Dimensions of industry convergence in probiotics showing cross-industry innovation using a value chain perspective

S. Bornkessel, S. Broering, S.W.F. Omta

Research output: Contribution to conferenceAbstractAcademic

Abstract

The aim of this paper is to analyse arising cross-industry relationships in a context of convergence by employing a value chain perspective combining the theory of industry convergence with the theory of value chain analyses. Focusing on cross-industry innovation, we describe in-depth the blurring of boundaries of formerly distinct industry sectors leading to industry convergence in the case of probiotics – an example for the emerging inter-industry field between foods and drugs. Thus far, industry convergence has been studied quite extensively from various perspectives. However, extant studies have not yet led to generally accepted indicators of industry convergence. The variety in terms of constructs, measurements, and samples has been substantial. Therefore, firstly, we deduce indicators of industry convergence from literature and secondly, we apply those indicators to the value chain perspective to explain cross-industry relationships and innovation. In principle, industry convergence can be divided into three levels: technology, market & industry and regulation convergence. Considering the technological level, bibliometric analyses through scientific publications and patents can be indicators. Furthermore, the market and industry level can be shown through mergers and acquisitions. Regulatory aspects are highly industry-related as for different products distinct legislative texts must be applied. Regarding the emerging field between foods and drugs the health claim regulation is of high relevance. This regulation as such focusing on health related issues for food products gives signs for industry convergence processes. Companies applying this regulation – so the activity in obtaining EFSA approved health claims – can be used to describe regulatory convergence on company level. In order to identify industry convergence and the related cross-industry relationships, we analyze companies in the converging area of foods and drugs with the example of probiotics. Thereby, four bacteria strains currently available in probiotic products on the market namely Lactobacillus Caseii DN 114001, Bifidobacterium Bb12, Lactobacillus acidophilus LA5 and Lactobacillus Rhamnosus serve as selection criterion to illustrate companies’ connections. Based on the indicators of industry convergence, we follow a netchain approach showing the value chain with different layers including the relationships of the companies between the layers as well as within them. Furthermore, the identified companies are analysed regarding the previously deduced indicators of industry convergence. The value chain delivers a network of altogether 13 companies stemming from the following four industrial backgrounds: food & agriculture, pharmaceutics, chemistry and personal care. These distinct industrial backgrounds are active on and between different layers within the value chain showing industry convergence in case of probiotics. This ongoing process of industry convergence can be described on the three levels: firstly, there are signs of technology convergence as the companies are publishing and patenting not only in their former industry sector, e.g., a food company filing a patent in a pharmaceutical background. Secondly, market and industry convergence appears for instance with different industrial backgrounds involved in mergers and acquisitions. Furthermore, companies of the distinct industrial backgrounds show activity in obtaining EFSA approved health claims – so the regulation is applied by distinct industry sectors. Based on these results, two important conclusions can be derived: firstly, industry convergence can be shown in the area of probiotics determined by the indicators according to the three levels of technology, market & industry and regulation convergence. Thereby, the degree of industry convergence differs between the examples of the four bacteria strains shown through differences of the activity of distinct industrial backgrounds. Secondly, innovation based on these cross-industry relationships leads to a converging of value chains into a network of companies with distinct industrial background. Keywords: Industry convergence; value chain analysis; functional ingredient; probiotics
Original languageEnglish
Publication statusPublished - 2014
EventSustainability and Innovation in Chains and Networks, Capri, Italy -
Duration: 4 Jun 20146 Jun 2014

Conference

ConferenceSustainability and Innovation in Chains and Networks, Capri, Italy
Period4/06/146/06/14

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    Bornkessel, S., Broering, S., & Omta, S. W. F. (2014). Dimensions of industry convergence in probiotics showing cross-industry innovation using a value chain perspective. Abstract from Sustainability and Innovation in Chains and Networks, Capri, Italy, .