2008, Volume 16, Paper 6
ISSN: 1883-5675
Product and process innovation in the food processing industry: case study in Guangxi province
Xin Ma
Peter McSweeney
Introduction
Recognizing that investment in knowledge and innovation is a driver of sustained long-term growth, developed economies have witnessed an increase in the volume of research and development with a focus on speeding up the development of new products and new processes (Earle and Anderson 1985). Governments have also recognized that investment in technology in particular can improve productivity and generate growth and employment. In the case of the food and agricultural sector, one example of government intervention in a developed economy is Australia’s recent National Food Industry Strategy which was an initiative which sought to “create sustainable advantage through innovation all along the value chain” (National Food Industry Strategy Ltd 2006). The targeted outcomes of the Australian strategy included finding innovative solutions to lowering costs, differentiating products and services and developing strategic alliances between the industry stakeholders.
Innovation in the food sector is driven by trends in consumer demand for food products with emphasis on variety, quality, nutrition, convenience, safety, reasonable cost and environmental soundness (Barbosa-Cánovas and Gould 2000). Food companies naturally respond to such trends and increase their research efforts as part of this response and seek to gain a sustainable competitive advantage over other companies by exploiting new technologies and innovations (Traill and Meulenberg 2002, Lagnevik et al. 2003).
China’s food processing sector has arrived at a critical stage and the challenges for the food industry including undergoing relevant structural adjustments are well documented (OECD 2000). The Chinese domestic economy continues to boom and living standards of people continue to improve. Food processors need to adjust to increasingly diversified consumer demands and improve the quality and nutritional content of foods. The food industry also needs to enhance its international market access through product quality, variety, safety and other attributes of their food products. Product and process innovation has become one of the top driving forces for improving the competitiveness of China’s food processing industry both domestically and internationally (OECD 2000).
This paper examines through case study analysis the response of several food processors in China to the changes in their external business environment and makes some assessment of their adoption or otherwise of innovative strategies. While relevant studies have been pervasive in Western countries, there is a dearth of analysis of such issues in China.
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