SECTORAL INNOVATION SYSTEM: THE PUBLISHING INDUSTRY INNOVATION SYSTEM: THE PUBLISHING INDUSTRY ... social and economic relations ... in which they operate, where broader factors such as socio ...

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  • InternationalAssociationforManagementofTechnologyIAMOT2015ConferenceProceedings

    P062

    SECTORALINNOVATIONSYSTEM:THEPUBLISHINGINDUSTRYINBRAZIL

    DLCIOROBERTODOSREIS,PHDUniversidadePositivo,Curitiba,Parana,Brazil

    PMDABusinessMastersandDoctorateProgrammeRuaProfessorPedroViriatoParigot5300,Curitiba,Paran81.280.330,Brazil

    dalcio.reis@gmail.com

    SIEGLINDEKINDLDACUNHA,PHDUniversidadePositivo,Curitiba,Parana,Brazil

    PMDABusinessMastersandDoctorateProgrammeRuaProfessorPedroViriatoParigot5300,Curitiba,Paran81.280.330,Brazil

    skcunha21@gmail.com

    RODRIGOCORTOPASSIGORONLOBO,PHDSTUDENTUniversidadePositivo,Curitiba,Parana,Brazil

    PMDABusinessMastersandDoctorateProgrammeRuaProfessorPedroViriatoParigot5300,Curitiba,Paran81.280.330,Brazil

    rodrigolobo@terra.com.br

    JULIANOLIMASOARESPHDSTUDENTUniversidadePositivo,Curitiba,Parana,Brazil

    PMDABusinessMastersandDoctorateProgrammeRuaProfessorPedroViriatoParigot5300,Curitiba,Paran81.280.330,Brazil

    julianoltda@hotmail.com

    Copyright2015byJulianoLimaSoares.PermissiongrantedtoIAMOTtopublishanduse.

    ABSTRACT

    Theobjectiveof thisexploratory researchpaper is todescribe thepathof thepublishing industryinnovationsystem inBrazil,startingfrombibliographicresearchandcontentanalysisofsecondarydataavailableaboutthe industryand itsactors. Italsoprovidesananalysisofthecurrentstateoftheindustry,thesituationofthedominantparadigmofprintedcommunications,thepossibilitiesfordisruption and the prospect of a new paradigm based on digital communication, within theboundaries of the digital communication presented. The expected outcome is a referenceframeworkasacontributionforfutureresearch,aswellascollaborationforagreaterunderstandingofthecurrentstateandprospectsforthe industrywithinthedimensionofthesectoral innovationsystem.

    Keywords:publishingindustry,sectoralinnovationsystem,technologicalparadigm.

    INTRODUCTION

    ThepublishingindustryinBrazilischaracterizedasbeingpartofabroaderandmorecomplexvaluechain,namelythepaper,printingandpackagingindustries.Althoughtherearevariousassociations,groups,andsectoralchambersspecificallyforpublishers,mostoftheoperationsarerelatedtootheractors in the value chain,mainly those focused on capital investments and innovations. In thisscenario, theanalysisofan innovation system for thepublishing industrywill involve theseotheractorsat leastat the levelof interdependence.Onecan thereforevisualize the integrationof this

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    valuechain towhich thepublishing industrybelongsand thatwillbe fullyaffectedby innovationscomingfromanyofsuchactors.

    Tostartwith,theindustryexistswithinaparadigminwhichthedominantlogicisfocusedonprintedcommunication. Despitemajor technological advances in digitalmedia, especially in the UnitedStates,progressinthisareainBrazilisstilllimited.Furthermore,theprevailingcultureinthecountrythat gives greater credibility to printed publications in part because of the physical nature ofprintedmatteragainstthevirtualnatureofdigitalmediaiscompoundedbytheresistanceofmajormarketplayers namely largepublishers,printersandpapermanufacturers todigitalpublicationformats.Associatedwith this context, the countrys institutional structure clearly favoursprintedpublications,asevidencedforexamplebythetaxationofpaper,whichisexemptfromtaxessuchasICMSandIPI,thusprovidingsignificantadvantagestothevaluechainasawhole.

    However,thematurityofthecurrentparadigm in the industry isevidencethatanewparadigm isemerging.Incrementalinnovationsimplementedoverthepastfewyearsrangefromimprovementsin production processes and chain integration to media management actions. But two maininnovationgroupsstandout:theconsolidationofdigitalcommunication,whichinthescopeofthisstudy includes ebooks and audiobooks as themost relevantmedia, followed by the advance inlegislation on job safety and sustainability that will inevitably require actors to promotemajoradjustments in their respective fields of operations. In the first group, the shift from printedcommunicationtodigitalcommunicationwhich,albeitconsolidatedwithinthetechnologicalrealmisnotwidespread,willrepresentadrasticdisruptionintheindustry,ultimatelyleadingtothefalloftheprintedpublicationparadigmandtheriseofthedigitalpublicationparadigm,whichwillbecomethenewdominantparadigm.Actorsandagentsintheindustryandinthevaluechainitselfwillhavetoadapttothisnewparadigm,butnot in isolation.Broad institutionaladaptationwillberequiredfroma systemicperspective, sincemanyaspectswillbeheavily impacted, suchas tax structures,logistics,humanqualification,andpapercertificationamongothers.

    Thesecondgroup,whichfocusesonjobsafetyandsustainability,willexperienceamorediversifiedadjustment. Job safety applies more strongly to large industrial activities in the value chain,especiallyinthepaperandprintingindustries.Thenewpathstobefollowedbytheseactors,whicharemore resistant to a shift of the current paradigm, are still uncertain. However, a new andcomprehensiveopportunityforsustainabilityisemerging,giventhelikelyreductionofthesocialandenvironmental impactofapossibledigital communicationparadigm.However, it ispremature tospeculateaboutthesescenarios,asprintedpublicationswillcertainlyenjoyarelatively longperiodofexistenceinthecountry.

    Thisscenarioleadstotheobjectiveofthisexploratoryresearchpaper,whichistodescribethepathof the publishing industry innovation system in Brazil, starting from bibliographic research andcontentanalysisof secondarydataavailableabout the industryand itsactors.Ananalysisof thecurrent state of the industry is presented, togetherwith the situation of the dominant printedcommunicationparadigm, thepossibilities forashift insaidparadigm,and theprospectofanewparadigm based on digital communication, within the boundaries of the digital communicationpresented. This study also intends to provide a reference framework for future research andcontributetoagreaterunderstandingofthecurrentstateandprospectsfortheindustrywithinthedimensionofthesectoralinnovationsystem.

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    THEORETICALREFERENCEFRAMEWORK

    Asetofconceptsclosely linkedtotheobjectiveofthestudy,suchasthedefinitionsof innovation,types of innovation and the innovation system is presented below, followed by the researchmethodology.

    Innovation

    Withrespecttotheterminnovation,understandingitsimportancetothegrowthanddevelopmentofthenationisperhapsasimportantasunderstandingtheconceptitself.Inthisregard,thisarticlerecognizes that innovation is the lungof thedevelopmentof enterprises, thus influencing theirsocial and economic relations, displacing the previously existing steady state and leading to acollectiveimprovementinfavourofdevelopment(SCHUMPETER,1997).

    Thedefinitionof innovationcanbeunderstoodas the intellectualcapacity tomaterializea setofcreativity,knowledgeandskills,withtheaimofgeneratinganincrementaladvanceinthestatusquo(FILHO, 2013), which enables value addition, thus extending the economic life of the company(MOROCOCHI, 1994). Influences the production system of the entity, allowing greater efficiencygainsandboostingcreativedestruction inordertoreplaceoldconsumptionhabitswithnewones(SCHUMPETER,1997).

    Asfortypesof innovations,there isnohomogeneityofconcepts.ThesummarytablebelowshowsthemaintypesofinnovationbasedontheperceptionsofSchumpeter(1997)andthosedefinedbytheOrganizationforEconomicCooperationandDevelopment(OsloManual,1997).

    Table1:TypesofInnovation

    SCHUMPETER,1997 OsloManual,2007

    Introductionofanewgood:aproductwhichconsumersarenotyetfamiliarwithoranewqualityofagood.

    ProductInnovation:ischaracterizedbyasignificantchange in the functionalcharacteristicsofproducts(goodsand services). Itapplies toboth totallynewproductsandtosignificant improvement inexistingones. Examples of product innovation(Manufactured Goods) include: mobile phones,digital cameras, disposable diapers, personalcomputers, flash drives, and dual fuel engines. Asfor services, innovations include ATM bankingservices,onlinesalesovertheInternet,andreverselogisticssystemforpackagingwaste.

    Introductionofanewproductionmethod:amethodthathasnotyetbeentestedthroughexperienceinthecorrespondingbranchofthemanufacturing industry and which by nomeansneeds tobebasedonanewscientificdiscoveryandmayalsoconsistofanewwayofhandlingacommoditycommercially.

    Process innovation: occurs when production anddeliverymethodsundergosignificantchangessoasto incorporate new features. Examples of processinnovation include assembly lines, computeraidedmanufacturing (CAM), and new predictivemaintenancemethods.

    Opening of a new market: a market into Marketing Innovation: includes the use of new

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    SCHUMPETER,1997 OsloManual,2007

    which the particular branch of themanufacturing industry of the country inquestionhasnotyetentered,whetherornotthismarkethasexistedbefore.

    methods involvingproductdesign,marketbehavioranalysis,product techniques,customer loyalty,andsales pricingmethods among others. Examples ofmarketinginnovationsarerewardscards,exhibitionofconceptcars,productstogeneratebrand image,andtheuseofsocialmediaontheInternet.

    Conquestofanewsourceofsupply:supplyofraw materials or semimanufactured goods,again, irrespective of whether this sourcealreadyexistedorhadtobecreated.

    Organizational innovation: occurs when neworganizationalmethodsare implemented. Itcanbeobtained inanyareaofbusinessmanagementsuchas business model, organizational structure,financialmanagement, and personnel training andperformance management. Examples oforganizational innovation include activitybasedcosting (ABC), franchise systems, BalancedScorecard(BSC),andtheleadershipmatrixsystem.

    Establishment of a new organization:implementation of any industry, such as thecreationofamonopolyposition(forexample,through trustification) or disruption of amonopolyposition.

    Source:AdaptedbytheauthorsfromtheOsloManual(2007);Schumpeter(1997).

    The introductionof innovationconcepts,their importancetothecountry'sdevelopmentandtypesof innovation will be followed by the definitions of innovation systems, innovation processes,sectoralinnovationsystemandtechnologicaltrajectory.

    InnovationSystems

    Thestudyofaninnovationsystemisacomprehensivestudyofboththeevolutionarymechanismsoftheeconomythataredirectlyorindirectlylinkedtotheinnovation,aswellasofthestructureoftheuseofresourcesandknowledgethatdoesnotyetproducenewproductsandservicesbutproducesnewknowledgeandcapabilities,withtheconsequentgenerationofnewgoodsandservices.Thus,innovation happens through relationships of cooperation, technology transfer ormore complexrelations involving company behaviour and other categories of analysis such as culture, socialcontext, institutional and organizational framework, infrastructure, and distribution of scientificknowledge (SMITH,2000).The innovationsystembasedontheclassicaltheoryofFriedrich (1956)indicatesthattheagents involved inthe innovationprocessuseexistingresourcesandknowledge,whichtheytransform intonewproductsthroughasetofsequenceofactivities (linear)orspecificprojects(fixedstages)(SMITH,2000).

    Theinnovationprocessinvolvescomplexrelationshipsbetweenorganizationsandtheenvironmentsin which they operate, where broader factors such as sociocultural context, institutional andorganizationalframework, infrastructure,productionanddistributionofscientificknowledgeaffectorganizationalbehaviour.Innovationisthecentralelementofcompetitivenessandthereforeshouldbe addressed systemically and focused on sustaining macroeconomic growth (KEITH, 2000;KASTELLE,POTS,DODGSON,2009).

    Thesameauthorsdiscusstheneed tounderstand thattheTheoryof InnovationSystemsexploreshow innovative agents use the available resources to produce new knowledge in order to add

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    greater economic value to the organization. Therefore, innovation is understood as the cause ofeconomic development. The innovation system can be subdivided into the National InnovationSystem (NIS),which isthebroadest levelwherefirmswithinthesystemaretheprimarydriversofinnovation;theRegionalInnovationSystem(RIS),whichexistsaccordingtothedifferencesbetweeninnovationsystemswithinanation;andtheSectoralInnovationSystem(SIS),whichisexplainedbythe difference in institutional consistency across economic sectorswithin a nation. The questionthen arises of how innovation systems evolve and interact. To help understand the innovationsystemintheBrazilianpublishingindustry,themainactorsandtheircontributionstothehistoryofthepublishingmarketaswellasprospectsforthedevelopmentofthissectorwillbepresentedafterthesectiononresearchmethodology.

    Abetterunderstandingof the innovationsystem requiresdelving into thehistoryof thesector inquestion,especiallyasregardsitstechnologicalbase.Technologicalrevolutionoccurswhenthereisadrasticchangeordevelopmentintheindustrystechnologicalsystem.Thesedevelopmentsentailasetofnewtechnical industriesandprinciplesthatdidnotexistbeforeandenable invigoratingandrenewing all production practices. However, this evolution not only takes approximately two tothreedecades tooccur,but italso facesstrong resistanceon thepartof institutional leadersandstakeholders, thus requiringa long time for theeconomicsector toabsorb thesechanges (PEREZ,2004;KUHN,2011).

    Since this phenomenon affects the entire system and social structure, Perez (2004) defines it as"longwaves".It istheresultofasuccessivecouplingoftwospheresthetechnoeconomicsphereand the socialindustrial sphere, in search of a good alignment between them so as to ensureeconomic prosperity. An indispensable element for that to occur is the development of bothincremental innovation (from a process of organizational improvements upon products andprocesses,whose purpose is to increase the capture of profits) and radical innovation (which isrelated directly to a disruption in the economy). The disruption then occurs and the productgradually consolidates a position in themarket. From then on, there is a period of successiveincremental improvementsrelatedtoproductionefficiency,followingthetrajectoryoftheproductandaccumulating technology,until theproduct finally reachesmaturity,which iswhen it loses itsdynamismandprofitability.Tobetterillustratethisphenomenon,thechartshowingtheevolutionofthetechnologicaltrajectoryispresentedbelow.

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    Figure1:EvolutionofaTechnology,Source:Perez(2004)

    Therefore,strengthening technologicaldevelopment requiresa robust technologicalsystembasedon the development of services such as the required infrastructure, specialized suppliers,distributors, and maintenance services. It seeks "cultural" adaptation to the logic of theinterconnected technologies involved among engineers, sales managers and service staff,consumers,etc.andfavorsthesettingupof institutionalfacilitators,namelyrulesandregulations,specializedtrainingandeducation....

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