cassettes
Paper 9 Deviceforpulpwashingand productioninaclosedsystem, packagingdesign,productionof cardboardforpharmaceutical, chemicalinputforthe productionofpaperand paperboardandtreatmentof inputsforpaperproduction
3 Treatmentprocessofthecooking liquorfromthewood,packaging andcarddesign
VCP Paper None 2 Methodofassemblinglarge
cylindricalstructures,devicefor cuttingwiresinbales
Totals 45 63
Table6
Implementedinnovativeactivitiesandrelatedbefitsintheforestrycases.
Firms Innovativeactivities !Benefits
1970–1980s
Aracruz Newprocessofeucalyptusproductionby vegetativepropagationleadingtoworld’s firstlarge-scaleeucalyptusclonalforestfor pulpandpaper
Achievementofhigherbiomassproductionper unitofplantedarea;significantimprovementsin woodquality(asindustrialrawmaterialoras energyinput);andhomogenizationofwoodfor industrialpurposes.Eucalyptuscuttings producedinintensiveclonalsystemswere40% higherthanthoseproducedthroughseeds Neweucalyptusvarietieswithreductionof
treematurationtimefromanaverageof15 yearsto6–8years
Greateradaptabilityofeucalyptustolocal environmentandreducedincidenceofpests
Klabin Implementationofthe‘MonteAlegre formula’
Improvedestimationofforestfirerisks. Disseminationofthisinnovationtootherfirms Newgeneticmaterialsinpine Greaterdiseaseresistance;higherproductivity
andbetterqualityinpapermaking Rigesa Forestbiometricsmodelsforforest
management.
Accurateassessmentprocessofavailabletreesin plantingareaandgreaterprecisioninharvest planning
1990s
Aracruz Geneticimprovementofeucalyptus Yieldincreasefrom6.4to11.8tonsofpulp/ha/ year(thenworld’shighest)withimprovedwood qualityandlowerenvironmentalimpactsof plantingprocesses
Newtechnologiesinvolvingrootingof micro-ormini-cuttingstoreplacethe clonaleucalyptusproductionwith micropropagation
Improvedrootingpotential,speed,andquality plusreductioninclonalgardenarea,reducing costsoftransportandshootscollection,improved overallplantingefficiency
Klabin Productionofpineseedlingsusingthe cuttingprocess
Theproductionprocesswasbasedonprocessed eucalyptuscutting
Somaticembryogenesisprocessforcloning inpine(laterdisseminatedtoChile)
Uniformplantationswithhigherforest productivity,lowercostsofharvestingand thereforelesspressureonnativeforests Suzano Newmethodforgenetictransformationof
eucalyptus
Attainmentoffirsttransgeniceucalyptus, creatingabasisforpotentialyieldincrease VCP Geneticimprovementprocessesthrough
eucalyptusclonalplantationsanduseof molecularmarkers
Achievementofmoreaccuratewaystoselect varietiesofeucalyptuswithhigherproductivity andresistancetopestsanddiseases
2000s
Aracruz Neweucalyptusvarietiesresistantto droughtandcold
Itpermittedtheplantingofeucalyptusinlow temperatureregionssubjecttofrost Soilconditionerproducedfromorganic
wastesanddregs
Disseminatedtootherfirms,itreplaceslimeand chemicalfertilizer
Automationoftheproductionof micro-propagatedseedlingsinbioreactors
Reductioninproductioncosts,greatersecurity andcleanlinessandpurityinobtainingseedlings withlowerlignincontents
‘Aracruzbioindex’(decision-making supporttoolforforestmanagement)
Integratedandcomparativeoverviewof productionareasinvolvingthediversityof plantedgeneticmatter,plantages,type,sizeand wateravailability,improvingforeststewardship ‘Aracruz’sPestAssessmentTool’ BetterguidancetoAracruz’sresearchprojectson
forestprotection Newsoilconditionerproducedfrom
organicwastesanddregs
Replacementoflimeandchemicalfertilizers Neweucalyptusvarietiesresistantto
droughtandcold(withinGenolyptus project)
Newopportunitiesforforestryinvestmentsand productdiversification
massproductionofclonallypropagatedplantingstock.Forthisinnovation,Aracruzwasawardedthe prestigiousSwedishMarcusWallenbergPrizein1984,whichrecognizesworld-leadingtechnological innovationsinforestry.Duringthe1980s,AracruzandSuzanodevelopednoveleucalyptusvarieties thatwerebothmoreproductiveandmore resistanttodisease, inadditiontobeingadaptable to Brazil’sclimate.Thisinnovationyielded higherbiomassproduction perunit ofplantedarea and significantlyimprovedthequalityofwoodusedasanindustrialrawmaterialandenergyinput.During the1990sand2000s,Aracruz,Suzano,Klabin,RigesaandVCPexpandedtheirinnovationactivitiesin forestry,whichreflectedadeepeningoftheirrelatedcapabilities.
Table7presents28observationsfromimplementedinnovativeactivitiesinthesefirmsrelatedto pulpandpaper.Duringthe1960sand1970s,thesefirmsutilizedtheirengineeringandproduction capabilities to change contemporaneous production processes and process equipment, such as chemicalprocesses,toproducepulpandpaperbasedonthenewrawmaterial.Processinnovations involvedthedevelopmentofmodifiedprocesstechnology,whichwastheninstalledinasuccessionof new plants over three decades. These innovative production-based activities might also have contributedtoanincreaseinaverageannualpulpproduction(1980–2009)inthesecasefirmsof6.08% comparedwiththe4.8%averageforotherfirmsinBrazil,whereasthepaperproductionofthesefirms grewatanaverageannualrateof3.9%comparedwith3.6%forotherfirmsinBrazilduringthesame period.
Since the 1980s, several innovations in the bleaching process became associated with environmentallytargetedeffortsandinvolvedresearchonligninbiosynthesisandthepatentingof thetotally chlorine-free (TCF) pulp process that continuedthrough the 1990s. For example,by augmenting its research capabilities for forestry with pulp and papermaking research, Aracruz intensifiedinvestigations in lignin biosynthesis and pollution control methods based on natural micro-organisms.By1992,Aracruzhadadoptedtheelementallychlorine-free(ECF)andTCFprocess, followingCanadaandScandinavia.However,AracruzwentfurtherbycreatingavariantintheTCF process,whichwascharacterizedbyamuchlowerlevelofabsorbableorganichalogens(AOX);the process,knownasalphachlorine-free(ACF),waspatentedin1997.Oneyearlater,VCPcreateditsown versionsoftheTCFprocess.Becauseoftheseinnovations,fewerchemicalproductsarenowrequired towhitenpulpusedtomakepaper.
Operationalandenvironment-relatedperformanceimprovement
Table8showsseveralcountry-levelperformanceparametersrelatedtoforestryforpulpandpaper. According to the fieldwork and technical literature (WRI, 1999; Evans and Turnbull, 2004), consideringthesignificanttechnological relevanceandscaleof Aracruz,VCP,Suzano,Klabinand
Table6(Continued)
Firms Innovativeactivities !Benefits
Klabin Somaticembryogenesisprocesstoperform cloninginpine
Achievementofuniformityinplantations,greater forestproductivity,lowercostsofharvesting Rigesa ClonalplantingofPinustaedaona
commercialscaleusingsomatic embryogenesistechnique
Indoorgardenforrecombinantclonesof Eucalyptusdunniibyusingcontrolled pollinationinpots
Recombinationofspeciestoidentifythebest clonesforgreenhousecontrolledpollination
Suzano Neweucalyptusvarietiestoimplement ‘‘energyforests’’
Productionofpelletswithhighpowerburning andshortplantingcycle(2–3years)insmallareas VCP Softwaretocalculatetheeconomicvalue
ofaeucalyptusclones
Identificationofmostsuitablecloneforparticular plantationsites
Newgeneticmaterials Improvementinwooddensity,pulpingand bleachingprocesseswithpositiveeffectson printingortissuepaperquality
Table7
Implementedinnovativeactivitiesandrelatedbenefitsinpulpandpapercases.
Firms Innovativeactivities !Benefits
1970s–1980s
Aracruz Adaptationanduseofcellmembranetechnologyfor thehardwood-basedpulpmakingprocess
Eliminationofthepreviousmercury-basedprocessthat generatedhazardouseffluents
1990s
Aracruz Improvementstobrownstockwashingandoxygen predelignificationprocessesandeliminationof molecularchlorine
Reducedvolumeofpollutingeffluents
Newtestsofindustrialwastewater:completionof seaurchinsfertilizationssubmittedtoeffluent conditionsandassessmentofmusselsneardischarge sites
Improvedaccuracyintheassessmentofoffspringandof toxicityofeffluentsleadingtoprocessand
environmentalperformanceimprovement
Completelychlorine-free(TCF)processtechnology Reductionintheloadofadsorbableorganichalogens (AOX)intheeffluentsleadingtoimproved environmentalperformance
Projectcontrolsystem(PCS) Improvedprojectmanagement(e.g.,FiberlineCwas completedinrecordtime,creatingaworldwide benchmark).Planterectiontimewasreducedfrom36 months(e.g.,FiberlineA)to12months(e.g.,FiberlineC). Thisprojecttechnologyledtoabenchmarkingandwas usedinotherstartupplantsinBrazil
Neworganizationalarrangementsforproject managementbasedoninternalinterfunctional interfacesandinterfaceswithsuppliers
Klabin CardboardwithawhitelayerforTetra-Pak packaging
Thisallowedthecompanytopositionitselfasaprovider foroneofthemostimportantinternationalpackaging manufacturers
Suzano Automationandcontrolsystemforrecoveryboiler Effectivereductionofparticulatematterand sulfur-basedcomponentemissionstotherecoveryboiler Introductionofelementalchlorine-freepulp
bleachingprocess
Meetingofinternationalstandardsandthereductionof environmentalrisksatthebleachingstage
‘Waterconsumptionreductionproject’ Settingofnewstandardsintheindustryregarding environmentalsuitableproductionprocesses Alkalinecorrectioninthepapermakingprocess Environmentallyfriendlypapermakingprocess Cutsizepapertolaserandinkjetprinting Paperexportspackedwiththecustomerbrand VCP NewvariationofECF(elementalchlorine-free)
process
Reduceduseofabsorbableorganichalogens(AOX)and achievementofenvironmentallyfriendlyproduction process
Newalkalinesizingprocess Achievementofgreaterbrightness,colorstabilityand body(bulk)inpaper-basisformakingchemicalspapers andcoatedpapers,meetinginternationalquality standards,exportspackedwiththecustomerbrandand newmarketshare
2000s
Aracruz Newtechnologytomapcarbonfootprintand optimizecookingadditivetechnologies
Increasedproductivityandreducedoperatingcostsin differentproductionunits
Diffusionofshort-fibertechnologytopapermakers anddevelopmentofnewtypesofcellulosethrough environmentallyfriendlyprocesses
Increaseintheuseofeucalyptusfibersinpapermaking processesleadingtolesswastefromelectricaland thermalenergyandreductionofspecificfiber consumptionbyincreasingtheretentionofmineralfillers Noveloperationalpracticestorecycleresidues(e.g.,
limemud,biomassash,dregsandgrits)from chemicalsrecoveryprocesses
Reductionof40%intheseresidues,withsignificant economicandenvironmentalbenefits
Improvementinlogisticpracticesofstorageand distributionofchemicalresidues
NeworganicfertilizerOrganomaxwiththe biotechnologyfirmOrganoeste
ReplacementoftheconventionalNPKfertilizers (nitrogen–phosphorous–potash)andimprovedphysical andmicro-biologicalcharacteristicsinsoil.Byusing 100%ashandlimemudinitseucalyptusplantations, Aracruzstoppedbuyinglimestone,reduceditspurchase ofmineralfertilizers,andimproveditsgeneralrecycling indexby20%
Rigesa, it is highly likely that those leading parametersachieved by Brazil (Table 8) reflect the accumulationofinnovativecapabilitiesandrelatedimplementedactivitiesofthesecompanies.The improvementsinforestryperformanceparameters(Table9)reflectthecasefirms’capabilitiesfor geneticmanipulation and selectivebreeding.For instance,thefirst-generation clonal forestryof eucalyptus during the 1980s reduced wood-specific consumption (WSC) by 20%. A further 20% reductionwassubsequentlyachievedbasedonsecond-generationclonesderivedfromeucalyptus hybridization,whichledtothefirstlarge-scalecommercial plantingofstands ofselectedclones derivedfromhardwoodcuttings,whichinturnresultedinexceptionalgeneticgainsingrowth,in additiontoadaptabilitytotropicalconditionsandhigherpulpyields(GrattapagliaandKirst,2008). The evidence in Tables 10 and 11 indicates significant improvements in certain process performanceparametersforpulpandpaperduringthe2000–2009period.Forexample,specificwater consumptionof36.7 m3pertonofpulpandthemean20.1 m3pertonofpaperachievedbythecase
firmswereequivalenttothoseattainedfortheFinnishandEuropeanUnionbestavailabletechnology standards(www.environment.fi).Improvementsachievedunderotherindicators(e.g.,reductionsin
Table7(Continued)
Firms Innovativeactivities !Benefits
Klabin Cardbarrier Manufactureofpackagingresistanttowater,greaseand steamwithoutusingplastic
Newchemi-thermomechanicalpulpingprocess basedonhardwood
Moreresistantandinnovativepackaging Newproductionprocessesusingmulti-layers
cardboardfromchemi-thermomechanicalpulp
Rigesa Packagingforredfruitsmadefromkraftpaper Highdegreeofsecurityinthestackwithaneffective ventilationsystemwithminimumhandlingofthefruit withperfectexposureatsalepoint
Recyclablecontainerforliquids(200 L)with corrugatedpackagingsystem
Facilitatesindividualhandling,high-performance packagingandlogisticscostsreduction Suzano Specialcardboards,suchasanti-thermaland
anti-freeze,andotherdistinctcharacteristicsdefinedby thedemandsofcustomers
Thesetypesofrolesbegantooccupyspaceinthemarket ofspecialtypapersthatwerepreviouslyonlyservedby importedpaper
Tissuepaperforthepharmaceuticalindustry NewmarketshareinBrazil VCP Processandpapermachinetoproducecarbonless
paperon-machine
Achievementofbetterqualityandlower-pricepaper Processestoproducethermalpapers Improvedimagestabilityanddurabilitytosupportnew
applications(e.g.,suchcreditcardandinvoice machines)
Source:Derivedfromempiricalstudy.
Table8
Country-leveloperationalperformanceparametersinforestryforpulpandpaper. Typesoftree/
parameters
Brazil Chile Indonesia Finland Canada (coastal) USA Hardwood Rotationa (years) 7(eucalyptus) 10–12 (eucalyptus)
9(eucalyptus) 35–40(birch) n.a. n.a.
Yield(m3/ha/year) 44 25 24–34 6 n.a. n.a.
Softwood
Rotation(years) 15(pinusspp) 25(pinus radiata) 7(pinus merkusii) 70–80(picea abies) 45(Douglas Fir) 25(pinus elliottii/taeda) Yield(m3 /ha/year) 38 22 24 4 7 10
Sources:Bracelpa(2012)andFAO.
Table 9
Evolution of some technical indicators in forestry (1970–2009).
Parameters Unit 1970 1975 1980 1985 1990 1995 2000 2002 2003 2004 2006 2009 Average annual
rate of decrease/ increase (%) (1970–2009) Forest yield m3 /ha/year 37 44 47 45 53 52 45 46 45 46 49 49 +0.7 Basic density of wood kg/m3 473 473 473 488 488 488 485 489 494 496 493 506 +0.1 Density ton/m3 0.47 0.47 0.47 0.49 0.49 0.49 0.49 0.49 0.49 0.5 0.49 0.51 +0.2
Cut-off age years 9.5 9.0 8.5 8.0 7.5 7.4 7.2 7.2 7.1 7.1 7.0 7.0 0.78
Volume of wood per amount of pulp produced
m3
/ton pulp 4.2 4.1 3.9 3.8 3.7 3.7 3.8 3.8 3.8 3.9 3.9 3.8 0.2
Planting density trees/ha 1651 1651 1512 1512 1486 1419 1224 1259 1259 1326 1326 1326 0.5
Source: Derived from empirical study.
Figueiredo / Journal of Engineering and Technology Management 31 (2014) 73–102 89
specificsteamandelectricity consumptionand fiberloss) mightalsohave exertedanimportant impactoncostreduction.
Withreferencetoenvironment-relatedindicatorsinpulpandpaper(Tables12and13),theaverage industrialeffluentoutputwithinthepulpmillsdecreasedby3%annuallyfrom2000to2009,whereas theSO2emissiondecreasedbyanannualaverageof3.4%.Inabsoluteterms,bothindicatorswere
belowthelimitsdelineatedbytheBrazilianEnvironmentAuthority(Conama)andbyEuropeanbest availabletechniques(BAT).Similarly,withinthepapermills,thedecreasein biochemicaloxygen demand(BOD)variedfrom6.8%to23.1%annuallywhich,inabsoluteterms,werebelowthelimits establishedbyConama.Consequently,themills’environmentalimpactwasreduced,particularlyin termsofdiminishedliquideffluents.TheperformanceimprovementsinTables10–13reflectthefirms’ innovativeactivities (Table 7) which are highly likely to be anoutcome related tothese firms’ innovativecapabilities.
Table10
Evolutionofprocessperformanceinpulpmaking.
Parameters 2000 2001 2002 2003 2004 2006 2009 Averageannual rateofreduction/ increase(%) (2000–2009) Specificconsumptionof
Steam Steamton/pulp weight(ton) 4.92 5.4 4.9 4.9 4.5 4.4 3.6 3.4 Electricity KWh/pulp weight(ton) 737 730 640.8 646.4 674.2 639.6 571 2.8 Water m3 /pulp weight(ton) 41.3 45.6 42.7 39.6 40.9 40.1 36.7 1.3
Fiberlosses ton/day 13.1 16.7 15.5 11.1 8.8 9.5 10.9 2 Source:Derivedfromempiricalstudy.
Note:Thelowerthebetter.
Table11
Evolutionofsomeprocessperformanceinpapermaking.a
Parameters Units 2000 2001 2002 2003 2004 2006 2009 Averageannual rateofreduction/ increase (2000–2009)(%) Specificsteamconsumptionb
Printingandwriting Steamweight (ton)/paper weight(ton) 3.1 2.9 2.8 2.7 2.6 2.5 2.4 2.8 Packaging,wrapping &boxboard 1.9 2 3.5 3.2 2 1.9 1.9 0.00 Tissue 1.9 1.7 1.4 1.4 1.4 1.4 1.4 3.3
Specificelectricityconsumptionb
Printingandwriting
KWh/paper weight(ton) 627.5 614.3 591.9 576.1 572 554.5 547 1.5 Packaging,wrapping &boxboard 457.5 465.2 655 725.8 486.3 432.8 391.9 1.7 Tissue 412 473.5 439.2 458.1 447.1 398.2 229 6.3
Specificwaterconsumptionb
Printingandwriting m3 /paper weight(ton) 28 26.2 24.6 20.8 19.2 18 17.1 5.3 Packaging,wrapping &boxboard 31.6 32.5 32.6 33.5 23.2 19.3 20.1 4.9 Tissue 34.8 33.1 31.8 30.6 28.9 25.8 23.3 4.3
Source:Derivedfromempiricalstudy.
aAggregatedbyspecificpapersegments(printingandwriting;packaging,wrappingandboxboard;tissue). b
Additionally, field evidence suggests that firm capabilities and subsequently implemented inventiveandinnovativeactivitiesmighthaveexertedapositiveinfluenceontheachievementof highlycompetitiveproductionandcommercializationcostsintheinternationalmarket.Forexample, thecompetitiveadvantages ofthefirms(whichwereresponsibleforthemajorityofBrazil’spulp
Table12
Evolutionofenvironment-relatedperformanceinpulpmaking. Typesofeffluents
andparameters
Units 2000 2003 2006 2009 Averageannual rateofreduction/ increase(2000–2009)%
Limitsof CONAMAc
Liquid
Industrialeffluentsoutputa
m3
/pulp weight(ton)
46.7 42.9 38.7 35.3 3 50–100
COD(chemicaloxygen
demand)a kg/pulp
weight(ton)
11.9 10 7.6 6.1 7.1 10
BOD(biochemicaloxygen demand)a
1.8 1.3 1.1 0.8 8.6 2.5
Totalnitrogena
0.2 0.1 n.a. n.a. 20.6 n.a.
Solid Limemud/dregs/gritsb 33.9 43.5 68 96.2 12.2 n.a. Totalashesb 11.7 15.5 29.1 38.5 14.1 n.a. Air SO2(fromchemical recoveryboiler)a mg/Nm3 8.8 24 7.1 6.4 3.4 100 NOx(nitrogen-oxides,
fromchemicalrecovery boiler)a
n.a 239.8 187.56 237.91 0.1 470
AverageTRS(Totalreduced sulfur)a
ppm
1.64 0.82 2.13 2.42 4.4 n.a.
AverageSO2a 1.69 2.83 4.4 7.06 17.2 n.a.
AverageTRS(Limekiln)a
17.1 42.9 16.6 17.2 0.03 n.a.
Source:Derivedfromempiricalstudy.
a
Thelower,thebetter.
b
theyvarywithproductionoutput.
cTheNationalEnvironmentCounciloftheBrazilianMinistryofEnvironment;n.a.=notavailable.
Table13
Evolutionofenvironment-relatedperformanceinpapermaking. Typesofeffluents
andparameters
Units 2000 2001 2002 2003 2004 2006 2009 Averageannual rateofincrease/ decrease 2000–2009(%)
Limitsof CONAMA
Industrialeffluentsoutput Packaging,wrapping &boxboard m3 /paper weight(ton) 28.4 28.4 25.1 37.4 38.8 38.2 39.7 3.7 50–100 Tissue 90 80 80 46.1 43.4 34.1 31.7 –10.9 50–100
COD(Chemicaloxygendemand) Packaging,wrapping &boxboard kg/paper weight(ton) 7.23 6.31 12.7 10.0 10.9 4.9 7.1 –0.2 10 Tissue 14.5 18.0 13.6 13.6 15.9 9.3 9.2 –4.9 10
BOD(Biochemicaloxygendemand) Packaging,wrapping
&boxboard
kg/paper weight(ton)
n.a. n.a. 4.3 3.4 4.4 1.5 n.a. –23.1 5
Tissue 3.8 5.0 4.32 5.4 5.6 2.4 2.0 –6.8 5
Source:Derivedfromempiricalstudy. n.a. = notavailable.
exports) in relationto internationalpulp and papercompetitors aremanifest in their abilityto producehighqualitybleachedeucalyptuskraftpulp(BEKP)forapproximatelyUS$225perton(Fig.2). Patternsofcorporategrowth
AsindicatedinTable14,growthpatternsbasedonhorizontalandverticalintegrationprevailed overtheentire1950–2000period,whichseemstohavebeenenabledbyaccumulatinginnovative projectmanagementcapabilitiesthatpermittedthesefirmstodesignandexecuteplanswithpartners andtocoordinateexpansionprojects.Forexample,Aracruzdevelopednoveltechniquesforproject engineeringthatpermittedthefirmtoexpanditsfiberlinesinworldrecordtime.Thesecapabilities seemto have paidoff by allowingAracruz and VCPto setup large-scalelogistics projectsthat positivelyaffectedtheircompetitiveness.
‘Direct’firmdiversificationbegantobecomesignificantonlyduringthe2000s.Thesefirmswere createdundertheISIregimeandtheirbusinessesevolvedaroundthepulpandpaperindustry,witha lowdegreeofdiversification.OneexceptionisVCP,whichispartofalargeBrazilianbusinessgroup thatisdiversifiedintosomewhatrelatedareas(e.g.,chemicals,cement,metals,agro-industry,pulp andpaperandbanking).However,duringthe2000s,thesefirmsbegantodrawontheir world-leading innovativecapability in forestry to diversify into new activities from their innovative capabilitiesinthatfield,whichgaverisetonew‘hightech’activitiesintheBrazilianpulpandpaper industries.
Forexample,byacquiringFuturaGene(withoperationsintheUS,Israel,ChinaandSoutheastAsia), Suzanowasable tofirmlyengage in theinternationalcommercializationof modified genesand developtreesthatrequirelessland,waterconsumptionandfewerfertilizers,thatproducelesslignin (andfewerchemicalsduringthepulpingprocesses)andgeneratehighercarbonsequestration,which contributestostrongercompetitivenessinitsforestryandpulpandpaperbusinesses.Thecreationof SuzanoRenewableEnergymayallowSuzano tomoveintothenewforestrysegmentof planted ‘energy forests’ by producing genetically modified trees with short cut-off times and calorific properties.By drawingon itsworld-leadingforestryinnovativecapabilities,Klabinintensifiedits business in medicinal plants, phytotherapy and phytocosmetics. With respect to ‘indirect’ firm diversification(spin-offs and spillovers), theevidence suggests that as these firms accumulated innovativecapabilities,theyalsoseemtohavestimulatedtheemergenceofspin-offsandspillovers, such as the four outstanding examples described in Table 15: Imetame Metalworking, Inflor Consultingand Systems, thewoodcluster in themunicipalityof TelemaˆcoBorba andthe forest partnershipsprogram.
Fig.2.Productionandcommercializationcostsofshortfiberpulp(US$). Source:www.hawkinswright.com/pulp_and_paper.
Patterns of corporate growth in the researched firms.
Patterns of corporate growth 1950–1980s 1990s 2000s
Horizontal integration Enlargement of current facilities and set up of new ones
Klabin: 12 new facilities Klabin: two new facilities in Brazil and one in Argentina. Enlargement of Monte Alegre Mill in Teleˆmaco Borba
Enlargement of Monte Alegre Mill in Teleˆmaco. Borba through Project MA1100
Aracruz: Fiberline A Aracruz: Fiberline B and C Suzano: Start-up of Line 2 of Mucuri (Bahia)
Aracruz and VCP: start-up of Eldorado Brazil
Merger/acquisition to increase production of current products
Suzano: Acquisition of Papel Rio Verde
Klabin with Kimberly (50%) = Tissue
Aracruz and VCP (26%)
Aracruz and VCP (100%, forming Fibria, 2009)
Suzano: acquisition of Ripasa (50%) and Bahia Sul
VCP: joint venture with Ahlstrom in paper business
Vertical integration
Upstream Production of own feedstock All firms: production of eucalyptus pulp
Downstream International distribution
channels of final product.
Aracruz, VCP, Suzano: international distribution channels Logistic services for final
product.
Aracruz: operation of Portocel, a specialized forestry terminal
Aracruz: Operation of three docks for wood and pulp
Aracruz: Operation of a terminal to load 6 million tons of pulp/year
VCP: Operation of two terminals at Porto of Santos with capacity to ship 2 million tons pulp
VCP: Operation of railways to transport pulp from Western Brazil to Porto of Santos
Diversification ‘Directly’ (diversification by the firm)
None Aracruz, VCP, Klabin: electricity
and steam power
Aracruz:
organic fertilizer (with Organoeste, Brazil)
renewable energy (with Ensyn, USA) Suzano:
bioenergy (by creating Suzano Energia Renova´vel)
biotechnology (by acquiring FuturaGene) Klabin
biorefinery (embryonic). fitoterapics
‘Indirectly’ (spin-offs/spillovers) All firms: Program of forest partnerships
Aracruz: Imetame Metalworking Klabin: Wood cluster Aracruz: Inflor Consulting and Systems Source: Derived from empirical study.
P.N. Figueiredo / Journal of Engineering and Technology Management 31 (2014) 73–102 93
Discussion
Building ona researchtraditionin technological capabilityaccumulation anditsperformance implicationsforlatecomerfirms(e.g.,Belletal.,1982;Katz,1987;Figueiredo,2002),thepurposeof thisstudywastoempiricallyinvestigatethetypesofoutcomesthatareachievedbylatecomerfirms from the accumulation of innovativecapabilities, up to the world-leading level, in addition to technologicalcatch-up.Incontrastwithmostpreviousstudies,thisarticlehasproxiedinnovative capabilitybydrawingonacomprehensivetaxonomythatisbasedonascaleofcapabilitylevelsfora widerangeoftechnologicalactivities.Basedonaninductivemultiple-casestudyinvolvingfirst-hand and long-term evidence that was derived from extensive field investigations of a relatively
Table15
Examplesofspin-offsandspilloversgeneratedbythesecases. Examplesofspin-offs/
spillovers
Start-upyear Origin Description
ImetameMetalworking 1980 Aracruz Afterspinningoff,Imetamedeepenedits capabilitiesinengineeringservices(engineering projects;maintenanceservicesinpulpandpaper, metallurgyandmining;industrialerection;and structureandlogistics).Withapproximately 4000employees,Imetamehasalargeportfolioof clients,includinglargelocalandmultinational firmsinthepulpandpaper,oilandgas,steel,and capitalgoodsindustriesandhasbeenawarded severalprizesfromthesefirms.
(www.imetame.com.br) InflorConsultingand
Systems
2001 Aracruz Afterspinningoff,Inflordeepeneditscapabilities tocreateoriginalinformationtechnology(IT) systemsforintegratedandsustainableforestry management;by2007,theyexpandedtheir servicestosectorssuchassugarcaneethanoland agriculture-relatedfirms.Since2008,Inflorhas beenprovidingitsservicestocustomersinChile, Uruguay,EuropeandChina,whichappearsto constitutesolidstepsintothe
internationalizationofitsactivities. (www.inflor.com.br)
WoodclusteratTeleˆmaco Borba,amunicipality inthesouthernstate ofParana´
Mid-1990s Klabin ThepartnershipsledbyKlabinwiththe municipality’scouncil,theNationalServicefor IndustrialApprenticeship(SENAI),theFATEB,a localtechnicaluniversityandtheWood TechnologicalCenter(CETMAN),stimulatedthe emergenceof50smallandmedium-sizedfirms inTeleˆmacoBorba,generatingapproximately 1500jobsandtheCenterofResiduesUtilization. Bythemid-2000s,Klabinledneweffortsto expandthiswoodclustertoanother14 municipalitiesintheregion.
Forestpartnerships program
Early1980s Aracruz,Klabin, SuzanoandVCP
Basedontheirinnovation-capability developmentforlarge-scaleclonedeucalyptus plantations,thesefirmscreatedaprogramto transferelementsofthistechnologyto independentlandownerstoplanteucalyptusand becomewoodsuppliers.Bypurchasingwood fromtheseproducers,thefirmsencouragedthe developmentofprofitableagriculturalactivities withforestplanting,reconcilingeconomicgains withenvironmentalpreservation.Theprogram benefitsthousandsofsmallruralownersin539 townsinBrazilandsupplies20%ofthewoodused inpulpproduction.
homogenoussetofpulpandpaperfirmsintheBrazilian forestrysector,this studyscrutinizeda number of outcomes related to innovativeperformance and business performance as outcomes achieved by these firms fromthe innovation capabilities that theyhad accumulatedover their lifetime.Therecursivefieldworkprocess—combinedwithinsightsfromtheliteratureoninnovationin latecomerfirmsandthestrategicmanagementliterature—facilitatedtheemergenceoftheframework inFig.1,particularlywithrespecttoexploringtherelationshipsbetweencomponentsA,B,andC,the findingsofwhichrespondtothearticle’sgeneralresearchquestionandgeneratefurtherimplications outlinedbelow.
Discussionoffindings
Innovativecapabilityaccumulation
Theresearchedfirmsaccumulatedinnovativecapabilitiesthateventuallyturnedthemintoworld leaders in a particular segment of the pulp and paper industry, i.e., the short-fiber segment (eucalyptus).Thisfindingisconsistentwithpreviousstudiesthathavereportedthatlatecomerfirms in other industrieshave attained leadingtechnological positionsat the internationalinnovation frontier(see‘‘Studybackgroundandresearchquestion’’).However,insteadofbeginningwiththe accumulation of production capability and then moving into the progressive accumulation of innovativecapabilities(fromadaptationtoR&D-basedinnovation),asistypicallydocumentedinthe literature,thesefirmsaccumulatedinnovativecapabilitiesthatpermittedthemtotakeadirectionof technologicaldevelopmentthatdifferedfromthosedirectionspreviouslypursuedbyglobalindustry leaders.Theirinnovativecapabilityaccumulationprocessinvolvedaqualitativediscontinuityfromthe establishedtechnologicaltrajectoryatanearlystageinthedevelopmentoftheircapabilities,whichis rarelydocumentedintherelatedliterature.Additionally,asopposedtomoststudiesoftechnological capabilityaccumulationthatfocusonso-called‘high-tech’industries,thisstudyhasexaminedthis issueinnaturalresource-relatedfirms,whicharebarelyinvestigatedintheliterature,despitetheir importancefornationaleconomies,althoughthereareafewexceptions(e.g.,DantasandBell,2009; Silvestre and Dalcol, 2009). Additional details are provided elsewhere in the literature for this capabilityaccumulationprocess(Figueiredo,2010);thus,thefollowing sectiondiscusses findings relatedtooutcomes.
Outcomesofinnovativecapabilityaccumulation
Asthefirmsaccumulatedtheseinnovativecapabilities,theydrewontheresourcestochangeand or createtechnologies and componentsof production systems beyond achievinga technological catch-up;thus,theyachievedconcretebenefitsfromtheaccumulationofthesecapabilitiesintermsof innovationandbusinessperformance,whichcouldguaranteetheirinternationalcompetitiveness. Thus,thestudyfoundthat thefollowing outcomesresultedfromtheaccumulationofinnovative capabilities(i)Innovativeperformance(implementedinventiveandinnovativeactivities),whichinvolved evidence from 108 accumulated patents (Table 5) and 24 examples of significantly innovative activitiesinforestryand28inpulpandpaper(Tables6and7)ofdifferenttypesandwithvarying degreesofcomplexityandnovelty;(ii)Operationalandenvironment-relatedperformanceimprovement, whichinvolvedcountry-levelandfirm-levelperformanceparametersinforestry(Tables8and9), several performanceparametersfor pulpmakingand papermaking(Tables 10–13), inadditionto country-levelproductandcommercializationcosts(Fig.2);and(iii)corporategrowthpatterns,which involvedseveralexamplesofthesepatternsintheformofhorizontalintegrationandupstreamand downstreamverticalintegration,and‘direct’diversificationand‘indirect’diversification(spin-offs and spillovers) (Tables 14 and 15). This studyindicates that these outcomes wereachieved by accumulating a wide range of innovative capability levels (from basic toadvanced) for diverse technologicalfunctions(e.g.,silviculture,harvesting,projectmanagement,processandproduction organization,product-centeredandrelatedengineering-basedcapabilities)andvarious implementa-tions of inventive and innovative activities with differing levels of novelty and complexity. Specifically,withrespecttothenatureofthesecapabilitiesandtheoutcomesthattheygenerated beyondtechnologicalcatch-up,thisstudyhasyieldedthefollowingfindings.
