Volume Seven Number One

ISSN 1474-2748

International Journal of

Technology Management & Sustainable Development
intellect Journals | Media & Culture

The International Journal of Technology Management & Sustainable Development
Volume 7 Number 1
The International Journal of Technology Management & Sustainable Development (IJTM&SD) is a refereed academic journal dedicated to publishing high quality, original and research-based papers addressing issues arising from the relationship between technology and development. It seeks to provide expert and interdisciplinary insight into the technology dimension of international development, and by doing so, aims to advance contemporary knowledge about the empirical and theoretical aspects of technology management and sustainable development from the vantage point of developing countries.

Mohammed Saad
University of the West of England, School of Operations Management, Bristol Business School, Bristol BS16 1QY, UK E-mail: Mohammed.Saad@uwe.ac.uk

Girma Zawdie
David Livingstone Centre for Sustainability (DLCS), University of Strathclyde, Glasgow G4 0NG, UK E-mail: g.zawdie@strath.ac.uk

Editorial Advisory Board
University of Bradford, UK University of London, Imperial College, UK Genève, Switzerland Harvard University, USA Newcastle University, UK University of Sussex, Science Policy Research Unit, UK Andrew Hall UNU-INTECH, Maastricht, Netherlands Paul Hyland The University of Queensland School of Natural and Rural Systems Management, Australia Eric Hyman African Development Foundation, Washington D.C., USA John Kirkland Association of Commonwealth Universities, UK Jean-Michel Larrasquet ESTIA – Technopole Izarbel, France John Mugabe NEPAD Science & Technology Commission, Pretoria, South Africa Lynn Mytelka UNU-INTECH, Maastricht, Netherlands Alejandro Nadal El Colegio de Mexico, Mexico John Rice University of Canberra, Australia Joyce Tait University of Edinburgh, UK Italo Trevisan Universita Degli Studi Di Trento, Italy Judi Wakhungu African Centre for Technology Studies, Kenya David Wield Open University, UK José Manoel Carvalho de Mello Universidade Federal Fluminense, Brazil P. B. Anand John Bessant Ajit S. Bhalla Calestous Juma Henry Etzkowitz Michael Gibbons

Associate Editor
Norman G Clark
African Centre of Technology Studies (ACTS) Nairobi Kenya E-mail: norman18542@yahoo.co.uk

Reviews Editor
James Smith
Centre of African Studies and ESRC Innogen Research Centre, University of Edinburgh, 21 George Square, Edinburgh, Scotland. EH8 9LD, UK. E-mail: james.smith@ed.ac.uk

Editorial Assistant
Frances Jefferies
Quality Assurance Administrator, Bristol Business School, 2C13, University of the West of England, Bristol BS16 1QY, UK Tel: + 44 (0)117 328 5204 E-mail: Frances.Jefferies@uwe.ac.uk ISSN 1474-2748

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Manuscripts and editorial communications:
Dr Mohammed Saad, University of the West of England, School of Operations Management, Bristol Business School, Bristol, BS16 1QY, UK. E-mail: Mohammed.Saad@uwe.ac.uk Dr Girma Zawdie, David Livingstone Centre for Sustainability (DLCS), University of Strathclyde, Glasgow, G4 0NG, UK. E-mail: g.zawdie@strath.ac.uk.

Books for review:
Dr James Smith, Centre of African Studies and ESRC Innogen Research Centre, University of Edinburgh, 21 George Square,Edinburgh, Scotland. EH8 9LD, UK. E-mail:james.smith@ed.ac.uk

International Journal of Technology Management and Sustainable Development Volume 7 Number 1 © 2008 Intellect Ltd Article. English language. doi: 10.1386/ijtm7.1.3/1

Assessing a rural innovation system: Low-input rice in Central China
J. David Reece Devon Development Education Centre Abstract
Following China’s ‘Green Revolution’, public policy now aims to maintain high yields while reducing the amounts of water and agro-chemicals used by agriculture and so to lower costs and minimise environmental damage. This goal is pursued by supporting biotechnology-based research to develop new crops with the required characteristics, but the innovation systems framework suggests that a range of non-research actors are also essential for these efforts to lead to practical changes. This article therefore examines what the new policy direction means for university-based researchers, whether such research is set within an institutional context of the kind necessary for effective innovation, and whether the various actors involved shared the goals of the new policy. It reports that the study area possesses all the elements needed for an effective innovation system; but that the various actors in place lack the agreement on objectives that is required for effective innovation.

Sustainable agriculture research policy biotechnology hybrid rice insect resistance genetic modification public-private partnership university-industry collaboration

In the wake of China’s ‘Green Revolution’, the goals of public policy towards agricultural research have changed. Yields high enough to feed China’s large population have been achieved (IRRI 2005) but only through the use of very high levels of agro-chemical inputs (FAO 2005). Research policy has responded to the high environmental and other costs resulting from this style of agriculture, and rather than pursuing further yield increases, it now aims to find ways to maintain these yields while reducing the amounts of water and agro-chemicals used by agriculture. These goals are mainly being pursued by means of agricultural biotechnology, with substantial investments in applied genomics and genetic modification (Wang, Xue, and Li 2005; Huang, Wang et al. 2001). Will this new policy lead to practical change? There is a general consensus amongst observers of technical change that effective innovation requires contributions from a range of diverse actors and institutions, not just researchers and their organisations (Hall et al. 2001; Sumberg 2005; Spielman 2006). In this case, action is needed from researchers (developing new technologies); from farmers (making use of those new technologies) and also from organisations able to provide the new technologies to
TMSD 7 (1) 3–17 © Intellect Ltd 2008


large numbers of farmers. A useful framework for analysing this kind of situation is offered by the Innovation Systems (IS) approach (Hall and Rasheed 2002), in which research becomes just one element of a wider process of transforming new knowledge into goods and services. Authors using this framework have stressed the importance of varied actors involved in innovation and of the relationships that link these actors and have highlighted the ways in which public policy may modify such relationships. It follows that the new direction in research policy will only have practical results if actors with the appropriate capabilities are present and are willing to take part in the process of innovation. The research on which this article is based therefore began by enquiring how the new direction of research policy was affecting the work of university-based agricultural researchers. It then sought to establish whether the institutional context included actors other than researchers, with the capabilities required to complement research and to transform research results into innovations. Finally, it sought to assess whether such actors shared the goals of the new policy, at least to the extent necessary for them to take part in the related process of innovation. Field research began in three universities (although only two are discussed in this article), all of which had received significant research funding under the policy initiatives in question and so were engaged in developing new crop varieties that could be used in low-input agricultural systems. All three are located in the city of Wuhan, which lies at the heart of an important rice-growing region and has a long tradition of applied research. Semi-structured interviews were conducted with scientists undertaking relevant research in these universities, and in the course of these interviews, they were asked to identify any off-campus organisations that played an important part in the practical application of their work. Through these and other means, a number of key stakeholders were identified, and wherever possible, interviews were also conducted with one of their senior managers. The next section of this article describes relevant work in two of the universities studied, exploring the ways in which researchers in contrasting environments have responded to objectives set by the government and noting that the immediate users and beneficiaries of this work have few opportunities to influence what is done by the researchers. The article then explores the ways in which researchers in these universities are linked to the (intended) users of their work. Universities are not wellplaced to disseminate new seeds and related technical information to large numbers of farmers. This task has traditionally been given to publiclyfunded extension services, but policy-makers in China (and in many other developing countries) have seen the extension service as being ineffective and in need of reform. Privatisation and the discipline of market forces have been widely advocated as a means of improving the performance of extension services. Within China, agricultural extension is the responsibility of the government of each province, and so arrangements vary between different regions. In the province studied, the extension service had in
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1977 been divided into a seed company and a regulator. About 160 companies compete with each other to sell rice seed in this province, with the regulator ensuring that competition is fair as well as disseminating technical information to farmers. The transition to a more sustainable form of agriculture is likely to require complementary actions from these different kinds of actor. However, the evidence presented in this article suggests that the perceptions and priorities of these stakeholders are markedly different from those underlying research policy, and therefore raises serious doubts as to whether the researcher and other stakeholders jointly possess the coherence of objectives required for an innovation system to function.

Applied research in the universities Wuhan University
Wuhan University houses the Key Laboratory of the Ministry of Education for Plant Developmental Biology and Institute of Genetics, College of Life Sciences. Its mission is to undertake fundamental research rather than to apply the results of such research, and this was stressed by interviewees: Professor Yang stated ‘the government also told us to pursue, so many funding to support this fundamental research’, while Professor He stressed that it was ‘really difficult’ for him to do plant breeding because ‘Wuhan University is not an agricultural university . . . what’s important is doing the basic research’. Despite this institutional orientation to basic research, the Key Laboratory has responded to the practical needs of China. We shall consider two research initiatives: the development of a new form of hybrid rice; and the discovery of new genes that enable the rice plant to resist attack by its most serious insect pest. Both of these projects were made possible by the University’s long-standing interest in wild rice and its extensive collection of this kind of germplasm. Hybrid rice The development of hybrid rice enabled China’s farmers to increase yields by up to 20 per cent and so helped to avert the risk of famine. Now, hybrid seed is produced when a female parent is fertilised by pollen from a plant of another line or variety, and so it is vital that the female parent does not produce viable pollen (otherwise it will simply fertilise itself). Such lines are rare, and because their male sterility is produced by abnormalities in the DNA of their cytoplasm they are known as cytoplasmic male-sterile (CMS) lines. The hybrid rice that was first introduced to Chinese agriculture relied on Wild Abortive (WA) CMS lines, but these produced grain of lower quality than conventional high-yielding varieties. A team led by Professor Zhu Yingguo began research on hybrid rice in the 1970s (at the time when it was first cultivated on a large scale) and discovered a new form of CMS in a wild rice line from the University’s collection. This discovery made possible the production of a different kind
Assessing a rural innovation system: Low-input rice in Central China


of rice hybrid, which was named Hong Lian (HL), the Chinese words for Red Lotus. While the HL rice hybrid was initially of purely academic interest (and so an appropriate object of study for a university whose primary mission was the conduct of basic research), in the 1980s the goals of research policy changed, giving more emphasis to rice quality as well as the quantity produced. And HL offered higher grain quality than the more widelyused WA hybrid rice, meaning that farmers could charge higher prices for their harvests. It also offered yields that were 5 per cent higher than those possible using WA hybrid rice (interview with Professors Zhu and Yang). The development of an HL hybrid that could be cultivated on a large scale was therefore financed by the Ministry of Science and Technology (MoST), and this was achieved in 1997 when Honglianyou 6 (Red Lotus number 6) was first produced. This line, which MoST described as resulting from a cross between ‘Hainan Hongmang wild rice and regular hybrid rice’, then underwent extensive testing before the certificate permitting its commercial cultivation was awarded by the Hubei Provincial Agricultural Crop Species Assessment Committee (MoST 2002). Commercial cultivation began in 2001. Initially, the university directly provided seeds to farmers, but did not have the capital and other resources required to produce seeds on a large scale, and was not assisted by the government. Large-scale production only became possible after the university formed a partnership with the private sector to market Red Lotus number 6. This partnership began when the university’s College of Life Sciences formed a college-business committee and held an open day to show off its technologies to prospective business partners. An entrepreneur met Professor Zhu at this open day, and they agreed to form a new company. Ownership of the new company was divided between the university and a group of anonymous investors: even Professor He (interview), who at the time was the Dean of the College of Life Sciences, did not know the source of this capital. The university received a 30 per cent stake in the company in return for the Honglianyou 6 technology, since Chinese law specifies that in such cases the value of the ‘technical investment’ is limited to 30 per cent. The company is run by a professional management team, and the university does not interfere in its development, although some academics serve on its board and provide it with technical consultancy services. With adequate capital and an excellent product, the company developed rapidly, particularly because it was able to use the university’s reputation to promote its product. In return, it provides additional funds for the university (used to support further research, including the development of new products for the company) as well as professional fees for the individual academics who provide it with services. Even as HL CMS rice was being used to develop and commercialise the Red Lotus number 6 hybrid, fundamental research on it continued, now aided by the molecular tools that have become available since the early 1990s. Professor Zhu and his colleagues established that HL male sterility
J. David Reece

resulted from the presence of a specific sequence in the mitochondrial DNA, a sequence unique to HL-sterile cytoplasm that they described as a ‘new chimeric gene’ (p744) and named orfH79 (Yi et al. 2002). Knowledge of this sequence enabled them to develop a range of molecular marker systems (first RAPD, then SSR, now SNP) to predict the presence of HL male sterility. They then used these markers to screen germplasm collections to identify new materials, with other desirable traits, that also possessed HL male sterility and so could be used to breed a new generation of hybrids. The traits that were of greatest interest included stable disease resistance, particularly to Blast. At the same time, increased yield continued to be a priority and so efforts were made to find suitable germplasm exhibiting traits that would make this possible: these included strong stems and root systems (to reduce lodging) as well as enhanced capacity for photosynthesis. New breeding materials identified in this way, together with new molecular tools for breeding (molecular markers), were used to develop the next generation of their product, Red Lotus number 8. The traits that were chosen for this new product reflect the priorities of Professor Zhu and his colleagues, priorities chosen in response to signals from MoST and MoA about the changing needs of Chinese agriculture. This hybrid thus combines high yield with improved quality for the consumer. It reaches maturity about seven days earlier than other rice hybrids, a trait resulting from gamma-ray induced mutation, and it displays some resistance to Blast, although no efforts were made to give it resistance to the Brown PlantHopper, an omission that is surprising in view of the university’s expertise in managing resistance to this pest (see below). Resistance to brown plant-hopper The Brown Plant-Hopper (BPH) is generally regarded as being the most serious insect pest of rice: in China, it affects 13 million hectares of ricelands. It is natural that China’s new research policy, whose objectives include reducing insecticide use, includes support for work that could lead to the development of rice lines resistant to BPH. Professor He’s work on the genetics of BPH resistance has therefore received official support. With this support he succeeded in introgressing two genes for BPH resistance into domesticated rice, mapping their loci within the rice genome, and developing markers for these genes. Professor He was already interested in the introgression of desirable traits from wild relatives of rice when in 1994 he joined Wuhan University, which already held an extensive collection of the germplasm of wild relatives of rice. This collection included accessions of Oryza officinalis, a wild rice species that was known to be highly resistant to BPH. A wide cross had already been made between an accession of O. officinalis collected in China and the cultivar Zhenshan 97B, as the first step in transferring the BPH resistance into cultivated rice.1 A number of BPH-resistant lines were selected from the progeny of this cross, one of which, termed ‘B5’, showed strong resistance to both biotypes 1 and 2 of BPH.
Assessing a rural innovation system: Low-input rice in Central China


No record was kept of the precise identity of the o. officinalis accession used, nor of where it had been collected.


In a joint project between Wuhan University and Huazhong Agricultural University (see below), B5 was crossed with the indica cultivar ‘Minghui 63’ to produce a mapping population of 250 hybrid plants (Huang, He et al. 2001). These plants were exposed to insect attack and the damage sustained by each plant was observed. DNA from highly resistant and from highly susceptible plants was compared, and these results indicated the existence of two BPH resistance genes located on chromosomes 3 and 4, respectively. DNA from each of the 250 hybrid plants was then tested with additional markers from chromosomes 3 and 4. The results of these tests indicated the positions of two loci at which alleles from B5, the resistant parent, significantly reduced the damage caused by insect attack. These two loci acted essentially independently of each other in determining BPH resistance and therefore constitute genes. Moreover, they are distinct from at least nine of the ten BPH resistance genes previously characterised, and so represent a new means of protecting rice from insect damage. Germplasm including these genes, together with the molecular linkage map and markers developed in the course of the project, make it possible for breeders to incorporate them into new rice cultivars by means of markerassisted selection (MAS). Professor He provided this germplasm and associated markers without charge to prospective users throughout China and listed seven institutes that were using it in their breeding. However, none of these institutes had yet developed a cultivable variety incorporating his material, since a number of obstacles remained to be overcome. Perhaps the most serious such obstacle was the need, after crossing resistant material with an elite rice cultivar, to test each generation of seedlings for BPH resistance so that susceptible material can be removed from the breeding programme. In order to do so, it was necessary to maintain a population of virulent insects, and special skills are required to keep an insect population alive through the winter. Again, the BPH only attacks rice under particular weather conditions, and only during one of the four phases of its life-cycle, so skills are required to replicate the relevant weather conditions and ensure that the insects are virulent prior to conducting tests of resistance. Such skills were generally not available at the plant-breeding institutes in question. While Professor He and his colleagues did possess the relevant skills, this institute emphasises basic research and is not an Agricultural University, so that this team was discouraged from engaging in plant-breeding. While the task of plant-breeding using the newly-discovered resistance genes was delegated to institutes for applied research, the team at Wuhan University proceeded with fundamental research on the mechanism underlying BPH resistance in rice. Map-based cloning, they argued, ‘represents the most promising approach to isolating BPH resistance genes and elucidating the molecular mechanism of BPH resistance in rice’ (Yang et al. 2004). To this end, they produced a high-resolution genetic map of the region of chromosome 4 around one of the newly-discovered resistance genes. This large-scale project involved screening 9,472 plants in order to position 21 DNA markers in the target chromosomal region. The authors
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note in passing that the ‘closely-linked molecular markers developed in this study should be very useful in marker-aided breeding programs against BPH’ (p189), although they make it clear that fundamental research is their main objective.

Huazhong Agricultural University (HAU)
Established in 1952 by the merger of a number of agricultural colleges in Central China, this agricultural university is directly administered by the (national) ministry of education. It has well-established expertise in cropbreeding and genetics, together with strengths in plant molecular biology. It therefore provided a suitable setting for the National Key Laboratory of Crop Genetic Improvement, which was founded in 1994 by the State Planning Commission and partly financed by the Ministry of Agriculture. To this was added the National Centre of Plant Gene Research, which was founded in 2005. The work of these two institutes is closely linked, with both being directed by the same person, Professor Zhang Qifa. Professor Zhang (interviewed December 2005) explained that the research agenda of these institutes reflects national policy objectives and so involves finding ways to reduce the environmental impact of agriculture while maintaining output. Ultimately, their work is intended to make possible ‘a revolution which is to reduce the negative impact of the green revolution, so we call it a second green revolution’. This will involve developing technologies that are ‘low input, high output, environmentally friendly’, and so research targets those traits that make such technologies possible: disease and insect resistance, drought tolerance, efficient use of nutrients (nitrogen and phosphorous) to reduce the need for fertiliser as well as quality and yield. To implement this research agenda, HAU has the world’s ‘biggest team in rice research’ apart from the International Rice Research Institute (IRRI), with ‘a structure where people can research, where people can sort of transform, making transitions of technology to breeding, and people to do breeding. So that is why we have such a structure. Actually it is basically the structure of a company, a biotechnology company’. However, HAU lacks the skills in production and business management and the access to capital that a comparable biotechnology company would have. Research, then, is on three levels: basic research, developing technology for improved crops and crop-breeding. ‘One approach is basic research, so that research addresses the issues behind these [needed] traits’. This approach embraces work on the functional genomics of the desired traits, conducted to identify the relevant genes. ‘So with those traits, so that is one part of the research. So that is upper-edge. And the middle-edge is the ways for developing technology for improved crops’. This includes germplasm discovery and involves evaluating rice germplasm from a range of sources to find breeding lines that exhibit the traits that are needed. This work makes possible the discovery of genes for the traits in question, and hence the development of linked molecular markers. Indeed, ‘we have markers
Assessing a rural innovation system: Low-input rice in Central China


and mappings to identify the genes that might be interesting and we also have transformation technology and genes for transformation. So that is a middle range, we have three people, one person working on germplasm, another on molecular markers, a third on transformation technology’. HAU thus searches seed collections for desirable genes and does so mainly by examining their DNA rather than by studying complete plants. This approach has become feasible over the last decade and makes possible the discovery of ‘recessive’ genes. It is forcefully advocated by (Tanksley and McCouch 1997) Tanksley and McCouch (1997: 1063), who assert that ‘there is tremendous genetic potential locked up in seed banks that can be released only by shifting the paradigm from searching for phenotypes to searching for superior genes with the aid of molecular linkage maps’. ‘So there we have breeders. We have a breeder who is breeding, actually field breeding. He has a background in conventional breeding, comes to grasp the technology together with the whole team’. The breeder had already developed high-yielding hybrids that had been commercialised by private-sector seed companies. He described projects that aimed to improve rice quality and to introgress genes for resistance to the diseases blast, rust and bacterial leaf blight (BLB) from wild relatives of rice. A series of such projects involved work with the parents of Shanyou 63, an elite hybrid prized for its high yield and broad adaptability. The team used MAS to introduce a pair of genes for BLB resistance into Minghui 63, its restorer line (Chen et al. 2000). Working jointly with IRRI over the same period, they used genetic modification to introduce a Chinese-created BT gene into Minghui 63 to improve its resistance to insect pests. They then verified that both the transformed Minghui 63 and Shanyou 63 derived from it, showed high resistance to yellow stem borer and to leaf-folder without reduced yield (Tu et al. 2000). These two new forms of Minghui 63 were then crossed, and the progeny examined at both a whole-plant and at a molecular level to select derived lines that combined resistance to insects and to BLB (Jiang et al. 2004). Meanwhile, work proceeded on Zhenshan 97, the other parent of Shanyou 63. An allele from Minghui 63 changed its amylose content and so improved its cooking and eating quality. MAS was then used to introgress two genes for blast resistance. Resistance to the brown plant-hopper (the most serious insect pest of rice) was then incorporated into both parents, starting with germplasm that had previously been discovered at Wuhan University (see above). Wuhan University supplied introgression lines, together with a fine genetic map showing the relevant loci, and so HAU was able to make use of MAS. HAU is now conducting a series of back-crosses to develop stable parental lines and so produce hybrid rice that incorporates this trait. This work is time consuming and also requires considerable skills in breeding and selection, since durable resistance must be combined with desirable agronomic characteristics, and even when the work has been completed, it will be necessary to test the new hybrid’s field performance and obtain a certificate of good quality from the provincial seed bureau before commercial production can begin.
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The development of new varieties and hybrids is constrained by the fact that HAU only has one rice-breeder. Yet, as Professor Zhang explained, ‘in a university you cannot have too many breeders in a single team’. The university is therefore collaborating with the private sector to expand its breeding function and so has set up a seed company using capital provided by its commercial partner.

Links with stakeholders
This section examines the relationships between the research institutes discussed above and their main stakeholders. As we shall see, research objectives reflect the priorities of the government (which pays for the research). Other stakeholders had different objectives but were not in a position to influence the research agenda. We shall consider information about seed companies, farmers, the provincial seed bureau (regulator) and even the investors who capitalised HAU’s seed company, none of whom apparently shared the stated objectives of national policy. Research, both at Wuhan University and at HAU, is almost entirely financed by organs of China’s central government, with some additional support from the Rockefeller Foundation. Provincial government, farmers and the seed industry, the immediate beneficiaries of this work, have provided minimal support. Local seed companies do pay royalties in return for exclusive licenses to market high-yielding hybrids that the university has developed, but the breeder made it clear that the sums involved were too small to cover the costs of development: ‘Very little: maybe five to ten percent of the value to give to the university. How can we get this money to do the research’? Decisions about research objectives reflect the characteristics of the institute where it is performed and the way in which the work is funded. Research at Wuhan University was thus presented as being primarily of academic interest, while its practical value was downplayed. At HAU, however, the research agenda was driven by public policy. The rice breeder there explained that information about what new crop varieties are needed is provided both by seed company managers and by government officials but that he and his colleagues concentrated on achieving the goals stated by the government ‘because every year the government gives some money to us’. A germplasm specialist confirmed that although ‘the information of the demands of the farmer is given by the seed company’, when it came to choosing research objectives ‘we are . . . following the Ministry of Agriculture, maybe they have some announcement for us in some targets that must be focused on’. Seed companies, however, had less opportunity to influence the choice of breeding targets. The breeder described the relationship with seed companies as being distant and beginning only once the research is completed: ‘we will invite several company managers to come to see our variety experiment (yield trials)’. If the company is interested, a mutually acceptable royalty is negotiated.
Assessing a rural innovation system: Low-input rice in Central China



For wheat in northern China, for example, it would be optimal to apply 20 kg/ha of nitrogenous fertiliser at 160 days, but actual application rates are 150 kg/ha (Chen et al. 2006). And for rice, Peng et al (2006) conducted experiments in farmers’ fields in four major rice-growing provinces in China and found that while farmers were applying 180-240 kg/ha of nitrogenous fertiliser, maximum yield was achieved mostly at the significantly lower level of 60-120 kg/ha. And fertiliser (over) use varies between regions, with inadequate amounts applied to 40 per cent of agricultural land and excessive amounts applied to the remaining 60 per cent (Zhang 2004). Interestingly, these payments were being made to individual breeders working for a number of universities (including University B), and amounted to annual amounts of US$20,000 to each breeder during the development phase, in addition to royalties on sales of successful products. Field trials of genetically modified organisms must be licensed by the Biosafety Office in the Ministry of Agriculture. Decisions to permit commercialisation should be taken by an Inter-Ministerial Committee with representatives from the Ministry of Agriculture, the State



The research agenda at HAU, with its ecological focus, thus reflects the concerns of the government rather than those of other stakeholders. There is little or no evidence that these concerns are shared by farmers or the seed industry. The widespread over-use of agro-chemicals suggests that there is very little farmers demand for new crop varieties that would require lower levels of inputs than at present.2 The university’s germplasm specialist also doubted whether there would be much farmer interest in the new varieties that he was working to develop: ‘but for the farmer, maybe they have a low thinking, so they just want to have a high yield, and maybe have a good resistance to the disease . . . is OK’. Similarly, the main interest of the seed industry seemed to be in traits such as high yield, high rates of photosynthesis and rapid growth to maturity. A leading seed company (formerly part of the provincial extension service) was paying substantial sums of money for the development of new rice hybrids with characteristics such as these.3 The company’s general manager, who is also a director of the China Seed Trade Association and so expresses views that are likely to be widely held within the industry, thus stated in interview that all farmers needed high-yielding hybrid rice, even those with poor land. ‘You’re a farmer, . . . you have to make your soil more nutritious for plants, right, so the farmer has to improve the quality of the soil to be valuable . . . to be farmed. If you just depend on the natural soil without any improvements, of course, the yield will be very, very low’. He is critical of the advocates of low-input agriculture: ‘ecosystem preservation is a kind of fashionable term [but] that can only work in America or European countries. They have less population [pressure]’. Although their priorities differ from those of HAU, both farmers and the seed industry appear to be very interested in the BT rice (genetically modified) that the former has developed. This rice has passed a range of laboratory and field trials, but permission to commercialise it has not yet been granted.4 Late in 2004, however, Newsweek magazine claimed that a ‘local’ company had got hold of some of this seed and begun selling it, so that at that time it was being grown on more than 100 ha (Simons 2004).5 This disclosure prompted an investigation by the campaigning group Greenpeace, which later claimed that 950–1,200 tons of genetically modified rice entered the food chain in 2004 and that ‘up to’ 29 tons of genetically modified rice seed would be sold in Hubei in 2005 (Greenpeace 2006). While these estimates may well have been inflated for political effect, they do serve to indicate that a substantial market would exist for this seed if its commercialisation were permitted. And it did seem that commercialisation was about to be permitted. Persistent reports indicated that the December 2004 meeting of the Biosafety Committee would recommend or had already recommended granting permission (Lei 2004; Robertson 2005), although the proceedings of that meeting have not officially been disclosed (Keeley 2006). These developments created a climate captured by Chen Zhang Liang, president of China Agricultural University, who reportedly promised the private sector high returns on investment in GM rice (China Business Weekly 2005).
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The decision to permit the commercial cultivation of genetically engineered rice can only be taken at the very highest political level (Keeley 2006). However, demand for the other environmentally-friendly products of HAU’s research could be created by policy action at a local level, since the Provincial Seed Bureau is well placed to change the priorities of farmers and of seed companies. This agency is responsible for regulating the seed market and disseminating practical information to farmers. Rice seed may only be offered for sale once the Bureau has tested it and issued a certificate that it is of satisfactory quality. Furthermore, the Bureau advises farmers which (certified) seeds are ‘best’, and how they should be grown. However, the criteria that it uses when deciding whether to grant a certificate do not relate to the ecological impact of cultivating the variety in question but rather concern the quality of the seed (moisture content; rate of germination; accuracy of labelling) and the yields that it provides for the farmer. Similar criteria inform the selection of the ‘best’ varieties for promotion to farmers throughout the province, while little or no consideration is given to the environmental concerns of the central government. Faced with this apparent lack of interest in practical application of its research results, as well as the expectation that a large and profitable market for its genetically engineered rice was about to open, HAU responded by forming its own seed company at the end of 2004. This initiative was informed by the vision of a seed company unlike any then existing in China, of a Chinese Monsanto. Implementing such a grandiose vision required significant finance, and so HAU turned to the private sector for the necessary capital. Since China’s seed companies (like seed companies in most of the world) are generally poorly capitalised, the university had to look for partners operating in other sectors and so with limited understanding of agriculture. The relationships that resulted proved problematic, mainly as a result of the gulf between the two sides of the partnership. In the first year of the company’s operation, two successive partnerships collapsed and a third was formed.6 Describing these relationships, which Professor Zhang termed ‘a marriage between science and capital’, he explained that ‘we have different ways, different views of development and different interests’. The commercial partners did not share the university’s knowledge or its vision for the future of the enterprise. As a result of this difference, ‘it’s very difficult to reach a common understanding, although we talk and then it seems we have common understanding, but in reality, when it comes into practice, it seems we don’t have common understanding’. In particular, each of the commercial partners wanted an unrealistically quick return on its investment: ‘they don’t have the patience to wait several years to get the seed; they want the money before they put down any money’. Financial returns were far less important to the university, since its work was supported by the government. This meant that its staff would not lose anything if the seed company failed to make a profit, although ‘if the capital makes money, then they may get some money for
Assessing a rural innovation system: Low-input rice in Central China

Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Commerce, the Ministry of Health, the General Administration of Quality Supervision, Inspection and Quarantine, and the State Environmental Protection Administration (Keeley 2006). 5 The article named Professor Zhang as the source of this information, although he has made it clear that he was misquoted. The first of these failed partnerships had been with a company selling ‘health’ drinks, the second with a real estate company.



themselves’. The university’s priority was different: ‘I’m only interested in seeing what we have been doing be useful to agriculture’. Unfortunately, this concern was apparently not shared by its commercial partners.

This article has confirmed that the universities studied were undertaking research that was consistent with China’s new policy for agricultural innovation, although the goals of this policy were perhaps at variance with the ‘mission’ of one of the universities, which was defined in terms of a commitment to fundamental research. More broadly, it examined other actors that play a part in the process of agricultural innovation and so assessed whether the province studied possesses an innovation system capable of implementing the new policy. Two points are immediately apparent: the province studied possesses all the elements needed for an effective innovation system; but the various actors in place lack the agreement on objectives that is required for effective innovation. With regard to the first point, we note the presence of publicly-funded universities performing applicable research and enjoying commercial relationships with seed companies and venture capitalists. An effective regulatory regime is in place, with defined standards for seed quality and characteristics being rigorously enforced. However, the division of labour that is implicit in the differing missions of these actors is somewhat puzzling. As we saw, Wuhan University is supposed to undertake ‘basic’ research; HAU is supposed to apply the results of such research and develop new crops, which can then be mass-produced and marketed by the seed industry. However, the example of BPH resistance showed that the skills required to undertake ‘basic’ research (in this case the ability to maintain a viable insect population) were also essential for breeding crops with this trait, so that such plantbreeding might have been performed more effectively at Wuhan University than in other institutes. Equally, the ‘applied’ work on a new form of hybrid rice led directly to fundamental research on the molecular basis of HL male sterility, which in turn provided tools to facilitate the development of new rice hybrids. Turning to the work of HAU, the projects discussed involve genetic modification and so commercialisation of the crops that they are developing is not at present permitted. In the meantime, their main impact has been the large number of publications in high impact factor journals that they have produced, a measure that is usually more appropriate for assessing ‘basic’ scientific research. These experiences suggest that ‘basic’ and ‘applied’ research are so closely related that attempts to separate them at an institutional level are unlikely to prove helpful. The division between research (in universities) and industry could also prove problematic, since it limits the ability of industry to recognise new technological opportunities to respond to market demands. This weakness was a feature of each of the three models of university-industry collaboration that were encountered. Wuhan University had first developed and commercialised a new product, and then formed a company around it.
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The company remains entirely dependent on the university for its new product development, and so is not in a position to use customer (farmer) feedback to inform the characteristics of new products. University researchers said that it was a valuable source of finance for further research but not of information about the traits that should be incorporated into future products. Such technological dependence of the company upon the university was also a feature of HAU, which not only defines the products to be offered by its seed company but even (unlike Wuhan University) manages its company’s production and marketing activities. This arrangement contrasts with the practice of the ‘leading’ seed company, which itself decides how to respond to its customers’ requirements and pays for the development of new crops with the required traits. Virtually all the research that it requires is contracted out to university researchers, with its own in-house breeders concentrating on near-routine activities (described in interview as ‘production of parental lines’) and not undertaking the applied research activities that companies in other contexts would perform in-house. Working in this way may limit the research that the company commissions, since it is unlikely to be aware of relevant scientific developments and so may be slow to realise that new opportunities exist for research to find solutions to the problems faced by its customers. HAU continues to rely on venture capital to finance the development of its company. It is remarkable that in the space of a year three successive companies were willing to invest in this venture: the new company did not (yet) have any distinctive new products; its strategic objectives were not a response to market demand and not formed by commercial considerations; and the seed sector provides neither the rate nor the rapidity of return on investment that these companies expected. The willingness of these companies to invest may perhaps be understood as recognition of the scientific prowess of HAU, together with a general faith in technology and a determination to exploit the new opportunities expected to arise from the commercialisation of GM rice. More generally, the relationships between universities and seed companies are ambiguous and require further research. It is curious that while the royalties that seed companies pay to universities at an institutional level are apparently too small to influence their research agenda, the payments made to individual breeders working for universities seem to be sufficient for the breeders to develop varieties that meet the companies’ needs. It is not clear how the breeders’ time and other research resources are divided between these two very different research agendas. With regard to the second point, it is clear that the environmental agenda of the national government and the universities is not shared by seed companies, farmers, or even by the seed bureau (regulator). The position of the latter is at first sight surprising, since the seed bureau is also a public agency and so could be expected to implement public policy. However, the seed bureau is an organ of provincial government and so is not linked to the ministries of the national government. In fact, the powers of the seed
Assessing a rural innovation system: Low-input rice in Central China


bureau could enable it to play a decisive role in reducing the environmental impact of agriculture, since it could refuse to certify seeds that required above-average levels of agro-chemicals (and so prevent their sale), promote seeds that performed well with low levels of inputs and so give a commercial advantage to the suppliers of such seeds, and disseminate information to farmers about the feasibility and benefits of low-input agriculture. Actions of this kind would be likely to create demand for the kinds of technologies that the national government wishes to be used. Government policy, however, has acted only to increase the supply of environment-friendly crop varieties and has not included measures to stimulate demand for such technologies. Since these technologies are being developed for the sake of the environment rather than to meet user needs, demand for them may not develop once they are available to users. Indeed, there is no evidence that such demand exists, and so public policy measures to stimulate demand are essential if these technologies are ever to be put to practical use. Acknowledgements
This research was part of the work of the ESRC Genomics Network. I would like to thank my Chinese hosts for their gracious hospitality and my informants and interviewees for giving away their time so generously. I am especially grateful to Professor Zhang Qifa for his considered and thought-provoking comments on an earlier version of this article and to Gao Lili for help and support throughout the research process. All responsibility for the content of this article must rest with the author.

Chen, S., Lin, X.H., Xu, C.G. and Zhang Q. (2000), ‘Improvement of Bacterial Blight Resistance of ‘Minghui 63’, an Elite Restorer Line of Hybrid Rice, by Molecular Marker-Assisted Selection’, Crop Science 40, pp. 239–244. Chen, X., Zhang, F., Romheld, V., Horlacher, D., Schulz, R., Boning-Zilkens, M., Wang, P. and Claupein, W. (2006), ‘Synchronizing N Supply from Soil and Fertilizer and N Demand of Winter Wheat by an Improved N-Min Method’, Nutrient Cycling in Agroecosystems 74: 2, pp. 91–98. China Business Weekly, staff (2005), ‘GM Rice May Soon be Commercialized’, China Daily. FAO (2005), Statistical Yearbook 2004, Vol. 2, Rome: FAO. Greenpeace (2006), ‘Illegal GE rice contamination spreads to major Chinese city 2005’, http://www.greenpeace.org/international/footer/search?q=Hubei. Accessed 15 September 2006. Hall, A., Bockett, G., Taylor, S., Sivamohan, M.V.K. and Clark, N. (2001), ‘Why Research Partnerships Really Matter: Innovation Theory, Institutional Arrangements and Implications for Developing New Technology for the Poor’. World Development 29: 5, pp. 783–797. Hall, A. and Rasheed, S.V. (2002), ‘Application of the innovation systems framework in North-South research’, International Journal of Technology Management and Sustainable Development 3: 2, pp. 182–195. Huang, J., Wang, Q., Zhang, Y. and Zepeda, J.F. (2001), ‘Agricultural Biotechnology Research Indicators: China’, in Working Paper, Beijing: Center for Chinese Agricultural Policy, Chinese Academy of Sciences.
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Huang, Z., He, G., Shu, L., Li, X. and Zhang, Q. (2001), ‘Identification and Mapping of Two Brown Planthopper Resistance Genes in Rice’, Theoretical and Applied Genetics 102, pp. 929–934. IRRI (International Rice Research Institute) (2007), ‘World Rice Statistics IRRI 2005’, http://www.irri.cgiar.org/science/ricestat/index.asp. Accessed 30 January 2007. Jiang, G.H., Xu, C.G., Tu, J.M., Li, X.H., He, Y.Q. and Zhang, Q.F. (2004), ‘Pyramiding of Insect- and Disease-Resistance Genes into an Elite Indica, Cytoplasm Male Sterile Restorer Line of Rice, ‘Minghui 63’’’, Plant Breeding 123: 2, pp. 112–116. Keeley, J. (2006), ‘Balancing technological innovation and environmental regulation: An analysis of Chinese agricultural biotechnology governance’, Environmental Politics 15: 2, pp. 293–309. Lei, X. (2004), ‘China Could be First Nation to Approve Sale of GM Rice’, Science 306: 5701, pp. 1458–1459. MoST (Ministry of Science and Technology of the People’s Republic of China) (2002), ‘China’s Honglian Hybrid Rice’, China Science and Technology Newsletter, 310. Robertson, B. (2006), ‘GM Crops Catch China’s Fancy’, Aljazeera, 20 May 2005, http://english.aljazeera.net/NR/exeres/81A2FD4E-D8BF-411C-BD7324CFF50B76B9.htm. Accessed 25 September 2006. Simons, C. (2004), ‘Of Rice and Men’, Newsweek. Spielman, D.J. (2006), ‘ Critique of Innovation Systems Perspectives on Agricultural A Research in Developing Countries’, Innovation Strategy Today 2: 1, pp. 41–54. Sumberg, J. (2005), ‘Systems of Innovation Theory and the Changing Architecture of Agricultural Research in Africa’, Food Policy 30: 1, pp. 21–41. Tanksley, S.D. and McCouch, S.R. (1997), ‘Seed Banks and Molecular Maps: Unlocking Genetic Potential from the Wild’, Science 277: 5329, pp. 1063–1066. Tu, J.M., Zhang, G.A., Datta, K., Xu, C.G., He, Y.Q., Zhang, Q.F., Khush, G.S. and Datta, S.K. (2000), ‘Field Performance of Transgenic Elite Commercial Hybrid Rice Expressing Bacillus thuringiensis Delta-Endotoxin’, Nature Biotechnology 18: 10, pp. 1101–1104. Wang, Y., Xue, Y. and Li, J. (2005), ‘Towards Molecular Breeding and Improvement of Rice in China’, Trends in Plant Science 10: 12, pp. 610–614. Yang, H., You, A., Yang, Z., Zhang, F., He, R., Zhu, L. and He, G. (2004), ‘HighResolution Genetic Mapping at the Bph15 Locus for Brown Planthopper Resistance in Rice (Oryza sativa L.)’, Theoretical and Applied Genetics 110, pp. 182–191. Yi, P., Wang, L., Sun, Q. and Zhu, Y. (2002), ‘Discovery of Mitochondrial ChimericGene Associated with Cytoplasmic Male Sterility of HL-Rice’, Chinese Science Bulletin 47: 9, pp. 744–747. Zhang, F. (2004), In CCAP Workshop on reform of China’s Agricultural Extension System. Beijing, China.

Suggested citation
Reece, D. (2008), ‘Assessing a rural innovation system: Low-input rice in Central China’, International Journal of Technology Management and Sustainable Development 7: 1, pp. 3–17, doi: 10.1386/ijtm.7.1.3/1

Contributor details
Dr. David Reece is a Trustee of Devon’s Development Education Centre. Contact: The Global Centre, 17 St David’s Hill, Exeter, Devon, EX4 3RG, UK. E-mail: faithful_frodo@yahoo.co.uk
Assessing a rural innovation system: Low-input rice in Central China


International Journal of Technology Management and Sustainable Development Volume 7 Number 1 © 2008 Intellect Ltd Article. English language. doi: 10.1386/ijtm7.1.19/1

Determinants of the adoption of technological innovations by logistics service providers in China
Chieh-Yu Lin Chang Jung Christian University Abstract
The growth of China’s economy hinges to a large extent on the ability of the logistics industry to operate more efficiently and effectively in the global supply chain system. China’s logistics service providers should pay attention to adopt more efficient logistics technologies to provide better services for their customers. This article studies the factors influencing the adoption of technological innovations by logistics service providers in China and investigates the influences of adopting new technologies on supply chain performance. A questionnaire survey is conducted to study the adoption of technological innovations by China’s logistics industry. Technological innovations are classified into data acquisition technologies, information technologies, warehousing technologies, and transportation technologies. The influencing factors include technological, organizational, and environmental characteristics. We find that the adoption of technological innovations is significantly influenced by technological, organizational and environmental characteristics and that adopting new technologies will increase supply chain performance for the logistics industry in China.

technological innovation technology adoption supply chain performance logistics service providers China

More than two decades of economic reform and transition to market economy has brought China unprecedented economic growth. With the fast growth in China’s economy and China’s accession to World Trade Organization (WTO), the demand for logistics services has been growing significantly in China, and the logistics industry in China is set to take off. The total logistics value has grown by 29.9 per cent year-on-year (China Distribution and Trading, 2005). New modern facilities such as logistics parks, distribution centers and warehouses are being built at a record setting pace. Many logistics companies have invested extensively in information and logistics technologies. As China continues to develop into a global manufacturing factory, its logistics industry will play an important role in the global supply chain. One key to effective supply chain is to make the logistics function more efficiently (Bowersox, Closs and Cooper, 2002). The globalization of supply chain has prompted many firms to develop
TMSD 7 (1) 19–38 © Intellect Ltd 2008


logistics as a part of their corporate strategy (McGinnis and Kohn, 2002). To deliver products quickly to customers, many companies seek to outsource their logistics activities to logistics service providers. This reflects the trend of using logistics service providers to satisfy the increasing need for logistics services (Lieb and Miller, 2002). To fully satisfy the diversifying requirements of customers, many logistics service providers improve their service efficiency by continuous adoption of information or automation technologies (Mason-Jones and Towill, 1999; Sauvage, 2003). Many studies have found that innovation is the most important tool for enterprises to keep their competitive advantage (Kimberly and Evanisko, 1981; Damanpour and Evan, 1984). However, most research about innovation focused on manufacturing industries, though increasing attention has been paid to innovation in service industries recently (Gallouj, 2002; Howells and Tether, 2004; Miles, 2004). The survival of an enterprise in the age of knowledge-based economy depends on how to improve their organizational innovation capability. Technological innovation is the key variable and the means of differentiation between logistics service providers (Sauvage, 2003). Nixon (2001) suggests that logistics service providers should employ new information technologies to raise their service capability in the e-commerce age. Speakman (2002) proposes that logistics companies could increase their performance by employing new technologies. Chapman, Soosay and Kandampully (2003) suggest that the logistics industry should pay more attention to innovation in logistics service, and the innovation in logistics can be implemented through technology, knowledge and relationship networks. Adopting new technologies might enable logistics service providers to enhance their service abilities. Based on the above illustrations, it can be concluded that technological innovation is important for China’s logistics service providers. Most operations in China’s logistics service providers are labour intensive and rely on the input of a large number of service workers. Nowadays, in the age of knowledge-based economy, how China’s logistics service providers can be transformed from labour-intensiveness into knowledge-intensiveness and how they can make full use of the market intelligence to create knowledge and further take advantage of the knowledge to innovate products, services as well as strategies to promote the competence of organizations, are the topics worth taking into deep consideration. Continuous technological advancement can assist China’s logistics industry to revolutionise the way they operate and conduct their business. When logistics service providers draw up strategies for adopting technological innovations, they should know what factors will influence the adoption of technological innovations. However, there is still a lack of empirical research on technological innovation for China’s logistics industry. Therefore, the main purpose of this article is to explore the determinants of adopting technological innovations by the logistics industry in China. The next section presents a summary of innovation in logistics technologies and section three introduces the theoretical foundations of the
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determinants of innovation. Section four gives a description of the research methodology, while section five focuses on the analysis of the results and the discussion of the findings. The final section gives conclusions and research’s implications.

Innovation in logistics technologies Definition of innovation
Porter (1990) said that ‘companies achieve competitive advantage through acts of innovation. They approach innovation in its broadest sense, including both new technologies and new ways of doing things’. What is innovation? One of the problems in managing innovation is variation in what people understand by the term. Drucker (1985) defines innovation as the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or service. It is capable of being presented as a discipline, capable of being learned, capable of being practiced. Betz (1997) assumes that innovation is to introduce a new or improved product, process, or service into the marketplace. Tidd, Bessant and Pavitt (1997) define innovation as ‘a process of turning opportunity into new ideas and putting these into widely used practice’. Afuah (1998) proposes that innovation is the use of new technical and administrative knowledge to offer a new product or service to customers. The product or service is new in that its cost is lower, its attributes are improved, it now has attributes it never had before, or it never existed in that market before. Therefore, we can conclude that innovation relates to any practices that are new to organizations, including equipment, products, services, processes, policies and projects (Kimberly and Evanisko, 1981; Damanpour, 1991). The new product or service itself is called an innovation, reflecting the fact that it is the creation of new technical or administrative knowledge, or it is new to customers. The new technical or administrative knowledge that is used to offer the new product or service can underpin any of the chain of activities that the firm must perform in order to offer the new product. It can be in the design of the product or service or in the way the product or service is advertised. Past research has argued that distinguishing types of innovation is necessary for understanding organizations’ adoption behavior and identifying the determinants of innovation in them (Knight, 1967; Rowe and Boise, 1974; Downs and Mohr, 1976). Among numerous typologies of innovation advanced in the relevant literature, the pair of types of innovation, administrative and technological (or technical) innovations, is commonly used (Damanpour, 1991). Technological innovation pertains to products, services and production process technology; it is related to basic activities and can concern either product or process (Knight, 1967; Damanpour and Evan, 1984). Administrative innovation involves organizational structure and administrative processes; it is indirectly related to the basic work activities of an organization and is more directly related to
Determinants of the adoption of technological innovations by logistics . . .


its management (Knight, 1967; Kimberly and Evanisko, 1981; Damanpour and Evan, 1984). This article will focus on the technological innovations in the logistics industry.

Innovation in logistics technologies
Logistics is the supply of service or product to the demander or demanding unit at the right time, in the right quantity and quality, at the right cost and at the right place. The Council of Logistics Management (currently, Council of Supply Chain Management) in USA defines ‘logistics management’ as ‘a kind of programming, implementing and controlling process dealing with the flow from the primitive occurring point to the final consumption point and the storage efficiency as well as the cost benefit of raw material, half-finished product, finished product and related information, for the purpose of satisfying the customer’s requirement’ (Bowersox and Closs, 1996). Logistics has become an important source of competitive advantage (Day, 1994; Olavarrieta and Ellinger, 1997). Due to the emergence of the concept of supply chain management, logistics management has attracted more and more attention. Logistics management has become a strategic factor that provides a unique competitive advantage (Christopher, 1993). A supply chain includes all the interactions between suppliers, manufactures, distributors and customers. The chain includes transportation, scheduling information, cash and credit transfers, as well as ideas, designs and material transfers. Logistics service providers play an important role in the supply chain. One of the keys to effective supply chain management is to make the logistics function more efficiently in the supply chain (Bowersox et al., 2002). A logistics service provider is a provider of logistics services that performs all or part of a client company’s logistics function (Coyle, Bardi and Langley Jr, 1996; Delfmann, Albers and Gehring, 2002). To fully satisfy the increasing requirements of customers for one-stop services, many logistics service providers have taken initiatives to broaden the scope of their services (Murphy and Daley, 2001). In addition to transportation and warehousing functions, logistics service providers can also provide other services such as materials management services, informationrelated services and value-added services (Berglund et al., 1999). Recently, many logistics service providers try to improve their operation efficiency by continuous implementation of information or automation technologies according to their business characteristics (Mason-Jones and Towill, 1999; Sauvage, 2003). The operation processes in logistics service providers, such as distribution centers, have their own features and know-how knowledge. It is important for logistics service providers, in this age of knowledge-based economy, to accumulate and use their skills and knowledge efficiently and consistently. In order to keep the competitive advantage, logistics companies must make use of knowledge more efficiently to make them become innovation-based logistics service providers (Chapman et al., 2003).
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Technology has traditionally been viewed as the key to productivity in manufacturing; however, technology has assumed greater significance in services recently (Bitner, Brown and Meuter, 2000; Howells and Tether, 2004). Technology enables service firms to improve service efficiency and effectiveness. Based on the above discussion about innovation, we think that innovation is a process of turning opportunity into new ideas and of putting these into widely used practices. According to the logistics activities, technological innovations in the logistics industry can be classified into four categories: data acquisition technologies, information technologies, warehousing technologies and transportation technologies. Data acquisition technologies Logistics service providers usually deal with a large amount of goods and data. Data collection and exchange are critical for logistics information management and control. Good quality data acquisition can help logistics service providers deliver customers’ goods more accurately and efficiently. The bar code system and radio frequency identification system (RFID) are acquisition technologies that can facilitate logistics data collection and exchange. Information technologies Information technologies are the devices or infrastructures to make communications of business information among several organizations more efficiently. Many logistics managers see the information technology as a major source of improved productivity and competitiveness. Information technologies may increase organizational productivity, flexibility and competitiveness as well as stimulate the development of inter-organizational networks. The information technologies that are commonly used in logistics industry include electronic data interchange (EDI), the Internet, value added network (VAN), point of sales (POS), electronic ordering system (EOS), logistics information system, computer telephony integration and enterprise information portals. Electronic data interchange is identified as inter-company computer-to-computer exchange of business documents in standard formats. Recently, extensible markup language (XML) provides a more efficient way for data exchange. Warehousing technologies A warehouse is typically viewed as a place to store inventory. However, in many logistical systems, the role of the warehouse is more properly viewed as a switching facility as contrasted to a storage facility. Warehousing plays an important role in a logistical system. The design of a warehouse management system should address physical facility characteristics and product movement. The warehousing technologies that are commonly used in logistics industry include automated storage and retrieval system (AS/RS), automatic sorting system, computer-aided picking system and thermostat warehouse. The automated storage and retrieval system is a
Determinants of the adoption of technological innovations by logistics . . .


means to high density, hands free buffering of materials in distribution and manufacturing environments and can offer a quick and efficient way to search and move storages from a warehouse.

Transportation technologies
Transportation is one of the most visible elements of logistics operations. Transportation functionality provides the major function of product movement. The major objective of a transportation management system is to move product from an origin location to a prescribed destination while minimizing costs and damage expenses. The movement, at the same time, must take place in a manner that meets customer demands regarding delivery performance and shipment information availability. The transportation technologies that are commonly used in logistics industry include transportation information system, global positioning system (GPS), geographical information system (GIS), radio-frequency communication system and transportation data recorder. The transportation information system and geographical information system can help logistics managers planning, managing and controlling transportation issues. The global positioning system and radio-frequency communication system can track and guide drivers during the transportation of products.

Technological innovations and supply chain performance
Innovation can reinforce competitive advantage for companies in markets where customer preferences change rapidly, where differentiation is limited, and where competition is intense (McAfee, 2002). A substantial body of research links innovation and performance for service industries (de Brentani and Cooper, 1993; Irwin, Hoffman and Geiger, 1998; Johne and Storey, 1998; Lynn et al., 1999; Gray, Matear and Matheson, 2000, Harvey, 2000; Li and Atuahene-Gima, 2001). In the logistics literature, it has been shown that logistics services capabilities, such as warehousing and freight bill payment, are drivers for superior performance (Murphy and Poist, 2000). Customer-focused capabilities including responsiveness and flexibility can enhance performance (Zhao, Droge and Stank, 2001). Lai (2004) suggests that a LSP with a better service capability attain a higher service performance. Based on the above discussions, the following hypothesis is proposed: Hypothesis H1: Logistics service providers, who are willing to adopt technological innovations, are more attain better supply chain performance than those who do not. Several measures in the evaluation of supply chain performance have been identified (Beamon, 1999; Brewer and Speh, 2000; Chan and Qi, 2003; Gunasekaran, Patel and McGaughey, 2004; Rafele, 2004). Neely, Gregory and Platts (1995) define quality, time, flexibility and cost as primary categories of performance measurements. Based on the available literature, supply chain performance measurements in this study consist of financial indices including profit margin, revenue growth, cost per order, cost per unit and return on assets and non-financial indices including
Chieh-Yu Lin

order fill rates, order cycle time, delivery time, customer requirements met, number of faults and flexibility.

Determinants of innovation
There is a large body of research done on the determinants of innovation (Kimberly and Evanisko, 1981; Amabile, 1988; Tornatzky and Fleischer, 1990; Damanpour, 1991; Wolfe, 1994; Tidd et al, 1997). Kimberly and Evanisko (1981) suggest that the individual factor, organizational factor and contextual factor would influence the adoption by hospitals of technological innovation. Variables affecting technology adoption are classified into individual, task-related, innovation-related, organizational and environmental characteristics. Tornatzky and Fleischer (1990) suggest that the adoption and implementation of technological innovation would be affected by the technological context, organizational context and the external environmental context. Patterson, Grimm and Corsi (2003) indicate that technology adoption is affected by organizational size, structure and performance, supply chain strategy, transaction climate, supply chain member pressure and environmental uncertainty. Scupola (2003) use technological, organizational and environmental characteristics to explain the adoption of Internet commerce. This article will investigate the influence of technological, organizational and environmental factors on the adoption of technological innovations by China’s logistics service providers. Although the individual factor might affect adopting technological innovations by logistics service providers, this article will not investigate each individual’s influence on the company’s innovation.

Technological characteristics
Technologies can be viewed as one kind of knowledge (Grant, 1996). Tsai and Ghoshal (1998) found that an organization will have higher innovative capability when knowledge can be distributed easily within the organization. The transferability of knowledge or technology will influence technological innovation; technological innovation can be advanced when the technology has higher transferability. The transferability of technology is determined by the explicitness of technology. It is more easy to transfer or share technological knowledge with higher explicitness (Grant, 1996; Teece, 1996). In addition to the explicitness of the technology, how the technology fits with the technologies that a firm already possesses will also be another important technological characteristic (Tornatzky and Fleischer, 1990; Chau and Tam, 1997). Teece (1996) found that technological innovation usually follows a technological paradigm. The cumulative nature of technologies will influence the innovation in technologies. Grant (1996) and Simonin (1999) also concluded that an organization with rich experiences in the application or adoption of related technologies will have higher ability in technological innovation. Therefore, we would expect that explicitness and accumulation of logistics technology might influence technological innovation.
Determinants of the adoption of technological innovations by logistics . . .


Hypothesis H2a: The more explicit the technology, the more the likelihood that China’s logistics service providers will adopt innovation in logistics technology. Hypothesis H2b: The more the accumulation of technology, the more likely that China’s logistics service providers will adopt innovation in logistics technology.

Organizational characteristics
Much of the research about organizational behavior has argued that certain features of organizations themselves, including structures, climates, and cultures of organizations, will influence the adoption of innovation (Kimberly and Evanisko, 1981; Tornatzky and Fleischer, 1990; Russell and Hoag, 2004). Amabile (1988) finds that management skills, organizational encouragement for innovation and support of innovation resources would help the improvement of organizational innovation. Tornatzky and Fleischer (1990) suggest that informal linkages and communication among employees, the quality of human resources, leadership behavior of top management and the amount of internal slack resources would significantly influence the adoption of technological innovations. A firm with higher quality of human resources, such as better education or training, will have higher ability in technological innovation. Therefore, we would expect that organizational encouragement and quality of human resources might influence technological innovation. Hypothesis H3a: The more the organizational encouragement, the more the likelihood that China’s logistics service providers will adopt innovation in logistics technology. Hypothesis H3b: The higher the quality of human resources, the more the likelihood that China’s logistics service providers will adopt innovation in logistics technology.

Environmental characteristics
In addition to technological and organizational characteristics, the external environment in which a firm conducts its business will also influence the innovative capability (King and Anderson, 1995). Miles and Snow (1978) found that organizations would pay more attention on innovation when they face environments that are vulnerable to instability and chaos. Kimberly and Evanisko (1981) concluded that environmental complexity and uncertainty would influence organizational innovation in the case of hospitals. Damanpour (1991) found that environments with high uncertainties would have a positive influence on the relationship between organizational structures and organizational innovation. Zhu and Weyant (2003) suggest that demand uncertainty tends to increase a firm’s incentive to adopt new technologies. Provision of government support is another important environmental aspect that bears on technological innovation. The government can both encourage and discourage the adoption of innovation in the administration of regulatory mechanisms
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(Tornatzky and Fleischer, 1990; Scupola, 2003). The government can provide financial incentives, pilot projects and tax breaks to stimulate technological innovation for logistics service providers. Therefore, environmental uncertainty and governmental support can be expected to influence technological innovation. Hypothesis H4a: The more the environmental uncertainty, the more likely that China’s logistics service providers will adopt innovation in logistics technology. Hypothesis H4b: The more the provision of government support, the more the likelihood that China’s logistics service providers will adopt innovation in logistics technology.

Methodology Research framework
Based on the above discussions, the research framework is organised around the four main hypotheses, as shown in Figure 1. This research framework will be verified from a questionnaire survey in China’s logistics industry. The questionnaire contains six parts: company’s information, technological context, organizational context, environmental context, the adoption of technological innovations and supply chain performance. There are 61 items in the questionnaire. Besides, the company’s information, the other items were measured using the five-point Likert scales anchored by ‘strongly disagree’ and ‘strongly agree’. The willingness to innovate or acquire new technologies and the utilization of innovative technologies are used as measurements of adoption of technological innovation.

Data collection and sample
The data to test our hypotheses came from a questionnaire survey of logistics service providers in China. With China becoming a global manufacturing powerhouse, its central and local governments have delivered several policies to reinforce the logistics industry (Jiang, 2002). Moreover, after China’s accession to WTO, the operation of foreign logistics companies in China has boosted the growth of China’s logistics industry. More and more logistics companies in China have begun to adopt technological

Figure 1: Research Framework
Determinants of the adoption of technological innovations by logistics . . .


innovations to increase their logistics service capabilities. However, the logistics industry in China is still in its infancy compared with its counterparts in more developed countries. Ta, Choo and Sum (2000) found that the logistics barriers to international operations in China include lack of cargo tracing services, lack of delivery reliability for local carriers, lack of carrier selection, complicated customs procedures and geographical fragmentation of transportation networks. Generally, logistics service providers are companies which carry out logistics activities for their customers. Logistics activities associated with logistics service providers include warehousing, transportation, inventory management, order processing and packaging (Sink, Langley and Gibson, 2996; Delfmann et al., 2002). The sample frame was drawn from members of the Logistics Council in Beijing, Shanghai and Shenzhen regions because the development of logistics service providers in these three regions are more mature than in other regions in China. The Beijing Municipal Government has placed high on the agenda the establishment of a highly effective logistics platform by 2010 in its tenth five-year development plan. The Shanghai Municipal Government has giving priority to the development of three large-scale logistics parks during its tenth five-year plan period. The Shenzhen Municipal Government plans to develop logistics services into one of the three mainstay industries in the 21st century. Five hundred questionnaires were mailed and/or delivered directly to the sampled companies in each region from June to August in 2005. In order to get a higher rate of response, we also personally administered questionnaires to some logistics companies in each area. In total, we delivered 1500 questionnaires, and 583 completed questionnaires were returned: 163 in Beijing, 201 in Shanghai and 219 in Shenzhen. Of these respondents, 26 were excluded because their responses were incomplete and somewhat suspect. The overall response rate is 37.1 per cent. The basic information of these companies is shown in Table 1. It was found that most of logistics service providers in China do not have R&D departments. Only four per cent of the companies in sample survey have R&D departments. In China, most logistics companies belong to small and medium size enterprises. In this study, the measured scales were submitted to factor analysis. Factors with eigen values greater than 1.0 for each characteristic are summarised in Tables 2, 3 and 4. Reliability analysis was also conducted. According to the reliability coefficients shown in Table 5, the smallest value of Cronbach’s alpha for this study is 0.7915. This implies that the sampling results are reliable. Technological context is factorised by ‘explicitness of technology’ and ‘accumulation of technology’; organizational context is factorised by ‘organizational encouragement’ and ‘quality of human resources’; environmental context is factorised by ‘environmental uncertainty’ and ‘provision of governmental support’; supply chain performance is factorised by ‘financial’ and ‘non-financial’ measures.
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Category Company history (years) 0~5 6~10 11~20 Above 20 Below 50 51~100 101~300 301~500 Above 501 Below 1 1~5 5~10 10~50 Above 50 Yes None

Number 389 123 35 10 204 186 103 43 21 133 184 117 76 47 534 23

Percentage (%) 69.8 22.1 6.3 1.8 36.6 33.4 18.5 7.7 3.8 23.9 33.0 21.0 13.7 8.4 95.9 4.1

Number of employee

Capital (Million, RMB Yuan)

R&D department

Table 1: Basic information of companies in the sample.
Factor loadings Items Explicitness of technology (Factor 1) It is easy to find books or other resources about the technology. It is easy to understand the technology. It is easy to learn the application of the technology from the books. It does not need too many experiences to learn the technology. Accumulation of technology (Factor 2) Our company has implemented many related technologies. It is necessary to have experiences in using related technologies. It is easy to integrate that technology with company’s current logistics system. Eigen value Variance explained Accumulated variance explained Factor 1 Factor 2

0.818 0.783 0.762 0.714

0.125 0.142 0.163 0.193

0.109 0.141 0.152 4.175 36.133 % 36.133 %

0.821 0.774 0.712 2.819 32.496 % 68.629 %

Table 2: Result of factor analysis for technological factors. Table 6 shows the correlations among these factors and the innovation in logistics technologies. The correlation matrix gives us initial evidences of our hypotheses: technological, organizational and environmental are associated positively with the adoption of technological innovations, and the supply chain performance is positively associated with the adoption of technological innovations. Moreover, the technological, organizational and environmental factors are not highly correlated.
Determinants of the adoption of technological innovations by logistics . . .


Factor loadings Items Organizational encouragement (Factor 1) Company’s leaders encourage employees to learn new information. Our company provides supports for employees to learn new information. Company’s leaders can help employees when they face new problems. Our Company provides rewards for innovative employees. Quality of human resources (Factor 2) Employees possess abilities to use technologies to solve problems. Employees can learn new technologies easily. Employees usually provide new ideas for companies. Employees can share knowledge with each others. Eigen value Variance explained Accumulated variance explained Factor 1 Factor 2

0.832 0.816 0.776 0.735

0.131 0.099 0.103 0.129

0.100 0.134 0.115 0.197 4.231 36.309 % 36.309 %

0.813 0.788 0.746 0.701 2.987 32.715 % 69.024 %

Table 3: Result of factor analysis for organizational factors.

Factor loadings Items Governmental support (Factor 1) Government helps training manpower with logistics skills. Government encourages companies to propose projects of logistics technologies. Government relieves the regulation for the logistics industry. Government provides financial support for the development of logistics technologies. Environmental uncertainty (Factor 2) Competitors usually provide new logistics services. Customers’ requirements are diversified. The advance in new logistics technologies is quickly. Customers’ requirements vary quickly. Eigen value Variance explained Accumulated variance explained Factor 1 Factor 2

0.838 0.802 0.776 0.711

0.091 0.083 0.071 0.096

0.113 0.103 0.102 0.093 4.204 36.243 % 36.243 %

0.819 0.794 0.768 0.708 2.901 32.579 % 68.822 %

Table 4. Result of factor analysis for environmental factors.
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Factors Technological context Explicitness of technology Accumulation of technology Organizational context Organizational encouragement Quality of human resources Environmental context Environmental uncertainty Governmental support Supply chain performance Financial Non-Financial Adoption of technological innovations

Cronbach’s alpha 0.8126 0.8382 0.8947 0.8164 0.8436 0.9079 0.8291 0.7915 0.8751

Table 5. Results of reliability analysis.
Variables 1. Explicitness of technology 2. Accumulation of technology 3. Organizational encouragement 4. Quality of human resources 5. Environmental uncertainty 6. Governmental support 7. Adoption of innovations 8. Financial performance 9. Non-Financial performance
p < 0.1. *p < 0.05. **p < 0.01.

Means 3.79 3.26 4.01 3.86 3.01 4.15 3.58 3.37 3.04

Std 0.89 0.93 0.81 0.96 1.05 0.68 1.02 0.86 0.94

1 1.0 0.26 0.18 0.25 0.03 0.09 0.41 0.16 0.13

2 1.0 0.25 0.31 0.06 0.15 0.58** 0.21 0.24








1.0 0.38 0.08 0.12 0.61** 0.43 0.40

1.0 0.11 0.08 0.66** 0.51* 0.53*

1.0 0.06 0.33 0.21 0.18

1.0 0.71** 1.0 0.33 0.68** 1.0 0.28 0.64** 0.44


Table 6. Result of correlation analysis.

Results and discussion
Using the results of the questionnaire survey, we first investigate the adoption of technological innovations by China’s logistics service providers, and then study the influences of technological, organizational and environmental factors on the adoption of technological innovations and the relationship between technological innovation and supply chain performance.

Adoption of technological innovations by China’s logistics service providers
Logistics technologies can be divided into four categories: data acquisition technologies, information technologies, warehousing technologies and transportation technologies. We asked logistics service providers what kinds of innovative logistics technologies they acquired during the past three years. A summary of the adoption of technological innovations by logistics service providers in China is shown in Table 7. It was found that almost all respondents acquired innovative information technologies during the past three years. This could possibly be attributed to the rapid
Determinants of the adoption of technological innovations by logistics . . .


Logistics technologies Data acquisition technologies Information technologies Warehousing technologies Transportation technologies

Number (N 312 529 411 493


Percentage (%) 56.0 94.9 73.8 88.5

Table 7: Adoption of technological innovations by China’s logistics service providers.
Dependent variable: Adoption of technological innovations Predictors Control variables Company history Number of employee Capital size Technological context Explicitness of technology Accumulation of technology Organizational context Organizational encouragement Quality of human resources Environmental context Environmental uncertainty Governmental support R2 adj R2 F
p < 0.1. *p < 0.05. **p < 0.01.

Coefficient 0.024 0.038 0.101 0.159 0.162 0.201 0.199 0.131 0.216 0.683 0.579 9.284**

t 0.748 0.385 1.597+ 1.701+ 2.733* 2.909* 3.521** 1.158 3.711**

Table 8: Standardised regression results for the determinants of technology innovation. growth in information and communication technologies over the past decade and by the urgent needs of logistics companies to deal with a great amount data. However, only 56 per cent of the respondents acquired innovative data acquisition technologies such as bar code or RFID technologies.

Determinants of innovation in logistics technologies
To find the influence of technological, organizational and environmental contexts on adoption of the technological innovations, regression analysis was used. Technological context consists of explicitness of technology and accumulation of technology; organizational context consists of organizational encouragement and quality of human resources; environmental context consists of environmental uncertainty and governmental support. We took these six factors as independent variables and the adoption of technological innovation as the dependent variable, and consequently, employed the method of regression analysis to determine their relationship. We also take company
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history, number of employee and capital size as control variables in the regression analysis. Table 8 shows the results of regression analysis. Table 8 shows that the capital size of logistics service providers may have positive influences on the adoption of innovative logistics technologies. This implies that logistics service providers with a larger scale may have more willingness to adopt innovative logistics technologies. However, the positive effects are not significant. It can also be found that the technological, organizational and environmental contexts have positive influences on the adoption of technological innovations by China logistics service providers. Explicitness of technology, accumulation of technology, organizational encouragement, quality of human resources and governmental support all have significant influences on the adoption of technological innovations. This means that the hypotheses H2a, H2b, H3a, H3b and H4b are not rejected, but the hypothesis H4a is rejected. Therefore, we can conclude that for China’s logistics service providers, higher explicitness of technology can help the transfer of technological knowledge within the organization and, therefore, raise the willingness to adopt technological innovations. Logistics companies with rich experiences in the application or adoption of related logistics technologies will have higher willingness to adopt technological innovations. Organizational encouragement can give employees motivation and support to adopt technological innovation. High quality of human resources means that employees are capable of innovation in technologies. Governmental support can encourage and guide logistics service providers to innovate inlogistics technologies. The government can draw up public policies to encourage private sector performance improvements through trade and inter-modal policies, infrastructure investment and development, creative financing arrangements, tax incentives, safety regulation, public/private partnerships and special programs and projects (Morash and Lynch, 2002). Although environmental uncertainty does not have significant influence on the adoption of technological innovations, the positive effect reveals that China’s logistics service providers still want to adopt innovative logistics technologies to overcome the challenges of environmental uncertainties. Moreover, because most logistics companies in China are small and medium in size and have their strength in providing flexible services to customers’ varying requirements, environmental uncertainty is to some extent common to them. This appears to be the reason why environmental uncertainty does not feature as a significant influence on the adoption of technological innovations by China’s logistics industry.

Innovation in logistics technologies and supply chain performance
The influence of adopting innovative logistics technologies on supply chain performance is investigated using regression analysis. Company history, number of employee and capital size are also taken as control variables in the regression analysis. The results of the regression analysis are shown in Table 9 below.
Determinants of the adoption of technological innovations by logistics . . .


Dependent variables: Supply chain performance Financial Predictors Control variables Company history Number of employee Capital size Adoption of technological innovations R2 adj R2 F
p < 0.1. *p < 0.05. **p < 0.01.

Non-Financial t Coefficient 0.021 0.038 0.047 t 0.994 1.003 1.106

Coefficient 0.023 0.019 0.039 0.213

0.930 0.602 1.038 4.041** 0.617 0.561 8.935**

0.201 3.835** 0.601 0.553 8.214**

Table 9: Standardised regression results for the supply chain performance. We find that the adoption of technological innovations exhibits significant and positive influences on both financial and non-financial supply chain performances. This means that the evidence at hand does not warrant rejection of the hypothesis H1. Indeed, the evidence appears to suggest that China’s logistics service providers with favorable attitude toward and keen to adopting innovative logistics technologies would achieve better supply chain performance.

With the Chinese government actively engaged in formulating policies to promote China’s participation in the global economy, China has become an important investment destination for a growing number of multinational corporations which are located in China to take advantage of low labour costs and the potentially huge market that China offers. However, many foreign investors have faced several logistics problems with respect to the transportation of materials or products and the flow of information. The logistics cost in China is still high compared to many developed countries. Hence the logistics bottleneck on the growth of inward investment in China, and hence, the Government’s concern to promote the development of the logistics industry. Many logistics companies in China have started adopting innovative logistics technologies with the view to enhancing their services. Advanced technologies and innovations play a critical role in expediting the growth of the logistics industry in China. However, there is a lack of empirical research on the adoption of logistics technologies in China. This article has attempted to fill the knowledge gap by investigating the determinants of technological innovations in China’s logistics industry. It is found that most of China’s logistics service providers in China tend to rely on information
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technologies to enhance their supply chain management. It is also found that China’s logistics service providers with a more favorable attitude toward adopting new logistics technologies achieve better supply chain performance. Technological, organizational and environmental factors significantly affect the adoption of technological innovations by China’s logistics industry. It is found that higher explicitness and accumulation of technology can help the transfer of technological knowledge within the organization and can raise the capability to adopt innovative technologies. China’s logistics companies can increase their technological innovation capabilities by encouraging or supporting their employees to adopt new technologies and by training and educating their employees. Moreover, policy can stimulate the adoption of innovative logistics technologies through the provision of financial incentives, pilot projects and tax breaks. References
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Determinants of the adoption of technological innovations by logistics . . .


Russell, D.M. and Hoag, A.M. (2004), ‘People and Information Technology in the Supply Chain: Social and Organizational Influences on Adoption’, International Journal of Physical Distribution & Logistics Management, 34: 1/2, pp. 102–122. Sauvage, T. (2003), ‘The relationship between technology and logistics third-party providers’, International Journal of Physical Distribution & Logistics Management, 33: 3, pp. 236–253. Scupola, A. (2003), ‘The adoption of Internet commerce by SMEs in the south of Italy: An environmental, technological and organizational perspective’, Journal of Global Information Technology Management, 6: 1, pp. 52–71. Simonin, B.L. (1999), ‘Transfer of Marketing Know-How in International Strategic Alliances: An Empirical Investigation of the Role and Antecedents of Knowledge Ambiguity’, Journal of International Business Studies, 30: 3, pp. 463–490. Sink, H.L., Langley, C.J. Jr., and Gibson, B.J. (1996), ‘Buyer Observations of the US Third-Party Logistics Market’, International Journal of Physical Distribution & Logistics Management, 26: 3, pp. 36–46. Speakman, J.P. (2002), ‘Innovation Leads to New Efficiencies’, Logistics Management, 41, p. 71. Ta, H.P., Choo, H.L. and Sum, C.C. (2000), ‘Transportation Concerns of Foreign Firms in China’, International Journal of Physical Distribution & Logistics Management, 30: 1, pp. 35–53. Teece, D.J. (1996), ‘Firm Organization, Industrial Structure, and Technological Innovation’, Journal of Economic Behavior and Organization, 31: 2, pp. 193–224. Tidd, J., Bessant, J. and Pavitt, K. (1997), Managing Innovation: Integrating Technological, Market, and Organizational Change, New York: John Wiley & Sons. Tsai, W. and Ghoshal S. (1998), ‘Social Capital and Value Creation: The Role of Intra-Firm Networks’, Academy of Management Journal, 41: 4, pp. 464–476. Tornatzky, L.G. and Fleischer, M. (1990), The Process of Technological Innovation, Lexington, MA: Lexington Books. Wolfe, R.A. (1994), ‘Organizational Innovation: Review, Critique and Suggested Research Directions’, Journal of Management Studies, 31: 3, pp. 405–431. Zhao, M., Droge, C. and Stank, T.P. (2001), ‘The Effects of Logistics Capabilities on Firm Performance: Customer-Focused Versus Information-Focused Capabilities’, Journal of Business Logistics, 22: 2, pp. 91–107. Zhu, K. and Weyant, J.P. (2003), ‘Strategic Decisions of New Technology Adoption Under Asymmetric Information: A Game-Theoretic Model’, Decision Sciences, 34: 4, pp. 643–675.

Suggested citation
Lin, C. (2008), ‘Determinants of the adoption of technological innovations by logistics service providers in China’, International Journal of Technology Management and Sustainable Development 7: 1, pp. 19–38, doi: 10.1386/ijtm.7.1.19/1

Contributor details
Chieh-Yu Lin is Associate Professor, Department of International Business, Chang Jung Christian University, Taiwan. Contact: 396, Sec 1, Chang Jung Rd, Kway Jen, Tainan 71101, Taiwan, Republic of China. E-mail: jylin@mail.cju.edu.tw


Chieh-Yu Lin

International Journal of Technology Management and Sustainable Development Volume 7 Number 1 © 2008 Intellect Ltd Article. English language. doi: 10.1386/ijtm7.1.39/1

Innovation and entrepreneurship in Brazilian universities
Mariza Almeida Augusto Motta University Centre Abstract
This article is concerned with the analysis of university-based initiatives in Brazil, emphasising activities directed at enhancing innovation and entrepreneurship. The Triple Helix thesis is utilised here to probe the nature of the changes taking place in Brazilian universities, reflecting the characteristics of the changes taking place in the wider economy. The article begins by reviewing some of the modifications introduced in the Brazilian innovation system and by explaining how universities have been incorporating entrepreneurial activities. Three university case studies are presented in order to identify different models of entrepreneurship and innovation activities. The article shows that different structures have arisen in universities in order to stimulate innovation and entrepreneurial activities. Government support for these initiatives has been increasing at the federal, regional and local levels.

triple helix entrepreneurial university innovation Brazil

In the configuration of a new economic model, known as ‘the learning economy’, where knowledge is understood to be the key driver of growth and wealth, issues relating to change and learning assume a progressively more important role, making skill-building and innovation fundamental to economic health and well-being. At the same time, a general perception has taken hold in the world that technological factors are important to competitiveness and economic growth. In the modern knowledge economy, growth depends extensively on the presence or the formation of a network, which provides a favourable environment for innovation based on the development indigenous capabilities. Even though firm-specific factors are important determinants of innovation activity, technological opportunities and a favourable entrepreneurial environment also have a positive effect. The evolution of the relationships among the institutions from the three separate spheres, namely, university, industry and government, shows different patterns according to the level of development and to the historical and institutional traditions of individual countries (Senker 2003). In the international context, developing countries in general are observed striving to see their economies evolve from one based on low
TMSD 7 (1) 39–58 © Intellect Ltd 2008



The R&D sector was excluded from the data cited above, given that in Brazil, basic, applied and experimental/ developmental research is generally conducted by public institutions. Many of these produce services specialized in intensive knowledge generation, particularly in the fields of energy, agriculture, medicine and information and communications technology. They tend to work for both the government and the private sector through contracts which sport confidentiality clauses.

technology use aimed at resource exploitation to a position associated with high technology-based economic growth. The desire to free economies from their dependence on natural resources and other limiting factors that inhibit growth is at the heart of this transformation. No less important for developing countries is the need to identify and address the range of factors which are of fundamental significance for technology-based growth. For the past two decades, Brazil has been undergoing a transition from a top-down innovation system to an innovation system which operates at various levels: municipal, regional, national and multi-national. In this new innovation structure, initiatives arise from diverse actors, hitherto inactive in the field, most especially universities and industrial associations. Universities not only play their traditional roles, but also take on some of the roles of other institutional spheres – industry and government, in particular – in helping to put knowledge to use, both by establishing organisational mechanisms to transfer knowledge and technology and by playing a strategic role in regional innovation (Etzkowitz and Mello 2004). The first academic revolution, the incorporation of research as a broad university mission, took place in Brazil in the 1970s, expanding the traditional support role of the university in society to one directly linked to national priorities. Although this transformation took place under a military regime, the universities were left with some autonomy that enabled them to provide a space for the nurturing and articulation of new initiatives aimed at transferring knowledge produced at the universities to industry. These initiatives were originally implemented outside of the universities’ formal structure. They were not the result of academia incorporating economic and social development as a mission, for such a mission would have made universities fragile and vulnerable without support from the other institutional spheres of the Triple Helix. Recently, however, funding agencies such as CNPq (National Research Council), Finep (Projects and Studies Financing Agency) and others at regional and municipal levels have been increasing the support for university-based knowledge transfer programmes. The results of the ‘Research into Technological Innovation in Brazil (PINTEC)’ published by the Brazilian Agency for Geography and Statistics (IBGE), revealed that, between the years 2003 and 2005, only 33.4 per cent of the country’s industrial firms renewed their technology base. High-tech intensive companies, such as those involved in telecommunications and computing, had higher rates of innovation: 45.9 per cent and 57.6 per cent, respectively. These numbers reveal a low level of dynamism in the companies in question, because product innovation occurs at an annual rate of 6.5 per cent in the industrial sector, 8.4 per cent in telecommunications and 15.5 per cent in the computer industry.1 With R&D activities being concentrated in public institutions such as universities, the interface between these institutions and companies obviously becomes of prime importance. Here, we find activities which can be considered to be examples of Triple Helix interactions as well as the
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transformation of teaching and research universities into entrepreneurial universities (Etzkowitz and Zhou 2007). According to a 1968 law, institutions of higher education in Brazil are classified as either public or private. Public institutions are sub-classified as federal-supported and managed by the Federal Government; state-supported and managed by state governments; and municipal-supported and managed by municipal governments. Private institutions, on the other hand, can be sub-classified as non-profit or pro-profit. Finally, non-profit private institutions can be communitarian, confessional (religious orientation) and philanthropist. The 1968 law categorises institutions of higher education as universities; specialised universities and university centres; centres for technological education; isolated schools; extensive schools; and institutes of higher education. The INEP Educational Census (2005) gives a comprehensive picture of the state of the Brazilian higher education with 2,165 Higher Education Institutions (HEIs), distributed among five categories as shown in Table 1 below. No study has yet been made regarding the entrepreneurial activities in these institutions of higher education in Brazil, so it is difficult to evaluate how the set of actions and programmes promulgated by these institutions have contributed to the country’s economic development. Article 207 of Brazil’s 1988 post-military Constitution stipulates that research, teaching and extension are, in principle, inseparable activities of universities in Brazil. Universities, however, are not directly charged with the task of making contributions to economic development. The Technological Innovation Law No. 10.973/2004 was an important watershed as it established innovation incentive measures and situated scientific and technological research within a productive environment, seeking to create technological autonomy and industrial development in Brazil. This law aimed at encouraging strategic partnerships between universities, technological institutes and companies; stimulating the participation of science and technology institutes in the innovation process; and creating incentives for innovation within companies. After the establishment of the Technological Innovation Law, Andifes (National Association of Federal Higher Learning Institutes), an organisation
Spe.Univ/ Univ.Center – – 7 7 155 69 224 231 Ext.Schools/ Institutes 8 26 47 81 1213 280 1493 1574 Center for Tech. 37 16 – 53 127 4 131 184

HEIs type Federal State Municipal Total Public Pro-Profit Non-Profit Total Privates Total HEI

Universities 52 33 5 90 25 61 86 176

Total 97 75 59 231 1520 414 1934 2165

Source: INEP (2005) Census.

Table 1: Higher education institutions in Brazil, 2005.
Innovation and entrepreneurship in Brazilian universities


which includes 58 federal universities, created a Commission for Science, Technology, Innovation and Entrepreneurship with the remit to evaluate the extent of the commitment of the university system to the development of entrepreneurship through teaching and research. According to the Commission’s report, only some 9 per cent of the participating universities had incorporated entrepreneurship in their undergraduate courses before the 2004 law was passed; 82 per cent got involved with it consequent upon the enforcement of the law; and a further 9 per cent still had no courses or dealing with entrepreneurship in their undergraduate programmes. Results for graduate level courses were even more extreme, as none of the universities involved had dealt with the topic prior to the 2004 law, as shown in Table 2 below. The data in Table 2 show that programmes in a good number of federal universities do not address the issue of entrepreneurship head on, and that those universities which already deal with the issue would need to expand their course offerings throughout all their departments. Where companies generate little innovative activities on their own and R&D activities are largely concentrated within the university system and in research institutes, the significance of incorporating entrepreneurship studies in undergraduate and postgraduate programmes cannot be over-emphasised. In this article, we consider the involvement of three Brazilian universities in activities directed towards disseminating entrepreneurship behaviour and innovation practice in accordance with local conditions and internal and external influences. The remainder of the article is seven parts. Part two presents the methodology of the study. Part three discusses the conceptual basis of the research. Part four looks into the changes which have occurred in technological development policies in Brazil. Part five deals with the beginning of the teaching of entrepreneurship as a subject in Brazilian universities. Part six presents the results of our three case studies; and the seventh part concludes with a discussion of our findings and future recommendations.
Activities linked to entrepreneurship Departments with courses dealing with Entrepreneurship Activities

Level Undergraduate

Percentage One department: 27% Several departments: 64% All departments: 9% Lectures: 30% Optional or complementary classes: 20% Activities integrated into the curriculum: 50% One department: 14% Several departments: 57% All departments: 29% 36% still have no courses


Departments with courses dealing with Entrepreneurship

Source: Andifes (2006).

Table 2: Entrepreneurship activities at federal universities.
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The research presented below is exploratory in nature. Its goal is to provide an overview of the extent to which universities in Brazil have effectively incorporated entrepreneurship and innovation studies in their programmes using the case study approach, which is considered appropriate as it can provide ideal typifications that would allow a better understanding of the characteristics of a more general problem. For the purpose of this study, three cases have been chosen from the population of Brazilian universities that have developed entrepreneurial-related activities. These choices were made on grounds that the three cases are at different stages in the course of implementing entrepreneurial activities. The questions which this research seeks to answer include the following: • Can these universities be considered to be entrepreneurial according to the definition provided by Etzkowitz and Zhou (2007)? Are entrepreneurial activities accepted and systematically supported? Do interface mechanisms, such as technology transfer offices, exist? Do a significant number of staff members create companies which generate funds to support university research and other activities? What internal or external factors influenced these institutions to take on board entrepreneurship as a mainstream concern? How was the process of incorporating entrepreneurial activities undertaken in each institution and what is its significance for the extension projects proposed by the universities in question?


Part of this research was conducted while the author was working on her doctoral dissertation in 2001/2004, and the rest in 2006/2007.

• •

Different approaches were used for eliciting data for the study, including recourse to published and unpublished sources, semi-structured interviews with professors and/or university directors, and participation in events where university representatives presented information regarding their institutions and programmes.2

Brief survey of Triple Helix experience
The Triple Helix thesis provides a useful framework for us to examine the inter-relationships between the three main actors in the innovation chain: university-industry-government (Etzkowitz and Leydesdorff 2000). The interaction among these players in the innovation process is central to policy initiatives aimed at improving the conditions for innovation and knowledge generation. The model explains new and complex interinstitutional relationships where innovations occur in a process of continuous exchange of ideas among the three spheres. Institutional overlapping creates a new environment, leading to increased interaction which, in turn, results in new innovation strategies. The emergent entity – the Triple Helix – constitutes a new synthesis between university, industry and government (Etzkowitz and Leydesdorff 2000). Research directed towards innovation, which was previously limited to company R&D laboratories, is now increasingly being conducted within
Innovation and entrepreneurship in Brazilian universities


universities. This has led to the development of an entrepreneurial culture within universities and has had an impact on both teaching and research activities. New organisational structures appeared, in the form of offices for the transfer of technology, spin-off companies, technology parks, incubators and other entities (Etzkowitz et al. 2000). The Triple Helix perspective is based upon the presupposition that the relationships between university, industry and government create conditions for the production of technological innovations and that specific groups inside the three helices meet in order to address new problems arising in a constantly changing economic, institutional and intellectual world (Shinn 2002). The creation of an entrepreneurial university involves the cultural transformation of academia, so that this plays a more active role in society at several levels. Research and teaching activities need to be developed and directed to contribute to economic and social development as well as to the education of students and the advancement of knowledge. Such a university, which is committed to promoting entrepreneurial attitudes and is capable of creating initiatives at various levels (among faculty, students and administrators, for example), is considered to be an entrepreneurial university (Etzkowitz 2006). The entrepreneurial university develops distinct activities within a creative tension and possesses three primary characteristics: (1) entrepreneurial activities are accepted and systematically supported; (2) interface mechanisms, such as technology transfer offices, exist; and (3) a significant number of staff members create companies, which generate funds for research and other university activities (Etzkowitz and Zhou 2007). Cultural and national factors evidently have an impact upon this change. Many studies have been conducted regarding entrepreneurial experiences inside universities in countries with different economic and political conditions. For example, the study by Saad, Zawdie and Derbal (2005) looks into the triple helix experience in developing countries with particular reference to experiences in Algeria, Malaysia and Ethiopia. There is also Nanal’s work (2007) regarding the importance of an ethical culture based upon public transparency. The types of entrepreneurial activities also vary. Lee and Chen (2007) have looked into the stimulus given to undergraduate student entrepreneurship at the Multimedia University in Malaysia. The generation of spinoffs at the Universidad Autônoma de Barcelona was facilitated by the growth in research activities, internal changes in the institution itself and in the surrounding environment (Gonzalez 2007). Marques (2007) has also described a university entrepreneurial model in Portugal based on the cooperation between university and industry through the construction of business incubators associated with and/or promoted by universities. Jacob, Lundqvist and Hellsmark (2003) have described the transformations of the Chalmers University of Technology in Sweden. In Brazil, several studies regarding experiments in transforming the universities and
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research institutes have been undertaken, emphasising different perspectives. Zouaim and Sousa (2005) have analysed the effects of management changes at the Instituto de Pesquisas em Energia Nuclear em São Paulo (IPEN) and Mello and Renault (2006) have described the bottom-up initiatives taking place in civil society which have created the so-called community universities which seek to develop the surrounding communities and regions, particularly in the country’s southern states. Etzkowitz, Mello and Almeida (2005) have analysed the creation and development of the incubator movement. Finally, Lahorgue, Mello and Santos (2005) have researched technology transfer offices.


Brazilian political change and new proposals for technology transfer
The military government that took power in 1964 continued to apply the same science and technology (S&T) policies adopted after the Second World War. These were directed towards national security, technological autonomy and the development of institutional infrastructure and human resources for universities and state-owned companies. Some good results were obtained in developing indigenous technologies in fields such as energy (off-shore technologies), telecommunications, information and aviation. However, the technological autonomy project was mainly directed towards state industries in strategic sectors. The private sector, as a whole, was left outside this project and did not benefit from technology transfers from universities and public laboratories. Short of R&D policy of their own, the companies of this sector were generally reduced to acquiring mature technologies from sources outside the country (Coutinho and Ferraz 1995). The need for the role of government in technological development began to be felt in the mid-1970s, when CNPq, an agency created to support academic research, was expanded to include technology (although it retained its original name). Another important issue that dominated S&T policy in the 1980s was university–industry relationships. The main point debated in this respect was how to create new policies and new mechanisms to improve the transfer of knowledge from universities to industry. CNPq, normally more interested in supporting academic science, began to take actions focused on technological innovation programmes beginning with the creation of a technological innovation office in 1980. As a first step, twelve Technological Innovation Centers (NITs) were set up in research institutes and universities across the country. The NITs’ goals were to promote innovation in universities and research institutes, encourage knowledge transfer to industry and conduct technological forecasting.3 The NIT programme was closed at the end of the 1980s, in part due to the severe economic crises affecting Brazil at that time (Medeiros, Stal and Souza Neto 1987). A second programme, however, the ‘Program for the Establishment of Science Parks’, was introduced in the mid-80s by CNPq under the direction of the Technological Innovation Office. Difficulties
Innovation and entrepreneurship in Brazilian universities

Mello, J.M.C. and Almeida, M. Interview with: 1) Maurício Guedes, Director of Federal University of Rio de Janeiro Science Park, on December 12, 2001; Ricardo Pereira, COPPETEC, Federal University of Rio de Janeiro, on January 7, 2003. These people were members of the NIT at the Federal University of Rio de Janeiro.



http://www. memoria.cnpq.br/ areas/ sociedadeinformacao/ softex/softex_2000. pdf, accessed on October, 21, 2007. Idem.


apparent in these science park initiatives included insufficient resources, absence of venture capital and lack of academic leadership. In 1986, the military government came to an end and Brazil returned to democratic rule. The re-democratisation process began with elections for state governments in 1982. This made state governments more receptive to academic proposals in general and to science and technology initiatives in particular (Etzkowitz, Mello and Terra 1998). Regional development based on contributions from science and technology thus began to occur at the state level. State secretariats for Science and Technology were established from 1984 onwards, and these began to develop into regional S&T plans. The emergence of this space in civil society, associated with the S&T infrastructure built by the military regime, propitiated conditions for the establishment of new types of university-based organisations in line with the Triple Helix model of overlapping spheres. The reorganisation of civil society allowed for a whole new set of policies to be developed. In a climate of increased political freedom, following the debate over the transfer of technology from universities to industry, it was proposed that incubators be established. As civil society learned to express itself and the bottom-up policy for creating incubators was consolidated, different kinds of institutions became involved in the their organisation. The entrepreneurial university was introduced in Brazil through teaching and the development of research as a highly organised activity. New university initiatives based upon the Triple Helix model were introduced in a bottom-up fashion in conjunction with industrial organisations and non-governmental organisations and received the support of municipal, state and federal governments. From this emerged new types of universitybased organisations – the hybrid organisations. Academic entrepreneurship also takes place through innovation in incubation, science parks, technology transfer offices and junior company projects.

The beginning of entrepreneurship teaching in Brazil
The first ‘Information Technology Law’ No. 7,232/84, was a significant milestone, which guaranteed a market in the IT area for Brazilian companies. As a result, an investment strategy was developed for both the government and the private sectors. This strategy focused on the development of human resources, with the view to allowing the transfer and assimilation of technologies and R&D. The ultimate goal was the assembly of microelectronics and hardware architecture and the development of basic software and parallel support for first applications.4 This strategy of creating a niche market had both defenders and critics; and although its termination in 1991 was criticised by some as the abandonment of the struggle for technological independence, this change also brought about a profound transformation in both national policy and in the configuration of the IT economic sector. At the level of government policy, the focus switched from hardware to software development.5
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In 1991, the Brazilian Software Engineering Symposium formed the concept of creating a national software producing and exporting industry. University computer scientists drew up the proposal with contributions from the Computer Sciences Advisory Committee, the Brazilian Computer Society, ASSESPRO (Association of Brazilian Information Technology, Software and Internet Enterprises), AUTOMÁTICA and important national leaders in this field.6 As a result of this involvement of institutions from all three spheres of the Triple Helix, a programme was established in 1992 to stimulate the creation of software companies, and the National Export Software Program (Softex) was founded by CNPq. Other steps were also taken later to complement this initiative. Table 3 presents the chronological development of these activities, the institutions which lead them, the programmes or projects which were created, the impact of these upon the teaching of entrepreneurship and, finally, the results achieved. The Softex programme was national in scope, but sensitive to regional characteristics. Its goal was to carry out a series of coordinated steps,



Institution National Research Council (CNPq)



Influences Stimulates the foundation of a Brazilian software industry geared to exportation

Results Institutions acting together with local Softex agents in 15 states, supporting more than 1000 software development companies(a) A total of 21 units were selected, by means of public notices issued in 1996 and 1997, to host the local nuclei(b) Create entrepreneurship courses in 200 of the country’s technical and higher education establishments(c) Contributed the experience and knowledge acquired in the process of creating businesses and in the teaching of entrepreneurs to Anprotec(d)

1992 SOFTEX Programme

1995 Generation of New Organise regional Enterprises in nuclei geared towards Software, Information stimulating creation Technology and of new companies in Services (Genesis the software sector Project) 1996 Softstart Project It aimed to set up an entrepreneurship courses at universities

Softex nuclei Forum

1998 To transform Softex nuclei into incubators

Widen actions designed to create companies and entrepreneurs in order to meet the project’s initial goals and to participate in Anprotec

Sources: (a) http://www.softex.br/portal/_asoftex/agentes.asp, accessed on October, 21, 2007. (b) http://www.memoria.cnpq.br/resultadosjulgamento/softex_2001_result.htm, accessed on October, 21, 2007. (c) Dolabela (1999). (d) Interview with José Alberto Sampaio Aranha, director of the Brazilian Association of Science Parks and Business Incubation (Anprotec) and Director of the Genesis Institute at PUC-Rio, on October, 09, 2001.

Table 3: Softex programme.

Innovation and entrepreneurship in Brazilian universities


involving government agencies, universities and industry with the view to promoting the technological capacity of software and information technology companies, as well as the creation of new companies. The programme involved measures which encouraged the development of software for export as a source of foreign revenue (Prochnik 1998; Valdés and Furiati 1994). The creation of new businesses in the high technology software sector was planned by Softex to stimulate recently graduated professionals to start up businesses based on their knowledge of software and services. This idea led to the Genesis Project in 1995. The Genesis Project aimed to inject university students and recently graduated professionals with the entrepreneurial ‘bug’ and equip them with the necessary knowledge, such as management and entrepreneurial skills, tools and methods (Silva and Araújo 1996). In 1996, CNPq created the Softstart project, which was linked to Genesis. This groundbreaking initiative covered basic entrepreneurial training right through the monitoring of ensuing start-ups during their initial phase. During this period, industry – university relations were hardly in evidence in the majority of Brazilian universities, and because of this, entrepreneurship training was originally implemented outside of the academic sphere with no direct linkages to universities and without the direct involvement of the federal and state educational ministries and institutions (Dolabela 1999). Entrepreneurship was introduced as a theme within universities through initiatives which were directed by institutions and bodies that were not formally part of Brazil’s educational sector. This may explain the incongruities in the data presented above regarding the diffusion of entrepreneurship in the undergraduate and post-graduate programmes.

Towards an entrepreneurial university
Three case studies are presented here involving Brazilian universities that introduced entrepreneurship. The cases look into local contexts and external interference and opportunities to establish the factors have been crucial in widening activities relating to entrepreneurship in Brazilian universities.

The Pontifical Catholic University of Rio de Janeiro (PUC-Rio)
PUC-Rio was chosen as one of our three case studies because it undertakes innovation and entrepreneurial activities as part of its mission and as a matter of an institutional policy. PUC-Rio is a private, non-profit Catholic university based in Rio de Janeiro, Brazil’s second largest city. It was founded in 1941 by the Jesuits in order to develop knowledge based on humanistic values. Over the years, the university has gained experience that has made it an exemplar for higher education, research, social projects and entrepreneurship. PUC-Rio has approximately 10,000 undergraduate students, 2,500 graduate students and 5,000 extension students. These have at their disposal a first-rate educational structure, containing 29 undergraduate programmes which participate in several different diploma-orientated and certificate courses. The university also has 50
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postgraduate programmes divided into 26 masters’ degree and 24 doctorate degree courses. Table 4 below presents, in chronological order, the internal and external factors which favourably impacted PUC to introduce entrepreneurial activities. Until the 1990s, PUC-Rio was mainly a basic education and research university with financial support from Finep for its science and engineering programmes since the 1960s. The University had established several laboratories and has a good reputation for research.7 The changes which led PUC-Rio to institute entrepreneurial activities within its campus came about in the 1990s, as can be seen in Table 4. These changes were the result of external pressures and internal leadership which used an immediate crisis to visualise new opportunities. The external pressures came in the form cuts in federal resources dedicated to higher education. This led to financial instability for PUC-Rio that posed a threat to its established institutional prestige. Faced with this problem, the University sought alternative financing strategies to reduce its dependency on the federal government. Consequently, PUC created its Technology Transfer Office as a first attempt to create ties with industry (Guananys 2003; Aranha et al. 1998). In 1995, Finep created the REENGE, which aimed at improving engineering education with the aim to enhancing interaction between the productive and research sectors. This created an opportunity for an internal debate regarding engineering education in a post-industrial context of rapid technological change and economic globalisation (Aranha et al. 1998). Elective classes on entrepreneurship dealing with behaviour, simulation and planning were offered to graduate students for the first time in 1997 as a consequence of Softex and Softstart Project. These classes were pioneered by PUC-Rio’s Entrepreneurs Formation Program (EFP). CET (Coordination of Entrepreneurship Teaching) is an agency of the Genesis Institute for Innovation and Entrepreneur Action created in 2000 to promote educational activities, research and extension in the area of entrepreneurship. The entrepreneurship programme includes 14 classes: commercial and social enterprises; venture capital; business plan; issues related to the creation of technological, cultural and design firms; and creativity. According to Guananys (2003), PUC-Rio’s establishment of an incubator also resulted in changes in laboratories and researchers, transforming several groups into what can be described as quasi-companies. A series of external pressures and internal debates combined to create new opportunities; but what really turned PUC into one of the most successful cases as an entrepreneurial university in Brazil is the internal consensus, particularly among its Directors, that established entrepreneurship and development as an integral component of the University’s mission. Consequently, the focus on entrepreneurship covered all areas of the University’s programmes and a research environment was created to attend to the needs of industry. Finally, institutional space was built for students, researchers
Innovation and entrepreneurship in Brazilian universities


Research reputation as measured by researchers’ publications (Guarannys 2003)




Decision The federal government changes public policies for the promotion and subsidy of technological areas REENGE program aimed at improving engineering education by enhancing interaction between the productive and research sectors Softex Project launched Genesis Project launched CNPq invites universities to present proposals for the establishment of Genesis project nuclei Softstart Project launched



Federal 1994 Government




1992 1995 1996






From 2000 on

Resources for Brazilian Puc-Rio develops an universities, including adjustment process PUC-Rio, quickly and create the CTC decline and are Development Office(a) practically extinguished in 1994 PUC-Rio starts an Engineering course internal debate curriculums are regarding engineering modified in order to education renew engineers’ professional profile in the new economy(b) – – – – Puc-Rio submits a The PUC-Rio proposal is proposal selected, giving new impulseto the construction of an entrepreneurial culture in the university(c) Elective entrepreneurship Those classes were classes in behaviour, pioneered by PUC-Rio’s simulation and Entrepreneurs planning, are offered Formation to undergraduate Program (EFP)(d) students for the first time Infogene Nuclei InfoGene Nuclei The Technological participates in the becomes a Gênesis Incubator could receive Softex nuclei Forum Technological 20 firms to incubate(e) Incubator and is associated with Anprotec Puc-Rio decides to New teaching programs CET becomes an agency of evaluate its experience were adopted in the the Genesis Institute for in teaching second semester Innovation and Entrepreneurship of 2001 Entrepreneur Action(f) Genesis Institute for Institute aims to Institute has been Innovation and promote educational focusing its actions on Entrepreneur activities, research three major areas: Action active and extension in the entrepreneurial entrepreneurship education; outreach activities with entrepreneurs; and entrepreneurial research

Sources: (a) Guarannys (2003). (b) Aranha, Pimenta-Bueno, Carmo and Silveira (1998). (c) http://www.cin.ufpe.br/~genesis/historico.html#edital96, accessed on October, 20, 2007. (d) Salim 2001. (e) Almeida, M. interview with José Alberto Sampaio Aranha, Director of Genesis Institute at PUC-Rio, on October, 09, 2001. (f) Salim 2001.

Table 4: External and internal influences and their impact on PUC-Rio.


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and professors to create companies based upon research conducted in incubators linked to the Genesis Institute.


Federal University of Itajubá
This case involves a university with an entrepreneurship project under development. The University’s Dean, who had been an incubator manager, proposed to transform the University’s isolated entrepreneurial activities into an institutionalised and cohesive university mission that introduced innovation and entrepreneurship as a common element to all courses in the University.8 The Federal University of Itajubá, located in a small town in Minas Gerais state, was founded in 1931 as the Instituto Eletrotécnico e Mecânico de Itajubá (IEMI). In 1968, the school, renamed as the Itajubá Federal Engineering School (UNIFEI), started to expand its engineering undergraduate courses. In 1994, the university began to offer masters courses and in 1998, seven additional undergraduate courses were added. In 2002, UNIFEI became the Federal University of Itajubá. UNIFEI offers eleven undergraduate, six MA and two PhD programmes, with a total enrolment of 2,200 students. Table 5 presents, in chronological order, the internal and external factors which have had an impact upon UNIFEI, as well as the changes which have been wrought in terms of the introduction of entrepreneurial activities. UNIFEI became entrepreneurial in focus influenced partly by internal factors and partly by the new pedagogical project designed during 2004–2008. Other than reinforcing its research and teaching activities, UNIFEI also sought greater participation in local development projects and on the international scene. The new pedagogical project considers local development activities as a socially responsible part of the University’s extension mission. UNIFEI’s entrepreneur and entrepreneurship training programme cuts across all departments, encouraging innovation and generating new enterprises (both within and outside of its incubators). One of the first activities of the ‘entrepreneurial university’ project was transfer of the management of the university restaurant and snack bar to the students’ organisation in February, 2005. The Dean proposed this challenge and it was immediately accepted by the students, who had already presented a business plan working out the costs of the restaurant, the financial viability of the business, meal prices and so forth. In the Dean’s opinion, the restaurant has thus become a management lab for the students from business and industrial engineering courses.9 Another objective of the programme is the dissemination of entrepreneurial culture through the university environment by promoting discussions, business plan competitions and by recommending that entrepreneurship courses be open to students from across the University. There are three incubators at the University. One is dedicated to the support of technological firms. The second, which was established upon agreement with the local government, incubates firms in traditional
Innovation and entrepreneurship in Brazilian universities

Renato Aquino Faria Nunes, Dean of Federal University of Itajubá. Presentation at XVI Seminário Nacional da Anprotec. Salvador, October, 20, 2006. Almeida. M. interview with Renato Aquino Faria Nunes, Dean of Federal University of Itajubá, on September, 19, 2007.



Institution Escola Federal de Engenharia de Itajubá

Year 1995

Decision Cefei (Centro Empresarial de Formação Empreendera de Itajubá) created(a) Business Department creates Entrepreneurship classes(b) Establishment of the Empresas de Base Tecnológica de Itajubá Incubator(c) Transform the Federal Engineering School onto the Federal University of Itajubá Professor Renato Aquino, creator of the incubator, is named as Dean(d) Entrepreneurial activities included in the school’s program

Influences Promote the teaching of Entrepreneurship in the School of Engineering Promote the teaching of Entrepreneurship in the Business School Create high tech companies

Result Creation of entrepemeurial classes


Creation of entrepreneurial classes 14 companies supported by the incubator


Ministério da Educação


Strengthens and expands the university

Strengthens school’s role in the region

Universidade Federal de Itajubá




New pedagogical model is defined for the university in 2004–2008 Widening of entrepreneurial teaching to other graduate and undergraduate programs Technological park Installed at the university Creation of the Centro Incubator directed Gerador de Empresas towards traditional de Itajubá (CEGEIT) economic sectors Creation of the University started to Cooperativas contribute to social Populares Incubator inclusion New campus is built Installed in neighbouring city of Itabira in partnership with local municipal government and the Vale do Rio Doce Company

Entrepreneurial research and local development gets a big boost Entrepreneurial content in 17 of the 25 undergraduate programs; lectures on the theme in post-graduate programs Under construction Incubates 6 companies

Incubates 5 groups

The university amplifies its activities and partnerships

Sources: (a) Araújo, Lago, Oliveira, Cabral, Cheng and Fillion (2005). (b) Leite (2002). (c) Ribeiro Jr and Silva (2006). (d) Almeida.M. interview with Renato Aquino Faria Nunes, Dean of Federal University of Itajubá, on September, 19, 2007.

Table 5: External and internal influences on UNIFEI. economic sectors. The third is a cooperative incubator, which was established to organise enterprises that create jobs for marginalised social sectors. The project of transforming UNIFEI into an entrepreneurial university is not yet complete. The changes to date have nonetheless kept pace with
Mariza Almeida

the growing interest in entrepreneurship in the context of an expanding university system in Brazil.

Federal University of Minas Gerais (UFMG)
The Federal University of Minas Gerais (UFMG), situated in Belo Horizonte, offers 44 undergraduate programmes, currently catering for over 35,000 students. It has also about 6,000 students enrolled in masters and PhD programmes.10 Unlike in the two cases discussed above, at UFMG, entrepreneurial activities have not been implemented in a top-down fashion. Entrepreneurship is an isolated activity here and depends on the activities of a handful of professors and colleges.11 In spite of this, some colleges have been able to create successful spin-offs, such as the IT course, which some professors used to create the Akwan company. Google bought this firm which is now its laboratory in Latin America (Deutscher, Renault and Ziviani 2005). UFMG has promoted various internal entrepreneurial activities in the University, and has also forged partnership with external institutions to do the same. Some examples are mentioned in Table 6 below. The Computer Science course at UFMG was a pioneer in Brazil in introducing entrepreneurship classes to undergraduate students in 1993. This work was initiated by two professors at the University (Silva and Colenci Jr 2002). In 2003, the CIM incubator and Inovatec decided to merge and become a new incubator named Inova-UFMG. The unification of the two projects, which was led by the UFMG Dean, joined the better physical structures of Inovatec with the incubation know-how of CIM.12 In 2006, another incubator was established by the UFMG’s Business School.13 The absence of a centralised project at UFMG allowed considerable flexibility in the creation of an entrepreneurial environment, albeit without any commitment that the institution of formal academic programmes would have warranted. As shown in Table 6, several initiatives have taken place at UFMG over the years in order to promote entrepreneurship. However, the University still lacks a unified policy geared towards implementing these activities, which have for the most part resulted from isolated and ad hoc initiatives.14

10 Ronaldo Tadeu Pena, Dean of Federal University of Minas Gerais, presentation at XVII Seminário Nacional da Anprotec, Belo Horizonte, October, 18, 2007. 11 Ibid. 12 http://www.inova. ufmg.br/portal/ modules/wfchannel/ index.php?pagenum= 62, accessed on June, 15, 2007. 13 http://www.face. ufmg.br/servicos/ sub_ser_cei_his.php, accessed on June, 06, 2007. 14 Ronaldo Tadeu Pena, Dean of Federal University of Minas Gerais, presentation at XVII Seminário Nacional da Anprotec, Belo Horizonte, October, 18, 2007.

The state of entrepreneurial activities within the Brazilian University system raises two key issues. The first is university autonomy. This allowed activities related to entrepreneurship to be conducted, new courses to be offered to students, innovative companies to be created, incubators to be established, local development networks to be contacted, and so forth, as a result of the formation of local contacts and agreements. Incubators assumed a leadership role in different areas, disseminating the concept of entrepreneurship and – on a wider scale – interacting with and convincing institutions, universities, research centres and governments (federal, state and municipal) to take part in the movement and support the incubators and entrepreneurial
Innovation and entrepreneurship in Brazilian universities


Institution Federal University of Minas Gerais CNPq CNPq CNPq

Year 1993

Decision Introduction of Entrepreneurship class in the Computer Science Department Launching of the Softex Project Launching of the Genesis Project CNPq invites universities to present proposals for the establishment of Genesis project nuclei

Influences UFMG was a pioneer in Brazil

Results This experiment created 30 new IT companies(a) – – In 11 years of functioning, 29 companies have been benefited or are still receiving the upport of the sincubator(b)

1992 1995 1996

– – Founding of a Softex nucleus in Belo Horizonte, the Sociedade Mineira de Software (FUMSOFT) UFMG professors participate in the project Elective subjects in entrepreneurship in areas of behavior, simulation and planning, were offered to undergraduate students for the first time Interdisciplinary focus with the participation of undergraduate students from both the Physics and Engineering Departments An external network of institutions is established to support the incubator



Softstart Project launched

Federal University of Minas Gerais


Physics Department includes Entrepreneurship in their curriculum

As these classes already existed in the Computer Sciences Department and the Softex nucleus was established beyond the university’s walls, there wasn’t much of an impact Students are taught to present projects for the future incubator(c)




Physics Department creates the university’s first incubator, the Multidisciplinary Innovation Center (CIM) The Coordenadoria de Transferência e Inovação Tecnológica organises a competition for the diffusion of Entrepreneurship Engineering School decides to organise a Technological Entrepreneurship and Innovation Center (Empreende)

Undergraduate programs which want to receive support in order to implement their own Entrepreneurship classes are selected Helps academic community elaborate technical and economic viability studies regarding the results of research

The multidisciplinary character of the incubator has favored the formation of mixed teams within the resident companies(d) Classes implemented in 10 undergraduate programs(e)

Develops pre-incubation phase(f)

Table 6: External and internal influences and their impact over UFMG. (continued)
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Year 2002



Results Successful creation of various spin-offs(g)


A second incubator: Systematically the Enterprising implements activities Center of which permit the Technological DCC to improve and Innovation (Inovatec), expand the is created by the technology Computer Sciences generation and Department transference project The CIM and Inovatec Improvement in the incubators are merged, capacities of the forming a new incubated companies incubator (INOVA)

28 companies are served(h)

Source: (a) Silva and Colenci Jr (2002). (b) http://www.fumsoft.softex.br/insoft/insoft.php?m 0.1&s 0, accessed on June 13, 2007. (c/d) Valadares and Cabral (2002). (e) http://www.ufmg.br/prpq/EditalCTIT2001.doc, accessed on June 13, 2007. (f) Cheng, Drummond and Mattos, 2004. (g) http://www.face.ufmg.br/servicos/sub_ser_cei_his.php, accessed on June 15, 2007. (h) http://www.inova.ufmg.br/portal/modules/wfchannel/index.php?pagenum 62, accessed on October 31, 2007.

Table 6: External and internal influences and their impact over UFMG.
Entrepreneurial university characteristics according to Etzkowitz and Zhou (2007) Entrepreneurial activities are accepted and systematically supported Interfaces are present Spin-off creation and generation of resources for the university Pontifical Catholic University of Rio de Janeiro (PUC-Rio) Yes Federal University Federal University of of Itajubá (UNIFEI) Minas Gerais (UFMG) Proposal in progress Isolated activities

Yes (Incubator, TTO) Yes

(Incubator) No

Yes (Incubator, TTO) Yes

Source: Based on the definition of entrepreneurial university by Etzkowitz and Zhou (2007).

Table 7: Case study comparison. activities inside the university system. The second issue relates to the expansion of this process inside each university, while university autonomy is maintained. This has often depended on the existence of internal consensus that is crucial for welding isolated initiatives into a cohesive action proposal that can be incorporated into the university’s mission. Table 7 shows the different stages in the evolution of entrepreneurship in the three universities discussed in this article and the similarities and differences thereof. Developments at UNIFEI and UFMG are still inchoate and it is not yet clear as to how they would respond subject to internal and external pressure. Although the three universities are different in size and legal mandate, we can see that at both PUC-Rio, the non-profit private university, and UNIFEI, which is a federal university, an internal consensus can be achieved for the adoption and development of entrepreneurship
Innovation and entrepreneurship in Brazilian universities


programmes. On the other hand, even where a university-wide consensus does not exist and entrepreneurship activities are limited to one or a few departments, as in the case of UFMG’s Computer Sciences Department, these departments came into being largely as a result initiatives driven from within the university. The creation of an entrepreneurial environment in a university is a step towards transforming it into an entrepreneurial university, depending, among other things, on the extent of participation of the university’s various departments and networks to which the university is linked. Isolated initiatives, like those which occurred in PUC-Rio towards the mid-90s, can find institutional space to grow and become university-wide policy. This has encouraged the creation of new opportunities for students and staff in teaching activities and participation in the foundation of spin-offs. The entrepreneurial activities which are reshaping the Federal University of Itajubá have created new possibilities for the University. Universities have started to develop the ethos of commercial entrepreneurship, and a new trend is emerging making way for the culture of social entrepreneurship to evolve. This has already occurred, if to a limited extent, in teaching and research and in incubator activities, and is reflected in the growing number of cooperative incubators in recent years.

This article has attempted to show the importance of internal and external factors that influence the role of universities in economic development through the development of entrepreneurial culture. There is, however, no single road towards the development of entrepreneurial university. There are many outstanding differences, even within the Brazilian environment, between universities and institutions, such as the three cases discussed in this article. A major feature in the process of building an entrepreneurial university is the complementary interaction between university, industry and government (the three helices), which inevitably widens the original goals. For example, the Softex programme originally sought to create new companies, but in order to facilitate its goals, it needed to create a second programme – Sofstart – which introduced the teaching of entrepreneurship in different institutions. Likewise, other institutions came up with initiatives that increased the number of incubators in Brazil, specifically with the aim to reduce social inequality by shifting the teaching of technological entrepreneurship towards the realm of social intervention activities. References
Aranha, J.C.A., Pimenta-Bueno, J.A., Carmo, L.C.S. and Silveira, M.A. (1998), ‘Entrepreneuship in the Engineering Curriculum: PUC-Rio’, International Conference on Engineering Education, Annals, Rio de Janeiro. Araújo, M.H., Lago. R.M, Oliveira, L.C.A., Cabral, P.R.M., Cheng, L.C. and Filion, L.J. (2005), ‘O Estímulo ao Empreendedorismo nos Cursos de Química: formando Químicos Empreendedores’, Quimica Nova, 28 (suppl), pp. S18–S25.
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Cheng, L., Drummond, P. and Mattos, P. (2004), ‘ Integração do trinômio tecnologia, A produto e mercado na pré-incubação de uma empresa de base tecnológica’, 3rd Conferência Internacional de Pesquisa em Empreendedorismo na América Latina (CIPEAL), Rio de Janeiro. Deutscher, J.A., Renault, T. and Ziviani, N. (2005), ‘A geração de riqueza a partir da universidade: o caso da Akwan’, Inteligência Empresarial, 24, pp. 2–8. Coutinho, L. and Ferraz. J. (1995), Estudo da Competitividade da Indústria Brasileira, Rio de Janeiro: Papirus. Dolabela, F. (1999), ‘Uma revolução no ensino universitário de empreendedorismo no Brasil. A metodologia da Oficina do Empreendedor’, 44th ICSB World Conference, Annals. Etzkowitz, H. and Zhou, C. (2007), ‘Regional Innovation Initiator: The Entrepreneurial University in Various Triple Helix Models’, Triple Helix 6th Conference theme paper, Singapore. Etzkowitz, H. (2006), ‘The Entrepreneurial University and the Triple Helix as a Development Paradigm’, Ethiopia Triple Helix Conference, Addis Ababa. Etzkowitz, H., Mello, J. and Almeida, M. (2005), ‘Towards ‘Meta-Innovation’ in Brazil: The Evolution of the Incubator and the Emergence of a Triple Helix’, Research Policy, 34: 4, pp. 411–424. Etzkowitz, H. and Mello, J.M.C. (2004), ‘The rise of a triple helix culture: Innovation in a Brazilian economic and social development’, International Journal of Technology, Management and Sustainable Development, 2: 3, pp. 159–171. Etzkowitz, H. and Leydesdorff, L. (2000), ‘The dynamics of innovation from National Systems and ‘Mode 2’ to a Triple Helix of university-industry-government relations’, Research Policy, 29: 2, pp. 109–123. Etzkowitz, H., Webster, A., Gebhart, C. and Terra, B. (2000), ‘The future of the university and the University of the future: the evolution of the ivory tower to entrepreneurial paradigm’, Research Policy, 29: 2, pp. 313–330. González, S. (2007), ‘New University Instruments for Spin-Offs Global Growing: the Case of Universitat Autònoma de Barcelona Research Park (UABRP) Entrepreneurship and Innovation Programme’, 6th Triple Helix Conference, Singapore. CD ROM. Guananys, L.R. (2003), ‘De universidade de pesquisa a universidade empreendedora: o papel do Empreendedorismo e da incubadora tecnológica na transformação da PUC-Rio Anprotec’, XIII Seminário Nacional, Annals. Instituto Nacional de Ensino Superior e Pesquisas Educacionais Anísio Teixeira, INEP (2007), Censo da Educação Superior: sinopse estatística – 2005, Brasília: O Instituto. Jacob, M. Lundqvist, M. and Hellsmark, H. (2003), ‘Entrepreneurial Transformations in the Swedish University system: The Case of Chalmers University of Technology’, Research Policy, 32: 9, pp. 1555–1568. Lahorgue, M.A., Mello, J.M.C. and Santos, M.E.R. (2005), ‘Economic Development Mission in Brazilian Universities’, 5th Triple Helix Conference, Italy. Lee and Chen (2007), ‘Multimedia University’s experience in fostering and supporting undergraduate student technopreneurship programs’, 6th Triple Helix Conference, Singapore. CD ROM. Leite, V.F. (2002), ‘Crescente demanda pela educação empreendedora com métodos apropriados e o caso UNIFEI. XIII Encontro Nacional dos Cursos de Graduação Em Administração’, Annals, p. 47. Mello, J.M.C. and Renault, T. (2006), ‘Integrating entrepreneurial initiatives in Brazilian universities’, Ethiopia Triple Helix Conference, Addis Ababa.
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Marques, J.P.C. (2007), ‘Lessons learned from Portuguese business incubators: A model of entrepreneurial university based on empirical data’, 6th Triple Helix Conference, Singapore. CD ROM. Medeiros, J. A. e Stal, E. and e Souza Neto, J. A. (1987), ‘A difícil relação pesquisa – produção: experiência brasileira dos núcleos de inovação tecnológica (1981 – 1987)’, II Seminário Latino Americano de Gestion Tecnologica, p. 85. CIUDAD DE MEXICO. Nanal, G. (2007), ‘An Emerging Model for the Entrepreneurial University in Mauritius’, 6th Triple Helix Conference, Singapore. CD ROM. Prochnik, V. (1998), ‘Cooperation among universities, industry and government in the Brazilian software production and export – Softex-2000’, 2nd Triple Helix Conference, New York. Ribeiro Jr, H.J. and Silva, C.E.S. (2006), ‘Contribuições da metodologia project management body of knowledge (PMBoK) de gestão de projetos a gestão do conhecimento adaptada ao ambiente de incubadoras de empresas – Estudo de caso INCIT’, XIII Simpósio de Engenharia de Produção, Annals, Bauru, Brasil. Saad, M., Zawdie, G. and Derbal, A. (2005), ‘Issues and Challenges Arising from a Greater Role of the University in Promoting Innovation in Developing Countries: A Comparative Study of Experiences in Malaysia, Algeria and Ethiopia’, 5th Triple Helix Conference, Italy. Salim, C.S. (2001), ‘Entrepreneurship Formation Programs, Presentation at the World Conference on Business Incubation’, Brazil. CD ROM. Senker, P. (2003), ‘Editorial’, Science, Technology, & Human Values, 28: 1, pp. 5–14. Shinn, T. (2002), ‘The Triple Helix and New Production of knowledge: Prepackaged Thinking on Science and Technology’, Social Studies of Science, 32: 4, pp. 599–614. Silva, F. and Araujo, E. (1996), ‘Enterprise start-ups in academic departments: the GENESIS project’, V World Conference in Science Parks, Rio de Janeiro. Silva, N.C.D. and Colenci Jr, A. (2002), ‘Procedimentos para a valorização da formação da cultura empreendedora dentro da universidade: estudo de caso: UFMG. Anprotec’, X Seminário Nacional, Brazil. CD ROM. Valadares, E.C. and Cabral, P.R.M. (2002), ‘Entrepreneurial Opportunities for Engineering, Science and Technology Students within a Multidisciplinary Business Incubator’, Proceedings of International Conference on Engineering and Technology Education, Brazil. CD-ROM. Valdés, G.J.A. and Furiati, N.M.A. (1994), ‘Desenvolvimento Estratégico em Informática – DESI e as Novas Fronteiras Tecnológicas’, XVIII Simpósio de Gestão da Inovação Tecnológica, São Paulo, Annals, p. 416. Zouain, D. and Sousa, W.H. (2005), ‘Development of a culture based on strategic and knowledge management of a Brazilian public institute: the case of the Nuclear and Energetic Research Institute – IPEN’, 5th Triple Helix Conference, Italy.

Suggested citation
Almeida, M. (2008), ‘Innovation and entrepreneurship in Brazilian universities’, International Journal of Technology Management and Sustainable Development 7: 1, pp. 39–58, doi: 10.1386/ijtm.7.1.39/1

Contributor details
Dr Mariza Almeida is Assistant Professor at the Augusto Motta University Centre in Brazil. Contact: Avenida Paris, 41, Bonsucesso, Rio de Janeiro, RJ, Brazil, CEP 21041-020. Tel: 0055 2138 829752; Fax: 0055 2139 778943 E-mail: mariza@unisuam.edu.br; almeida.mariza@globo.com
Mariza Almeida

International Journal of Technology Management and Sustainable Development Volume 7 Number 1 © 2008 Intellect Ltd Article. English language. doi: 10.1386/ijtm7.1.59/1

Knowledge proximity and technological relatedness in offshore oil and gas and offshore wind technology in the United Kingdom
Zahid A. Memon Mehran University of Engineering
and Technology

Roshan S. Rashdi Mehran University of Engineering
and Technology

The United Kingdom (UK) has a strong base of offshore oil and gas (O&G) industry and possesses enormous offshore wind power (over 40 per cent of the total in Europe). The skills and technological resources of the O&G industry could possibly be applied to develop offshore wind farms to generate electricity. In this article, the core capabilities and competencies of offshore O&G industry are studied to see if they can supplement the emerging offshore wind industry, which is likely to be one of the future renewable energy sources for the United Kingdom. The fact that the United Kingdom will turn out to be energy importing country in the future against its current position as energy exporting country, prompts the need to explore avenues for alternative sources of energy. The authors perceive this threat to offshore O&G sector as an opportunity for the offshore wind industry, and investigate, through a survey of views, the proposition that the offshore wind industry offers a future market opportunity for the offshore O&G industry in the United Kingdom.

core competence and capabilities offshore O&G installations offshore wind farms diversification technological discontinuities

The purpose of this article is to investigate the extent to which the offshore oil and gas (O&G) sector in the United Kingdom can diversify its operations to build renewable energy plants (offshore wind farms),1 in addition to producing fossil fuels – the main area of its operation. The article looks into the core capabilities and core competencies of offshore O&G firms that can be adapted to construct offshore wind farms to generate renewable energy from offshore wind. The United Kingdom has an abundant resource of offshore wind, which could be exploited to produce electrical energy (DTI 2003). This goal can be achieved, inter alia, by establishing more wind
TMSD 7 (1) 59–70 © Intellect Ltd 2008 1 Wind turbines concentrate airflow energy to drive generators to produce electrical energy.


farms on commercial basis. This would call for, among other things, the development of wind turbine manufacturing and related technologies. Consideration of renewable options is inescapable in view of the decline of the stock of oil, gas and coal deposits (ICEPT, 2003) and the growing concern with climate change arising from the use of fossil fuels (DTI, 2002). After Canada, the United Kingdom has been the only net energy exporting country of the world following the successful development of North Sea O&G reserves (The UK Energy White paper 2003). But this scenario is fast changing. By 2020, it is projected that the United Kingdom will depend on imported energy for about 75 per cent of its total primary energy needs (The UK Energy White paper 2003). Diversification is one of the options for energy policy in the United Kingdom (DTI’s Report on Diversification). Technological diversification would allow certain skills in the offshore O&G sector to be transferred to offshore wind industry for effective application. This sort of diversification of the O&G sector into offshore renewable industry may possibly be a response to the threat posed by the dwindling O&G reserves in the United Kingdom. It is also necessary for the UK O&G sector to keep its skill base from withering away and also to keep its operations in UK waters. The experience of the UK offshore O&G industry spans over three decades (DTI, 2003). Its knowledge, technological capabilities and access to offshore wind resource could provide a viable basis for offshore wind farm construction in the United Kingdom, as this article shows.

Diversification and core competencies
Firms generally tend to diversify as they grow and mature. The specific conditions that enhance firms’ decision to diversify and the extent of the benefits to be derived from diversification are probed here in the context of the relationship between innovation and diversification, which occur as major technological traits. Also raised as a point of discussion here is the impact of changes (innovations) arising from diversification on the competencies or capabilities of firms. The core competence is the collective learning in the organization (Prahalad and Hamel, 1990). The core competence of O&G firms may be their seabed survey expertise, offshore installation and construction skills and overall marine experience of their manpower and machine tools at their disposal to carry out such operations.

It is in the nature of firms in a competitive environment to evolve adapting to changing market and resource conditions. In order to compete and retain its market share, a firm must innovate, introducing changes in the characteristics of the goods and services it supplies. Sometimes innovative activities enable firms to extend their operations into more than one technology, that is, to be ‘technologically diversified’ (Breschi, Lissoni and Malerba 2003). So, it can be inferred that it is actually innovation that prompts a firm to diversify and broaden its base. It can also be argued that
Zahid A. Memon and Roshan S. Rashdi

technological diversification pre-empts product and service diversification and leads to service and product innovation as a result. Innovation refers to change. If change occurs in multi-faceted ways, it forms the basis for diversification. Change of this kind can take two forms – change in products and services supplied (product innovation), and change in the ways in which the goods and services are created and delivered (process innovation) (Tidd, Bessant and Pavitt 2002). The changes in product and process characteristics could sometimes be minor, slow and gradual; and sometimes they could be of radical nature resulting in technological paradigm shifts. There has been a growing body of research over the years on corporate diversification (Granstrand et al. 1990). They have further explained that the pioneering research was done by Nelson (1957) followed by his various contemporaries like Patel and Pavitt (1994). Much of the research so far has, however, been on product rather than market diversification or firms’ expansion into a broader range of product areas’ (Granstrand et al. 1990). Technological diversification, on the other hand, is defined by Kodama (1986) and Pavitt et al. (1989) as extension of the competence of industry into various technological areas (Granstrand et al, 1990). Technological diversification is analogous to technological transition in a manner that cellular phones experienced transition from analogue to digital technologies. Technological competence of a firm evolves over time and is even transformed with the accumulation of knowledge and the application of it. The pace at which technological competence and capabilities are transformed depends on the opportunities and incentives that are open to firms (Patel and Pavitt 1994).

Competence and technological discontinuities
After an extensive study of different firms for the pattern of technological changes, Tushman and Anderson (1996) note that firms may go through changes of ‘discontinuous’ nature and that technology is a crucial element in shaping the firms’ environmental conditions. They argue that while firms innovate in a gradual and incremental manner, sometimes certain major ‘breakthroughs’ (discontinuities) occur that may either enhance or destroy the competence of the firms that innovate. They identify two different forms of technological discontinuities: competence-destroying discontinuities; and competence-enhancing discontinuities. Competence-destroying discontinuities (radical innovations), destroy the traditional competence of firms in the production of goods and services, and introduce novel ways of doing things. This is akin to what Joseph Schumpeter would refer to as ‘creative destruction’ to show that the new way of doing things is radically different from the old or existing way. Competence-enhancing discontinuities (incremental innovations) are, on the other hand, based on the existing skills and capabilities of firms. Tushman and Anderson specify that while competence-destroying discontinuities occur in new firms and cause drastic changes and major
Knowledge proximity and technological relatedness in offshore oil and gas . . .


shake-ups in the environmental conditions of the firms, competenceenhancing discontinuities are initiated by existing firms and result in less ‘environmental turbulence’. Indeed, competence-enhancing advances permit existing firms to exploit their competence and expertise and thereby gain competitive advantage over smaller or newer firms. However, they argue that both types of discontinuities create uncertainty in the organization, albeit in varying degrees and with varying implications for the organisation and management of the firm and production and marketing strategies.

Role of ‘knowledge proximity’ in diversification
One important aspect of the concept of ‘knowledge proximity’ in diversifying firms relates to geographical nearness and neighbourhood, which results in learning and knowledge spill over from one firm to another (Breschi et al. 2003). Another important aspect relates to the generic nature of knowledge used in multiple technologies and activities. Firms may also diversify in related technologies keeping in view the lower switching costs in terms of locally available opportunities of diversification. This way, high capital costs incurred on R&D and human resources may be avoided. Diversification could in this case be seen as a two way process in which the firms at the diversification and acquisition ends share commonalities and proximities. In the words of Breschi et al. (2003):
firms follow a coherent pattern of technological diversification, which clusters around groups of technologies that share a common or complementary knowledge base, rely upon common scientific principles or have similar heuristics of search.

Diversification of offshore O&G industry into offshore renewable industry will depend upon the nature of both industries and the ability of O&G firms to diversify and of wind industry to absorb the technology. This may call for a close look into the capabilities of both industries to be able to see whether the ‘R&D outlays’ have really been beneficial for the industry at source and the industry at use. The concepts of ‘prior knowledge’, ‘knowledge proximity’ and ‘technological relatedness’, have resulted in the transformation of one technology into another sharing commonalities. Thus, diversification opportunity may very well be available to the offshore O&G industry; it may also be the creation of offshore renewable energy through wind and tidal and wave technologies.

Diversification in O&G sector: future prospects
In a report produced by DTI/PILOT (Sustainability Through Diversity 2003), it has been identified that over 850 companies in the United Kingdom are operating in the O&G environmental market. Over half are primarily product suppliers. The report further suggests that the UK O&G
Zahid A. Memon and Roshan S. Rashdi

supplier industry, which covers more than half of the environmental market, has considerable strengths, assets and capabilities (unique to offshore environment), which are transferable into other market sectors. It also outlines a number of potential opportunities for new business in three main markets where there is an outline fit with supplier strengths and capabilities. Table 1 below provides an insight into the various supplier opportunities of offshore O&G firms that can be used to strengthen marine wind industry in addition to other sectors like onshore wind and tidal and wave technologies, and shows the scope for successful diversification of one sector into another, sharing knowledge similarities and complementarities. O&G firms’ experiences, skills, facilities and equipment used in providing construction support to complex offshore projects can be directly transferable for use in the construction and installation of offshore wind farms. O&G companies have extensive experience in areas such as supply

Source: DTI/PILOT Study - Executive Summaries, available on CD-Rom. Acquired on personal request.

Table 1: (Matrix): Prospects for the UK O&G supplier industry.
Knowledge proximity and technological relatedness in offshore oil and gas . . .



DTI is responsible for giving consent for the wind projects in the UK. Interview with DTI personnel. A number of respondents also referred to the competence of O&G firms in the construction of the recently built North Hoyle offshore wind farm in the UK. This led to the transfer of certain skills from O&G industry to the North Hoyle offshore wind project.

chain co-ordination, manpower and equipment supply, procurement, planning and logistics support.


Survey of data
Views expressed by different people from the renewable energy sector, the O&G sector and the Department of Trade and Industry (DTI)2 – the three major stakeholders – are analysed and discussed here. Data used in this article were obtained through the administration of questionnaires, telephone interviews and face to face meetings. The overall survey results are found to be very satisfactory as far as amount and quality of information are concerned.

Transferable skills
Interestingly, views on transferable skills are similar across all stakeholders. There is consensus that the offshore O&G industry has skills, facilities and equipment that the wind industry requires. Some emphasised that the experience of the offshore O&G industry in installing structures of all kinds worldwide. The UK offshore industry has been at the forefront of this technology, particularly the engineering and management skills. Installation of small structures such as wind farms would be a relatively straightforward project for the ‘techno-rich’ O&G industry. The O&G industry has capability to undertake construction activities in adverse conditions. It has also marine expertise as in cable laying, lifting and installation; marine equipment like sub-ploughs; and knowledge of marine legislation and control. All these are important for building the support structures of offshore wind farms like that of Scroby Sands, United Kingdom’s largest offshore wind farm inaugurated in March, 2005. According to a business executive associated with an O&G supplier company and involved in the engineering and management, the most obvious areas where the offshore industry prior experience can be useful are fabrication and installation. There have been many structures placed offshore in all kinds of environments and in all sizes – from the very small (wind turbine scale) to structures weighing thousands of tonnes. The hardware required is available from a number of installation specialists. Crane vessels exist in O&G operator companies that are capable of installing single piece structures weighing from a couple of hundred up to 12,000 tonnes. The skills in engineering and marine engineering are also usable. Inspection and maintenance are areas for which the wind industry would need support in the future. These skills and expertise do lie in the O&G sector. Moreover, the operations and maintenance (O&M) expertise of the O&G sector is potentially transferable. For instance, an existing O&G product manufacturing company was involved in the North Hoyle offshore wind farm.3 As a Project Engineer in a renewable energy firm noted, the role of O&G project management expertise could be significant when multi-million
Zahid A. Memon and Roshan S. Rashdi


Operator companies are the oil companies, which explore, develop and produce hydrocarbon resources.

Figure 1: Transferable skills from O&G to offshore wind as per survey results. contractual arrangements with weather risk and high vessel costs is something the wind industry is not yet familiar with. O&G companies also have good experience in foundation construction and installation – particularly for tripods in deeper water. For O&M, there is already a skill base, but for transfer to happen, the skills of O&G technicians would need to be directed by experienced wind turbine engineers. The O&G skills suitable for offshore wind farm industry indicated by various people covered in the survey are shown in Figure 1 below. The Technical Manager of an offshore O&G operator4 company revealed during the telephone interview that their company had involvement in wind projects in Spain, especially in the area of tightening bolts/joints. He considered the joint tightening know-how in O&G firms critical to the wind turbines to withstand vibration/stress and maintain torque/tension during turbulent weather. Also, knowledge and experience in bridge construction, like assembling large structures, are transferable to the wind farm construction, which means that civil engineering and construction firms have scope of work in turbine construction and related activities.

Not all respondents are agreed on the extent of effectiveness of O&G firms in strengthening offshore wind-farm development, and hence on the scope for diversification of O&G firms into the offshore wind industry. Different viewpoints are expressed by respondents from O&G companies, renewable industry (offshore wind farm) and DTI with respect to the limitations on offshore diversification. O&G companies’ views A respondent from an O&G company said that offshore wind offers a diversification opportunity, but only to those companies that are prepared to
Knowledge proximity and technological relatedness in offshore oil and gas . . .


adapt to the needs of an industry with a different cost structure and prospect of long term recovery of investment. Another respondent said that the scope for diversification was not as large as it is often made out to be. This is largely because, he argued, the costs associated with offshore wind power are scarcely competitive without subsidy and the facility provided to trade renewable obligation in view of the safety and environmental impact of the industry that would have unfavourable consequences particularly for the shipping and fishing industries. There is also the view that the O&G business in United Kingdom is decreasing and that diversification into the renewable offshore wind sector would hardly feature as a matter of priority in the circumstances. Rather, relocation of business to other potential overseas sites like Singapore, Russia and Brazil would be a sound option for the O&G business in the United Kingdom. According to the manager of a fabrication and engineering company, their company relied on the major contractors in the oil industry, as their main source of work recognised some years ago that the volume of work from the oil industry was on the decline. The company’s turnover was 85 per cent oil related in 1999. The traditional workload of the company disappeared fast consequent upon the closure of the Ardersier Construction Yard, the decline of the Nigg Yard and the decline of drilling activity in the North Sea. By 2003, the business turnover had fallen by 50 per cent and the company was in dire straits. It was felt that diversification could be the way forward for an O&G company in such a difficult situation. However, diversification into markets, which are new and volatile, such as offshore wind, involve investment risks in the sense that immediate returns are hardly in sight. The decision to diversify is not therefore straight forward in such cases. Renewable industry’s position Respondents from the offshore wind sector were less sceptical than those from O&G companies over the issue of diversification. Diversification is generally perceived here as more of an opportunity than a risk for O&G companies; and respondents maintained the view that insofar as the skills and scale of facilities required for the manufacture of towers and monopiles are similar to O&G yards, there could be good market in the offshore wind sector to warrant provision of enough work that would keep at least a small team in an O&G company permanently occupied in offshore wind. Respondents are not however unaware of the limitations of diversification opportunities for O&G companies. A major constraint on O&G diversification is the scale of the offshore wind industry which, being small, cannot fully support the scale of the current O&G activities. Yet another problem militating against technology transfer across sectors the cultural difference between the O&G and offshore wind sectors. Moreover, profit margins in the wind sector are currently small unlike the margins afforded by many in the O&G sector.
Zahid A. Memon and Roshan S. Rashdi

These, it was generally acknowledged, would act as a disincentive for O&G companies to diversify into offshore wind. DTI’s position The majority of respondents from DTI agreed with the idea of offshore wind offering a sustainable opportunity to O&G firms to diversify into offshore wind business; but they also expressed concern about the economic viability of such diversification. These views are broadly reflective of the DTI Gap Analysis which highlights cost and market factors as constraints on the diversification of O&G into offshore wind industry. Although the O&G industry has the skills and expertise to be able to diversify into offshore wind, the exercise would not be cost-effective. Moreover, offshore wind business is much more standardised and based on much lower margins than O&G. Regarding the market constraint, as mentioned elsewhere above in this article, offshore wind would not be commercially viable without Government support. This situation would hardly make offshore wind business in the United Kingdom an attractive proposition for O&G to diversify into. O&G is very profitable business, whereas offshore wind has yet to demonstrate such profitability. It would therefore make more economic sense for multinational oil companies to continue to exploit hydrocarbon resources in other parts of the world rather than diversifying into UK offshore wind that would give them, if at all, very modest returns.

The offshore O&G sector in United Kingdom constitutes a mature industry. Offshore wind, on the other hand, is a growing industry. A major challenge that the O&G sector has to contend with is the decreasing fossil fuel reserves and the uncertain prospects for further explorations. It is as such steadily heading towards stagnation and decline. In the circumstances, it would need to take necessary steps to diversify its operational capabilities and respond to the needs expressed in the emerging environmental market. The competence of the O&G industry and its business and technological environment appear to favour transition to offshore wind business. The major incentive offered by transition is that the O&G sector would remain in the forefront as a provider of renewable energy and thus avoid the risk of stagnation and decline. It is apparent from the survey, however, that even after recognizing offshore renewable sector as a potential area of diversification, the O&G sector is rather reluctant to diversify into offshore wind business. This could be due to the problem of technological uncertainty transition and diversification would bring in train for O&G firms.

The survey conducted by the authors of this article has provided enough evidence to suggest that offshore O&G industry skills are transferable to offshore wind farm construction. But, given that the UK offshore wind
Knowledge proximity and technological relatedness in offshore oil and gas . . .


industry is inchoate and offering only modest profit margins, it is considered by the offshore O&G industry only as a residual opportunity. However, there is good reason to believe that the two sectors could work together to provide substantial support to offshore wind farm development in the United Kingdom. The core competence areas that are of common usefulness to both O&G and offshore wind industries involve material and manpower skills. It is apparent from the survey that the transferable manpower skills of O&G technicians would need to be directed by experienced wind turbine engineers, whereas the material skills can be transferred with much ease. The offshore O&G sector is diversifying into offshore renewable sector, but not to the extent required to achieve renewable targets. This is mainly due to the investment risk and uncertainty that would militate against the possibility of achieving smart returns. However, government subsidy is seen by many as an important factor to considerably increase the scale of transfer of technology from O&G sector to wind farm construction. The UK O&G industry recognises the decline in its activity could be countered by diversifying into offshore wind industry. However, as discussed in the article, this opportunity is not considered commercially serious enough to be taken on board with total commitment. Rather, the industry would prefer to relocate its businesses to oil rich countries overseas. The survey shows project management, inspection and maintenance, construction of foundations and installation expertise as the top four areas in offshore wind farm development where offshore O&G prior competence is transferable. They are in total consonance with DTI matrix shown in Table 1. Acknowledgement
The authors acknowledge the help and guidance offered by Dr. Jim Watson of the Science and technology Policy Research Unit (SPRU) at the University of Sussex, United Kingdom.

Breschi, S., Lissoni, F. and Malerba, F. (2003), ‘Knowledge-Relatedness in Firm Technological Diversification’, Research Policy Journal, 32: 1, pp. 69–87. Carter, M. (2001), ‘UKCS: Half-Full or Half-Empty?’, http://www.boreasconsultants. com/pdf/papers/bor_paper_007.pdf. Accessed 12 May 2004. Corporate Responsibility Report (2000), By RWE Innogy, http://www.rweinnogy. com/index.asp. Accessed 17 May 2004. Cohen, W.M. and Levinthal, D.A. (1989), ‘Innovation and Learning: The Two Faces of R&D’, The Economic Journal, 99, pp. 569–596. ———(1990), ‘Absorptive Capacity: A New Perspective on Learning and Innovation’, Administrative Science Quarterly, 35, pp. 128–152. Granstrand, O., Oskarsson, C., Sjoberg, N. and Sjolander, S. (1990), ‘Business Strategies for development/Acquisition of New Technologies: A comparison of Japan, Sweden and the US’, Department of Industrial Management and Economics, Chalmers University of Technology, Goteborg, Sweden.


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Granstrand, O. (1998), ‘Towards a Theory of the Technology-Based Firm’, Research Policy, 27: 5, pp. 467–491. Magnusson, T., Tell, F. and Watson, J. (2000), ‘From CoPS to Mass Production? Capabilities and Innovation in Power Generation Equipment Manufacturing’, SPRU, University of Sussex, Falmer, Brighton. Morgan, C.A., Snodin, H.M. and Scott, N.C. (2003), ‘OFFSHORE WIND- Economies of scale, engineering resources and load factor’ by GARRAD HASSAN, http://www.dti.gov.uk/energy/renewables/policy/renewables_innovation_review. Accessed 5 June 2004. Patel, P. and Pavitt, K. (1994), ‘Technological Competencies in the World’s Largest Firms: Characteristics, Constraints and Scope for Managerial Choice’, SPRU, University of Sussex, Falmer, Brighton. Prahalad, C.K. and Hamel, G. (1990), ‘The Core Competence of the Corporation’, Harvard Business Review, May-June 1990, 68: 3, pp. 79–93. Pavitt, K. (1998), ‘Technologies, Products and Organisation in the Innovating Firm: What Adam Smith Tells Us and Joseph Schumpeter Does Not’, Industrial and Corporate Change 7: 3, pp. 433–452. Report on ‘Oil and Gas Environmental - Business Opportunity Report’ (2003), published by Department of Trade and Industry (DTI), CD-Rom. Report on ‘Sustainability Through Diversity’ (2003), published by Department of Trade and Industry (DTI), CD-Rom. Report on ‘Diversification’, URL: http://www.og.dti.gov.uk/sponsorship/ Diversification.htm. Accessed 7 August 2004. Report on ‘Energy - Its Impact on the Environment and Society’ (2002), http:// www.dti.gov.uk/energy/publications/policy/index.shtml. Accessed 12 May 2004. Report on ‘Renewable Innovation Review’, a joint DTI/Carbon Trust Report, http://www.dti.gov.uk/renewable/publications.html. Accessed 2 June 2004. Report on ‘Environmental Opportunities: A Guide for the Oil and Gas Industry’ (2003) http://www.og.dti.gov.uk/sponsorship/Publications.htm. Accessed 2 June 2004. Report on ‘Innovation in Long Term Renewables Options in the UK - Overcoming Barriers and System Failures’, ICEPT report for the DTI renewable Innovation Review, (2003), http://www.dti.gov.uk/energy/renewables/policy/ iceptinnovation.pdf. Report on ‘Offshore Renewables: The Potential Resource’ (2003), http://www. dti.gov.uk/energy/leg_and_reg/consents/future_offshore/chp2.pdf. Accessed 17 June 2004. Tidd, J., Bessant, J. and Pavitt, K. (2002), Managing Innovation: Integrating Technological, Market and Organizational Change, Chapter-2, Chichister, England: John Wiley & Sons, pp. 37–59. Tushman and Anderson (1996), ‘Technological Discontinuities and Organizational Environments’, Administrative Science Quarterly, 31, pp. 439–465. ‘UK Energy White Paper’ (2003), http://www.dti.gov.uk/energy/whitepaper/index. shtml#wp. Accessed 20 March 2004. Yin, R.K. (1994), Case Study Research: Design and Methods, 2nd edn., California: Sage.

Suggested citation
Memon, Z.A. and Rashdi, R. (2008), ‘Knowledge proximity and technological relatedness in offshore oil and gas and offshore wind technology in the United

Knowledge proximity and technological relatedness in offshore oil and gas . . .


Kingdom’, International Journal of Technology Management and Sustainable Development 7: 1, pp. 59–70, doi: 10.1386/ijtm.7.1.59/1

Contributor details
Zahid A. Memon is Assistant Professor at Mehran University Institute of Science and Technology Development (MUISTD), Jamshoro, Pakistan. Contact: Mehran University Institute of Science and Technology Development (MUISTD), Jamshoro76062, Pakistan. Tel: +92 22 2772430-31; Fax: +92 22 2772432 E-mail: memon.zahid@muet.edu.pk; memonzahid2007@yahoo.com Dr. Roshan S. Rashdi is Professor at Mehran University Institute of Science and Technology Development (MUISTD), Jamshoro, Pakistan. Contact: Mehran University Institute of Science and Technology Development (MUISTD), Jamshoro76062, Pakistan. Tel: +92 22 2772430-31; Fax: +92 22 2772432 E-mail: codirector.muistd@muet.edu.pk; pirrashdi@yahoo.com


Zahid A. Memon and Roshan S. Rashdi

International Journal of Technology Management and Sustainable Development Volume 7 Number 1 © 2008 Intellect Ltd Article. French. doi: 10.1386/ijtm7.1.71/1

Partenariat public-privé en Tunisie: Les conditions de succès et d’échec
Amira Bouhamed Université de Sfax Jamil Chaabouni Université de Sfax Résumé
Les changements qu’a subi le contexte politique, économique et social ont suscité le développement des accords de partenariat public-privé. La présente recherche a mis l’accent sur les différentes conditions favorables et défavorables susceptibles d’influencer la réussite de la relation de sous-traitance des services publics. La recherche empirique menée auprès de dix-huit établissements universitaires en Tunisie (Sfax) ainsi qu’auprès de leurs fournisseurs a permis de relever que: les évaluations pré et post contractuelles et le climat de confiance représentent des voies porteuses pour le succès de la relation de sous-traitance. Les conflits d’intérêts et l’asymétrie d’information entre les partenaires constituent des conditions qui entravent la réussite d’une telle relation.

Mots clés
partenariat public-privé sous-traitance des services publics établissements universitaires conditions de succès conditions d’échec

public-private partnership subcontracting public sector organizations success and failing factors

Changes in the political, economic and social environments may spark the development of the public-private partnerships agreements. The article notes that a range of favourable and unfavourable conditions are likely to influence the relationships of suppliers with the public sector in Tunisia. This empirical research focuses on eighteen academic establishments in Tunisia (Sfax) and their suppliers. The investigation highlights the impact of determinants such as trust and pre- and post-contract evaluation on successful suppliers relationships. The conflicts of interests and the asymmetry of information between the partners are found to be examples of inhibitors to the success of such relationships.

Depuis quelques décennies, la crise qui a affecté la légitimité de l’organisation publique, son rôle et son fonctionnement a été à l’origine de l’émergence de la réflexion sur le new public management (Yaya 2005: 5). Né en Grand Bretagne, depuis les années 80, sous le gouvernement de Margaret Thatcher et dans bien d’autres pays de tradition anglo-saxonne, le new public management est un mouvement de réforme du secteur public. Il consiste à favoriser la transposition de modèles de gestion du secteur privé
TMSD 7 (1) 71–89 © Intellect Ltd 2008


sur le secteur public (Pettigrew 1997: 113). Moderniser l’Etat, le réinventer, moderniser les services publics, améliorer la gestion des organisations publiques et instaurer des contrats de performance sont les objectifs de ce mouvement (Yaya 2005: 6). L’approche de l’administration publique relative à la façon de fournir ses services à ses ‘citoyens-clients’ a changé. La culture bureaucratique fait place à l’innovation, l’imputabilité selon les résultats et le management des affaires. La prudence et la stabilité sont remplacées par l’entrepreneurship, la flexibilité et la créativité (Morin 1998: 17). Assurer de nouvelles missions et dépasser le simple statut de prestataire unique des services publics représentent aussi des défis lancés par les institutions internationales. Les exigences internationales sont considérées par les grands bailleurs de fonds multilatéraux–notamment par la Banque Mondiale (BM) et le Fond Monétaire International (FMI). - comme une composante indissociable des programmes d’ajustement structurel (Medeb 2003: 1). Pour répondre à ces défis, la Banque Mondiale a proposé un découpage du secteur public en trois domaines distincts: les entreprises stratégiques, les entreprises non indispensables au processus de développement candidates à une procédure de liquidation juridique et les entreprises non stratégiques mais viables candidates désignées à des opérations de privatisation (Guillaumont et al. 1997: 275). La privatisation peut être totale ou partielle (partage des responsabilités entre les acteurs publics et privés) (Medeb 2003: 1–2). Cette dernière catégorie pouvant être mise en oeuvre au moyen du partenariat public-privé (PPP). A cet égard, le paradigme impliquant l’intervention de l’Etat-nation pour délivrer les services cède la place au nouveau paradigme de partenariat (Fisbein et Lowden 1999: 69). Le PPP a été défini par Choe, (2002: 281) comme suit: «Les PPP rassemblent un large éventail de talents et de ressources provenant aussi bien du secteur public que du secteur privé. Ils produisent des résultats qui profitent à tout le monde et qui sont dans la ligne des intérêts et des problèmes généraux de la Société». Ce qui caractérise le partenariat public-privé (PPP) des autres types de partenariat concerne la spécificité de ses parties contractantes (partenaires public et privé). Cependant, s’engager dans un partenariat est une décision stratégique. Elle peut avoir des effets aussi bien positifs que négatifs sur les partenaires mais aussi sur certaines parties prenantes telles que le consommateur. L’objectif de cet article est d’analyser les conditions qui favorisent le succès d’un PPP et celles de l’échec de telles relations inter-organisationnelles. L’intérêt est porté sur une forme particulière de PPP à savoir la soustraitance des services publics. Ce type de partenariat a été développé dans plusieurs pays tels que: le Royaume-Uni, l’Australie, la Turquie, les EtatsUnis et la Nouvelle-Zélande (PUMA, Note de Synthèse N°2, 2004: 2-4). En Tunisie, la sous-traitance des services publics est considérée comme étant l’une des formes les plus courantes de la privatisation. Elle est fréquemment utilisée par les autorités locales et les services de santé (Rapport de l’ISP 2004: 18).
Amira Bouhamed and Jamil Chaabouni

Afin d’évaluer le succès du PPP, une revue des critères développés à cet effet est présentée dans la première partie. Nous proposons, dans la deuxième partie, un aperçu théorique sur les conditions de réussite et d’échec de ces partenariats. L’étude de la littérature débouche sur la proposition d’un modèle conceptuel qui est testé sur la relation de sous-traitance entre les institutions universitaires rattachées à l’université de Sfax (Tunisie) et leurs prestataires (entreprises de services).

Les critères d’évaluation du succès du PPP
Le succès du partenariat peut être évalué par le degré de réalisation des objectifs stratégiques des parties contractantes (Lambe et al. 2002: 149) en l’occurrence les partenaires public et privé. Par ailleurs, un des principaux enjeux des PPP est d’améliorer le bien-être collectif. C’est au consommateur des services publics d’apprécier l’atteinte de cet objectif (Rapport de développement dans le monde, 1994: 78).

Les objectifs du partenaire public
Les objectifs de l’organisation publique sont multiples et ne sont pas toujours harmonieux (Guillaumont et al. 1997: 272). A cet égard, la recherche de l’intérêt général n’est plus à elle seule suffisante, faut-il encore que l’organisation publique apporte la preuve de son efficience et de son efficacité (Chevallier 1997: 31). La politique de PPP a été reconnue comme étant profitable pour améliorer l’efficience et l’efficacité de l’organisation publique. Elle met en place de nouveaux mécanismes gouvernementaux et une coopération (Choe 2002: 283). Cette coopération contribue à accroître la mobilisation de l’ensemble des ressources complémentaires (matérielles et immatérielles), à améliorer l’efficience et l’efficacité de leur utilisation et à réaliser un effet de synergie (Fisbein et Lowden 1999:16; 86). Le PPP permet aussi de dépasser les difficultés de juger la performance de l’organisation publique. En effet, cette dernière ne peut pas définir l’efficience et l’efficacité de son action en fonction de critères simples, quantitativement mesurables et objectivement partagés. Ces critères influencés essentiellement par la logique marchande existent plutôt, dans le secteur privé (Favoreu 2004: 8). Le PPP permet aussi de remédier à la dilution des responsabilités. En effet, l’acteur public a un unique interlocuteur qu’il peut responsabiliser (Landier et Benayoun 2003: 26). De ce fait, l’amélioration de l’efficience et de l’efficacité du partenaire public peut être considérée comme étant un critère d’évaluation du succès du PPP.

Les objectifs du partenaire privé
La coopération avec le secteur public permet à l’entreprise privée de générer une «rente relationnelle» (Dyer et Singh 1998) sur la base des ressources partagées. En effet, selon l’approche relationnelle, la performance de l’entreprise est liée au réseau de relations que celle-ci développe et entretient
Partenariat public-privé en Tunisie: Les conditions de succès et d’échec


avec l’ensemble des acteurs présents dans son environnement. Ce réseau de relations permet de créer et de coordonner des ressources relationnelles qui dépassent les frontières de l’organisation (partager des connaissances et des savoir-faire, exploiter des compétences complémentaires, etc.) (Donada et Garrette 2001: 21). Le sous-traitant développe aussi, une capacité à travailler avec des clients non traditionnels ce qui permet l’expansion de son marché (Fisbein et Lowden, 1999: 34) et par conséquent de se faire voir, se ménager des positions (Damon 2002: 39) et se créer une réputation (Fisbein et Lowden 1999: 33), ce qui participe à la réalisation de profits. Ainsi, nous pouvons considérer que le succès du PPP est évalué par la réalisation des objectifs du partenaire privé tels que la création d’un réseau relationnel, l’accès à de nouveaux marchés, la réputation et la réalisation de profit.

Les objectifs des bénéficiaires
Le PPP ouvre la perspective d’une mobilisation des compétences et des ressources complémentaires susceptibles d’être utilisées pour trouver des solutions harmonieuses aux problèmes économiques et sociaux et pour assurer le bien-être de la communauté (Choe 2002: 281). Il s’agit essentiellement de la réduction des coûts de prestation des services, l’élargissement de la gamme des services offerts, l’amélioration de la qualité, etc. (Aubert et Patry 2004: 5). Le citoyen participe directement ou indirectement au financement du PPP et il est le bénéficiaire des biens et services qui sont produits par le partenariat. Il peut mieux évaluer la qualité des services rendus et l’amélioration du bien-être social (Rapport de développement dans le monde 1994: 78). La satisfaction du bénéficiaire est supposée être l’objectif ultime du partenariat (Aubert et Patry 2004: 5) dans la mesure où le citoyen est devenu de plus en plus exigeant (Morin 1998: 19). La satisfaction des bénéficiaires constitue donc un critère important d’évaluation du succès du PPP.

Quels référentiels théoriques d’explication des conditions de succès et d’échec du PPP?
La théorie des coûts de transaction (TCT) (Coase 1937; Williamson 1975, 1985) est le paradigme dominant pour l’analyse du dilemme «faire ou faire faire». Elle a été utilisée par nombreux travaux empiriques portant sur la sous-traitance (Barthélémy 2004). Or, la TCT ne permet pas de capturer certaines caractéristiques de la relation entre le donneur d’ordres et son prestataire à savoir: l’asymétrie d’information et le conflit d’intérêts. Pour introduire ces deux dimensions, il semble pertinent d’analyser la sous-traitance aussi, sous l’angle d’une relation entre un principal et un agent, comme l’indique la théorie de l’agence (TA) (Chanson 2003). Pour cette raison, nous mobilisons aussi bien la théorie des coûts de transaction que la théorie de l’agence afin d’appréhender respectivement les conditions de succès et celles de l’échec du PPP.
Amira Bouhamed and Jamil Chaabouni

La théorie des coûts de transaction et les conditions de succès du PPP
Selon la TCT, les acteurs ont des comportements opportunistes (Williamson, 1975). L’objet des contrats de partenariat est de formuler les engagements bilatéraux de manière à réduire ces risques d’opportunisme (Calvi et al., 2000: 10). Or, les contrats réels sont relativement incomplets et ne sont pas strictement appliqués (Nogatchewsky 2003: 174). Les contrats ne sont pas les seules garanties contre l’opportunisme. Ils peuvent être complétés par d’autres mécanismes de gouvernance qui sont liés à l’auto-exécution de l’accord (self-enforcing agreement) dans laquelle aucune tierce personne ne participe pour déterminer si une violation intervient (Dyer 1997). Dyer, (1997) et Dyer et Singh, (1998) distinguent entre les garanties formelles et les garanties informelles. Les garanties formelles Dans la littérature, les économistes mettent l’accent sur les mécanismes formels et sur la rationalité dans la relation de gouvernance (Poppo et Zenger 2002: 710). Les garanties formelles peuvent prendre deux formes dans la sous-traitance: l’évaluation ex-ante et l’évaluation ex-post de la relation (Calvi et al. 2000: 7). L’évaluation ex-ante permet d’estimer la qualité marchande ou potentielle du fournisseur (évaluation de l’organisation): compétitivité prix, respect des normes de qualité, réputation, etc. (Neuville 1997: 302; Baudry 1999: 65; Aubert et Patry 2004: 9). Dans le cadre du PPP, la sélection du prestataire privé peut s’effectuer soit par négociation directe ou par le recours à l’appel d’offres. La négociation peut faire baisser le coût global et améliorer l’offre en permettant la mise en place de solutions innovantes (Viau 2003). L’appel d’offres met en place des procédures écrites et formelles favorisant la transparence, la crédibilité, la responsabilité, la mise en place de la concurrence et la diffusion large de l’information (Viau 2003; Jost et al. 2005). La phase du choix du fournisseur privé s’avère, alors stratégique pour le client public. Il s’agit essentiellement d’évaluer les compétences du soustraitant et d’estimer sa capacité à être fiable. Parallèlement, le sous-traitant s’assure de la transparence des procédures de sélection et du respect des engagements du donneur d’ordres (Trégan 2004). L’évaluation exante contribue alors à la réalisation des objectifs des partenaires public et privé et à la satisfaction des bénéficiaires. Proposition 1: le recours du donneur d’ordres publics à des mécanismes d’évaluation ex-ante de son sous-traitant privé, augmente la probabilité de réussite du PPP. L’évaluation ex-post mesure la qualité effective du partenaire privé (évaluation de sa production). Elle concerne aussi bien la quantité que la qualité de ses prestations et sa conformité aux cahiers des charges (Neuville 1998: 19). Les dispositifs de contrôle mis en place permettent au partenaire public de lutter contre l’opportunisme du fournisseur privé, de s’assurer qu’il se
Partenariat public-privé en Tunisie: Les conditions de succès et d’échec


comporte conformément à ses attentes (Nogatchewsky 2003: 182) et d’agir sur les futures phases de sélection (Calvi et al. 2000: 7). Ils permettent aussi, de coordonner les activités, leur donner un ordre, compte tenu des intérêts divers et potentiellement divergents des acteurs de la coopération (Nogatchewsky 2003: 173). Cette évaluation post-contractuelle représente une condition favorable à la réalisation des objectifs des partenaires et à la satisfaction des bénéficiaires. Proposition 2: le recours du donneur d’ordres public à des mécanismes d’évaluation ex-post de son sous-traitant privé, augmente la probabilité de la réussite du PPP. Les garanties informelles Pour les sociologues, la relation d’échange est basée sur une composante sociale représentée par la confiance (Poppo et Zenger 2002: 710; Calvi 2000: 7). Neuville (1997: 303) et Zaheer et al. (1998: 142) distinguent entre deux types de confiance qui peuvent s’instaurer dans la coopération: la confiance inter-organisationnelle qui règne entre les organisations partenaires et la confiance inter-personnelle entre les membres des deux organisations. Le climat de confiance permet de réduire la perception du risque associé aux comportements opportunistes en diminuant leur probabilité d’apparition (Brulhart 2002: 56) et de suspendre en partie les incertitudes. La confiance est un réducteur d’anxiété qui permet aux individus d’entrer en interaction et de s’engager dans l’action collective (Giauque 2004: 14). Elle permet à chacun de se concentrer sur les bénéfices à long terme de la relation plutôt que de vérifier au jour le jour l’engagement du partenaire, ce qui permet de réduire les coûts de transactions (Trégan 2004). Ainsi, la confiance contribue à assurer l’amélioration du bien-être collectif en livrant des services publics de qualité et à mieux satisfaire les attentes des partenaires public et privé. Proposition 3: la confiance entre le donneur d’ordres public et le sous-traitant privé accroît la probabilité de réussite du PPP.

La théorie d’agence et les conditions d’échec du PPP Selon Montmorillon (1989: 18), «il y a relation d’agence, quand un agent
appelé principal ou mandant délègue tout ou une partie de son pouvoir de décision à un autre agent dénommé mandataire. La notion d’agence a même été étendue à toutes les formes de coopération qui se nouent entre deux partenaires». Dès que s’établissent de telles relations, des coûts spécifiques apparaissent. Les coûts d’agence proviennent de la nécessité de contrecarrer les comportements opportunistes inévitables dès qu’il y a asymétrie d’information et conflits d’intérêts entre le principal et l’agent (Voisin 1995: 485). Baudry (1993: 55) distingue deux caractéristiques de la relation d’agence: l’asymétrie dans la distribution de l’information et le conflit d’intérêts entre le principal et l’agent.
Amira Bouhamed and Jamil Chaabouni

L’asymétrie d’information La TA suppose une situation d’asymétrie d’information ce qui est le cas dans la sous-traitance. En effet, les firmes sous-traitantes sont mieux informées sur les conditions de la demande et des coûts que le donneur d’ordres. En outre, la réalisation des projets publics ou la prestation des services publics sont soumises à l’opportunisme éventuel des différents acteurs (Martimort et Rochet 1999: 48). Fabbe-Costes et Brulhart (1999: 37) suggèrent que cette situation d’asymétrie d’information constitue une incitation à la méfiance. Par contre, le partage d’informations permet d’anticiper, coordonner et planifier les actions, de mesurer les résultats, de détecter les non-qualités et de mettre en place un processus d’apprentissage partagé ou collectif pour stimuler le changement dans le partenariat (Kanter 1994: 107). L’asymétrie d’information est plus accentuée dans le PPP dans la mesure où les partenaires poursuivent des logiques différentes dans le management de leurs systèmes d’informations (degré de confidentialité [Huat 1980: 188], disponibilité des données, nature des informations [Nutt 2000: 81]). L’asymétrie d’information peut alors, entraver la réalisation des objectifs des deux partenaires publics et privés et la satisfaction des bénéficiaires. Proposition 4: Plus l’asymétrie d’information entre les partenaires est élevée, plus la probabilité d’échec du PPP s’accroît. Les conflits d’intérêts En général, les objectifs des partenaires ne peuvent pas toujours s’aligner. Plus particulièrement, lorsqu’il s’agit de partenaires appartenant à des secteurs différents (public et privé), les objectifs peuvent être encore plus conflictuels (Huat 1980: 187). L’organisation publique est plutôt dominée par l’intérêt général (Chevallier, 1997: 26). Il s’agit d’objectifs économiques généraux et des objectifs non économiques qui sont des obligations sociales (Boyne 2002: 100). Cette situation est due au fait que la propriété des organisations publiques est commune et que ces organisations sont soumises à des contraintes du système politique (Boyne 2002: 98; Nutt 2000: 81). Par contre, l’entreprise privée est influencée par les contraintes économiques (Boyne 2002: 98). Ses propriétaires ou ses actionnaires sont plutôt intéressés par la réalisation des objectifs économiques (Bonnafous 2002: 180). La différence de logiques et de valeurs prédominantes dans les deux organisations augmente l’écart entre les objectifs poursuivis par les parties engagées dans le PPP (Huat 1980: 187). Cette condition est à l’origine d’un état conflictuel, provoquant, ainsi, la non-réalisation de leurs objectifs et la dégradation du bien-être social. Proposition 5: un niveau élevé de conflits d’intérêts entre les partenaires accroît la probabilité d’échec du PPP. Le modèle de recherche peut être schématisé comme suit:
Partenariat public-privé en Tunisie: Les conditions de succès et d’échec


Figure 1: Le modèle de recherche.

Méthodologie de la recherche
La recherche menée sur le terrain vise à tester les propositions théoriques dans le cadre de la sous-traitance des services publics au sein des établissements universitaires. Il s’agit d’une recherche plutôt exploratoire menée durant l’année 2004, auprès de 19 établissements de formation rattachés à l’université de Sfax (Tunisie), ainsi qu’auprès de leurs fournisseurs (dix entreprises de services). Deux principales méthodes de collecte de données ont été retenues, à savoir l’analyse documentaire et l’entrevue semi-dirigée. Les textes réglementaires et les cahiers de charges ont été des sources pour l’analyse du contexte de la relation. En outre, nous avons réalisé, au début de la recherche, une première pré-enquête auprès d’un établissement grâce à un entretien approfondi couvrant les différents aspects de l’externalisation de certains services. Une deuxième pré-enquête a été menée, par la suite, auprès d’une entreprise privée de services concernant ses activités sur le marché public et en particulier, au sein des institutions universitaires. Les informations collectées ont permis d’élaborer les questionnaires (semi-directifs). Le questionnaire destiné aux établissements comporte les parties suivantes: les objectifs des institutions et des bénéficiaires, L’évaluation ex-ante, l’évaluation ex-post, la confiance, l’asymétrie d’information et les conflits d’intérêts. Le deuxième questionnaire destiné aux entreprises traite les aspects suivants: les objectifs des entreprises de services, l’évaluation expost, la confiance, l’asymétrie d’information et les conflits d’intérêts. Dix-huit institutions universitaires ont accepté de participer à cette recherche. La collecte de données a été effectuée auprès des responsables de la gestion des contrats de sous-traitance. Ces derniers occupent diverses fonctions: secrétaire général (7), responsable financier (7), administrateur conseiller (2), secrétaire principal (1) ou chef de service personnel (1). Six prestataires privés de services ont fourni des informations exploitables pour l’étude. L’enquête a été menée auprès des gérants (5) et un responsable administratif. La méthode de traitement des données est celle de l’analyse du contenu. Cette méthode repose sur le postulat que la répétition d’éléments de discours révèle les centres d’intérêt et les préoccupations des acteurs (Thiétart 1999). En outre, la méthode du tri simple a été retenue afin d’analyser les données quantitatives.
Amira Bouhamed and Jamil Chaabouni

Résultats et discussion
Dans les institutions universitaires, le nettoyage et le gardiennage demeurent les services les plus souvent sous-traités (17). La pratique de sous-traitance a démarré depuis à peu près 20 ans. Cependant, elle a marqué récemment une évolution qui nous a amené à l’étudier.

Les critères d’évaluation du succès de la relation de sous-traitance
La mesure du succès du PPP réfère à trois critères: la réalisation des objectifs des partenaires public et privé et la satisfaction des bénéficiaires. Les objectifs des établissements universitaires Les institutions ont deux objectifs: le premier est lié à l’amélioration de la qualité des services sous-traités (88,9% des interviewés) et le second concerne la réduction des coûts [les charges du personnel (classées en deuxième position par 50%) et les autres coûts de l’activité (matériaux, lessives, etc.) (classés en dernière position par 61,1%)]. Avec le passage au mode du marché, les institutions visent ‘l’amélioration de la qualité des services avec un minimum de coûts’ (Secrétaire général de l’Université de Sfax). Confrontées à ce dilemme, les institutions n’atteignent pas toujours leurs objectifs. Alors que 55,6% des répondants indiquent que les attentes de leurs établissements sont satisfaites, 33,3% mentionnent qu’ils sont peu satisfaits voir totalement insatisfaits (5,6%). Ce résultat corrobore les résultats de l’étude menée par la Banque Mondiale portant sur 6 cas de contrats de concession dans le secteur de distribution de l’eau en Amérique Latine: certains opérateurs privés ont été capables d’améliorer la qualité du service, comme à Buenos Aires et à Santiago. Par contre, d’autres expériences ont un faible impact comme à Cancun (Ideloviteh et Ringskog 1995: 25). Les objectifs des sous-traitants Les objectifs des sous-traitants sont d’abord appréhendés par la part de marché public dans le chiffre d’affaires total de l’entreprise. Pour trois entreprises, les marchés publics participent à plus de 50% dans leurs chiffres d’affaires. La focalisation sur la clientèle publique s’explique par la solvabilité de ce type d’organisation. Les sous-traitants s’attendent, aussi à tirer d’autres avantages du partenariat: le développement de relations multiples au niveau de l’administration et une bonne réputation. Ces deux types d’avantages ont été aussi reconnus par Fisbein, et Lowden, (1999, p.34) dans une étude concernant le PPP en Amérique Latine, en particulier, en Colombie et au Venezuela. Par contre, les compétences techniques (classées en 3ème position) et les relations pour pouvoir recruter (classées en 4ème position) restent des gains facultatifs. Les entreprises poursuivent deux principaux objectifs: celui du profit et celui du développement de relations multiples au niveau de l’administration et de l’amélioration de leur réputation.
Partenariat public-privé en Tunisie: Les conditions de succès et d’échec


Les objectifs des bénéficiaires La catégorie des bénéficiaires regroupe les étudiants, les enseignants et le personnel de l’institution. Vu la durée limitée de la recherche, la collecte des données concernant le niveau de satisfaction des bénéficiaires n’a touché qu’une seule catégorie, à savoir les administratifs (18). Les résultats de l’enquête montrent qu’au sein de certaines institutions, les bénéficiaires des services sous-traités ont gardé le même niveau de satisfaction (55,6% des répondants). 38,9% des interviewés ont mis l’accent sur les avantages tirés en terme de consolidation du bien-être collectif. Ce résultat rejoint ceux publiés par le rapport de développement dans le monde, (Banque Mondiale 1994) qui mentionne que la participation du secteur privé dans la fourniture des services d’infrastructure a induit des gains en termes de bien-être collectif, dans certains pays (par exemple, dans le secteur de télécommunication au Chili, au Mexique, et au Royaume-Uni).

Les conditions de succès de la relation de sous-traitance
L’évaluation ex-ante L’évaluation précontractuelle des sous-traitants privés a été formalisée, conformément aux articles 30 et 38 du décret n°2002-3158 par une procédure d’appel d’offres (9 établissements) ou par une consultation (9). L’analyse a porté sur les critères d’évaluation et les sources d’information utilisés par les institutions universitaires pour sélectionner leurs sous-traitants. La sélection des prestataires se base sur des critères qui sont souvent objectifs: la situation financière du titulaire du marché [la conformité des documents exigés par la loi (décret n°2002-3158) et le chiffre d’affaires (63,6% pour l’appel d’offres et 35,7% pour la consultation)], les cautionnements, les pièces justificatives portant sur les employés (100% pour les deux procédures) et la réputation du sous-traitant [ses expériences passées avec l’institution en question (57,1% pour la consultation) et/ou avec d’autres institutions (72,7% pour l’appel d’offres et 71,4% pour la consultation)]. L’utilisation de ces critères augmente la probabilité de choisir un prestataire apte à améliorer la qualité des services et à mieux satisfaire les bénéficiaires. Le choix effectué sur la base du critère «offre du moins-disant» (100% pour l’appel d’offres et 85,7% pour la consultation) entraîne la satisfaction des attentes du donneur d’ordres relatives à la diminution des coûts. Ce critère permet aussi de garantir l’égalité et la transparence dans la procédure de sélection et de limiter la corruption. Toutefois, dans la plupart des cas, la prise en compte du prix le plus bas sans respect du salaire minimum légal payé aux employés provoque des difficultés dues à l’incapacité du soustraitant à remplir ses obligations ce qui conduit à la dégradation de la qualité. Or si l’on admet, comme l’a relevé Maréchal et Morand, (2002: 107), dans le cas de la France, que l’objectif de la puissance publique ne se limite pas à la recherche du coût le plus faible, mais intègre la volonté de garantir la pérennité financière des entreprises, alors le critère de choix ci-dessus évoqué serait
Amira Bouhamed and Jamil Chaabouni

insuffisant. Ceci pourrait expliquer pourquoi un nouveau décret a substitué la procédure d’adjudication où seul le critère de prix est retenu par la sélection de l’offre économiquement la plus avantageuse. En outre, les institutions essaient souvent de s’assurer de la fiabilité des informations recueillies afin de choisir un sous-traitant apte à accomplir les exigences des cahiers de charges. Ainsi, l’offre du soumissionnaire constitue la principale source d’information, particulièrement pour les appels d’offres. Pour la consultation, 42,9% des enquêtés affirment que leurs institutions consultent aussi l’université de Sfax et les autres institutions. Par ailleurs, l’attribution du marché se réfère souvent aux textes réglementaires qui incitent les donneurs d’ordres à respecter des principes comme la sincérité, la transparence des procédures et le recours à la concurrence entre les soumissionnaires. Néanmoins, ces principes ne sont pas toujours respectés, surtout dans la procédure de consultation. A cet égard, la législation tunisienne a limité les conditions du recours à la consultation aux marchés dont le montant de la commande est inférieur à 30 000 dinars (décret n° 2003-1638). Certes, l’évaluation précontractuelle basée sur des procédures et des critères en vue de sélectionner le soumissionnaire qui répond au mieux aux divers objectifs des parties contribue à la réussite de la relation de sous-traitance, néanmoins elle est insuffisante pour satisfaire toutes les attentes. L’évaluation ex-post Une fois l’accord conclu, un système de contrôle est instauré par l’établissement et son prestataire. Afin de vérifier l’impact de cette évaluation post-contractuelle, les critères et les sources d’informations utilisés ont été étudiés. Les critères d’évaluation réfèrent aux aspects suivants: le déroulement satisfaisant des prestations (88,9% pour les établissements et 83,3% pour les entreprises); la présence des employés (94,1% pour les établissements et 83,3% pour les entreprises); la disponibilité des fournitures et des matériaux (70,5% pour les établissements et 83,3% pour les entreprises) et la satisfaction des bénéficiaires (60,6% pour les établissements). Les institutions n’accordent pas la même importance au contrôle des conditions de travail des employés. Un premier groupe d’interviewés affirme que la satisfaction des employés (53%) ainsi que les problèmes qu’ils rencontrent (47%) sont fréquemment suivis. Un second groupe mentionne que ce suivi est rarement réalisé. Ainsi, le système existant d’évaluation post-contractuelle de la relation s’intéresse principalement à la qualité et aux coûts des services. Ce résultat rejoint celui trouvé par Calvi et al. (2000: 12–13), dans le cadre d’une recherche réalisée auprès des responsables achats dans des entreprises de divers secteurs d’activités. Pendant cette phase, les institutions font appel à diverses sources d’information. La majorité des informations provient des constats de ceux chargés de procéder au contrôle et appartenant à l’institution (100%), des
Partenariat public-privé en Tunisie: Les conditions de succès et d’échec


réclamations des bénéficiaires (61,1%) ou des remarques du personnel de l’institution (55,6%). Les sources d’information internes occupent alors une place primordiale. Calvi et al (2000: 12) ont constaté que les acheteurs se servent généralement des informations provenant du système d’information interne (66%). La mise en place de ce mécanisme de suivi, incorporant des indicateurs et des sources d’information en rapport avec les activités sous-traitées posséde des avantages. Il donne à l’institution une image proche de l’état réel des prestations. Ceci permet d’assurer la réalisation des objectifs de l’institution en termes d’amélioration de la qualité et de satisfaction des bénéficiaires. Aussi, le système de contrôle instauré par le titulaire du marché permet de détecter les défaillances avant qu’elles ne soient transmises à l’administration de l’institution. Ce système permet au sous-traitant d’être plus fiable, de construire une réputation afin de pouvoir élargir par la suite sa part de marché public. Néanmoins, cette évaluation présente des limites. La difficulté réside dans la méconnaissance des services comme le nettoyage ou le gardiennage «qui n’ont pas de caractéristiques techniques. La qualité ne peut pas être alors déterminée avec précision» (Secrétaire général de l’Université de Sfax). Par ailleurs, l’intégration de la dimension de responsabilité sociale dans les mécanismes de contrôle est faible. Ces défaillances peuvent avoir des répercussions perverses sur le bien-être social et ensuite sur la qualité des services. L’évaluation ex-post permet ainsi d’atteindre les objectifs de certaines parties de l’accord mais au détriment de la satisfaction d’autres attentes. La confiance Afin d’étudier le rôle de la confiance dans le succès du partenariat établissements universitaires-entreprises de services, l’analyse a été basée sur la typologie proposée par Zaheer et al. (1998: 149) distinguant entre: a. La confiance inter-organisationnelle: A ce niveau deux phénomènes sont analysés: la durée de la sous-traitance dans les établissements et l’intention des prestataires concernant le développement de leurs activités sur le marché public. La durée de sous-traitance s’étale sur une année (une institution), sur deux ans (9) ou sur trois ans (8). La majorité des institutions optent pour le renouvellement des contrats de sous-traitance. Ce choix est fondé sur trois critères classés comme suit: a. La crédibilité du sous-traitant (66,7% des répondants) b. Le suivi quotidien des prestations par le gérant (55,6%) c. La réactivité (66,7%): l’aptitude du sous-traitant à agir à temps pour résoudre les problèmes. La complémentarité entre ces trois critères permet aux prestataires de susciter la confiance des établissements et de les inciter à étendre la durée de la relation. En étant constamment associées, les deux parties peuvent
Amira Bouhamed and Jamil Chaabouni

bénéficier d’un investissement idiosyncrasique qui correspond au fait qu’elles aient appris à travailler ensemble (Trégan 2004). Selon la théorie du capital social, les individus travaillent ensemble de manière efficace et efficiente lorsqu’ils se connaissent, se comprennent mutuellement, se font confiance et s’identifient les uns aux autres (Nkakleu 2003). Le renouvellement des contrats permet aussi de diminuer les coûts de transaction ex-ante tels que les coûts de recherche d’informations et les coûts associés à la négociation et l’élaboration du contrat (Williamson 1985). Cette situation conduit, d’une part, à la réduction des coûts des services et d’autre part, à l’augmentation du profit pour les entreprises. Toutefois, cette stabilité contractuelle apparente ne signifie pas l’élimination de toute concurrence puisque annuellement, chaque prestataire est remis en compétition avec d’autres entreprises. Une telle remise en concurrence agit comme un stimulant de l’effort fourni par les prestataires (Baudry 1993: 53–59) pour mieux satisfaire les attentes de l’institution et des bénéficiaires en termes d’amélioration de la qualité. En outre, le sous-traitant qui a pu susciter la confiance des établissements est en mesure de se construire une réputation et multiplier le nombre de ses clients publics. Dans une autre perspective, les institutions ont pu susciter la confiance de certaines entreprises (trois) qui désirent développer leurs activités sur le marché public, vu la solvabilité, la transparence et la crédibilité des organisations publiques. Les autres entreprises ont plutôt l’intention de réduire leurs activités sur ce marché. Elles mettent l’accent sur le manque d’organisation qui caractérise le marché public comme la concurrence déloyale et le choix de l’offre du moins-disant. L’intention des entreprises privées de développer leurs activités sur le marché public augmente le nombre des soumissionnaires. La multiplicité des offres permet aux institutions de choisir le prestataire qui répond au mieux à leurs attentes. b. La confiance interpersonnelle: Décrivant la dimension relationnelle du capital social, Tsai et Ghoshal, (1998) considèrent que la confiance interpersonnelle facilite la communication, l’échange d’informations, de connaissances et des ressources entre les acteurs. A cet égard, l’étude a porté sur le rôle des rencontres entre les représentants des organisations partenaires. Ces rencontres représentent, en fait des occasions pour échanger des informations. La conformité des prestations, l’organisation du travail et les réclamations des bénéficiaires sont souvent discutées. Viennent ensuite, la satisfaction des employés et les problèmes rencontrés par ces derniers. Ces rencontres permettent également de remédier aux défaillances et d’améliorer la qualité pour mieux satisfaire les attentes des institutions et des bénéficiaires. Elles offrent un certain nombre de solutions pour développer les relations interpersonnelles et diminuer la distance culturelle et sociale des parties contractantes (Fabbe-Costes et Brulhart, 1999: 38). Ces conditions peuvent à terme induire des relations d’attachement entre les membres partenaires, élargir le réseau relationnel des entreprises et leur construire une réputation.
Partenariat public-privé en Tunisie: Les conditions de succès et d’échec


La confiance interpersonnelle permet aussi de réduire les coûts de transaction grâce à une meilleure circulation de l’information et à un contrôle social exercé par les membres (Tsai et Ghoshal, 1998). Les données collectées permettent de reconnaître que la complémentarité entre la confiance inter-organisationnelle et la confiance interpersonnelle participe à l’achèvement des objectifs des divers acteurs impliqués dans le PPP.

Les conditions d’échec de la relation de sous-traitance
L’asymétrie d’information Afin d’étudier le phénomène d’échange des informations, cette recherche s’est intéressée à la qualité des informations fournies par chaque partenaire. Les informations fournies par les sous-traitants sont considérées par les donneurs d’ordres comme étant peu crédibles (77,7% des interviewés), incomplètes (72,2%), peu conformes à leurs obligations (55,5%) et rarement fournies à temps (77,7%). Par contre, les entreprises disposent d’une information de qualité. La plupart des interviewés affirment que les informations transmises par leurs partenaires publics sont généralement crédibles (83,3%), complètes (66,7%), conformes à leurs obligations (66,7%) et fournies à temps (83,3%). Les partenaires publics disposent alors, de moins d’informations sur l’état réel des prestations que leurs associés privés, ce qui conduit à ce que Voisin (1995, p. 490) appelle ‘un avantage informationnel du mandataire sur le mandant sous la forme d’une rente informationnelle’. Cette situation d’asymétrie d’information mène à une observabilité imparfaite des comportements opportunistes du sous-traitant qui apparaissent souvent en phase post-contractuelle. A cette phase, les prestataires profitent de la «rente informationnelle» qu’ils détiennent et réduisent les coûts de l’activité afin d’accroître leurs marges bénéficiaires. Ceci entrave l’amélioration de la qualité et la satisfaction des bénéficiaires. L’asymétrie d’information a des effets distincts sur la réussite de la soustraitance. Elle entrave, d’une part, la réalisation des objectifs du partenaire public et des bénéficiaires et représente, d’autre part, une opportunité pour les sous-traitants en augmentant leurs profits, à court terme. Toutefois, les comportements opportunistes peuvent à long terme, influencer négativement leurs réputations et réduire leurs parts de marché. Les conflits d’intérêts La majorité des interviewés (77,2% des établissements et 66,7% pour les entreprises) mentionnent qu’ils rencontrent souvent des désaccords avec leurs partenaires. Ces désaccords sont d’origines diverses. Pour les établissements universitaires: L’insatisfaction des employés du sous-traitant (soucis relatifs au paiement des salaires, à l’assurance contre les accidents de travail, etc.) est la première cause (58,8%). Les problèmes de communication sont classés en 2ème position (52,9%). L’opportunisme
Amira Bouhamed and Jamil Chaabouni

du sous-traitant (41,2%) est la 3ème raison des désaccords entre les parties contractantes. Les failles de la réglementation tunisienne représentent la principale cause de ces différends. Les défaillances sont liées à «l’inexistence d’organismes de suivi des entreprises, de leurs pratiques et de la validité des documents justificatifs qu’elles fournissent» (Responsable financier) et au choix du fournisseur le moins-disant (Décret n° 2002-3158). Pour les entreprises de services: Le conflit sur les délais de paiement est le premier motif indiqué par la plupart des répondants (66,7%). Il est souvent dû «à la dispersion de la responsabilité, de la prise de décision et de l’information entre plusieurs acteurs, au sein des organisations publiques» (Gérant/entreprise de services). Les conflits liés aux aspects sociaux concernent principalement le personnel du partenaire public qui se décharge de certaines de ses activités qui se voient effectuées par les employés de l’entreprise (83.3%). Ces conflits d’intérêts provoquent, d’abord, la dégradation de la qualité et l’insatisfaction des bénéficiaires. Ils engendrent aussi, des coûts d’agence trop élevés augmentant les coûts des services. En outre, ils peuvent influencer négativement la santé financière de l’entreprise et sa capacité à couvrir ses charges. En effet, les PME sous-traitantes qui dégagent de petits fonds de roulement sont souvent dans l’incapacité de gérer des impayés (Trégan, 2004: 11). Ces conflits peuvent s’amplifier jusqu’à bloquer la relation. Toutefois, le règlement amiable demeure la modalité la plus souvent utilisée pour résoudre ces problèmes (83,3% pour les institutions et 100% pour les prestataires). Baudry (1994: 44) a constaté, dans son échantillon, que les litiges sont toujours résolus à l’amiable. En dehors des clauses contractuelles, des accords entre les établissements et leurs partenaires peuvent constituer des arrangements de convenance en rapport avec les relations de pouvoir. Chaque participant à la transaction trouve un intérêt à la poursuite de la relation (Baudry 1993: 59). Malgré les comportements opportunistes des prestataires, les acteurs publics ne peuvent pas réagir puisque ces sous-traitants aboutissent à des résultats plus satisfaisants en termes de qualité, coût et délai. Ils permettent de remédier à la lourdeur dans la gestion publique des ressources humaines. Selon Pochard (2000: 7), la gestion de la fonction publique est à dominante bureaucratique et administrative. Le monde de l’entreprise multiplie plutôt les efforts demandés au personnel. Même si certains conflits persistent, le sous-traitant accepte de maintenir une relation stable avec ses clients publics pour ne pas subir les représailles du partenaire public qui peut allonger les délais de paiement et/ou appliquer les pénalités et les sanctions financières. Certes, les conflits entravent, la réussite de ce PPP. Toutefois, dans la plupart des cas, la relation est maintenue puisqu’elle permet de dépasser les faiblesses de chaque partenaire. La coopération est parfois dictée par un besoin (Derbel et Ben Ammar Mamlouk 2003).
Partenariat public-privé en Tunisie: Les conditions de succès et d’échec


Le PPP est l’une des alternatives qui marque la redéfinition du rôle de l’Etat. L’objectif de ce travail de recherche est de cerner les différentes conditions de succès et d’échec de cette relation. La revue de la littérature a permis de dégager les critères d’évaluation du succès du PPP à savoir la réalisation des objectifs des partenaires public et privé et des bénéficières. Pour cerner les différentes conditions susceptibles d’influencer l’atteinte de ces objectifs, deux corpus théoriques ont été mobilisés. Selon la théorie des coûts de transaction, les évaluations ex-ante et ex-post et la confiance représentent des mécanismes augmentant la probabilité de réussite du PPP. La théorie de l’agence met plutôt l’accent sur l’asymétrie d’information et le conflit d’intérêts entre les partenaires en tant que conditions d’échec du PPP. La recherche empirique a été menée auprès de 18 institutions universitaires ainsi qu’auprès de leurs prestataires (6 entreprises). Les résultats montrent que cette coopération n’aboutit pas toujours aux objectifs visés. Plusieurs facteurs peuvent expliquer ce résultat. Les évaluations ex-ante et ex-post et la confiance permettent de favoriser la réalisation de certains objectifs du partenariat et d’entraver l’atteinte d’autres. Dans le même ordre d’idées, l’asymétrie d’information et le conflit d’intérêts perturbent le déroulement du PPP, sans toutefois rompre la relation qui reste, malgré tout, profitable pour les différentes parties. Cette situation paradoxale peut s’expliquer par le fait que les acteurs respectent les prescriptions des organisations internationales et le nouveau cadre de la gestion publique, mais en gardant la même philosophie de gestion dans l’administration publique et dans l’entreprise privée. Selon Gosse et al. (2002) la sous-traitance induit une forme d’organisation paradoxale qui se définit par certains attributs des nouvelles formes organisationnelles, tout en présentant des similitudes avec les caractéristiques du taylorisme. La question qui se pose alors, comment les opérateurs publics peuvent-ils adopter les prescriptions des institutions internationales de façon à ne pas heurter la capacité de changement de l’organisation? Ceci représente un défi au niveau de la théorie et de la pratique que d’autres recherches devraient examiner. Si les intérêts certes différents des parties en collaboration peuvent inciter à l’opportunisme, des aménagements réglementaires conjugués avec un renforcement du processus d’apprentissage récent relatif à la coopération entre le public et le privé pourraient améliorer les chances de succès partagé du PPP. A cet effet, une plus grande autonomie dans la gestion publique combinée avec la mise en place de mécanismes d’imputabilité serait d’un apport substantiel. Références
Aubert, A.B. et Patry, M. (2004), ‘Les partenariats public-privé: une option à considérer’, Gestion, 29: 2, pp.74–86. Barthélémy, J. (2004), ‘Comment réussir une opération d’externalisation’, Revue française de gestion, 151, pp. 9–41.


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Baudry, B. (1993), ‘Partenariat et sous-traitance: une approche par les théories des incitations’, Revue d’économie industrielle, 86, pp. 51–69. ——— (1994), ‘De la confiance dans la relation d’emploi ou de sous-traitance’, Sociologie de travail, 1, pp. 43–61. ——— (1999), ‘Qualité des produits et coordination dans la relation de soustraitance: une analyse économique de la procédure de certification industrielle’, Revue internationale des P.M.E, 12: 4, pp. 59–75. Bonnafous, A. (2002), ‘Les infrastructures de transport et la logique financière du partenariat public-privé: quelques paradoxes’, Revue française d’économie, 17, pp. 175–193. Boyne, G.A. (2002), ‘Public and Private Management: What’s the Difference?’, Journal of Management Studies, 39: 1, pp. 97–122. Brulhart, F. (2002), ‘Le rôle de la confiance dans le succès des partenariats verticaux logistiques: le cas des coopérations entre industriels agroalimentaires et prestataires logistiques’, Revue Finance Contrôle Stratégie, 5: 4, pp. 51–78. Calvi, R., Le Dain, M.A. et Harbi, S. (2000), ‘Le pilotage des partenariats clientfournisseur dans l’industrie’, Revue française de gestion industrielle, 19: 1, pp. 5–15. Chanson, G., (2003), ‘ nalyse positive et normative de l’externalisation par la théorie A des coûts de transaction et la théorie de l’agence’, Les cahiers de la recherche, CLAREE, Septembre. Chevallier, J. (1997), ‘La gestion publique à l’heure de la banalisation, Revue française de gestion’, 105, pp. 26–37. Choe, S. (2002), ‘Promesses et embûches des partenariats public-privé en Corée’, Revue internationale des sciences sociales, 172, pp. 278–285. Coase, R.H. (1937), The Nature of the Firm: Origins, Evolution, Development, New York: Oxford University Press. Damon, J. (2002), ‘La dictature du partenariat: vers de nouveaux modes de management public’, Futuribles, 273, pp. 27–41. Derbel, W. et Ben Ammar Mamlouk, Z. (2003), ‘Le dilemme de la confiance et de la coopération: interdépendance des acteurs et suprématie du système organisationnel’, La revue des sciences de gestion, Direction et gestion, 204, pp. 63–89. Donada, C. et Garrette, B. (2001), ‘Partenariat vertical et gain coopératif pour les fournisseurs’, Management International, 5: 2, pp. 19–32. Dyer, J. et Singh, H. (1998), ‘The relational view: cooperative strategy and sources of inter-organizational competitive advantage’, Academy of Management Review, 23: 4, pp. 660–679. Dyer, J.H. (1997), ‘Effective inter-firm collaboration: how firm minimize transaction cost and maximize transaction value’, Strategic Management Journal, 18: 7, pp. 535–556. Fabbe-Costes, N. et Brulhart, F. (1999), ‘Fonctionnement en réseau de partenaires: conditions de réussite’, Revue française de gestion industrielle, 18: 1, pp. 29–46. Favoreu, C. (2004), ‘Réflexion sur les fondements de la structure et du management stratégique en milieu public’, www.stratégie.aims.com\montreal\favoreu.pdf. accès le 25 September 2004. Fisbein, A. et Lowden, P. (1999), ‘Working Together for a Change: Government, Civic, and Business Partnerships for Poverty Reduction in Latin America and the Caribbean’, EDI Learning Resources Series, Washington: World Bank. Giauque, D. (2004), ‘Coordination et coopération au sein d’ensembles organisés: une affaire de confiance’, http://gateway.proquest.com/openurl?url_ver=Z39.82004 &res_dat=xri:pqd&rft_val_fmt=info:ofi/fmt:kev:n. accès le 12 October 2004.

Partenariat public-privé en Tunisie: Les conditions de succès et d’échec


Gosse, B., Sargis-Rouselle, C. et Sprimont, P.A. (2002), ‘Changements organisationnels liés aux stratégies d’externalisation: le ces d’une entreprise industrielle’, Revue Finance Contrôle Stratégie, 5: 1, pp. 101–128. Guillaumont, P., Calipel, S., Chambas, G., Collier, P., Donsimoni, M., Faini, R., Geourjon, A.M., Mathonnat, J., Plane, P. et Zglinicki, J.P. (1997), Ajustement et développement: l’expérience des pays ACP: Afrique, Caraïbe, Pacifique, Paris: Economica. Huat, T.C. (1980), ‘Domestic joint ventures between the public and the private sectors: the case of Singapore’, in V.V. Ramanadhan (ed.), Joint Ventures for Public Enterprises in Developing Countries, Proceeding of an international seminar held in Ljubljana, Kumarian Pr Inc, pp. 149–177. Ideloviteh, E. et Ringskog, K. (1995), ‘Private Sector Participation in Water Supply and Sanitation in Latin America’, Direction in Development, Washington: World Bank. Jost, G., Dawson, M. et Shaw, D. (2005), ‘Private Sector Consortia Working for a Public Sector Client-Factors that Build Successful Relationships: Lesson from the UK’, European Management Journal, 23: 3, pp. 336–350. Journal Officiel de la République Tunisienne, Décret n° 2002-3158 du 17 Décembre 2002, 103, pp. 3036–3056. Journal Officiel de la République Tunisienne, Décret n° 2003-1638 du 4 Août 2003, 63, pp. 2605–2609. Kanter, R.M. (1994), ‘Collaborative Advantage: The Art of Alliances’, Harvard Business Review, 72: 4, pp. 96–108 Lambe, C.J., Spekman, R.E. et Hunt, S.D. (2002), ‘Alliance Competence, Resources, and Alliance Success: Conceptualization, Measurement and Initial Test’, Journal of the Academy of Marketing Sciences, 38: 2, pp. 141–158. Landier, D. et Benayoun, O. (2003), Malfaçons dans les bâtiments publics, Réalités Industrielles, Février, pp. 25–28. Maréchal, F. et Morand, P.H. (2002), ‘Sous-traitance et avenants dans les marchés publics: une illustration’, Revue d’économie politique, 112: 1, pp. 103–107. Martimort, D. et Rochet, J.C. (1999), ‘Le partage public-privé dans le financement de l’économie’, Revue française d’économie, 14, pp. 33–37. Medeb, R. (2003), ‘La participation du secteur privé au financement des projets d’infrastructures’, www.fcic-secteur-prive.com. accès le 22 May 2003. Montmorillon, B. (1989), ‘Vers une reformulation de la théorie du groupe’, Revue d’économie industrielle, 47: 1, pp. 14–26. Morin, D. (1998), ‘La fonction publique canadienne à l’aube de l’an 2000: Canada inc: fiction ou réalité?’, Gestion, 23: 1, pp. 14–22. Neuville, J.P. (1997). ‘La stratégie de la confiance: le partenariat industriel observé depuis le fournisseur’, Sociologie de travail, 3, pp. 297–319. Neuville, J.P. (1998), ‘Figures de la confiance et de la rationalité dans le partenariat industriel’, Revue française de gestion, 119, pp. 15–24. Nkakleu, R. (2003), ‘L’identité organisationnelle et création du capital social: la tontine d’entreprise comme facteur déclenchant dans le contexte africain’, cournot2.u-strasbg.fr/users/beta/publications/2003/2003-02.pdf. accès le 6 juin 2006. Nogatchewsky, G. (2003), ‘L’exercice du contrôle dans la relation client-fournisseur’, Revue française de gestion, 29: 147, pp. 173–183. Nutt, P.G. (2000), ‘Decision-Making Success in Public, Private and Third Sector Organizations: Finding Sector, Dependant Best Practice’, Journal of Management Studies, 37: 1, pp. 77–108.
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Pochard, M. (2000), ‘Quel avenir pour la fonction publique?’, Actualité juridiquedroit administratif, 1, pp. 3–19. Pettigrew, A. (1997), ‘Le new public management conduit à un nouveau modèle hybride public-privé’, Revue française de gestion, 105, pp. 113–120. Poppo, L. et Zenger, T. (2002), ‘Do formal contracts and relational governance: function as substitutes or complements?’, Strategic Management Journal, 23: 8, pp. 707–725. PUMA note de synthèse N°2 (2004), ‘La sous-traitance des services publics: principes directeurs pour une meilleure pratique’, www.oecd.org. accès le 20 January 2004. Rapport de l’ISP (2004), ‘Politique et stratégie de l’ISP face au rôle du secteur public’, www.world.psi.org. accès le 20 January 2004. Rapport sur le développement dans le monde (1994), ‘Une infrastructure pour le développement’, Washington: Banque Mondiale. Thiétart, R.A. (1999), Méthodes de recherches en management, Paris: Dunod. Trégan, J. (2004), ‘Facteurs déterminants des modes de relations entre donneur d’ordres et sous-traitant dans l’habillement marseillais’, www.univ-aix.fr/lest/ lesdocumentsdetravail/tregan/treganprox.pdf. accès le 9 December 2005. Tsai, W. et Ghoshal, S. (1998), ‘Social Capital and Value Creation: The Role of Intrafirm Networks’, Academy of Management Journal, 41: 4, pp. 464–478. Viau, J. (2003), ‘Pratiques relationnelles et commande publique: enjeux et perspectives’, Market Management, 2, pp. 3–39. Voisin, C. (1995), ‘La privatisation, une question d’incitation: propriété, réglementation et information’, Revue d’économie politique, 1, pp. 483–513. Williamson, O.E. (1975), Markets and Hierarchies, New York: Free Press. ——— (1985), The Economic Institutions of Capitalism, New York: Free Press. Yaya, H.S. (2005), ‘Les partenariats privé-public comme nouvelle forme de gouvernance et alternative au dirigisme étatique: Ancrages théoriques et influences conceptuelles’, www.innovation.cc/francais/yaya.1-final.pdf. accès le 14 December 2005. Zaheer, A., McEvily, B. et Perrone, V. (1998). ‘Does trust matter? Exploring the effects of inter-organizational and inter-personal trust on performance’, Organization Science, 9: 2, pp. 141–159.

Suggested citation
Bouhamed, A. and Chaabouni, J. (2008), ‘Partenariat public-privé en Tunisie: Les conditions de succès et d’échec’, International Journal of Technology Management and Sustainable Development 7: 1, pp. 71–89, doi: 10.1386/ijtm.7.1.71/1

Contributor details
Amira Bouhamed is Researcher and Lecturer at the Faculty of Economics and Management of Sfax in Tunisia. Contact: Chercheur, Faculté des Sciences Economiques et de Gestion de Sfax, BP 1088, 3018 Sfax, Tunisie. E-mail: Amira.Bouhamed@fsegs.rnu.tn Jamil Chaabouni is Professor in Management Studies at the Faculty of Economics and Management of Sfax in Tunisia. He leads a Reseach Unit on Management Studies. His research interests include governance, strategy and organisational structure, organisational change and information management. Contact: Professeur, Faculté des Sciences Economiques et de Gestion de Sfax, BP 1088, 3018 Sfax, Tunisie. E-mail: Jamil.Chaabouni@fsegs.rnu.tn

Partenariat public-privé en Tunisie: Les conditions de succès et d’échec


Event Report
International Journal of Technology Management and Sustainable Development Volume 7 Number 1 © 2008 Intellect Ltd Report. English language. doi: 10.1386/ijtm7.1.91/4

Global student innovators workshop: Opening the way for product inspiration and sustainability
Caroline Cottrill British Telecom (BT) Tony Houghton British Telecom (BT)

A major responsibility of industry is not only to innovate but also to understand and address evolving need profiles and technological trends in the light of the global objectives of sustainability. How do school age children view tomorrow’s world and to what extent are such views seriously taken on board by corporate business in the innovation design process? As a leading provider of communication solutions with a long track record in research and development through partnership with Universities and technology companies, British Telecom (BT) has recently taken the initiative to understand the needs and potentials of student innovators ranging from 6 to 18 years of age. The initiative went global with the launch of the first ‘Global Student Innovators BT Design Hothouse Challenge’ in December 2007. This initiative would allow BT to incorporate the views of those representing the mindset of the next-generation of customers into innovation designs for communication services. It is significant that BT has one of the largest technology research centres in the United Kingdom, which received £727 million in R&D investment in 2005–2006. The Design Hothouse initiative also gives gifted school children the opportunity to be able to tap their creative potentials at an early age. The remainder of this brief aims to highlight the significance of BT’s research and innovation programmes in the light of its recently launched Global Student Innovators BT Design Hothouse Challenge.

The initiative
Prior to the Hothouse, about thirty schools in the United Kingdom and those around the globe were invited to participate in the following challenge: • Design creative IT/communications technology implementations that can positively impact education as well as local and global communities.

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For example, what might be the next cool, ultra cheap mobile device? How might we best include older members of the local community? How might we use communications technology to reduce the carbon footprint? Use the most effective communication and collaboration methods in designing the technology. For example, a technology-rich school might discover a free on-line collaborative working tool which they can use with their partner schools, or a technology impoverished school might enlist the support of the local Internet café, and a school might explore how tin cans can enhance a WLAN.

After months of activities, eight winning teams and their global ‘twin’, from countries such as India, United States and Uganda, were chosen by BT to take part in the first Global Student Innovators Hothouse on 3 December 2007 in London. The Hothouse featured selected students and BT people working together in teams to develop and present the existing ideas, prototypes and solutions taking into account originality of idea and the feasibility of their ideas from business and technical perspectives. The participants undertook an intensive hot-house product prototype design activity with BT business and technology experts with the possibility of taking the idea through to delivery, that is, BT will support the development of the idea. BT is already doing this with the free open source BECTA compliant learning platform easiAPP, which was a result from previous Understanding the Young Customer work. The project Wiki is an ongoing log of just how far these ideas have come – over 50 percent of projects are now real.

Hothouse outcomes
The judges voted Gorseland Primary School, Ipswich, first for their innovative project ‘iCook’, http://www.icookbook.net/. Gorseland collaborated with their twin school Kudawella, in the Hambantota district of Sri Lanka to develop ‘iCook.’ This collaboration offered many possibilities to explore and contrast healthy eating, global differences and to learn local people’s recipes. Pershore High School, South Worcestershire came second (fabulous variety of five ideas with a common theme) and Katha school, India, third. Details of all the schools projects can be found on www.easicop.org

The workshop presented a learning experience that would help young students shape their perception of corporate responsibility for innovation in the light of future needs and prime them into being prospective innovators. The workshop was also significant for BT, as champion of the initiative, in terms of feeling the way forward into the future with respect to market research and development trends, as school children are frequently the entry point in households for new technology-based services or devices.
Caroline Cottrill and Tony Houghton

Moreover, students studying computer science today could become the technology entrepreneurs of tomorrow. Even though IT is playing an increasingly important role in everyday life, the number of students pursuing engineering degrees and IT careers is stagnating. Initiatives such as BT Design’s Global Student Innovators Hothouse is expected to encourage students to consider a career in technology by giving them valuable realworld experience in problem-solving, team dynamics, public presentations and other career-building skills. Suggested citation
Cottrill, C. and Houghton, T. (2008), ‘Global student innovators workshop: Opening the way for product inspiration and sustainability’, International Journal of Technology Management and Sustainable Development 7: 1, pp. 91–93, doi: 10.1386/ijtm.7.1.91/4

Contributor details
Caroline Cottrill is an internal communications manager and project leader in BT. Contact: PP 3/3, Telephone House, Charter Square, Sheffield, South Yorkshire S1 1BA. E-mail: caroline.cottrill@bt.com Dr Tony Houghton is head of the Global Student Innovators BT Design Hothouse Challenge. Contact: PP 3/3, Telephone House, Charter Square, Sheffield, South Yorkshire S1 1BA. E-mail: tony.houghton@bt.com

Global student innovators workshop: Opening the way for product inspiration . . .


Book Reviews
International Journal of Technology Management and Sustainable Development Volume 7 Number 1 © 2008 Intellect Ltd Reviews. English language. doi: 10.1386/ijtm7.1.95/5

Science and Citizens: Globalization and the Challenge of Engagement, Melissa Leach, Ian Scoones and Brian Wynne (eds.) (2005) London: Zed Books, 295 pp., ISBN 1 84277 550 2 (hbk); 1 84277 550 0 (pbk), £19.99.
Science and Citizens represents one of the first attempts to broadly ‘engage with engagement’ in the context of science, technology and development. This edited collection presents a series of case studies of engagement from countries in both the North and South, including South Africa, China, India, Brazil, Zimbabwe, Sierra Leone as well as countries such as the UK and USA. The book attempts to segue a range of concerns regarding science, for example, the role of indigenous knowledge, what we mean by citizenship, how participation shapes policy and how risk is perceived and what role this plays in decision-making. These debates, amongst others, key into the heart of debates around the development, or construction, of new knowledge in context. The book focuses on case studies from many different contexts, and while case studies are both Northern and Southern, developed and developing, I believe the importance of the book lies in the representation of the South. There is a massive literature on how citizens engage with science in the North where the discipline of science and technology studies has been widely deployed. For various reasons the discipline has been much less widely engaged in the South. One of the strengths of the book, then, is this attempt to tissue together such diverse case studies and draw insights from across both development studies and science and technology studies. The book, primarily drawn out of work organised by the Institute of Development Studies at Sussex, is organised and linked together into four sections: ‘science and citizenship’ and ‘beyond risks: defining the terrain’ set the conceptual scene, whilst ‘citizens engaging with science’ and ‘participation and the politics of engagement’ encompass around a dozen case studies that represent a variety of technologies, contexts and continents. The editorial team are particularly noteworthy, Melissa Leach and Ian Scoones have a long history of looking at the role knowledge plays in shaping development, and implicit in that is, understanding how knowledge is produced, negotiated and contested. The final member of the editorial triumvirate, Brian Wynne, is interesting in that he brings his own
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discipline of science and technology studies to the book, in particular his expertise in the relationship between expert and lay knowledge. Many of us would argue that science and technology studies has a lot to offer development studies, and indeed the opposite can be argued too, and this book represents an important first step in acknowledging the possibilities of engaging across disciplines in this way. The book provides an excellent introduction to thinking about participation, science and society. There is a clear and concise theoretical introduction that leads into a deeper debate about science, risk and regulation. The book then introduces a series of rich case studies examining issues as diverse as HIV/AIDS in South Africa, biotechnology regulation in developing countries, occupational health in India, farmers’ citizens’ juries in Zimbabwe and radioactive waste management in the UK. A strength of the book is that the authors include not only academics, but also policymakers, practitioners and activists. The book is very grounded. An almost inevitable weakness of this is that I feel participation is treated in a normative, slightly uncritical way. Participation is seen as a fairly universal good, and in some chapters at least there is a certain sense that the more participation the better. The book undoubtedly moves far beyond participation as simply an instrument, or a means to co-opt but one is left with the feeling that the more critical perspectives on participation (as ‘tyranny’ to paraphrase Cooke and Kothari) are somewhat absent. Nevertheless, Science and Citizens provides much critical insight alongside its empirical breadth. It helps us think about not only the implications of participation, but how it might occur in relation to science, technology and development. The focus of Science and Citizens is very much on engagement but one would hope that other lines of enquiry, for example understanding the ways in which technologies are socially embedded in developing country contexts and how meaningful innovation can be promoted in developing country contexts can be energised by this explicit and relatively systematic treatment of the relationship between science, technology and participation. I have always had the sense that technology, which has long been critiqued as potentially inappropriate or too central to the project of development is seen as somehow ‘inert’ by development studies. Science and Citizens, however, uncovers the living reality of engagement, politics, processes and platforms that attempt, at least, to shape debate, development and decision-making in a range of contexts. Reviewed by James Smith, University of Edinburgh. Reference
Cooke, B. and Kothari, U. (2001), Participation the New Tyranny? London: Zed Books.


TMSD 7 (1) Reviews © Intellect Ltd 2008

Biotechnology Policy in Africa, Clark, N.G., Mugabe, J. and Smith, J. (2007). Nairobi: African Centre for Technology Studies, 137 pp., ISBN 9966-41-148-8.
This book is a compilation of papers by researchers with wide-ranging hands-on experience in many aspects of science, technology and development in Africa and at the global level. The book brings out rich empirical and theoretical viewpoints and should therefore serve as a good source of information for researchers/scholars, civil society, policy makers, donors and many other actors with an interest in both practical and theoretical aspects of issues in science, technology and development in Africa. Issues of technology governance, institutions, innovation systems, public engagement and science policy studies are covered to commendable breadth and depth in the book. In particular, the book clearly brings out some of the ‘contested boundaries’ in development and regulation of technologies as amply covered in science and technology studies (c.f. Jasanoff 1987). The aim of the book, according to the authors, is to ‘generate and provide knowledge and information to improve policy processes in subSaharan Africa (SSA)’; and from the quality of its content, there is good reason to believe that the book can go a long way in achieving this. All regions of SSA are covered in the book, except Central Africa. The book sets the scene by building the story from the basics of biotechnology, its potential and challenges, the global debates around the issue, as well as the specific context of SSA with respect to the technology. As the authors aptly put it, the questions and issues around biotechnology are ‘as much about decision-making, as they are about the technology’. Their recognition of the bigger contextual issues overarching the policy processes in the area of biotechnology in SSA testifies to this and is also reflected in the importance they play not only on the contemporary global debates on science, technology and innovation but also on the importance of historical and future dimensions of current policy endeavours (c.f. Sociology of Expectations in Science and Technology). The presentation of different national experiences around biotechnology policy processes and the linkages with other sectors of the economy sets the stage for bringing out the realities that countries are facing, furnishing parallels and comparisons for the reader. Most importantly, the different experiences are presented in a way that not only explains the prevailing circumstances but also aims to predict future responses based on experiences. The challenges for this and for the entire policy processes are presented and explained. As with many projects focusing on Africa, this book sets out with multiple objectives, and in many ways this reflects the interrelationships between the various issues addressed and their complex intercalations on the ground. It also reflects the multiple challenges facing the continent and the quests to step up and address the issues. On the other hand, the
TMSD 7 (1) Reviews © Intellect Ltd 2008


grand setting also brings out the possibility of some grand statements being made – for example, ‘the policy processes are only in response to international policy and law’ (Page v). This downplays the local policy innovations and the socio-economic imperatives driving some of the processes or the interface between the external and internal influences. The book also seems to marginalise the increasingly important and prominent role of cross-national, regional and extra-regional technology development and regulation processes in the countries covered. Efforts by regional economic communities and bodies such as the New Partnership for Africa’s Development (NEPAD) and the African Union, among others, would in this regard be handy. In the final chapter, the book takes a close look at how countries can build ‘public confidence’ in the face of technological opportunities brought about by modern biotechnology. It is not clarified here what ‘public’ entails, but the inescapable assumption for this section is that it is this lack of ‘public’ confidence which is one of the bottlenecks for the development of appropriate policies for ‘maximising the benefits and minimising the risks of modern biotechnology’. On the other hand, the lack of ‘political will’ to push processes forward has been bemoaned by many researchers and policy actors in the continent, and it would be crucial to understand from both empirical and theoretical perspectives to what extent ‘politicians’ identify themselves as being part of the ‘public’ and how they would therefore be happy to be part of the proposed ‘broad-based’ platforms. These and the clearly positivistic and science-led approach proposed in this final chapter are well worth reading to understand the authors’ perspective, especially in the backdrop of socially-constructed and context-led interventions in the cases presented. Understandably, not all issues in the highly integrative area of science and technology, broadly, and biotechnology, specifically, could be covered in just one volume. This book thus represents an effort to bring together and illuminate these elusive issues which are emerging from as well as shaping an ever-changing context. Continuous and more such efforts can only help in the quest for effective policy decisions. This book is a must-read for all stakeholders in the science and technology policy arena. Reviewed by Julius Mugwagwa, Development Policy and Practice, Open University.


TMSD 7 (1) Reviews © Intellect Ltd 2008

International Journal of Technology Management & Sustainable Development
Volume 7 Number 1 – 2008
Articles 3–17 19–38 Assessing a rural innovation system: Low-input rice in Central China J. David Reece Determinants of the adoption of technological innovations by logistics service providers in China Chieh-Yu Lin Innovation and entrepreneurship in Brazilian universities Mariza Almeida Knowledge proximity and technological relatedness in offshore oil and gas and offshore wind technology in the United Kingdom Zahid A. Memon and Roshan S. Rashdi Partenariat public-privé en Tunisie: Les conditions de succès et d’échec Amira Bouhamed and Jamil Chaabouni Event Report 91–93 Global student innovators workshop: Opening the way for product inspiration and sustainability Caroline Cottrill and Tony Houghton Book Reviews 95–98 Reviews by James Smith and Julius Mugwagwa

39–58 59–70



ISSN 1474-2748

The International Journal of Technology Management and Sustainable Development is published with the cooperation of the Association of Commonwealth Universities

9 771474 274006

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