Technology Entrepreneurship of Large State-Owned Firms in Emerging Economies

Technology Entrepreneurship of Large State-Owned Firms in Emerging Economies

Jing Ge, Hongxia Sun, Yong Chen
Copyright: © 2020 |Pages: 15
DOI: 10.4018/JGIM.2020100107
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Abstract

Firms in emerging economies face greater resource constraints and higher levels of firm informality than those in developed economies. Particularly, large state-owned firms struggle for survival when encountering intense competition in the changing domestic markets and the global market. Technology entrepreneurship is proved an effective approach for these firms to gain competitive advantages. However, because large firms are less innovative and less adaptable, they often fail in technology entrepreneurship. As such, this article proposes a four-step scheme for large state-owned firms to develop technology entrepreneurship strategies and to implement entrepreneurial activities. A case study of the FAW Group Corporation, a Chinese automobile manufacturer, is conducted to elaborate the proposed scheme.
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Introduction

In today’s knowledge-based economy, entrepreneurship is a driver for innovation and competition (Gorji & Rahimian, 2011). Because entrepreneurship can stimulate positive outcomes for firms and societies (Duane Ireland & Webb, 2007), it is a key driving force in the economic development of a country (Carree &Thurik, 2003; Gupta, MacMillan, & Surie, 2004). On one hand, entrepreneurship can facilitate firms in product, process, and administrative innovation (Covin & Miles, 1999; Schumpeter, 2010). It not only facilitates strategic renewal in firms (Hitt, Nixon, Hoskisson, & Kochhar, 1999), but also creates values for customers and wealth for shareholders (Hitt, Ireland, Camp, & Sexton, 2001). On the other hand, entrepreneurship contributes to societies by creating jobs (Birley, 1986), promoting technological progress and the revitalization of economies (Birley, 1986; Zahra, 1996), and shaping global cultures (Gudeman, 1992; Inglehart & Baker, 2000). Therefore, entrepreneurship is a means of contributing to employment as well as social and political stability (Sarri & Trihopoulou,2005).

Janson and Wrycza (1999) point out that there is a positive association between the use of information technologies and firms’ entrepreneurial activities. Information technologies can be applied for creating customer value, improving organizational effectiveness, and managing business risk (Janson & Wrycza, 1999). Some innovative technologies have brought benefits to businesses, including big data, artificial intelligence, blockchain, and Internet of Things (IoT) (Furtado et al 2017; Hassani et al 2018; Ivanov 2019; Ivanov, Borisova, and Muminova 2019; Li et al 2018; Lu 2018a,2018b, 2019; Oliverio 2018; Viriyasitavat, Anuphaptrirong, Hoonsopon, 2019; Viriyasitavat and Hoonsopon 2019; Xu et al 2014; Xu and Duan 2019). Particularly, as the next generation of communication infrastructure and economic tide after computer and the Internet, IoT is expected to bring a revolution in society by boosting a tremendous amount of innovation, efficiency, and quality (Bi, Xu, & Wang, 2014; He, Lo, Xie, & Lartigue, 2016; Viriyasitavat, Xu, Bi, Hoonsopon, Charoenruk, 2019; Weyrich & Ebert, 2016; Xu 2011; Xu & Viriyasitavat, 2019; Xu, Xu, Li 2018).

Technology entrepreneurship is different from mainstream entrepreneurship because it focuses on new opportunities through innovation in science and engineering (Shane &Venkataraman, 2003; Beckman, Eisenhardt, Kotha, Meyer, & Rajagopalan, 2012). According to Bailetti (2012), technology entrepreneurship is “an investment in a project that assembles and deploys specialized individuals and heterogeneous assets that are intricately related to advances in scientific and technological knowledge for the purpose of creating and capturing value for a firm” (p9). It is an effective approach for growth, differentiation, and competitive advantage at the firm, regional, and national levels (Bailetti, 2012).

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