Open characters of innovation management in the Hungarian wine industry

Aron Torok and József Tóth
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József Tóth: Department of Agricultural Economics and Rural Development, Corvinus University of Budapest, Budapest, Hungary

Agricultural Economics, 2013, vol. 59, issue 9, 430-438

Abstract: The paper examines the relationship between the use of specific knowledge and economic success among Hungarian grape growers and wine makers. In the last decade, Hungary has been left behind by world trends as represented by the increasing share of the premium and super-premium wines (which utilise higher knowledge) in the export development. According to our survey, one cause of this might be the inappropriate use and management of knowledge and skills which is 'conditio sine qua non' for wine making. The Hungarian wine regions (usually with resource-based, fordist type resource endowment) are rather knowledge users. We have found (based on the PCA estimation) that two principal components cover 77% of the total variance: 'Size' and 'Innovation capabilities'. However, although the use and spread of skills is a basic component in explaining the differences of variation among the companies, it is not unambiguous in formulating the business success measured in different indicators. Because the small and medium sized enterprises (SMEs) have limited resources in capital accumulation and knowledge creation, they need to maintain living network connections in order to expand their constrained innovation capabilities. Instead of the 'closed' type of innovation and knowledge accumulation, they utilise the 'open' way of acquiring knowledge, where they necessarily share their specific information with their partners, but at the same time, they are supplied with new knowledge which might be vital for their own progress. The majority of the Hungarian vine- and wine makers are not open enough in the different phases of the innovation process. However, our analysis proves that if they showed up mutuality especially in knowledge sharing with their competitors, they could improve their positions significantly. We conclude that the Hungarian wine enterprises - keeping the idea generation as well as its further development, elaboration and the adequate use within the frame of the company - can achieve market success.

Keywords: Hungarian SMEs; open innovation; principal component analysis; vine- and wine sector (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:59:y:2013:i:9:id:24-2013-agricecon

DOI: 10.17221/24/2013-AGRICECON

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