2021 Review

Motivation:

As we learned the lack of studies on what pre-conditions to break the middle-innovation and middle-income traps in selected economies in Asia. Our research for 2022 will adopt the dynamic view of Doner and Schneider (Doner, R. F. and Schneider, B. R.,2016) to assess the pre-conditions and “essential” capabilities in driving both the growth and agendas in breaking their middle-innovation (income) cycle. We examine their basic and dynamic capabilities via studying their responses to pandemic crises.

Research Objectives:

In order to construct the political economy of resilience, this subproject thus extends its focus to the Tiger Economies and India, putting different economies into their context. We in this study wish to draw insights via a comparative exercise by first scoping the development contexts in Tiger Economies (Taiwan, South Korea and Malaysia and India). The contexts will be validated and compared with supporting empirical data.

Research Scope:

The selected economies are selected based on shared policy values and laid societal routine via democracy-free market means. Their economic growths are laid based on measures to champion exporting activities and their local firms are required to find their competitive advantage in the global production value chain. For the cases of Malaysia and India, their economic development agendas are sometimes coordinated with many flaws and the government in many times, unable to fulfill a collective will to build productive industries (effectively).

Contributions:

As previously stated, different economies have shown different economic resilience in the global pandemic. Taiwan, for one, is the economy that remains growing against the current in 2020. This does not only result from its expedient response to the virus outbreak, but also due to its well-positioned manufacturing sector in the global production. That said, Taiwan’s economy has actually been facing some long-term crises, such as losing companies to China, wage stagnant, aging population, etc.

The strategies and policies implemented to respond to pandemic crises by selected economies are useful as policy lessons for Taiwan, especially when it is now learning how to respond to the future crisis.

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Motivation:

It is known that literature on industrial districts have been the subject of interest of many economic geography scholars. Early works on industrial districts (e.g., Saxenian, 1994 and Markusen, 1996) are found profound and impactful. They are often used as a conceptual framework to study the characteristics of regional industrial activities and profiling them to provide distinction between innovative and peripheral clusters.

Such a construct basically enables small firms to pursue collective management of crises and enable them to shift businesses (and investment) swiftly as change often occurs in the business world. The networking institution and social capital of such districts (Lee and Saxenian, 2008) are often defined as the factors determining the success of high resiliency in fronting change and mobility in terms of capital and assets (for different investments) and personnel.

Research Objectives:

It is common (Cooke, 2001) to learn about the efforts of regional governments to commit to infrastructure building and favorable institutional conditions – with the aim to initiate an endogenous growth path via promoting indigenous industrial activities. Some regions (Satellite Platform) are driven to attract multinational firms to relocate their manufacturing operations as such measures are found to be instrumental and straightforward in stimulating the local economy (jobs, foreign direct investment (FDI), etc).

For our research in 2022, we would like to examine in detail the mobilization of labour workforces in selected industrial clusters in Taiwan. The measures used by industrial clusters in Taiwan will be compared to that of other selected countries.

Research Scope:

The conceptual framework about industrial clusters and regional innovation systems developed by Saxenian, (1994) and Cooke (2001) respectively will be utilized to guide our research activities.

Contributions: (specific outcomes: policy/artifacts)

We hope to provide some understanding about how semiconductor firms of selected countries mobilized workforces in the time of public movement control due to Covid-19 outbreak and how exporting businesses are managed in the time of crisis.

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Motivation

As mentioned before, resilience has been widely recognized as an important goal for the world to sustain from increasingly unexpected disasters such as earthquake, forest fires, tsunami, pandemics, etc. Public health crises have not gotten as much attention as now prevails from the worldwide outbreak of COVID-19. Even now in early 2021, there are no signs that the infection will be fixed quickly though the vaccine is available and people in many countries are starting to get vaccinated. And although the ramifications have macro- and meso-level implications, we must also be cognizant of the micro-level impacts on individual businesses. We propose that studying and modeling various micro-level responses to such crises can highlight emergent behaviors that have broader implications for self-regulation by industries and policy-making at the highest levels of government.

Research Scope

For industries, the common practice on business continuity planning (BCP) has been adopted to get prepared for emergency responses due to various events that occurred unpredicted. The BCP could be used for dealing with the emergency that occurred within the physical sites of an organization, such as the fire, earthquake, biohazard, etc., or outside the organization, such as the impacts from its suppliers caused by the disruption of production or services. To handle these potential risks causing discontinuity of business, many companies institutionalize their BCPs, especially for those global companies with large supply chain networks. However, for small and medium enterprises (SMEs), each company tends to have limited resources to tackle uncertainties including the fluctuation of markets due to unexpected events, emergencies occurring out of its scan, and the disruption of supply chains. Moreover, due to the relatively low information technology (IT) maturity of SMEs, the benefits from leveraging IT to facilitate the coordination among entities in the value networks composed of SMEs are usually not perceived, which worsens the situation faced by SMEs dealing with business discontinuity caused by unpredicted crises.

Research Objectives

Take the COVID-19 pandemic as a salient example, we observed the phenomena that SMEs have encountered. SMEs are generally more vulnerable than large companies during the pandemic. The factors cause the vulnerability include decreased demand dramatically, disruption of supply chain, workers’ safety and health, cash flow, and public policies and support, and international or geographical interdependencies (Wasame, 2020) Additionally, the maturity of IT also affects very much on how SMEs respond to uncertainties caused by events exceeding their information scanning boundaries. Thus, how SMEs use information technologies for responding to the uncertainties such as pandemics may be different from how they did in routine operations. The socially constructed meanings of IT for SMEs may differentiate the sustainability between companies.

There are many other factors affecting the resilience of SMEs. For example, the situation faced by export-oriented and domestic market driven businesses is different. Individually, lack of resources (slack resources) such as human resources, domain experts, IT, cash, property, etc. are major issues faced by SMEs in responding to the crises. The roles played by the government are significant in terms of enhancing SMEs’ resilience.

Facing the crises, SMEs may not just suffer from the unexpected disruption of routine businesses, but may take the advantage of perceiving new demands to transform their business models and offerings to thrill during and after the crises. It becomes a non-obvious topic in identifying the reasons that SMEs could transform their businesses and maintain their sustainability for resilience. The effective approaches for a SME to turn around during the crises especially from the widely covered social or environmental disasters could be a good lesson learned by other SMEs. Moreover, if these approaches could be organized as candidate alternatives for decision models for SMEs, which could be built and retrieved for SMEs to be prepared for future potential crises, we anticipate that the decision models could be the sources of inspiration for resilience-oriented service design.

In tackling the issues involved for SMEs to survive, transform, and sustain while facing social, economic, and environmental crises, this research project aims to investigate the key factors that affect SMEs in responding to these crises. Then, we tend to link the causes of action taken, and formulate the decision models that SMEs have used to prepare, respond, and to recover or transform from incidents occurred during the crises. After validating these decision models from a specific industry mainly composed of SMEs, we will build a multi-agent simulation system used for representing the value networks with individual agent’s decision models. Each agent represents one entity (e.g., company, customer, government, etc.) in the service system. Then, a user could play as an executive of an entity to make decisions given some unexpected urges. By doing these practices, users could exercise various decision models to evaluate the outcomes for individuals and the whole service system to gain the experiences in handling the crisis. Since it is a simulation system, it could allow individuals to innovate and test new approaches in the simulated environment to respond to crises, and then extract effective models for transforming business toward reliance.

In comparison to larger firms, SMEs often suffer from resource constraints. Therefore, SMEs are generally more vulnerable than large companies during crises. To survive and overcome a crisis, SMEs need to create and efficiently utilize digital resources. Blockchain technology, as a digital resource, has two roles: (1) a digital resource helps businesses reduce costs and operate more efficiently, and (2) as a platform for collaboration among SMEs through sharing resources and knowledge. In terms of cooperation, trust among participants is widely seen as a critical success factor that is necessary to induce cooperation in the construction process (Love, Davis, Cheung, & Irani, 2011).

But developing mutual trust between organizations with different goals and objectives is challenging (Manu, Ankrah, Chinyio, & Proverbs, 2015). Instead, mistrust might arise that leads individuals to pursue their own interests above joint goals (Hunhevicz & Hall, 2020). Mutual trust and collaboration can only come about from steady and timely sharing of information between parties. The emergence of blockchain technologies, which promise immutable, transparent, and traceable information records, might provide a novel means to achieve mutual trust (Zhong et al., 2020). Blockchain might also address information asymmetry issues by ensuring that participants of a blockchain network have the same information. Such transparency can prevent organizations from deflecting blame for failures if they violate their obligations or cut corners.

Blockchain technologies have progressed through three stages, often referred to as Blockchain 1.0, 2.0, and 3.0 (Swan, 2015). Blockchain systems can also be distinguished by their level of openness and access, and are broadly characterized as public, private, or consortium blockchains (Morabito, 2017). A public blockchain is an entirely decentralized blockchain with no central authority. In contrast, Private blockchain is entirely regulated by an organization. In a Consortium blockchain, multiple participants are responsible for the management of the blockchain network, where a single organization controls one or more nodes in the network. Therefore, Consortium blockchain is an appropriate solution for a SEMs corporate service system.

Contributions

Public, private, and consortium blockchain all employ consensus mechanisms to ensure information security and reliability, and in particular the traceability and data integrity. Consortium blockchains also provide a comprehensive set of security features such as certification, authorization, and auditing, which addresses business cooperation requirements and ensures mutual trust between different organizations. However, unlike publishing blockchain and private blockchain, consortium blockchain is built based on collaboration between various parties with different goals. Therefore, it is necessary to establish a suitable cooperative mechanism for sharing and integrating resources. This cooperation mechanism is designed based on the Multi-agent simulation method throughout the interaction between SMEs (human agent) and between SMEs with consortium blockchain (human and not-human agent) under different scenarios.

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