Innovation and by-product valorization: A comparative analysis of the absorptive capacity of food processing firms

Abstract

The transition toward the bioeconomy concerns how firms innovate, especially how they utilize bio-based resources. This qualitative study explores how incumbent firms in a low-tech industry like food make use of technological developments to create high added-value for their by-products. The paper compares managerial efforts to utilize biotechnology in a meat and a dairy firm in the Norwegian food processing industry. The theoretical approach draws on the concept of absorptive capacity from organizational learning literature and innovation studies. The study finds that firms in the same industry with quite similar structures (i.e. the form of ownership) can nevertheless pursue divergent strategies toward developing innovations for by-product utilization. Through the process of learning, the study notes the role of firms’ absorptive capacity—exploratory, transformative, and exploitative—in acquiring external knowledge, experimenting with the newly acquired knowledge, and mobilizing necessary resources to adopt and develop technological innovations during the transition process. The study highlights the importance of inter-industry learning and research collaboration, market understanding, and supportive policies and regulations in fostering a bioeconomy.