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Competence Enhancement

Innovation can range from incremental improvements to existing products or processes through to radical entrepreneurial market change or the creation of totally new markets. The complex nature of many radi?cal innovations means that many firms lack the resources and competences to effectively manage all the required entrepreneurial activities. Organisations often need to engage in inter-organisational collaboration and to become members of innovation research networks (Pyka 2002). Where the organisation needs to seek external assistance to successfully implement radical innovation, establishing strong working partnerships can be challenging (Story et al. 2009). There may be a lack of knowledge of other firms and the key actors within these firms, or a need for a lengthy period of collaboration before trust has been developed between participants.

O’Connor and DeMartino (2006) identified three competences for success in radical innovation: discovery, incubation and acceleration. Discovery includes all activities that create, recognise, elaborate and articulate opportunities. Key skills for this competency are in exploration and conceptualisation to identify opportunities in the areas of technical discovery and market evaluation. Incubation is the evolution of radical opportunities into viable business propositions. Acceleration includes those activities that permit the developed idea to evolve into a revenue-generating proposition. All three competences may well exist within a large multi-national, minimising the need for external collaboration. Story et al. (2009), however, in a study of radical innovation among UK firms, confirmed that this is unlikely to be the situation in smaller organisations. These researchers concluded that in today’s technologically complex business environments, entrepreneurial success will often be critically influenced by the way firms collaborate with other organisations and participate in networks to access the competences which are lacking inside their own operation.

Collaboration can also be important in the acquisition of new knowledge which can enhance innovation and entrepreneurial activities. In most industries the key source of this new knowledge is interaction with other members of the supply chain. Whether this new knowledge has any impact on existing competences will be determined by whether the firm has cutting-edge innovative management capabilities (Long and Vickers- Koch 1995). If knowledge sharing is to enhance innovation, there must be effective systems for delivery and receipt of knowledge among members of the supply chain (Davenport and Prusak 1999).

On the basis of research on innovation management among Taiwanese manufacturers, Sun (2013) concluded that by collaborating with other supply chain members, firms can obtain the resources needed to deal with changes in the environment and can increase their own core competences. To enhance their entrepreneurial capabilities, firms should establish a flexible supply chain that can expand access to knowledge such as industrial experiences, market messages and technical information both upstream and downstream within the system.

Firms with a high knowledge reception capability can gain more information on products, technical issues, markets and customer needs. Companies that gain useful knowledge from supply chain partners and convert it into understanding are better able to sensitively adjust or modify their innovation behaviour, especially when using relevant core abilities to develop innovations in competitive products, production procedures and marketing to satisfy market demands. Firms with low knowledge reception are less able to convert external information into understanding that can contribute to enhancing innovation (Lin et al. 2015).

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