A comprehensive and practical innovation management assessment model for manufacturing companies in Hong Kong/China

Abstract

Albeit majority of Hong Kong's manufacturing industry had been relocated to mainland China for cheaper land and labour, its direct contribution towards Hong Kong's GDP is still significant, reported to be about 25% for year 2007, according to the Hong Kong Trade Development Council (HKTDC). The indirect contribution down the value chain is estimated to be much higher at around 50% in total since many down-stream support businesses in Hong Kong (such as, shipping, finance, etc.) are also dependent on Hong Kong invested manufacturing in China. Hong Kong's manufacturing investment in China has to deal with more and more new challenges these days, such as higher labour and material costs, more stringent environmental controls, and reduced production capacities because of overall inefficiencies. The profit margins are significantly eroded, and the financial tsunami worldwide further put oil to the fire. Customers started to squeeze for further price reductions and longer payment terms. The net result is that many Hong Kong invested manufacturers in the Pearl River Delta area are forced to shutdown or relocate further inland towards the north and west of China to reduce overheads in order to maintain their competitiveness. Both Hong Kong Special Administration Region (HKSAR) Government officials and Hong Kong entrepreneurs owing manufacturing investments in China are fully aware of the need and urgency to innovate in order to offer differentiated products and, or to reshape manufacturing processes for better margins. The aim of this research study is to develop an innovation competence assessment tool to quantify those driving forces that affect the innovation performance of Hong Kong owned manufacturing investments in China. The study focuses on electronics manufacturing firms, especially those that are high-tech related. Two specific deliverables are expected as outcomes of this study. Firstly, a comprehensive conceptual model for assessing the level of innovation competence of a manufacturing firm to be proposed, and those driving factors that affect innovation performance duly tested to confirm their inter-relationships with each other. Secondly, based on the derived assessment model and survey questionnaire data, suggest a benchmark system for cross comparing firms' innovation success on a common scale. Innovation performance findings from seven action case studied companies (out of which only three can claim themselves to have some innovation success) will be used as surrogate data for formulating the innovation assessment model in this research, and the driving forces behind those seven companies' innovation success thoroughly tested using a separate (the eighth) action case studied company as validation vehicle. Several research methods that are different had been adopted in pursuing this project. They include preliminary and in-depth literature reviews for conceptual model and proposition developments, seven detailed action-case studies for model refinements, and another questionnaire survey to confirm the exact relationship between those factors that drive innovation success before embarking on another (the eighth) action-case study (supplemented by selective face-to-face interviews) for more thorough validations. The followings are salient outcomes arising from this Innovation Management study: Firstly, while the majority of those publications on earlier innovation research had placed emphases on identifying certain single dimension as critical factor for driving innovation success, this Study adopts a more panoramic view to include other dimensions unveiled during intensive literature reviews and in-depth action-case studies to perfect the model when developing the conceptual framework. As a result, the final model contains both operational enablers (culture, resource and innovation methods) and strategic enablers (leadership and strategy), and those enablers' correlations field tested using survey questionnaires. Secondly the Study provides not only a measurable yardstick, but a set of industry benchmarks (established through eight in-depth action case studies completed over a period of two years) for any companies interested to know more about its innovation management infrastructure to undertake self-assessments. Albeit there are observatory study findings published on innovation success, the Study is the very first that attempts to use a multi-dimensional tool to quantitatively gauge innovation driving forces and innovation success on Hong Kong invested electronics manufacturing firms in China.

Date of Award	2 Oct 2009
Original language	English
Awarding Institution	City University of Hong Kong
Supervisor	Hongyi SUN (Supervisor)