Success factors of innovation in resource-scarce environments

• Applicant: Professor Dr. Martin Högl
• Subject Area: Accounting and Finance
• Term: from 2013 to 2018
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 238362631

Innovation for resource constrained contexts at the base of the economic pyramid (BoP) in newly industrializing and developing countries has been frequently subject of case studies and anecdotal reports. What is missing in the literature, however, is a theoretical foundation and a systematic empirical analysis of how firms can successfully innovate in these countries and which capabilities firms need to do so.Hence, there are no generalizable recommendations as to how firms can successfully conduct innovation projects in the BoP context. Therefore, this study aims at answering the following central research questions: (1) What are the specific antecedents of innovation project success in the BoP context? (2) How does an organizational capability of resource-constrained innovation evolve from the capabilities developed in such innovation projects? (3) Which can firms from industrialized countries learn with regard to innovations for their traditional markets?The Resource Based View of the firm (RBV) is used as the theoretical foundation to examine these research questions in a two-stage empirical design. After conducting an in-depth qualitative study to develop hypotheses on the antecedents of innovation success in the BoP context, these hypotheses are tested using a quantitative multi-level study that integrates the organizational and project level of enquiry in order to capture influences on innovation success from both of these levels and their interdependencies. Here, we especially focus on how the capabilities that successful innovation project teams develop when working with scarce material resources can be used for developing an organizational capability of material resource-constrained innovation. This analysis thus explicitly considers micro foundations of organizational capabilities and the underlying basic assumptions of the RBV. This research project offers a several contributions. From an innovation management perspective, it aims at providing insights on the key factors for material resource constrained innovation. From an international management perspective, the study aims to identify antecedents of successful new product development for and in countries that are characterized by scarce material resources of customers as well as the whole business environment. Moreover, the literature on the RBV will be advanced by identifying and examining micro-foundations of the RBV. Beyond these theoretical contributions this research project will also offer practical implications. Managers will be provided with recommendations not only how they can increase the success of new product development in and for BoP markets, but also how firms generally can design a more efficient innovation process and develop resource-parsimonious products.

• DFG Programme: Research Grants