Gatekeepers, Knowledge Brokers and Inter-Firm Knowledge Transfer in Beijing Zhongguancun Science Park
Gatekeepers, Knowledge Brokers and Inter-Firm Knowledge Transfer in Beijing Zhongguancun Science Park
Gatekeepers, Knowledge Brokers and Inter-Firm Knowledge Transfer in Beijing Zhongguancun Science Park
GATEKEEPERS, KNOWLEDGE BROKERS AND INTER-FIRM KNOWLEDGE TRANSFER IN BEIJINGS ZHONGGUANCUN SCIENCE PARK
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MATIAS RAMIREZ*
SPRU- Science and Technology Policy Research University of Sussex, The Freeman Centre, Brighton, BN1 9QE, UK
An important part of industrial policy in China has been directed towards improving the degree and effectiveness of knowledge transfer between key rms in Chinas innovation system. Amongst these policies, the creation of regional science parks that encourage labour mobility and inter-rm collaboration on innovation projects have been central. Learning through inter-rm knowledge transfer focuses the attention on at least two key factors, improving absorptive capability (Cohen and Levinthal, 1990), which relies on the development of specialised skills in the rm and the establishment of inter-organisational networks through which knowledge is transferred. This paper contributes to this analysis through a detailed study of the relationship between learning and knowledge transfer of knowledge workers working on innovation projects in Chinese ICT companies located in Beijings Zhongguancun (ZGC) hightechnology park. A major advantage of analysing knowledge transfer through the activities of R&D employees is that it highlights the process by which specic competencies and network relations are built. A skills prole of R&D employees is developed that, amongst other features, includes three different networks Chinese knowledge workers use to access and share knowledge: formal organisational networks, personal networks and scanning networks. Empirical data based on two unique surveys in China of senior R&D managers and R&D employees was collected and analysed. This suggests that a skills prole combining knowledge within and outside of the company and scanning activity positively
Corresponding author.
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M. Ramirez & P. Dickenson impact both the innovation projects and the labour market position of the knowledge workers. Policy recommendations in terms of training and development in R&D follow. Keywords: Gatekeepers; clusters; China innovation system; knowledge brokers; knowledge transfer.
Introduction
A substantial body of literature emanating from innovation studies has emphasised that, with the development of the ICT paradigm, the organising principles in hightechnology industries have evolved to take into account greater degrees of collaboration and knowledge transfer. This process has emerged because of the more diverse and complex nature of knowledge associated with the development of new technologies and the greater range of actors involved in the generation of new knowledge (Gibbons et al., 1994; Castells, 1996; Chesbrough, 2006). Studies that focus on the specic role that scientists and engineers play in knowledge transfer have tended to emphasise two types of studies. Firstly, there are those that stress the importance of mobility and migration as a form of embodied knowledge ow (Zimmerman, 1995; Vandamme, 2000; Crescenzi et al., 2007). This has some important implications for patterns of skill and career formation, as expressed in the emergence of boundaryless careers in high-technology clusters (Arthur and Rousseau, 1996; Saxenian, 1996). A second related approach focuses on the networks employees form during their careers in different rms. For example, Casper and Murray (2005) compare the career paths of scientists in biotech clusters of Cambridge in the UK and San Diego in the US, and reveal that US scientists build up much higher levels of social capital through their careers because of the higher level of mobility. The signicance of this approach is that knowledge worker networks become an alternative medium through which knowledge is transferred and can potentially be an effective mechanism of knowledge transfer. A further point emphasised is that, over and above the different conduits that exist for knowledge transfer, the ability of knowledge workers to act as effective intermediaries of knowledge for the rm will be dependent on the development of a specic skills prole associated with the ability to scan, translate and evaluate the usefulness of external information and to apply this to a different organisational environment (Macdonald and Williams, 1992; Leonard-Barton, 1995). Creating effective bridges between the worlds inside and outside the rm is, therefore, based on developing common understandings between different groups of practitioners as a prior condition for learning. The paper builds on the above discussion by arguing that effective processes of knowledge transfer involve the development of a specic division of labour that combines experiential learning of knowledge
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workers inside and outside the rm. It goes one step further by identifying a series of networks and channels of communication Chinese knowledge workers will engage with and tests whether participation in these positively impacts both innovation projects and the labour market position of knowledge workers themselves. This study is highly relevant for Chinas emerging ICT research system, the labour markets of which have changed rapidly in the course of the last decade, but have not been studied in great detail. The methodology of the study is built upon a unique survey undertaken in 2006 of 381 R&D employees working on ICT innovation projects in 71 Chinese high-technology rms located in Beijings Zhongguancun (ZGC) high-technology park, Chinas largest high-technology science park. The paper is structured as follows. Firstly, the broader literatures tracing the mechanisms by which effective networks of knowledge transfer are built at the rm level are discussed. The next section discusses how R&D employees act as agents of knowledge transfer in innovation. Emphasis is placed on the development of specic competencies and access to networks. A series of hypotheses are generated that cover skills and network activities of R&D workers. Next, the evolution of scientic labour market structures in China is discussed, emphasising their rapid transformation since the years of the planned economy and the high rates of turnover currently experienced in the high-technology clusters. The empirical section analyses the data gathered on a recent project on knowledge workers in Beijing and discusses the ndings in the light of the hypotheses. The nal section reects on the implications of the analysis and ndings for knowledge transfer and the management of scientic labour markets in China.
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high-technology companies to locate in science parks in terms of tax breaks are considerable and this has attracted signicant numbers of enterprises. Three quarters of all high-technology activity in China takes place in its science parks. Moreover, it is estimated that more that 4 million people are employed within the science parks (China Science and Technology Statistics Databook, 2004) while in the year 2000, science parks accounted for more than 25% of Chinas value-added output (Cao, 2002). There is nevertheless some debate regarding the effectiveness of these policies (Katila and Ahuja, 2002), particularly in Asia. While Massey et al. (1992) question the existence of networking and point instead to the opportunity real estate developers have to benet from booming land revenues, Walcott (2003) suggests that in developing countries such as China, underlying institutions, such as government support, intellectual property protection and solvent nancial institutions are required to derive benets from industrial clustering. Similarly, for networking to be effective, mediating actors and institutions for the rules of engagement need to exist. Therefore, given the dominant position they have achieved in China, understanding how inter-rm knowledge transfer within science parks have inuenced the development of the ICT sector is clearly important. The enthusiasm for new economy type activity invites a brief recount of how the building of organisational capabilities through inter-rm knowledge transfer has been conceptualised. This begins by grouping a body of literature around resource-based explanations of competence building that suggest learning organisations build capabilities based on hard-to-copy and largely tacit internal routines (Penrose, 1959; Nelson and Winter, 1982; Barney, 1991; Teece and Pisano, 1994). The original emphasis of this work was on explaining differential performance between organisations through the development of internal competencies. Cohen and Levinthals (1990) highly inuential work on absorptive capacity extended the concept of internal competence to argue that learning from external sources will depend on the rms prior ability to assimilate new knowledge. Absorptive capacity, therefore, is a specic resource that has to be generated and built through strategic intent, for example, by specically targeting human resources that have the experience of working outside the rm. A number of other contributions underline the importance of coupling of internal and external capabilities. Rigby and Zook (2002), for example, argue that combining internal and external information sourcing through open market innovation is a critical source of comparative advantage, while Arora and Gambardella (1994) noted that internal know-how was required to be able to screen external projects. A related but more recent set of studies highlight knowledge ambiguity as one of the most important predictors of the effectiveness of organisational knowledge transfer (Levin and Cross, 2004; Szulanski et al., 2004). Knowledge
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ambiguity refers to the uncertainty of what the underlying knowledge components and sources are (Reed and DeFilippi, 1990). Although high ambiguity clearly acts as a barrier to knowledge transfer, van Wijk et al. (2008) also suggests that high levels also contribute to protecting knowledge from being imitated by rivals. Therefore, rms will often search for a balance between high and low levels of ambiguity. A third set of studies emphasises the types of networks rms engage in, with particular emphasis on differences between strong and weak ties (Granovetter, 1973). Strong ties implies regular interaction and a number of studies have emphasised their importance for the building of trust and long-term collaborative commitments. van Wijk et al. (2008), for example, in their meta-analytical review of the contextual factors that positively contribute to innovation performance, found that the degree of relational capital rms hold through tie strength and trust was highly signicant. Weak ties on the other hand imply access to disparate heterogeneous knowledge through a range of networks. They have been shown to be invaluable for introducing novelty (Burt, 2005), and have also been emphasised in Rodan and Galunics (2004) study of managers and Sammarra and Biggieros (2008) study of multiple networks. Finally, it is possible to identify an approach that focuses on the governance of networks as a mechanism of coordination for the transfer of knowledge. Unlike resource-based approaches that emphasise the organisation as the relevant unit of analysis, network-based theories suggest that social phenomena does not exist independently, but are in fact brought into existence by the relationships they establish (Thompson, 2003; Castells, 1996). It follows that an understanding of the governance of networks will provide important information as to the nature of the collaboration. If attention is focussed specically on the governance of social networks, the relationships that are established between the actors that conform these will be strongly shaped by the rules, conventions and standards that are formed within the network. In this sense, the governance of inter-rm networks can vary a great deal. On the one hand, it is possible to conceive of highly formalised contractual inter-rm alliances, such as strategic or supplychain type collaborations, the governance of which will be dened largely by hierarchical control (Powell and Grodal, 2005) and where transfer of knowledge is likely to be regulated to a high degree by formal codied arrangements over the scope, aims and outputs of collaboration. On the other hand, there exist informal quasi-horizontal networks of practitioners, such as the open source networks that owed from development of the Linux software, the existence of which hinges around norms for problem-solving that exist parallel to formal organisational structures (DeFillippi et al., 2006). Here governance may be dominated by concepts of reciprocity, where favours are provided on the
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expectation of future reciprocal gifts of equal or higher value. Alternatively, it may be wrong to conceive gifts as an exchange at all in some networks, but instead a service that is provided around values of cooperation and goodwill common to members of the network (Thompson, 2003). Although studies relating informal networks to innovation are less common in innovation research, Powell and Grodal (2005) note that informal relations may actually undergrid formal ties. Indeed, a body of work around action-based perspectives on learning, such as the communities of practice literature (Wenger, 1998) that emphasises the construction of bottom-up networks, have increasingly found their way into studies of innovation.
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argued that the existence of effective gatekeepers will underpin essential integrative capabilities for successful knowledge transfer. It is, therefore, proposed that innovation projects will be more successful to the extent that knowledge workers within the project combine high levels of experience and knowledge of the organisation with practical experience of participating in wider industry practitioner networks: Hypothesis 1 Innovation projects will be more successful when the skill prole of key knowledge workers on these projects combines experience and skills from inside and outside of the rm. A number of studies have indeed referred to the above proposition. For example, project SAPPHO (Freeman and Soete, 1997), one of the rst major studies aimed at identifying successful rm-level practices for innovation, found that the business innovator (whether in the form of an entrepreneur, gatekeeper or manager) played a critical role through their understanding of how to get things done in the rm, and through an understanding of the marketing needs of the technology. The coupling concept is extended in Hypothesis 1 to encompass experience of lead managers outside the company. This is backed up in more recent studies, including Powell (1998) who promoted the concept of network managers, and Burts knowledge brokers (2002), acting as intrapreneurs within the rm. A second key area of analysis involves differentiating the external networks in which knowledge workers participate and learn from. Three such knowledge worker networks are identied in this paper. These distinguish both formal and informal forms of governance, but also, perhaps more importantly, different forms of governance. 1. It is possible to identify a learning activity associated with keeping the organisation abreast of best-practice, lead thinking and on the technological frontier. Such work, that can be labelled as searching and scanning, has been analysed through different lenses. For example, Granovetter (1973) emphasised the importance of developing bridging agents, as means to connect to a wide range of distant communities, that may be benecial to gaining access to broader sources of information. In the context of a regional concentration of economic activity, scanning may involve attendance at conferences and talks and informal meetings, while general visits to Internet chat rooms are becoming a common way of scanning material. The characteristic of scanning is the relatively low cost of engagement and low reciprocal commitment, however, engagement through a narrower bandwidth (Powell and Grodal,
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2005) can also be argued to be a crucial rst step to building stronger inter-rm relationships. 2. A second type of networking activity groups together individuals that play a prominent role in bridging the cognitive gaps that can exist between rms collaborating in formal innovation projects. As discussed earlier, inter-rm collaboration requires rms to nurture boundary spanners, individuals that are able to understand the world of the source and the world of the receiver (Leonard-Barton, 1995; Tushman and Scanlan, 1981) as well as disseminate knowledge. Employees involved in these activities are described as involved in inter-organisational problem-solving activities. In contrast to scanning and searching, these employees will develop specialised knowledge of different organisations and the governance of this network will be characterised by formal control by organisations. 3. A third major source of activity that may impinge on inter-rm learning takes place within networks built around personal relations of knowledge workers. Macdonald and Piekkari (2005) suggest that personal networks emerge because of the difculty of getting the right information at the right time, hence market failure, and to overcome the limitations of contractual arrangements that restrict collaboration. These networks also resemble Granovetter (1973) embeddedness of labour markets, where effectiveness of career mobility depends on social networks that transcend the boundaries between economy and local social life. In other words, professional networks minimise the costs of search and the costs of switching jobs. These networks are termed relational networks and provide the information signals needed to ensure success outside of internal labour markets. From this discussion, a second hypothesis is developed concerning the importance of the involvement of knowledge workers in different networks for the successful outcome of innovation projects. Hypothesis 2 Innovation projects will benet in performance from the direct involvement of knowledge workers in external networks, including formal inter-organisational networks, relational networks and scanning activities. A further, more general point emphasised is that, from the point of view of the organisation, encouraging individuals to develop skills that specialise in knowledge brokering, i.e. working at the frontier of the organisation rather than at its core, requires the establishment of non-standard career routes and recruitment strategies that are open to new skills. Flexible HR practices will, therefore, provide a key institutional support for the emergence of knowledge brokering activities that underpin initiatives to transfer knowledge across organisations.
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institutes of the various academies of science and universities under non-industrial ministries, but they played little role, if any, in industrial innovation. Labour mobility was very limited and labour markets for knowledge workers did not exist, since jobs were allocated administratively, and were usually for life. In China, the structures for innovation were extensive, with 800 industry branch R&D institutes existing before the market-orientated changes began in the mid-1980s (Suttmeier, 1997). The 1985 policy initiative concerning the S&T sector was accompanied by similar measures concerning higher education, since the HE sector was seen as the main driver in Chinese high-tech development (Yin and White, 1994). The aims of the HE changes were to expand the autonomy, nancial and otherwise, of institutions, to strengthen links with production organisations and to develop a labour market for HE workers. The greater nancial autonomy was to be achieved in two ways. Firstly, by charging students for their tuition fees and secondly, by developing commercial structures to sell expertise or to invest in spin-off ventures of various kinds. The main vehicles for the new approach were the new vocational universities, which rst appeared in the 1980s. All students paid fees, in one form or another, to attend these bodies and the curriculum was exible and marketdriven, with a strong vocational content (Fang, 1991). Dramatic changes in the make-up of R&D labour markets appear in the growing mobility of employees. There is evidence from the business and professional press that Chinese high-tech rms are experiencing double digit labour turnover and difculty in retaining qualied staff, leading to the need to concede high salary rises (Raatikainen, 2003; Leininger, 2004), indicating that there is an active and mobile labour market in this sector. The new state HE policy discussed above could have facilitated this, because as well as trying to promote labour mobility in universities it also had an aim of developing a labour market in the S&T sector. A key feature of the new policy was that the system where jobs for graduates were allocated by the state was replaced in 1990 by the two-way selection process. As the term implies, the prospective employer and employee both had a say in the transaction (Lewin and Xu, 1993). The development of spin-off ventures may, however, have been the main driver in creating a high-tech labour market in China. The growth of this sector has been explosive, as revealed by the gures in the previous section that there are now 23,000 NTEs in the Torch programme. These rms were spun-off both by research institutes afliated to the academy of sciences or former industrial branch ministries and by HEIs. By the early 1990s, in some HEIs, most of the staff held concurrent jobs in spin-offs from their own institutions. For example, 80% of the teachers in Jiamusi Technology Institute were also working in its 12 afliated ventures (Yin and White, 1994). The same study also reported that there was
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pressure on staff to leave the HE sector completely for business. The state actively encouraged this trend through nancial mechanisms, i.e. budget cuts on HEIs, and has continued to do so. Another driver of labour market mobility was the transformation of research institutes into private companies, where the ability to hire/re staff was seen as a factor inuencing the change (Suttmeier, 1997). A study of one of the leading ICT rms, Stone, noted that all the R&D team had acquired their skills in the state R&D sector. The same paper also concluded that mobility of key researchers from state institutes to the new spin-offs was a factor in accounting for their success (Lu, 2001). The combination of rapid growth of Chinas high-technology sector, together with a high level of concentration of employment growth in government-sponsored science parks, has clearly created a highly dynamic labour market in terms of mobility. What is less known is the degree to which a specialised division of labour has emerged in high-technology areas that encourages cross-organisation learning or, indeed, if the high levels of mobility are benecial or detrimental to the rms innovation projects. The next section of the paper, therefore, formally tests the hypotheses laid out earlier in the paper.
The Data
The empirical study is based on two parallel and linked surveys undertaken in 20067, one of senior R&D project managers, the other of R&D employees in the Zhongguancun (ZGC) science park in Beijing. Examples of questions from the original surveys are included in appendices 1 and 2. It was decided to use the opportunity of a congress of ICT rms located in the ZGC park taking place in Beijing, to invite attending R&D managers to participate in the survey. Aside from facilitating access to rms, this non-probability method of identifying rms introduces some randomness into the sample, although some bias is possible, since those rms attending the congress may have been part of a particular network of organisations. A quota system was used, whereby a target of rms fullling certain criteria was established and collection of data was stopped once that target was reached. The population of interest and criteria for participation in the survey was determined specically to be Chinese-owned ICT rms undertaking specic innovation projects located in the ZGC area. Given the relative lack of knowledge of the practices of Chinese-owned ICT rms, vis-a-vis multinationals in this area, it was felt that a study of Chinese rms would be more revealing. Moreover, because of budget limits of the projects and the consequent sample size, it was also felt that comparative analysis would be facilitated through a more homogenous
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ownership sample. It was also decided to choose rms located in one industry, ICT. The choice (ZGC) is based on the fact that there exists a highly skilled community of both academic and non-academic practitioners, including 68 universities and 213 scientic research institutes. Moreover, rms located in the park share certain common characteristics. The Chinese state demands that all rms located in the park derive at least half of all revenue from high-technology products, and R&D expenditure must account for no less than 3% of total revenue. This facilitated the task of comparison of rms. In total, 71 different innovation projects in separate organisations participated in the survey. The protocol used to undertake the survey consisted of approaching a senior R&D manager (or if he/she was not available, a senior person in R&D) to participate in the research. If the answer was afrmative, the senior R&D manager was then emailed the address of a website that they could log on to where the survey was available. The respondents were asked to nominate a major innovation project in the company over the past three years and to answer questions in relation to this. The survey answers could be submitted on-line to a server that collected the data. Senior R&D managers were also asked to nominate up to ten R&D employees that worked in the above project, who in turn were asked to answer questions in a different survey and to submit these on-line. This method of choosing knowledge workers is more likely to suffer from bias, since it is based on the recommendations of the R&D manager. Some care, therefore, needs to taken when generalising these results to a wider population of ICT innovation in the ZGC park. Despite these limitations, it was felt that this research represents a novel approach to measuring the building of capabilities across organisational frontiers. Finally, analysis of the limited missing data in both surveys showed a randomised distribution with respect to both respondents and survey items. Therefore, to make full use of the results, mean substitution method was adopted for the multiple regression (MR) analysis. This technique is considered appropriate where missing values are randomly distributed across the data set (Cohen and Cohen, 1983). It can be regarded as a relatively conservative approach (Tabachnick and Fidell, 1996), i.e. the probability of identifying statistically signicant outcomes on a spurious basis is relatively low.
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operational terms, the model is the following: (Model 1) Y 0 1 OWN 2 SIZE 3 SQUAL 4 SEXP 5 SINT 6 SAGE 7 SREC ": The dependent variable Y, was quantied by senior R&D manager average ratings of project success in terms of meeting deadlines, levels of product sales and technical capability of the nal product in the innovation projects (see Table 1). Hypothesis 1 species the importance of skills within and outside of the organisation. The variables in model (1) therefore measure the importance line managers attach to different sets of skills and experience of knowledge workers within and outside of the organisation for the success of the innovation project they are working on.
Table 1. Survey item allocations to project success and networking practices constructs using innovation project as unit of analysis. Construct Project Success Items Success in meeting deadlines Success in market share of product Success in technical capability of product Sharing knowledge with research institutes Sharing knowledge with founder bodies Sharing knowledge with standardsetting bodies Sharing knowledge with former classmates Sharing knowledge with colleagues Sharing knowledge with marketing dept Sharing knowledge with other depts Attending conferences External communication via chat rooms, etc. Informal contact with external acquaintances Source Project Leader Project Leader Project Leader Team members Team members Team members Team members Team members Team members Team members Team members Team members Team members 56 0.66 57 0.60 57 0.91 Available n 55 0.62
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Inter-organisational problem-solving
56
0.73
Relational problemsolving
Internal problemsolving
General networking
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SQUAL represents the importance senior R&D managers attach to R&D employee academic qualications to project success.1 SEXP refers to the importance senior R&D managers attach to prior experience and familiarity of the rm by the R&D employee to project success.2 SINT is the importance senior R&D managers attach to prior experience of working on specic projects outside the rm by R&D employees.3 SAGE refers to the senior R&D managers perceptions of the reliance the company has on external recruitment agencies.4 SREC is the signicance senior R&D managers place on newly appointed staff to work on the project for the success of the projects. Both SAGE and SREC are proxies for the openness of labour markets in ZGC. Two additional variables were introduced. OWN represents ownership. Given the importance of state and non-state enterprises in China, OWN is a control variable that distinguishes between wholly and partly state-owned rms, such as cooperative enterprises and privately-owned companies. In practice, the vast majority of the state-owned rms in the survey were cooperative enterprises. In the Chinese context, cooperatives are enterprises where a signicant but minority stake is owned by the state. Management is relatively autonomous and answers to the stakeholders, a majority of which are private individuals (Jing and Tylecote, 2005). It is also usual in innovation studies to distinguish the size of the rm, as a potential factor differentiating innovation performance. SIZE therefore is a second control variable that differentiates rm size. Breakdown of the total sample in terms of size and ownership is reported in Table 2.
Table 2. Breakdown of sample in terms of size of rm and ownership. Ownership Cooperative Private Total Size Categories <100 29 (73%) 11 (27%) 40 (100%) 500499 11 (65%) 6 (35%) 17 (100%) >500 4 (67%) 2 (33%) 6 (100%) Total 44 (70%) 19 (30%) 63 a
a Eight cases omitted from table due to missing values on size and/or ownership. Source: Derived from survey of rms in ZGC, 2006.
1 2
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A multiple step modelling protocol was adopted with the control variables, size and ownership, forced into the solution as independent control variables at step 1. The ve items concerning knowledge worker skills were then considered for addition to the model at subsequent steps with entry determined using an empirically driven stepwise strategy. The inter-correlations, means and standard deviations of all the independent variables plus the dependent variable are reported in Table 3. The results of the regression model are outlined in Table 4. This yields a substantial overall t (the F-test is signicant at the 1% signicance level). The R 2 value of 0.42 suggests this model is a reasonably good explanatory model for the dependent variable. Final results identify experience gained by R&D employees of the rm, experience gained by R&D employees outside the rm and ownership as making a signicant contribution to prediction of project success. The rst two variables have positive weights. The nalised model also suggests that higher project success levels tend to be reported by cooperative enterprises. No evidence is found for an association between project success and size of organisations. The regression suggests that senior R&D managers look highly favourably upon high levels of experience within and outside of the rm, conrming from the R&D managers perspective, hypothesis 1.
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Table 3. Means, standard deviations and inter-correlations of rm level survey items and project success (n 71). Correlations Oship Size 0.00 1.00 0.21 0.15 1.00 0.09 0.01 0.14 0.16 1.00 0.05 0.15 1.00 0.20 0.18 0.19 1.00 0.02 0.11 0.33** Ac Qual Int Exp Ext Exp EA Use 1.00 Imp Rec 0.05 0.29* 0.11 0.20 0.07 0.22 1.00 Success 0.33** 0.20 0.27* 0.45** 0.34** 0.31** 0.14 1.00
Item
Mean
SD
2.44
0.55
2.47
0.53
1.59
0.64
Ownership (Oship) a Size Academic qualications (Ac Qual) Experience/knowledge of rm (Int Exp) External project experience (Ext Exp) Employment Agency Use (EA Use) Importance of new recruits (Imp Rec) Project Success
1.63
0.85
2.25
0.41
a Ownership
code 0 Cooperative enterprises, 1 Privately-owned enterprises. coefcient signicance p < 0:05, ** Indicates coefcient signicance p < 0:01. Source: Derived from survey of rms in ZGC, 2006.
* Indicates
Inter-Firm Knowledge Transfer in Beijings Zhongguancun Science Park Table 4. Result of regression analysis derived from R&D leaders. Y 0 1 X1 2 X2 3 X3 4 X4 5 X5 6 X6 7 X7 ". IV and status Variables entered Ownership Size Experience in rm Experience outside rm CONSTANT
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p < 0:01 n.s. p < 0:05 p < 0:05 p < 0:01 n.s. n.s. n.s.
Variables not entered Academic qualications Use of employment agencies Recruitment of new staff
R 2 : 0.42, F;12:074;66 , p < 0:01. Source: Derived from survey of rms in ZGC, 2006. Table 5. Survey item allocations to networking practices constructs using knowledge worker as unit of analysis. Construct Inter-organisational problem-solving Item Sharing knowledge with institutes Sharing knowledge with Sharing knowledge with bodies Sharing knowledge with classmates Sharing knowledge with Attending conferences research founder bodies standard-setting former colleagues 360 0.57 350 0.82 Available 343 Crombachs alpha 0.74
Relational network
External communication via chat rooms, etc. Informal contact with external acquaintances Source: Derived from knowledge workers survey in ZGC, 2006.
constructs show the alpha values are all above 0.6, except for searching and scanning, with a value of 0.57. Although it is a low value, there is precedent for using such values and it was decided to go ahead with the construct. In order to test hypothesis 2, that innovation projects will gain in performance from the direct involvement of knowledge workers in external networks, a
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three-step MR modelling protocol was adopted and the following multiple regression model tted. The following model was constructed. Model (2) Y 0 1 OWN 2 SIZE 3 IOPS 4 REL 5 SCAN 6 INT ": Y is the dependent variable and is measured in the same way as model 1, i.e. degree of success on the specic project as reported by R&D leaders. OWN denotes ownership as discussed earlier in relation to model l. SIZE denotes size of rm as discussed earlier in relation to model l.
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In the next step, four variables were constructed to represent different forms of knowledge transfer. IOPS is made up of three variables that reect formal mechanisms of knowledge sharing: These were the involvement of the knowledge worker in collaboration with other rms, institutes and standard-setting institutions. Following the categorisation of variables in the third section, this variable has been termed interorganisational problem solving (IOPS).5 REL brings together two variables that emphasise problem-solving using networks built on personal contacts and relations around ex-colleagues and classmates. Following the third section, this is a form of relational problem-solving.6 SCAN brings together three variables: attending conferences, sharing information outside of the rm via chat rooms and informal contact with external acquaintances.7 This variable operationalises an important distinction discussed in the third section of the paper, where knowledge workers act as bridging agents with a wider collection of practitioners. The variable is labelled searching and scanning. INT represents the degree to which knowledge workers collaborate with departments outside of their own but within the same company. In this case, marketing and other departments have been specied. This variable is labelled internal problem solving. Correlations of the constructs with each other and with the project success composite measure, after mean substitution had been implemented, are reported in Table 6. One major advantage of the above model is that unlike model 1, the dependent variable is drawn from R&D managers, while the independent variables are drawn from the knowledge worker survey. Given that these are two separate sources, this eases concerns regarding potential problems of self-report. The control variables,
5 6
Knowledge worker survey, see appendix question 10. Knowledge worker survey, see appendix question 10. 7 Knowledge worker survey, see appendix question 12.
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Table 6. Means, standard deviations and inter-correlations of networking constructs with project success (n 71).
Correlations Mean Inter-organisational problem-solving (IOPS) Relational problemsolving (RPS) Internal problemsolving (IPS) General Networking (GNW) Project Success Size Ownership
* Indicates
SD 0.46
IOPS 1.00
RPS
INT
GNW
Success 0.22*
Size 0.05
Ownership 0.20*
1.1
1.00
0.18 1.00
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signicance p < 0:05, ** Indicates signicance p < 0:01. Source: Derived from survey of rm and knowledge workers in ZGC, 2006.
size and ownership, were forced into the model at step one as control variables. In the next step, the four variables were constructed to represent different forms of knowledge transfer. Table 7 shows the results of the regression model. The regression model yields a substantial overall t (the F-test is signicant at the 1% signicance level). The R 2 value of 0.21 suggests that this model is a reasonably
Table 7. Result of regression analysis with knowledge workers. Y 0 1 X1 2 X2 3 X3 4 X4 5 X5 6 X6 ". IV and status Variables entered Size Ownership General Networking CONSTANT Variables not entered Inter-organisational problem-solving (IOPS) Relational problem-solving Internal Reg. Wt 0.15 0.36 0.24 t value 1.32 3.31 2.14 6.85 1.40 1.11 0.04 p
n.s. p < 0:01 p < 0:05 p < 0:01 n.s. n.s. n.s.
R 2 ; 0.21, F; 5:763;67 , p < 0:01. Source: Derived from survey of rm and knowledge workers in ZGC, 2006.
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good explanatory model for the dependent variable. Signicant variables are ownership at the 1% level (given the coding strategy, its positive weight suggests that cooperative enterprises tend to report higher levels of project success than privatelyowned rms) and searching and scanning with a positive coefcient at the 5% level. The empirical ndings so far can be grouped into two sets of results. Firstly, analysis of senior R&D manager responses suggest that a combination of internal and external experience will have a positive impact on innovation performance on projects as reported by senior R&D managers. This nding is important as it suggests that Chinese rms consider human resources from outside the rm as an important contributing factor for innovation success. It also underlines the importance of new economy efciencies in China, as discussed earlier by Bresnahan et al. (2001). Secondly, the results also suggest that inter-rm collaboration, whether through formal business-to-business channels or informal networks based on personal relations, appear to have no impact on innovation performance. However, searching and scanning activity, associated with establishing broader, non-dense network arrangements, has a positive impact on performance. Finally, distinguishing between ownership types appears consistently to discriminate between success and failure in both models. Cooperative enterprises appear more successful than privately-owned rms.
The view that earnings regressions measure the relative productivity of different skills sets has rightly drawn criticism to the fact that this approach ignores salaries that are determined by wider institutional, rather than market, factors, such as the existence of Trade Unions, professional associations and industry differences that have little to do with individual productivity.
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to raise their productivity, or alternately that this skill set is highly regarded in the labour market (Becker, 1962). The results of the earnings regression can be analysed in parallel with the results of the innovation studies and help to reinforce or alternatively undermine the ndings in the two earlier models regarding the impact that particular skills have on innovation projects. The earnings regression uses the individual knowledge worker as the unit of analysis, therefore it is not necessary to average out knowledge worker responses by rms. This allows the full sample of 381 knowledge respondents to be used, thereby improving the model as a whole. The following hypotheses were developed to reect the research questions posed in the paper. Hypothesis 3 Knowledge workers that have high levels of tenure and high levels of labour market experience will attract an earnings premium in the ZGC park. Hypothesis 4 Involvement of knowledge workers in formal inter-organisational networks, relational networks and scanning activities in the ZGC park will attract an earnings premium for knowledge workers. One further hypothesis also tests the impact that labour mobility has on earnings: Hypothesis 5 Inter-rm mobility in the ZGC park will attract an earnings premium for knowledge workers in the ZGC park. In the next step, a regression model is built with wages as the dependent variable. The regression model is shown below: Model (3) W constant a1EXPi a2 EXP2i b1TENUREi b2TENURE2i c1 Number of PREVIOUS JOBS d1 SEN d2 IOPS d3 REL d4 SCAN f1 IOPS SEN f2 REL SEN f3 SCAN SEN ":9 The dependent variable W is a banded response to gross annual wages including bonuses.10 In earnings regressions, the dependent variable Wages is usually logged. However in this case, earnings are in bands, therefore this is not required. EXP is years of experience prior to joining present rm.11
9
Conventional earnings regression would, in addition to tenure and experience, control for factors such as qualications and age. 10 Knowledge worker survey question 5. 11 Calculated as the number of years working since nishing formal education minus number of years in current employment.
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TENURE is years in current rm. EXP2 and TEN2 are the square terms of experience and tenure and are intended to show if there are diminishing returns to experience and tenure over time. SEN is level of seniority (a dummy variable that distinguishes between managerial/senior engineers and non-management R&D employees). Number of PREVIOUS JOBS species number of previous jobs and is included to signify mobility. IOPS is inter-organisational networking. REL is relational networking. SCAN is scanning and searching activity. A rst order interaction was introduced between networking activities to capture the differentials in the return to networking depending on the position of seniority in the company. These are IOP*SEN, REL*SEN and SCAN*SEN. The results are shown in Table 8. The regression provides strong evidence to support hypotheses three and ve, with positive and signicant returns to tenure, outside experience and mobility. The coefcients also show that tenure is rewarded more highly than experience. However, although returns to tenure appear to diminish at some point, this is not the case with experience. This may be because the workforce is very young and therefore have yet to experience negative returns to experience. If this were the
Table 8. Results of multiple regression gross, monthly wage plus bonuses dependent variable based on Knowledge Workers survey ZGN, 2006. Constant EXP EXP2 TENURE TENURE2 SEN Nu of PREVIOUS JOBS IOPS REL SCAN SCAN*SEN IOPS*SEN REL*SEN t value 7.692 2.119 0.937 5.165 3.073 1.302 3.174 0.506 0.504 0.762 2.207 0.445 0.129 p
0.278 0.120 0.698 0.412 0.214 0.174 0.028 0.028 0.049 0.371 0.052 0.013
p < 0:05 n.s. p < 0:01 p < 0:01 n.s p < 0:01 n.s. n.s. n.s. p < 0:05 n.s. n.s.
Dependent Variable: Model summary: R 2 0:253, adjusted R 2 0:229, F 4:872, Sig 0.028 n 381.
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case, however, it also suggests that at some point the returns to experience will outpace the rewards for tenure. With regards to networking activities, the regression shows no signicant returns to any type of networking within the entire sample. However, the interactive variable shows that for senior employees, positive and signicant returns to scanning activities exist. The results suggest that skills to establish formal competencies that facilitate formal networking do not attract a wage premium. Similarly, employees that turn to their personal networks to problem solve also fail to attract a premium. On the other hand, knowledge workers that focus on keeping up with managerial and technological developments do attract a premium, irrespective of their experience and tenure, but this occurs only amongst management and/or senior Chinese R&D employees. Non-management employees failed to receive a wage premium.
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emerged to suggest that knowledge sharing in formal inter-organisational problemsolving or from informal personal networks differentiates success or failure on innovation projects. Neither did these activities attract a wage premium. The methodology and the ndings of this study provide some useful reections for our understanding of how new economy practices referred to earlier by Bresnahan et al. (2001) and others are being adopted in Chinese high-technology rms. The skills analysis certainly underlines the importance rms attach to gaining experience outside the organisation, but perhaps more signicantly, the value of combining complementary skills in gatekeeping-type functions. This result backs up the points made by Harryson et al. (2008) and Easterby-Smith et al. (2008) that we should be focusing not just on knowledge transfer, but also on integrative skills. Given the importance bridging functions play in gatekeeper roles, a greater understanding of the skills required for such a bridging role, for example, the balancing between communication and interpretive skills and hard technical knowledge in different national contexts, would be highly valuable. A second reection concerns the effectiveness of contrasting networks. The results would appear to support Granovetters (1985) depiction of the importance of relatively narrow bandwidth but open channels of communication that help researchers rapidly access different types of knowledge. Further analysis around uid modes of communication, such as Assimakopoulos and Yan (2006) study of the popularity of IT forums amongst Chinese engineers are highly relevant here. By contrast, the ineffectiveness of inter-organisational problem-solving suggests support to those studies that are dubious about the generalised benets that can be derived from formal inter-rm collaboration in innovation projects (Zucker et al., 1995; Hakanson, 2005). Following the earlier discussion, high levels of knowledge ambiguity may create obstacles to the effectiveness of concrete knowledge transfer, although this in itself may be due to the absence of effective gatekeepers who are able to bridge cognitive gaps between projects. The fear of losing proprietary knowledge from collaboration has also been alluded to (Zucker et al., 1995) as a reason for limited inter-rm collaborations and may be a relevant factor. However, some research suggests that cultural factors around Guanxi type relationships and the burden associated with reciprocal favours (Saxenian, 2005) may place major obstacles to longer-term collaboration in the Chinese context. A recent empirical study of Chinese knowledge worker collaboration patterns would appear to support this view (Assimakopoulos and Yan, 2006) and may explain in part why scanning type activities, such as technology forums, that involve little reciprocal engagement, are popular and effective. Future studies in this area might also note that the emphasis on skills and workbased actions highlights the value of an action-based experiential approach to analysing the relationship between rm capabilities and networks. While much
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work in this area has rightly emphasised the tacit-based intangible capabilities at the level of the rm (Nelson and Winter, 1982; von Hippell, 1988), research on the division of labour and skills is able to provide tangible evidence and support for investment in some specic human resource practices as opposed to others. Further research on the development of skills-based indicators in innovation would thus further our understanding of rm capabilities substantially. Finally, a note of caution is merited. The results discussed in this analysis are based on a small sample and, therefore, need to be extended with larger samples and probability sampling that would allow stronger inferences and generalizations to be made from this analysis. Moreover, comparative labour market data that interplays the activities of knowledge workers with innovation data at a regional/ industry level would provide highly useful insights into the intangible factors distinguishing different innovation systems.
Acknowledgements
The authors wish to thank the Economic and Social Research Council for its support for this project, grant number: RES-160-25-0030. Also many thanks to the researchers of the National Research Centre for Science and Technology for Development in Beijing for their work in the compilation of the survey.
Appendix
Examples of questions from manager survey 21. Indicate how important do you value the following characteristics of employees who play a signicant role in innovation, by ticking the relevant box below, where 0 Not important at all, 1 Not very important, 2 Desirable, 3 Essential
0 Their academic qualification The status of the institution they were educated at Their experience and knowledge of the firm Outside networks the individual can bring to the firm Professional qualification (e.g. IEEE membership) Experience of working/studying overseas Experience in specific projects outside of the firm 1 2 3
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22. Indicate what relative importance do you attach to the following methods to recruit employees who play a signicant role in innovation, by ticking the relevant box, where 0 unimportant, 1 not very important, 2 quite important, 3 very important.
0 Advertising Direct approach to top scientists/engineers from universities/research institutes Head hunt from leading firms Apprenticeships via schools/universities Informal peer network Employment agencies If spin off, direct approach to founder body 1 2 3
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Examples of Questions from Knowledge Worker Survey 10. To what extent has sharing knowledge between you and any of the following inuenced the output of the innovation project? Below, Founder body refers to a university or research institute that originally established the rm. 0 no knowledge shared 1 small inuence 2 some inuence 3 very inuential (please tick one box for each question)
0 Your project team Colleagues from the marketing department Colleagues from departments other than your own and marketing Individuals from academic departments and/or research institutes Individuals from Founder body, if applicable Colleagues participating in standard-setting bodies or institutions. Individuals with whom the firm has a formal relationship (for example customers, suppliers, joint venture, affiliates) Former class-mates from the university Former colleagues 1 2 3
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12. Have any of the following been important sources of learning for you about new technologies or managerial methods? Please indicate the degree of importance attached to each question by ticking 0 not important 1 slightly important 2 moderately important 3 very important (please tick one box for each question)
0 Attending conferences Communication with people outside the company (e.g. group email, message board, chat room) Email communication inside team Informal communication with people you know outside the company dealing with similar problems Overseas visits Training outside of company inside the ZGC Park Internal training 1 2 3
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