Gaining competitive advantage through knowledge integration in a European industrialising economy

'Traditional' theoretical tools used to analyse capability building in a development context tend to focus on the accumulation of technological resources, ignoring the significant managerial and organisational aspects of the innovation process. This paper has looked into the performance of eight leading food-processing firms in a typical European industrialising economy. The results show that managerial and organisational aspects and, more specifically, the integration of knowledge over time, across technologies and with suppliers and other external organisations, affect critically the overall innovative and competitive performance of companies. 'Integrative' companies managed to develop more product innovations; low integration ability was associated with lower rates of growth and profitability. The paper calls for practitioners and policymakers alike to look more into managerial and organisational arrangements, especially those that affect the ability of the firm to integrate their knowledge and for them to turn the integration principle to an overriding principle for their actions and policies.