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The Journal of Technology Transfer

, Volume 41, Issue 5, pp 1168–1194 | Cite as

Structured uncertainty: a pilot study on innovation in China’s mobile phone handset industry

  • Li Tang
  • Michael Murphree
  • Dan Breznitz
Article

Abstract

This paper explains why many small and medium-sized (SME) private high-technology Chinese manufacturing firms survive and thrive within an institutional and political system arrayed against them. We use the mobile phone handset industry as an illustrative case of the vitality and capabilities of Chinese SMEs. We argue that in capitalizing on the advantages offered by the global fragmentation of production, while also being constrained by an institutional climate of structured uncertainty, Chinese non-state firms have chosen a pattern of incremental innovation in their search for competitive advantage. Despite falling outside central government innovation plans and engaging in practices inimical to nurturing novel product innovation capabilities, these firms have a sustainable business model based on niche tailoring, rapid product introduction and utilization of standardized components.

Keywords

Structured uncertainty Fragmentation of global production Incremental innovation Mobile phone handset industry Emerging economies 

JEL Classification

L52 L63 O14 O25 O31 R58 

Notes

Acknowledgments

This research was funded by the National Science Foundation under grant SES-0964907 and National Science Foundation of China (Award No. 71303147). The findings and conclusions are those of the authors and do not reflect the opinions of the National Science Foundation. The authors take full responsibility for any remaining errors.

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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.School of Public Economics and AdministrationShanghai University of Finance and EconomicsShanghaiChina
  2. 2.Darla Moore School of BusinessUniversity of South CarolinaColumbiaUSA
  3. 3.Munk School of Global AffairsUniversity of TorontoTorontoCanada

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