How do latecomer firms achieve catch-up through technology management: a comparative analysis

The rapid economic growth of emerging economies has sparked extensive research on the mechanisms driving their catch-up with established leaders. Much of this research focuses on the role of government policies and innovation, particularly product innovation, as a key driver of competitive advantage. However, while possessing technology resources is crucial, their effective deployment is equally important. This is where technology management (TM) becomes pivotal. TM encompasses the planning, directing, control, and coordination of technological capabilities to achieve organizational objectives. Existing research highlights the close relationship between TM and product innovation, yet acknowledges the variability of TM practices and modes across different contexts. A significant gap exists in understanding these variations, particularly between latecomer and forerunner firms across national borders. This research addresses this gap by comparing TM practices and modes in Chinese and Korean firms, representing typical latecomer and forerunner economies respectively. The choice of these two countries is justified by their shared Confucian cultural background, minimizing cultural bias in the comparison and improving the reliability of the findings. The study aims to reveal these differences, providing valuable lessons for latecomers seeking to improve their TM practices and ultimately achieve successful catch-up.

Existing literature on catch-up primarily examines the role of government support, either through institution-based frameworks emphasizing the supportive environment created by the government or stakeholder-based perspectives highlighting collective action. These studies often focus on the transition of latecomer firms from Original Equipment Manufacturing (OEM) to Original Design Manufacturing (ODM) and finally Original Brand-Name Manufacturing (OBM), emphasizing the importance of innovation capability development. While the link between product innovation and catch-up is well-established, the connection with TM remains under-explored. This paper bridges this gap by explicitly examining TM's role in the catch-up process. Regarding technology management, the literature defines it as the process of planning, directing, controlling, and coordinating the development and implementation of technological capabilities. This involves managing various technology resources including financial resources, physical resources, and human intellectual resources. TM encompasses diverse practices such as technology finance management, technology equipment management, technological human resource management (THRM), technology information management, and technology achievement management. Although research demonstrates a positive relationship between TM and product innovation, the nature of this relationship is recognized as highly context-dependent, highlighting the need for a comparative analysis.

This study employs an international comparative research design, comparing Chinese and Korean firms to analyze TM practices and their relationship with product innovation performance. The selection of China and Korea is strategic due to their contrasting positions as a latecomer and forerunner economy, respectively, while sharing a similar cultural background (Confucianism), mitigating potential cultural biases. Data was collected through questionnaires distributed to senior managers in Chinese and Korean high-technology firms across various industries. For Korean firms, the sample focused on the automotive and electrical machinery and equipment industries, known for their technological advancement. The Chinese sample included firms from aircraft and spacecraft, automotive, electrical machinery, pharmaceutical, and machinery and equipment industries, representing sectors with varying levels of technological development. To avoid common method variance, responses to different variables were collected from different managers within each firm (TM managers and R&D managers). The response rates were 0.68 and 0.44 for Chinese and Korean firms, respectively. To test for non-response bias, a t-test comparing firm sizes of participating and non-participating firms showed no significant difference. The questionnaire, originally in English, was translated using a double-translation method and pilot-tested for clarity and accuracy. The instrument used to measure TM was adapted from Wu et al. (2012), covering five dimensions: technology finance management, technology equipment management, THRM, technology information management, and technology achievement management. Product innovation performance was measured using four items adapted from Alegre and Chiva (2008), focusing on innovation efficacy and efficiency. Data analysis involved descriptive statistics, reliability analysis (Cronbach's alpha), and correlation analysis using SPSS 24. Measurement invariance was ensured through similar sampling procedures and the use of bilingual native speakers for translation, ensuring the comparability of the measurements across countries. To ensure comparability, firm size and industry type were matched between the two samples. The similarities in distribution across small, medium, and large firms, and the proportion of firms from high-technology and medium-high technology industries, strengthen the reliability of the comparative analysis.

The study's descriptive results reveal notable differences in TM practices between Chinese and Korean firms. Chinese firms (latecomers) showed greater emphasis on grasping equipment condition, understanding technology talent needs, and completing technology information files. In contrast, Korean firms (forerunners) prioritized learning from competitors, effective training, and developing detailed technology information management systems. Hypothesis 2, 3, and 4 which posit differences in technology equipment management, THRM, and technology information management between latecomer and forerunner firms, were fully supported. Hypotheses 1 and 5, regarding the similarity in technology finance management and technology achievement management, were also supported. Correlation analysis further revealed significant differences in the relationship between TM and product innovation performance. In Korean firms, all five TM dimensions were highly correlated (β > 0.700, p < 0.01) with product innovation performance. In contrast, only THRM and technology achievement management showed strong correlations (β > 0.700, p < 0.01) for Chinese firms. This finding fully supports hypothesis 6 which posits a stronger relationship between TM and product innovation for forerunner firms. Specifically, for Korean firms, technology achievement management, technology finance management, technology equipment management, technology information management, and THRM were all highly correlated with product innovation performance metrics (product leadership, product development cycle, product cost, product success rate). For Chinese firms, only THRM and technology achievement management were highly correlated with product leadership and product success rate. This difference in the degree of integration between TM practices and product innovation performance highlights a key difference in TM modes between latecomer and forerunner firms, depicted in a transformation model (Figure 2).

The findings demonstrate substantial differences in TM practices and modes between latecomer and forerunner firms. Latecomers adopt a more fragmented approach, focusing on individual TM dimensions without fully integrating them to maximize their impact on product innovation. Forerunners, however, exhibit a more holistic TM mode where various practices synergistically contribute to enhanced product innovation performance. This disparity reflects the different strategic challenges faced by each group. Latecomers, often resource-constrained, prioritize acquiring and managing essential resources, resulting in a less integrated approach. Forerunners, with abundant resources, can concentrate on maximizing the value of existing assets through an integrated TM strategy. This contrasts the conventional wisdom that suggests that latecomers simply need to copy or imitate the success of forerunners. This highlights the importance of understanding the context-specific nature of TM practices and tailoring them to fit a firm’s unique resource profile and strategic goals. This study's implications for resource-based view (RBV) theory are significant, suggesting that resource deployment and the relationship between resource management and firm performance are highly context-dependent.

This study provides a valuable contribution to the understanding of technology management in the context of firm catch-up. It identifies distinct TM practices and modes between latecomer and forerunner firms, highlighting the importance of an integrated TM approach for achieving superior product innovation performance. The findings offer practical implications for latecomer firms, suggesting a focus on developing linkages between different TM practices and product innovation. Future research could explore TM practices in a wider range of industries and countries to further generalize the findings. Expanding the sample size and including more control variables would enhance the robustness of the results. Investigating potential mediating factors influencing the relationship between TM and product innovation would further enrich our understanding of this complex dynamic.

Despite its contributions, the study has limitations. While efforts were made to match samples on firm size and industry type, further controls might be needed to enhance sample comparability. The sample size, while sufficient for statistical analysis, could be expanded for greater representativeness. The focus on specific industries in both countries limits the generalizability of the findings. Future research should consider a broader range of industries and countries to assess the robustness and generalizability of the study's conclusions. The potential for omitted variables and the need for refinement of the questionnaire in future studies are also acknowledged.