Beyond technological catch-up: An empirical investigation of further innovative capability accumulation outcomes in latecomer firms with evidence from Brazil

This article examines outcomes that are achieved by latecomer firms by accumulating innovative capabilities. By drawing on fieldwork evidence from pulp and paper firms in Brazil from 1950 to 2010, it was found that (1) firms accumulated innovative capabilities that allowed them to become world leaders in the eucalyptus forestry segment of the global pulp and paper industry; (2) in addition to technological catch-up, the accumulation of these innovative capabilities resulted in outcomes that generated benefits within these firms such as (i) implementing inventive and innovative activities, (ii) consistently improving several parameters of operational and environment-related performance, and (iii) creating various patterns of corporate growth; and (3) these outcomes were achieved not just by research-based and patent-related capabilities but mainly by a mix of innovative capability levels that have varying degrees of novelty and complexity for diverse technological functions. Therefore, accumulating a wide range of types and levels of innovative capabilities does pay off for innovative firms, their industries and (ultimately) for their economies. By combining a novel approach to examining firm capabilities with findings from inductive fieldwork, this article generates new empirical and methodological insights for the long-standing debate about innovative capabilities as a fundamental source of a firm's competitive performance. This article should draw the attention of managers to the importance of having a multiplicity of types and levels of capabilities to achieve desired outcomes; in addition, it should encourage policy makers in developing economies to adopt a comprehensive view of innovative activities and place firm-centered innovation capability accumulation at the center of industrial innovation policies.