Adaptive Innovation in the Evolution of a Latecomer Firm: The Case of AsiaInfo, China

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Shanshan Zhou Angathevar Baskaran Mingfeng Tang Rajah Rasiah

Abstract

This paper is based on a case study of AsiaInfo, a latecomer telecommunications
software and service firm in China. It examines whether and how adaptive innovation
can enable the latecomer firms in developing countries to accumulate technological
advantages and gain competitiveness to emerge as multinational enterprises (MNEs)
Data for this study is obtained from a series of interviews with managers in AsiaInfo and
China Mobile. This study applied an evolutionary approach to analyse complex and
dynamic developments within AsiaInfo and found that the firm (AsiaInfo) has: (i)
gradually obtained its competitive advantages through continuous accumulations of
adaptive innovations over 20 years; (ii) accumulated adaptive innovations and its
competitive advantage co-evolved with the rapidly growing demands of the Chinese
telecommunication industry; and (iii) the ability to continuously generate adaptive
innovations depended not only on its ability to accumulate technological innovations, but
also social and organisational innovations. These factors were instrumental in enabling
AsiaInfo to eventually emerge as a multinational enterprise and catch-up with other
multinationals. This case study makes a significant contribution to the growing body of
literature on latecomer firms’ characteristics and strategies, particularly in East Asia. It
makes a theoretical contribution by modifying Michael Porter’s diamond model and
integrating it with latecomer strategies that treat adaptive innovation as central for
achieving competitive advantages.

Article Details

How to Cite
ZHOU, Shanshan et al. Adaptive Innovation in the Evolution of a Latecomer Firm: The Case of AsiaInfo, China. Institutions and Economies, [S.l.], p. 75-108, july 2017. ISSN 2232-1349. Available at: <http://ijie.um.edu.my/index.php/ijie/article/view/4905>. Date accessed: 24 june 2018.
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