Participation of Bulgarian Furniture Manufacturing in Global and Local Value Chains as a Factor Supporting Their Innovation Activities
2. Literature Review and Hypothesis Development
3. Materials and Methods
3.1. Sampling and Data Collection
3.2. Data Analysis
b8ASECT + b9SINST + b10EUINST + b11TRDSHW + b12PRNTD + b13INT + b14EMEDIA,
b7SINST + b8PINST + b9OTHER + b10GLOBE + b11FINANC,
4. Results and Discussion
- The aim of this study was to analyze the collaborations of innovative Bulgarian furniture manufacturers with external stakeholders and the use of information channels as factors for the development and implementation of innovation and participation in global value chains over their innovation activities.
- The results of the research showed that 94.1% of the researched companies have introduced product innovation, and 62.4% of companies have introduced process innovation, which means that they have developed new and improved production methods and technologies. Out of the companies that have introduced process innovation, 77% have implemented new process practices with their own resources, while 22.6% created process innovations together with IT companies or those from the mechatronics sector.
- An important source of information was sectoral association, which was found to be negative regarding the development the process innovations inside the companies. Regarding the inclusion of furniture companies in Bulgaria, various information channels led to the development of product and process innovations. In terms of respondents introducing innovation because of agreement contracts with value chain participants like companies and institutions, the results showed the influence of consultants on creating process innovation in collaboration. On the other hand, this was not found to be the case when introducing the new products into the company.
- The results showed that furniture manufacturing companies that want to introduce process innovation collaborate with mechatronics firms for automation 11.13 times more than those that do not plan process innovation to be developed in collaboration. However, furniture manufacturing companies that want to introduce new products are 20 times more likely to collaborate with mechatronics companies regarding the common development of a new product than those that do not plan for process innovation to be developed in collaboration. In terms of diversifying the supply chain and achieving strategic autonomy, the analyzed companies from the furniture industry do not participate in complex chains that would make them dependent on market shock and changes. On the other hand, the results indicated that the companies from the furniture manufacturing sector do not enter into any collaborations with IT companies that are related to product or process innovations.
- The findings of this study contribute to new insights into the literature on participation in GVCs as a factor for collaboration with different stakeholders and hence for product and process innovation development within the furniture industry. Even though the topic cannot be considered new, the Bulgarian case shows that innovative furniture companies do not participate in GVCs and have a low level of cooperation with NGOs, academia, and other essential sectors such as IT and mechatronics. Therefore, they are less dependent on chain shocks. Such data are essential primarily for policymakers, academia, and the EU, as EU policies, regulations, and program frameworks rarely consider national and regional specifics, leading to ineffective and non-sustainable outcomes. According to these results, (the H3 hypothesis failed), national policies are crucial to enforcing collaboration with IT companies for two reasons: the improvement of the information role in innovations and the improvement of the optimality of administrative activities. The policies of the Bulgarian Ministry of Economy and Industry (MEI) are mainly focused on supporting manufacturing processes but not much on the business model creation. In this way, furniture manufacturing enterprises have limited capabilities for cost optimality and competitiveness. The MEI should focus its SMEs Guidance Policy on improving the awareness of the furniture manufacturing enterprises about the benefits they can get from the IT companies in process innovations.
- In Bulgaria, the furniture manufacturing sector is considered not so innovative. Still, because of the phenomenon of hidden innovations, we cannot confirm this statement. Companies prefer to hide their innovations for further protection, which might be the reason for the lack of cooperation between furniture manufacturing companies and academia, NGOs, and other relevant institutions. In this respect, further analysis related to the motives of Bulgarian furniture companies to participate in global value chains is needed, and the lack of cooperation must be further studied. The Bulgarian Ministry of Economy and Industry does not consider the Sectoral associations appropriately. The results from this analysis revealed that only these associations are involved with information sources for innovations. The National Strategy for Small and Medium-sized Enterprises (2014–2020)  failed to define the role of sectoral associations in the innovativeness of the enterprises. This is the reason for the enterprises only using them regarding innovations. At the same time, the Bulgarian Branch Chamber of Woodworking and Furniture Industry  alone is not capable of orienting entrepreneurs in the external environment. The policies related to furniture manufacturing need to be better implemented by improving the Bulgarian Ministry of Innovation platforms .
- The findings of this study indicate several specific policy recommendations to enhance innovation within Bulgaria’s furniture sector. Firstly, promoting collaboration among innovative companies, academic institutions, and the IT and mechatronics sectors through incentives and support programs can facilitate knowledge exchange and technological progress. Secondly, encouraging transparency in innovation by developing frameworks that encourage companies to disclose innovations for intellectual property protection can enhance collaboration with academia and stakeholders. Thirdly, creating incentives to participate in global value chains can provide companies access to foreign markets, technological knowledge, and innovation opportunities. Additionally, initiatives promoting knowledge exchange among companies, industry associations, academia, and the IT and mechatronics sectors can drive interaction and cooperation. Adapting existing industrial policies to the furniture sector’s needs and sharing experiences through workshops and platforms can further boost collaboration, innovation, and integration into global value chains. Moreover, refreshing research and development incentive programs can offer financial support for innovative projects within the furniture sector. Collectively, these policy measures can strengthen collaboration, innovation, and competitiveness in Bulgaria’s furniture industry, using research results as guidance for future strategies.
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
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|Variable Abbreviation||Description||Questionnaire Part|
|NPRD||New product development||Introduced|
|INSIDE||New processes developed inside the company|
|INCOLLAB||New processes developed in collaboration|
|Variable Abbreviation||Description||Questionnaire Part|
|CGROUP||Companies from the corporate group||Information Sources and general agreements|
|VEND||Vendors of raw materials and services|
|PRESC||Private research institutes|
|ASECT||Associations, trade, or sectoral|
|SINST||Stated owned institutions|
|EUINST||Institutions of the EU|
|OTHER||Other companies from the furniture sector||General agreements|
|MAUTO||Collaboration with companies from mechatronics sector in production automation||Collaboration with companies from mechatronics sector|
|MLOG||Collaboration with companies from mechatronics sector in logistics|
|MNEWPROD||Collaboration with companies from mechatronics sector in development of new products|
|ITSALES||Collaborating with IT companies in the sales||Collaboration with IT companies|
|ITRECRUIT||Collaborating with IT companies in the recruitment of personnel|
|ITACCOUNT||Collaborating with IT companies in the accounting|
|CONS||−2.76 *||0.37||2.97 *|
|INCOLLAB||2.49 *||0.29||2.99 *|
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Georgieva, D.V.; Neykov, N.; Barčić, A.P.; Ćurić, P.; Klarić, K. Participation of Bulgarian Furniture Manufacturing in Global and Local Value Chains as a Factor Supporting Their Innovation Activities. Sustainability 2023, 15, 13260. https://doi.org/10.3390/su151713260
Georgieva DV, Neykov N, Barčić AP, Ćurić P, Klarić K. Participation of Bulgarian Furniture Manufacturing in Global and Local Value Chains as a Factor Supporting Their Innovation Activities. Sustainability. 2023; 15(17):13260. https://doi.org/10.3390/su151713260Chicago/Turabian Style
Georgieva, Daniela Ventsislavova, Nikolay Neykov, Andreja Pirc Barčić, Petar Ćurić, and Kristina Klarić. 2023. "Participation of Bulgarian Furniture Manufacturing in Global and Local Value Chains as a Factor Supporting Their Innovation Activities" Sustainability 15, no. 17: 13260. https://doi.org/10.3390/su151713260