Innovation and Changing ‘Worlds of Production’

Abstract

Restructuring within the agro-food supply chain has given rise to a debate about how to maintain the creation of local added value. Innovation is one of the main strategies proposed as a part of the quality ‘turn’ in agro-food. The purpose of this paper is to identify and discuss problems and important factors in the processes of product development. Three Norwegian case-studies of dairies, which have tried to develop new dairy products, constitute the empirical basis.They are all local firms within a larger cooperative company. Even though there are similarities in the context for these three cases, there are differences in how their strategies are carried out. The theoretical framework is based on the theory of conventions and the theory of worlds of production. It is concluded that important factors for innovation and change of worlds of production are local entrepreneurial capabilities, intensity of integration between firm and parent-company, and the strength of the firm’s embeddedness to the local community. Entrepreneurs are important as agents who break old conventions; intensity of vertical integration may be a constraint for change of world of production; and strong local embeddedness is an advantage for innovation within the quality ‘turn’ in agro-food. It is an advantage to be strong on entrepreneurial capabilities, but there are possibilities of substitution. Local entrepreneurial capabilities can be substituted by mobilizing vertically in business integration; however, this substitution may constrain a more radical innovation.