Technology convergence capability and firm innovation in the manufacturing sector: an approach based on patent network analysis

Abstract

As a consequence of the convergence between manufacturing technology and the foundation technologies of Industry 4.0, it is becoming more important for firms to formulate an innovation strategy for their technological capabilities. In this context, the present study measures firm-level technology convergence (TC) capability using patent network analysis. A firm's TC capabilities are measured using three centrality indices pertaining to a patent network, which is constructed based on the relationship between patents and their international patent classification. For the empirical analysis, panel regression is conducted to observe the effect of TC capabilities on innovation for the top 30 firms in four manufacturing industries. We find that the TC degree positively influences the firms' overall innovation, namely their total number of patents, and negatively influences their convergent innovation, calculated as the ratio between the number of TC patents and the total number of patents, while the effect of TC betweenness is the opposite. These findings imply that while concentrating on similar technologies may promote quick technology application, it could hamper the enhancement of a TC's potential. To promote TC, a firm should thus develop technologies more likely to be involved in TC.

The effect of collaborative innovation on ICT-based technological convergence: A patent-based analysis

“…Previous research on technology convergence has focused primarily on classification and prediction based on technology interdependencies at industry or technology level [14][15][16][17][18]. However, the importance of firm-level analysis has also been emphasized in recent literature that it can provide useful implications for the firm's strategic decision-making to survive in R&D competition [19]. Firms can seek for collaborative innovation with other firms that have different technologies to reduce the time required for innovation and to respond to the market demand [20][21][22][23].…”

The Optimal Diversification Strategy in Pharmaceutical Industry: Balance-centred or Hetero-centred?

“…Another dependent variable is innovation performance measured by firm’s annual number of patents created from its patent pool. Patent has been regarded as an innovation outcome as it represents the inventive outcome of R&D activity (Kim & Kim, 2018; Lee et al, 2019). In order to imply the minimum two years required for patent publication, two years of time lag is added.…”

“…Measuring technological diversification with the IPC may differ depending on the level of the IPC used. In this study, IPC sub-classes are used as they designate an intuitive and representative level of technology (Kim, Jung et al, 2018).…”

“…As they measured innovation performance by the total number of patent applications, their results imply a preferential attachment effect (Barabási & Albert, 1999). In other words, a firm developing similar technologies is more likely to develop a more comprehensive patent application (Kim et al, 2018). In this sense, concentrated diversification is preferred for the creation of valuable patents as it leads to more specialised technological development.…”

Research on the Evolution of Textile Technological Convergence in China

“…Compared to those of developed countries, China's textile industry lacks brand advantage, core technology and independent innovation, all of which are not conducive to its sustainable development. Moreover, with the in-depth integration of new technology systems based on information and internet technologies, product innovation has increasingly become diversified, compounded and intelligent [8]. This requires textile companies to no longer merely rely on traditional development, but also broaden their scope of original knowledge and implement crossfield technology convergence.…”