Arbeitspapier

Discrete innovation, continuous improvement, and competitive pressure

Does competitive pressure foster innovation? In addressing this important question, prior studies ignored a distinction between discrete innovation aiming at entirely new technology and continuous improvement consisting of numerous incremental improvements and modifications made upon the existing technology. This paper shows that distinguishing between these two types of innovation will lead to a much richer understanding of the interplay between firms' incentives to innovate and competitive pressure. In particular, our model predicts that, in contrast to previous theoretical findings, an increase in competitive pressure measured by product substitutability may decrease firms' incentives to conduct continuous improvement, and that an increase in the size of discrete innovation may decrease firms' incentives to conduct continuous improvement. A unique feature of this paper is its exploration of the model's real-world relevance and usefulness through field research. Motivated by recent declines in levels of continuous improvement in Japanese manufacturing, we conducted extensive field research at two Japanese manufacturing firms. After presenting our findings, we demonstrate that our model guides us to focus on several key changes taking place at these two firms; discover their interconnectedness; and finally ascertain powerful underlying forces behind each firm's decision to weaken its investment in traditional continuous improvement activities.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 3132

Klassifikation
Wirtschaft
Thema
Competitive pressure
continuous improvement
discrete innovation
field research
location model
product substitutability
small group activities
technical progress
Innovation
Ökonomischer Anreiz
Wettbewerb
Produktsubstitution
Innovationswettbewerb
Verarbeitendes Gewerbe
Technischer Fortschritt
Theorie
Japan

Ereignis
Geistige Schöpfung
(wer)
Ghosh, Arghya
Kato, Takao
Morita, Hodaka
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2007

Handle
Letzte Aktualisierung
20.09.2024, 08:25 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Ghosh, Arghya
  • Kato, Takao
  • Morita, Hodaka
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2007

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