Patterns of Strategic Innovation in the Latecomer Economies: Beyond the Frugality

Giedrius Jucevicius, Svetlana Sajeva, Inga Stankevice

Abstract


The paper, entitled Patterns of Strategic Innovation in the Latecomer Countries: Beyond the Frugality is aimed at revealing the diversity of possible approaches to strategic innovation of firms in the environment of a small open latecomer economy. More often than not, the latecomer economies suffer from underdeveloped institutional infrastructure, which limits their capacity to compete on equal terms in the realm of technological innovations. Therefore, strategic innovations offer a prospective alternative area for growth and possible catch-up.

Much of the academic debate on innovations in the so-called "emerging" or "latecomer" economies is centered upon two major dimensions. The first dimension usually concerns the aspects of industrial learning in the form of technological catch-up, transfer of knowledge from the established systems of innovation and passage from the imitation-towards innovation-based growth. The second dimension concerns the increasingly popular frugal innovation at the "bottom of the pyramid" (often termed "reverse innovation"), which stands for achieving new consumer-specific value configurations at a lower cost and possibly causing a disruption even in the established markets. Many of the success stories in a market-driven frugal innovation stem from the Indian, Chinese or Brazilian contexts, all with the substantial market sizes and huge potential for cost optimization through scale (such as the adoption by Dr. Devi Shetty of the mass production principles in heart surgery clinics in India). However, smaller economies often find it hard to follow the recipes that focus on scale-driven optimisation.

Therefore, the paper seeks to examine the viable alternatives of strategic innovation in the context of small open catching-up economies (e.g. Lithuania, Slovenia, etc.). It is aimed at answering a question – are there any "Third way" solutions for such countries apart from the technological learning and frugal innovations? The paper is based on qualitative method of research (case study of innovating firms), and conceptualises the patterns of strategic innovations in the above mentioned context.

The paper is written by Prof. Dr. Giedrius Jucevicius (e-mail: giedrius.jucevicius@ktu.lt), Head of the Department of Strategic Management, Dr. Svetlana Sajeva (e-mail: svetlana.sajeva@ktu.lt), Associate Professor, and Inga Stankevice (e-mail: inga.stankevice@ktu.edu), PhD candidate and Junior Research Assistant, Kaunas University of Technology, Kaunas, Lithuania. The paper draws on the project The Innovation Strategies of Organizations in the Emerging Economic Institutional Environment (reg. Nr. MIP-12350), sponsored by the Research Council of Lithuania.

Keywords:

Latecomer Firms, Strategic Innovation, Business Model Innovation, Frugal Innovation

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