Shanyun Lu (2021)

Managing contexts for innovation and renewal: Strategies of incumbent firms in traditional manufacturing industries

Innovation is important for established firms (i.e., incumbents) in traditional manufacturing industries (TMIs) to continuously survive and thrive. While internal factors often receive attention, different factors external to these firms enable and hinder the creation and realisation of novel products and processes. Firms in TMIs thus need to strategically deal with their outer contexts. How they do so in the post-industrial era and why they act in particular ways remain unclear in extant innovation studies. This dissertation offers nuanced explanations of the strategies of incumbents in TMIs, regarding managing contexts for innovation and renewal.

This dissertation investigates three cases involving firms in five different TMIs in Sweden. It shows that even firms that are expected to be the most inert display a proactive reorientation by developing radical and sustainable technologies that potentially revolutionise their industries and drive societal change. Innovative firms simultaneously manage multiple external factors such as societal norms and regulations, diverse networks, and place-based (lack of) resources by leveraging, shaping and fostering the alignment of those factors to protect and empower innovations. A core take-away for innovation managers is to “work in but also work out!”