A1 Journal article (refereed)
Fusion of technology management and financing management : Amazon's transformative endeavor by orchestrating techno-financing systems (2020)
Tou, Y., Watanabe, C., & Neittaanmäki, P. (2020). Fusion of technology management and financing management : Amazon's transformative endeavor by orchestrating techno-financing systems. Technology in Society, 60, Article 101219. https://doi.org/10.1016/j.techsoc.2019.101219
The research was funded by Strategic Research Council at the Research Council of Finland.
JYU authors or editors
Publication details
All authors or editors: Tou, Yuji; Watanabe, Chihiro; Neittaanmäki, Pekka
Journal or series: Technology in Society
ISSN: 0160-791X
eISSN: 1879-3274
Publication year: 2020
Volume: 60
Article number: 101219
Publisher: Elsevier Ltd
Publication country: United Kingdom
Publication language: English
DOI: https://doi.org/10.1016/j.techsoc.2019.101219
Publication open access: Not open
Publication channel open access:
Publication is parallel published (JYX): https://jyx.jyu.fi/handle/123456789/67014
Abstract
Such a rapid increase in R&D and subsequent market value has raised questions about how to conduct R&D and secure a large amount of funds needed for high-risk investments. Amazon has provided hypothetical answers to both of these questions.
Amazon has been conducting innovative R&D to transform routine or periodic alterations into significant improvements during the R&D process and claiming huge expenses for such transformation activities as expenses for R&D.
The company's ample free cash flow generated by sophisticated cash conversion cycle (CCC) management endorsed a large amount of investment for such a high-risk strategy.
Increased R&D induced business advancement and lean cost structure construction leading to a further increase in cash flow has stimulated interactions between vendors, customers, and Amazon via the Amazon marketplace. Activated interaction-accelerated CCC advancement, a subsequent free cash flow increase, and user-driven innovation have thus simultaneously accelerated R&D transformation.
All of these components - R&D transformation and technopreneurial strategy consisting of technology management, as well as marketplace development and CCC-driven cash flow generation consisting of financing management - function together as a consolidated sophisticated machine. Thus, Amazon has succeeded in fusing technology management and financing management by orchestrating all techno-financing systems.
In light of increasing concerns regarding R&D expansion without the dilemma of a productivity decline that most digital economies are now confronting, this paper demonstrates the above hypothetical answers.
Following the authors' preceding analysis of Amazon's unique technology management toward a new concept of R&D in the digital economy, an intensive empirical analysis focusing on the development trajectory of Amazon's techno-financing system over the last two decades was conducted.
An insightful suggestion as to neo-open innovation that fuses technology management and financing management is thus provided.
Keywords: new economy; research and development operations; innovation (activity); investments; cash flow
Free keywords: R&D transformation; fusion; cash flow management; cash conversion cycle; Amazon.com, Inc.
Contributing organizations
Related projects
- Platform Value Now: Value capturing in the fast emerging platform ecosystems
- Watanabe, Chihiro
- Research Council of Finland
Ministry reporting: Yes
VIRTA submission year: 2020
JUFO rating: 1