Within the broad field of economics of innovation my major research interests are in the intersection of product-service innovation in manufacturing firms (servitization), digital business models in creative industries, and the economic analysis of individual and groups of organizations. These research interests have arisen from the opportunity to work with multidisciplinary research teams in different institutions and countries. Across these themes I have made a distinctive contribution through my publications in a variety of internationally recognized journals, including the Journal of World Business, International Journal of Production Economics, Industrial Marketing Management, Technovation, Small Business Economics, Regional Studies, Supply Chain Management and R&D management.
Product-Service Innovation of Manufacturing Firms
Product and service firms have been conventionally thought of as largely independent entities, but evidence seems to suggest that there are potential synergies between products and services, which ultimately can enhance firm performance and consumer satisfaction. The business strategy consisting in adding services to product offerings in product firms is known as Servitization or product-service innovation. In servitization, product firms broaden their focus from product centred business, enhancing product features and capabilities, to enhance consumer satisfaction by including services to their portfolio. By including services firms obtain a more customizable offer. Services offered are not homogeneous. They differ substantially in their level of risk, level of competition, and potential to create competitive advantages. It turns out that developing services in addition to products is seen as often too risky for manufacturers. Outsourcing and collaborative partnerships with knowledge intensive business services (KIBS) allow product firms to experiment with service provision with controlled risk. My recent research has identified that there are additionalities at firm (Bustinza et al., 2017) and territorial (Lafuente et al., 2016) level from these collaborations between product and service firms.
Bustinza, O.F., Gomes, E., Vendrell-Herrero, F., Baines, T. (2017) "Product -service innovation and performance: The role of collaborative partnerships and R&D intensity" R&D Management, In Press.
Lafuente, E., Vaillant, Y., Vendrell-Herrero, F. (2016) "Territorial Servitization: Exploring the virtuous circle connecting knowledge-intensive services and sustainable new manufacturing businesses". International Journal of Production Economics, In Press.
Digital Business Models in Creative Industries
Another research interest deals with the innovation dynamics of digital business models within creative industries as well the impact of digital technology in organisation of creative businesses. This line of research has focused specifically on the multinationals in music, publishing and TV broadcasting industries. My first empirical effort on this topic was to analyse how consumers perceived the shift from product to service in the music industry. We concluded that around 60% of UK consumers were willing to engage in these new digital business models.
Parry, G., Bustinza, O.F., Vendrell-Herrero, F., (2012) “Servitisation and Value Co-production in the UK Music Industry”, International Journal of Production Economics, 135: 320-332
Other topic underexplored is how the value chain transforms after the implementation of digital technologies in organizations of the creative industries. This is especially interesting as digital services are substitutes of physical products. Our analyses suggest that the supply chain has broken and there is an empowerment to final consumers (Bustinza et al. 2013) and retailers (Vendrell-Herrero et al., 2016).
Bustinza, O., Parry, G., Vendrell-Herrero, F. (2013). "Supply and Demand Chain Management orientation - Adding services to product offerings", Supply Chain Management: An International Journal, Vol 18. Iss 6, pp.618-629.
Vendrell-Herrero, F., Bustinza, O.F., Parry, G., Georgantzis, N. (2017) "Servitization, digitization and supply chain interdependency". Industrial Marketing Management 60, 69-81
Economic Analysis of Individual and Groups of Organizations
In addition to services and digital technologies the economics of innovation have a more broad economic analysis of organizations, including the assessment of innovation policies. In this line of research I have done various contributions. First, by modelling innovation and entrepreneurship as regional capabilities, and not as a resources as previous research did, we shed light on this issue showing for the case of Spain that a higher capacity of a region to simultaneously generate new knowledge and start-up firms is positively linked to its level of competitiveness (Gonzalez-Pernia et al., 2012).
González-Pernía, J.L., Peña-Legazkue, I., Vendrell-Herrero, F (2012) “Innovation, Entrepreneurial Activity and Competitiveness at a sub-national level”, Small Business Economics, 39(3), 561-574
A parallel empirical strategy is to look at the productivity and profitability level at firm level between technology based and non-technology based SMEs. My previous research demonstrates that high-intensity technology SMEs are more productive for a large sample of Basque firms (Vendrell-Herrero et al., 2014).
Vendrell-Herrero, F., González-Pernía, J.L., Peña-Legazkue, I. (2014) “Do incentive matter to promote high technology-driven entrepreneurial activity?”, International Entrepreneurship and Management Journal Vol. 10 (1), pp. 43-66
This evidence at regional and firm level invites the evaluation of innovation policies by analysing differences in productivity between groups of firms. In this vein, I undertook an in-depth assessment of cluster policy in the Basque country using secondary sources (SABI). Results demonstrate that SMEs belonging to cluster associations in the Basque Country are more productive than those firms with no cluster membership (Aranguren et al., 2014).
Aranguren, M.J., Maza-Aramburu, X., Parrilli, D., Vendrell-Herrero, F., Wilson, J. (2014) “Nested Methodological Approaches for Cluster Policy Evaluation: An Application to the Basque Country”, Regional Studies, Vol. 48 (9), pp. 1547-1562
A similar question is how university spin-off compare with other technological firms. By comparing the productivity of 104 university spin-offs and 73 New Technology Based firms longitudinally the analysis shows that university spin-offs have significantly lower productivity than other technological firms at the outset (minus 17%) but they can recover after 2 years, and in five years they are able to achieve a significantly higher productivity (+26%) (Ortin-Angel and Vendrell-Herrero, 2014).
Ortín-Ángel, P., Vendrell-Herrero, F. (2014) “University spin-offs Vs. other NTBFs: Productivity differences at the outset and evolution”. Technovation 34(2): 101-112.
Last but not least, another important aspect is how geographically isolated firms engage with international markets by deploying a foreign market focus. Using data from the World Bank I found that manufacturing SMEs exerting foreign market focus in Latin-America are more productive than their counterparts (Vendrell-Herrero et al., 2016).
Vendrell-Herrero, F., Gomes, E., Mellahi, K, Child, J. (2016). Building international business bridges in geographically isolated areas: The role of Foreign Market Focus and Outward Looking Competences in Latin American SMEs. Journal of World Business, In Press.