This research aimed to study the application of knowledge to create open innovation of Thai automotive parts manufacturers. Data collection was conducted by using an in-depth interview form that was developed by setting interview topics and open-ended questions, including a small-group meeting of experts in the automotive industry to test and revise the interview form. According to the study, it was found that a problem of the innovation of Thai automotive parts manufacturers today was concerned with a lack of knowledge sharing between organizations as well as a lack of applying external knowledge in their organizations. As a result, they were required to spend a lot of money for in-house research and development. In addition, when unable to develop themselves, most companies bought a number of technologies and innovations to use in their organizations, which is considered a closed innovation. Since the Thai automotive parts manufacturers have created a very small number of innovations compared to other countries, it is necessary to accelerate the development of innovations by focusing on obtaining and using external knowledge to reduce development period and gain new knowledge. According to the research results, external knowledge source obtained from customers through their complaints and information of use problems was important and necessary for organization innovation. Thai automotive parts manufacturers can use this information to develop and improve their organization innovation. Moreover, according to the research results, most companies used a trial and error method starting from the operations of their employees to lead to the best practices of their organizations.
The innovation of the organization partly represents the success and performance of such organization because it is based on knowledge that can be acquired through research, purchase or personnel’s knowledge called “Best Practice”. Organization innovation is part of the organization's success and performance. It can be divided into 4 types based on the purpose of utilization: [
Various changes make the organization have to compete for survival by using strategies of differentiation, cost leadership, or target-group focus, and each of which all relies on knowledge to support its innovation. In the manufacturing sector, the Thai automotive industry is targeted at low cost production, which is regarded as a process innovation, because this industry can create much value for Thailand as compared to other industries and it is one of the industries that focus on innovation development. In addition, the Thai automotive industry is seen as the strongest player because it has the largest number of 2500 entrepreneurs.
Therefore, to respond to government policies emphasizing the innovation-based industrial development and to increase capacity onto the world automotive stage, the automotive manufacturers are required to join in developing and acquiring the knowledge to support their process innovation.
Innovation problems in the businesses are often caused by inefficiency in managing their foundation of knowledge resources, which is the source of innovation, including lack of knowledge absorption and dissemination to others for further applications. As the traditional concept of “Closed Innovation”, as shown in
Year | Granted Patent Registrations | ||||
---|---|---|---|---|---|
2012 | 2013 | 2014 | 2015 | 2016 | |
Invention patents Thailand | 39 | 52 | 67 | 62 | 61 |
Invention patents Other countries | 969 | 1097 | 1219 | 1302 | 1777 |
Design patents Thailand | 1173 | 1586 | 1455 | 2090 | 2103 |
Design patents Other countries | 934 | 1272 | 1022 | 1621 | 1652 |
Total patents Thailand | 1212 | 1638 | 1522 | 2152 | 2194 |
Total patents Other countries | 1903 | 2369 | 2241 | 2923 | 3429 |
Source: 2016 Annual Report 2016, Department of Intellectual Property.
The closed innovation as shown in
A key principle of open innovation management is about learning from both inside and outside the organization, both formal and informal, to create knowledge for innovation, as shown in
The open innovation as shown in
The open innovation can reduce the time of invention so the organization can spend most of its time to discover “innovative business model”. As a result, the private sector has been strengthened at the industry level with worthiness for investment and the businesses can therefore compete to respond to the strategies
of the country to change from economic structure driven by the development of industrial production efficiency to the technology- and innovation-driven economy in order to increase the competitiveness of the domestic industry.
Since the current sources of knowledge often consist of more components (i.e., new products and processes are often based on various technologies and sciences), it is important to understand that current companies are almost unable to separate learning and innovation from one another [
The exchange of knowledge not only occurs between the companies but also between the company and other agencies. Universities, research institutes, science parks, laboratories, and other institutions of knowledge are all related in the business environment [
The cooperation between the companies (including cooperation between the company and other agencies) has long been viewed as mainly limited to local cooperation and often researched only within a group context. However, in the age of globalization with the advancement of information technology and communication, the geographic scope of this interaction has expanded increasingly and often crosses the international boundaries. In case the company wants to succeed in innovation, it must have access to the highest level of technical knowledge in its industry. This means that the company must seek the right knowledge no matter where the knowledge is located in the world. Utilizing geographically close sources of knowledge has several advantages, such as face-to-face interaction, great flow of knowledge, and transfer of tacit knowledge [
Research and development activities within the organization have been clearly proven as important for the company’s innovation potential. Management members and other employees within the company are people who play an important role in the creation of knowledge and innovation [
At present, the companies in various industries are facing a constantly changing environment in terms of market, technology, and structure of the industry. In response to these uncertainties, many companies have more utilized external sources of knowledge. In addition, they still need to strengthen their own knowledge base by combining knowledge of other companies and agencies with its own knowledge base (often in any form of collaboration) so that they can utilize their own knowledge more effectively. The increased importance of this collaboration between the organizations can be explained by the concept of “modern knowledge” [
Nowadays, customer knowledge is becoming an essential abstract asset for companies because it enables these companies to create and customize their value proposition [
Customer knowledge (deeply embedded in the relationship with the customers) can directly and indirectly affect the way in which the company operates [
This research began with the literature review from relevant databases together with qualitative research through in-depth interviews with those involved in research and development in five automotive manufacturing companies in Thailand. The names of these companies were represented by letters A to E. We developed an interview form which consists of topics and open-ended questions used in the interviews. In addition, there was a small-group meeting with experts in the automotive industry to examine, test, improve or revise the interview form for effective use selected automotive parts manufacturing companies in order to know what sources of knowledge that those companies used from.
The researchers conducted in-depth interviews with senior executives who are involved in research and development in five companies selected from the 2017 automotive industry record. These companies manufacture and provide automotive parts to original equipment manufacturers (OEMs) directly and were selected to represent the automotive industry in order to know the sources of knowledge within the organization. They represented the manufacturers of different automotive parts: 1) exterior and body parts, 2) interior parts, 3) engine parts, 4) drive and transmission parts, and 5) suspension and brake parts, in order to know the internal sources of knowledge that are diverse and cover all product segments of automotive parts.
The scope of the interviews covered the following topics: 1) what sources of knowledge are used in the organization, 2) what percentage of sources of knowledge is used in the organization, and 3) what problems are found from such sources of knowledge. The researchers spent an average of one hour for each interview and the interviews were recorded and transcribed for further analysis.
After gathering data from in-depth interviews, We analyzed the data by taking into knowledge obtained from the interviews to determine the common factors. The sources of knowledge were then classified as internal and external sources of knowledge and analyzed to understand the process of creating new knowledge of the organization.
From the data collected from five companies, the overall sources of knowledge used in the organization to create open innovation of the Thai automotive industry currently operating in the country (2018) can be summarized as follows:
Based on the analysis results as shown in
Based on the total sources of knowledge used by five companies as shown in
companies had a high cost and took a long time for their own research and development activities because their employees had their own jobs and thus spent less time on research and development.
By considering all eleven sources of knowledge obtained from this study and used in the automotive industry, the results of the analysis show that the sources of knowledge can be divided into two groups:
Group 1. Internal Sources of Knowledge
The results of this study indicated that the internal sources of knowledge of Companies A to E were all composed of four sources of knowledge as shown in
Group 2. External Sources of Knowledge
The results of this study indicated that the external sources of knowledge of Companies A to E were all composed of seven sources of knowledge as shown in
The results of the study found that the best practice was often created by employees working in the production department. Therefore, if knowledge is sought through trial and error and the best practice is then created, it means that the knowledge gained through this method is almost retained, which represents
the effectiveness of knowledge management in terms of knowledge creation and knowledge storing. This can be seen in the companies’ information shown in
Since the theoretically obtained knowledge must be often adapted to the different environments and factors of production in each area, it can be seen that, in most cases, the knowledge creation process is usually as shown in
According to the results of the study in item A, the two most common sources of knowledge used by companies in the automotive industry were discovered, and the highest source of knowledge was in-house research and development. If every company in the automotive industry performs its research and development activities itself, they will face higher costs; therefore, it is recommended to encourage the sharing of knowledge to reduce costs and time. Knowledge sharing
between companies can occur, but it is difficult in practice because most companies are business competitors to each other. So, the company should consider other industries with the same desired knowledge and then exchange their knowledge in order to lead to the development of the automotive industry. According to Danial and Alexander, the knowledge management within the same organization or cluster is inadequate and cannot respond to all aspects. Thus, it is recommended to exchange the same knowledge with other industries or clusters to lead to the absorption and adaptation of knowledge and eventually the development of open innovation [
The second source of knowledge was joint with customer. The new marketing dimension is involved with a concept of customer co-creation based on customer complaints and experiences. According to HA Smith and J. McKeen, the knowledge should be made more complete by including customer knowledge, which is referred to as “knowledge co-creation”) where customers engage in knowledge creation [
According to the results of the study in item B, the least two sources of knowledge used in the automotive industry were joint with university and joint with government, respectively. Therefore, these companies had a high cost and took a long time for their own research and development activities and for acquiring new knowledge because their employees had no research skills. Some research suggested that there should be a network of cooperation between the organization and other institutions, such as universities, technology organizations, or research institutes, to provide research assistances for successful development of innovation [
According to the results of the study in item C, the companies in the automotive industry used both internal and external sources of knowledge for their development. This is in line with previous research suggesting that from an innovation perspective, new knowledge not only occurs in the research and development department, but it also is relevant to the company's general manufacturing activities and other factors, including through a process of interactive learning from the outside of the organization, before the innovation is developed [
Finally, according to the results of the study in item D, it can be seen that if knowledge is sought through trial and error and the best practice is then created, it means that the knowledge gained through this method is almost retained, which represents the effectiveness of knowledge management. Therefore, the researchers present a process of new knowledge creation from original knowledge in the organization, as shown in
The results of this study through in-depth interviews found a similar problem in sample companies regarding the mutual exchange of knowledge between employees from both external and internal sources of knowledge. With different educational levels, abilities in foreign languages, communications, and experience, employees cannot completely apply the knowledge they learnt and obtained because their ability to understand and absorb external sources of knowledge is not good enough so they cannot fully apply these external sources of knowledge. Therefore, future research should examine the mechanism of developing personnel’s ability of knowledge absorption so that they can adapt external knowledge and create open innovation in the automotive industry.
However, the companies chosen by us for interviews in this study were tier-1 suppliers that deliver parts to the car assembly companies directly and most of which are large companies. We did not select tier-2 and tier-3 suppliers and most of which are medium and small companies; therefore, this study did not cover the entire supply chain of the automotive industry. According to the consideration, it was found that the different orders of delivery of automotive parts might result in the different abilities of organization innovation. As a result, We suggests that the next study should focus on small-and medium-sized automotive parts manufacturing companies because there are approximately 2500 companies in Thai automotive industry in order to know the problems and solutions to develop the entire Thai automotive industry.
The authors declare no conflicts of interest regarding the publication of this paper.
Eamurai, P., Khantanapha, N. and Piriyakul, R. (2019) Open Innovation Management of Thai Auto Parts Manufacturer. Open Journal of Business and Management, 7, 502-518. https://doi.org/10.4236/ojbm.2019.72034