AMT adoption and innovation: An investigation of dynamic and complementary effects

The ability to innovate successfully is a key corporate capability, depending strongly on firms’ access to knowledge capital: proprietary, tacit and embodied. Here, we focus on one specific source of knowledge – advanced manufacturing technologies or AMTs – and consider its impact on firms’ innovation success. AMTs relate to a series of process innovations which enable firms to take advantage of numerical and digital technologies to optimise elements of a manufacturing process. Using panel data for Irish manufacturing plants we identify lengthy learning-by-using effects in terms of firms’ ability to derive innovation benefits from AMT adoption. Disruption effects are evident in the short-term while positive innovation benefits occur six-plus years after adoption. Strong complementarities between simultaneously adopted AMTs suggest the value of disruptive rather than incremental AMT implementation strategies.