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Can genetically modified foods be considered as a dominant design? An actor-network theory investigation of gene technology in agribusiness
Gene technology in agribusiness
JoAnne Labrecque Marketing Department, HEC Montre´al, Montre´al, Canada
Sylvain Charlebois Faculty of Business Administration, University of Regina, Regina, Canada, and
Emeric Spiers Banque Nationale du Canada Abstract Purpose – Technology influences market growth and productivity, and the food industry has seen major technological and productivity method changes in recent years. The debate on genetically modified (GM) food, in particular, has been led on multiple levels in both Europe and North America. Studies to date have described the structural differences between the North American and European regulatory agencies as reasons for differing attitudes towards GM foods. The purpose of this paper is to establish a conceptual framework that puts forward a systemic view on the interconnections between corporate marketing strategies (i.e. tool makers), public policies (i.e. rule makers), and science (i.e. fact makers) when a dominant design emerges in the food industry. Design/methodology/approach – This paper begins by describing the fundamental elements of the dominant design concept and the actor-network theory (ANT). This is followed by the presentation of levers that permit the emerging agrifood dominant design to be successful. Third, these theories are applied to the appearance of GM foods in both North American and European markets. Finally,a framework is presented outlining actors’ tasks associated with the emergence of an agrifood dominant design. Findings – This research uncovered the reality that technology developers, policy makers, and research protagonists all have the capacity to change the outcome of a dominant design in the food industry. All operate under a strict set of values and objectives and may influence the adoption process. The model in this paper presents a macro perspective of the institutional dynamics of a dominant design in the food industry when it appears in any given market around the world. Originality/value – This study is one of the first to systemically examine the development of technological change as a dominant design within the unique reality of the food industry. As such it makes a number of contributions which should be the subject of further study. Keywords Genetic modification, Food, Agriculture and food technology, Food controls Paper type Research paper
Introduction In recent years, there has been a growing interest in genetically modified organisms (GMOs), or genetically modified (GM) foods. In particular, trade with GMOs has long been a contentious issue between European and North American countries. The techniques of modern genetics have made possible the direct manipulation of the genetic makeup of organisms. GM foods offer a way to quickly improve crop
British Food Journal Vol. 109 No. 1, 2007 pp. 81-98 q Emerald Group Publishing Limited 0007-070X DOI 10.1108/00070700710718525
characteristics such as yield, pest resistance, or herbicide tolerance, often to a degree not possible with traditional methods. The power of genetic modification techniques raises the possibility of human health, environmental, and economic problems, including unanticipated allergic responses to novel substances in foods, the spread of pest resistance or herbicide tolerance to wild plants, inadvertent toxicity to benign wildlife, and increasing control of agriculture by biotechnology corporations. Although many researchers have focused on contentious issues such as GM food labeling, consumer behaviour towards GM foods, and public policies pertaining to the so-called Frankenfoods, the relationship between GM foods as a technological dominant design and the functions of institutional actors in the environment have not yet been explicitly recognized. Considering the large-scale implications of GM foods, it is important that marketing scholars learn to understand their economic and political functions within marketing systems. We can arguably consider GM food technology to be an emerging dominant design, or more precisely a major technological breakthrough that has not become mainstream thus far. GM food technology is a divisive topic in today’s modern society. Much research in marketing has applied the concept of dominant design on prominent technologies, but very little attention has been given to the widespread existence of GM food technology. The theoretical aspects described in this article provide for an interesting analytical framework for GM foods as a dominant design. It is important for any actor in a given sector to identify the new emerging design at a very early stage to maintain their market position, and maximize return on their investment. The need for applying gene technology to food production was first motivated by the need to increase productivity to satisfy increasing human needs. GM crops such as rice, soybeans, cotton, and corn are grown in more than 20 countries around the world. Nearly 70 percent of all GM crops in the world are grown in North America, while Argentina, Brazil, China, and South Africa represent other main growers of GM crops (Gaines and Palmer, 2005). GMOs allowed for a reduction of the use of pesticides or herbicides, increased productivity, and the capacity to grow stress-resistant and water-frugal plants. However, the first generation of GMOs launched on the market offer distinct benefits to producers but no clear advantages to consumers (Kolodinsky et al., 2003). The long-term effects of GMOs on environment and consumers’ health are still unknown, and most European countries have been reluctant to favour GM crops over traditional crops. In addition, it is still unclear as to how consumers can benefit from GMOs by reducing food security in developing countries or address health concerns by offering more nutritious foods. GM foods are becoming more prominent around the world and many interests groups, more specifically in Europe, have expressed their concerns. In spite of the American Medical Association, the British Medical Association and many other agencies from the scientific community that have found little evidence that GM foods pose any serious risk to human health, GM foods still generate trade quarrels among nations (Malarkey, 2003). Food-related trade disputes have materialized in the past due to food safety concerns and discrepancies in biotechnology ethics (Bruce, 2002), practices, and standards. Research has also suggested that a widespread lack of knowledge about food production methods by consumers may be an underlying reason of GM food fright (West and Larue, 2005). GM foods have gone through troubled times in recent years in Europe, and many have had
difficulties accepting them as foodstuff and not just embodiments of technology (Scholderer, 2005). The objective of this paper is to establish a conceptual framework that puts forward a systemic view on the interconnections between corporate marketing strategies (i.e. tool makers), public policies (i.e. rule makers), and science (i.e. fact makers) when a dominant design emerges in the food industry. The case of GM foods is used to exemplify this framework. To carry out the objective of this study, the paper is organized as follows. We first describe the fundamental elements of the dominant design concept and the actor-network theory (ANT). In the second part, we present levers that permit the emerging agrifood dominant design to be successful. Third, we then apply these theories to the appearance of GM foods in both North American and European markets. Finally, we present a framework outlining actors’ tasks associated with the emergence of an agrifood dominant design. The dominant design concept Technological innovations are perhaps one of the most commanding forces for growth in today’s global economy (Sood and Tellis, 2005). Time and again, a novel technology influences future product development schemes in an industry and eventually becomes a reference model. The product is then considered as a dominant design. Abernathy (1978) and Sahal (1981) describe a dominant design as a unique representation of a technology that determines and sets the status of dominance in a given product category. Utterback (1994) maintains that a dominant design is in fact a generally recognized concept, regardless of the product category, that earns the loyalty and confidence of markets. Technological innovations such as the VHS for video, the IBM-compatible architecture for personal computers, the Windows operating system, and DVD technology for home entertainment have become true industry standards, hence dominant designs. A few researchers have already examined how the concept of dominant design applies to the food universe and have identified products such as frozen vegetables, cold breakfast cereals, and soluble coffees as possible examples of dominant product designs in the food industry (Abernathy and Utterback, 1978; Buzzell and Nourse, 1966). More recently, Nordstro¨m and Bistro¨m (2002) studied the emergence of a dominant design in functional foods containing probiotics. They argued that the perceived value associated with functional foods by consumers contributed to the increase of market pressure. They also specified that factors related to supply and demand as the prevailing socio-political environment can pave the way for the successful consumer acceptance of new food products. A design is dominant when it meets the needs and the expectations of a large majority of consumers (Abernathy and Utterback, 1978). It is characterized by a standardized design and mass production. The production factor is crucial, particularly in the early stage of recognition of the dominant design. Based on the adoption time of the design, economies of scale are key, creating a descending production cost structure. It would then ultimately offer to the market a competitive retail price, which further reinforces the adoption factor of the design. A product would subsequently institutionalize itself in the market and, consequently, its dominance threshold (Utterback, 1994). Dominant designs can also create collateral dependence. In other words, consumers are forced to use complementary products to benefit from the dominant design. For example, consumers that own VHS players have to use VHS
Gene technology in agribusiness
Figure 1. Evolutionary and cyclical model of a technological change
videos. In agrifood, it seems that other by-products, such as pesticides and fertilizers, often created by the power of gene technology and intellectual property, may leverage the dominance status by increasing collateral dependency. This large-scale production implies natural selection between companies that master the fabrication and product development process to the detriment of firms that are slower to adapt (Suarez and Utterback, 1995). In fact, it is in the dominant design recognition phase that an aggressive price-driven competition occurs. The new market trends proposed by the future dominant design stimulate an influx of competitors that position themselves on the market by imitating, with slight variations, the particular dominant design concept (Abernathy and Utterback, 1978). Literature on the emergence of a dominant design concept suggests that the process of development and implementation can be explained by at least two theoretical approaches: the evolutionary and cyclical model (Anderson and Tushman, 1990), and the ANT (Callon, 1999; Latour, 1987; Law, 1999). Although these two theories, discussed below, differ in both approach and content, they are nonetheless complementary, and thus allow a better understanding of the concept of dominant design. The evolutionary and cyclical model of technological change put forth by Anderson and Tushman (1990) describes the creation process of a dominant design. This model traces the path of a technological innovation through four distinct temporal phases (see Figure 1). The first phase marks the discovery of a major technological innovation, a technological discontinuity. Major technological innovations are rare, unforeseeable innovations that break through an important technical barrier and that most often feature a new concept or product fabrication procedure (Anderson and Tushman, 1990). The characteristics of these technological innovations are promising and decisively advantageous in terms of cost and quality. Schumpeter (1942) argues that the character of these innovations go so far as to overturn the foundations of their respective industries. In the second phase, the era of fermentation, the recently discovered innovation is at a crude, nearly experimental stage. During this phase, companies compete to protect their designs (Anderson and Tushman, 1990; Foster, 1986). A fierce battle then ensues
between the currently dominant design (e.g. VHS video technology in the mid-1990s) and the new design (e.g. DVD technology), which tries to position itself in the market through superior performance. This intense era of technological fermentation is marked by uncertainty and ambiguity. At this point, the market is unclear as to which optimal model should be retained, but eventually leads to the emergence of the future dominant design. The technological evolution provided by the new design may well represent a sharp improvement, or it may just be newness following a long period without progression (Sood and Tellis, 2005). This third period is characterized by the appearance of a unique attribute of a product design that establishes the dominance of a given product category (Abernathy, 1978; Sahal, 1981). The dominance of a design is directly proportionate with the technological links with other previously dominant designs. It can either be a continuous or a discontinuous extension of current dominant technology. The major technological innovation becomes dominant, and is increasingly recognized by consumers as the future benchmark in the industry. The added value presented by the dominant design becomes self-evident and unequivocal to consumers. Subsequent technical improvements will be minimal, and based only on the standard nature of the dominant design (Sahal, 1981). A network effect at this stage, referred to the phenomenon in which the value of a product to one consumer increases as more consumers accept the product, may emerge (Lee and O’Connor, 2003). The fourth and final stage in the process (i.e. the era of incremental change) refers to the amplitude of the changes that occur in both the industry and the market following the hegemony of the dominant design. The new dominant design simply becomes the industry standard and has the advantage of being institutionalized among users. Its cost and its omnipresence on the market result both from economies of scale and experience, from production to marketing. In this phase, the existence of a centralized network that mobilizes the various stakeholders in a marketing channel, from production (strategic alliances and partnerships) to distribution (diversified and efficient distribution channels) support, encourage and protect the dominant design in its supremacy and hegemony (Constant, 1987). Dominant designs generally fall into one of two types of technological innovations: competence enhancing innovations, which are those based on existing technology or expertise; or competence destroying innovations, which represent an entirely new technology or expertise. Tushman and Anderson (1986) and Anderson and Tushman (1990) established a direct link between continuous innovation and adoption of a dominant design. This causal effect association is partly explained by the fact that a continuous innovation contributes to decrease the factors and uncertainty of risk that consumers face. Specifically, because a continuous innovation is partly based on existing technology or expertise, some of the technology of this design has already been proven to consumers or users, who can then adopt it more willingly. These consumers are also less reluctant, which effectively reduces their feeling of uncertainty and the risk associated with the design. We can thus affirm that, in general, a continuous innovation promises improved performance, in contrast with discontinuous or radical innovations. In addition, a continuous innovation more easily and quickly attains the status of dominant design (Tushman and Anderson, 1986; Anderson and Tushman, 1990).
Gene technology in agribusiness
Apart from the technology’s design, cost, and the influence of institutional and social forces, the propensity of a technological innovation to become a dominant design is directly proportionate with how quickly consumers can appreciate its virtues. For example, the undeniable value of DVDs over VHS tapes, in addition to the customers’ ease at testing it (such as through a demonstration in a retail store), is largely what fuelled the rapid adoption of DVD technology by all industry players. Inversely, regarding the technology ensuing from GM foods, the perception of added value of GM foods for consumers, farmers, scientists, or other industry players is still considered difficult to establish, as it can be considered as a discontinuous market innovation. This explains the existence of controversies surrounding this type of product, which undermines the status of GM foods as a dominant design. Producers, nonetheless, need to reduce their production costs and achieve economies of scale. When existing firms achieve significant economies of scale, it becomes difficult for potential followers to be competitive. Actor-network theory (ANT) Introduced by Callon (1986), and built on by Latour (1987) and Law and Hassard (1999), this theory centers on three complementary areas: knowledge development, controversy resolution, and actors’ roles. Knowledge development, for one, refers to the production of scientific facts. Latour (1987) asserts that all designs are originally (i.e. in the era of fermentation) perceived by the various industry stakeholders as a claim, a proposal of new technological alternatives. It is precisely when this claim evolves over time and is eventually considered by the market as a generally recognized fact that it is associated with the concept of dominant design. The evolution from the phase of claim to fact has inherent constraints. While an emerging design evolves toward dominance, it contains imperfections that create complaints and quarrels in the market. At this point, it is imperative that these defects be corrected as quickly as possible because otherwise the market might hesitate, rejecting the dominant design or choosing other alternatives. The black box, a concept used in the ANT, represents the resolution of past controversies. It inscribes behaviours from self-enlisted actors. Dominant designs are components of the so-called black box. The ANT stipulates that, to explain the causes of product dominance, one must also consider the social role of the actors. Operating in highly dynamic and unpredictable environments, actors refer to individuals that act directly or indirectly during the development and evolution of the design to dominance (Sahadev and Jayachandran, 2004). Evidently, these include the various members of the marketing channel (from production to distribution) linked to the dominant design as such, along with various institutional groups that also shape economic activities (Whitley, 1992). This construct therefore implies that there is more than a single economic logic that dictates corporate behaviour, and that market rules and their controlling elements are driven by social constructs. These socio-political and economical actors include government institutions that enact laws to influence the design, as do various social groups, community organizations, regulatory bodies, and scientists who all exert influence over the final product. Several of these international regulatory agencies are inclined to focus their policies around harmonization of food safety for the public and economical benefits for
food industries (Fitzgerald and France, 2003). They can become opinion leaders or network champions and operate as advocates for the technology, becoming vocal for its acceptance (Grundstro¨m and Wilkinson, 2004). In this dominant design perspective, Maguire (2000) differentiates three categories of actors, according to their potential roles: (1) the tool/artifact makers, defined as the designers and promoters of technological concepts; (2) the rule makers, defined as the politicians, the non-government organizations, concerned citizens or other members of the public scene; and (3) the fact makers, defined as the scientific community, the designers and the promoters of specific beliefs. It is imperative to note that tool users such as manufacturers, retailers and consumers are not considered in the investigation. At any rate, one of the pillars of the ANT is the social interconnection of the actors through a determining process of diffusion (Callon, 1999). This process stipulates that some actors within the network will try to enlist other actors in the pursuit of their own interests and objectives, either through interest, manipulation, or force. Personal networks with overlapping categories of actors as listed earlier can also be identified within the process of a dominant design progression (Grundstro¨m and Wilkinson, 2004). Trust can also be a concern for actors involved with the evolution of a dominant design. The lack of trust in the actors with great resources and responsibilities for ensuring safety, or specifically food safety, should also be regarded as an important obstacle to the adoption of a new technology (Lang and Hallman, 2005). Collectively, these actors positively or negatively impact the marketing future of the design. They can thus influence its dominance, or conversely substitute it for another design. For example, regulations by rule makers often have the power to enforce a standard, and thus inflict a dominant design to a market. Activist organizations, which can be categorized as rule makers, believe that consumers should be concerned not only with product knowledge and safety, but also believe in collective action to enforce ethical practices (West and Larue, 2005). The emergence of GM foods as a dominant design Controversy resolution is rooted in the emergence of a dominant design. Inspired by both the dominant design concept and the ANT, levers for a dominant design in agrifood are presented in Figure 2. We can speculate that certain levers can create favourable conditions to remove obstacles for an emerging dominant design in agribusiness. When considering an emergence of a dominant design in agribusiness, equilibrium exists between the levers originating from suppliers (i.e. tool makers) of the dominant design, and the marketplace. If no equilibrium exists between supply and marketplace, an unremitting controversy can occur. On the one hand, production benefits are sought from designers and firms seeking for strategic gains. These gains can be achieved through logistical benefits (i.e. transport tolerant, enhanced shelf-life), economical benefits (i.e. economies of scale), environmental benefits (i.e. less pesticide use, less acreage for more productivity), and lastly, marketing benefits (i.e. appealing fruit and vegetable, added nutritional values for better market segmentation, less seasonal constraints) (Nordstro¨m and Bistro¨m, 2002). The will to develop an agrifood dominant design can be triggered by one or many of these sought-after benefits.
Gene technology in agribusiness
Figure 2. Levers for an agrifood dominant design
As for the marketplace, it too needs to obtain benefits (health, environmental, aesthetics and practicality). For consumers, these benefits from an agrifood dominant design are interrelated, meaning that if customers do not believe that a product has certain benefits, they will most likely reject it (Sood and Tellis, 2005). Benefits for consumers of GMOs include: price reduction, availability, and first generation versus third generation (health value). Benefits must exceed costs for consumers, but this does not imply that there will not be any risks (Bredahl, 2001). Hence, Bredahl indicated that when less risk and more benefits are perceived, consumers are more willing to adopt gene technology. Benefits can be sought through such things as enhance freshness, taste and aesthetics. In between designers and consumers lie levers that have an important role in both perceived and factual risks dispersed by the emergent design. Regulations and monitoring from governmental and non-governmental agencies (or rule makers) influence perceived risks by consumers and hard-to-calculate risks produced by design promoters. Risk control to limit possible detrimental effects is required in the risk zone surrounding the emerging dominant design. There is often a fine line being drawn between educating the marketplace and avoiding unnecessarily alarming it, with the consumers’ trust in the balance (Lang and Hallman, 2005). In addition, science and research seek for answers to better understand the impact of the new dominant design for both supply and the marketplace. Science communities, or fact makers, play a significant role in this segment of the model. They build specific beliefs about the emerging dominant design for society in general, and assess risks. Limitation in research and regulations, or even ethical issues (Bruce, 2002), may distort perceived risks by consumers regarding the dominant design, even though these perceived risks have very little to do with factual risks. If the risks are not
significant in terms of actual health or environmental concerns, the design itself is sufficiently devastating on many levels so as to warrant more research and more regulations to safeguard consumers’ trust simply on principle. Adoption of a dominant design is not to be relegated to merely a production assurance measure. It also requires regulation that accounts for consumers’ perceived risks. By assessing Figure 2, the initial hypothesis of GM foods being the new dominant design in the marketing of food commodities raises the questions as to whether or not GM foods as a technological innovation has in fact the status of dominant design. Anderson and Tushman (1990) believe that a dominant design should correspond with the different phases of the evolutionary and cyclical model of technological innovation. Also, in this perspective, one has to hypothesize as to whether the technological claim, to which the concept of GM foods can be labelled with, has been transformed into a generally recognized fact, a sine qua non condition for a dominant design, as stipulated by the actor-network theory (Callon, 1986; Latour, 1987; Law, 1999). North America, and specifically the USA, has embraced GMOs. This country saw a very interesting market development potential in GMOs and GM foods, and thus quickly developed an entire industry to stimulate the growth of this promising science. Throughout the marketing channel, from farm to fork and including farmers and intermediaries, GM foods are being met with much less reluctance than in Europe (Ekici, 2000; Laros and Steenkamp, 2004). Although the European Union ended its ban on GM foods, fear amongst European consumers remain ubiquitous. Many Europeans have been reported to hold the view that GM foods are unnatural (Deckers, 2005). Many food companies in Europe felt that negative public attention would be given to those companies that would market GM foods. In North America, many believed labelling could translate into commercial failure for genetically engineered foods. Even North Americans seem to have a more avant-garde vision and more economic motivation than Europeans (de Tocqueville, 1961), which is translated by a desire to encourage all institutions, both corporate and state, on the continent to promote GMOs and GM foods as a dominant design. In addition, North Americans simply have a more positive approach toward new technologies in general (Chevallier, 2002) and are therefore apparently less reticent than Europeans. At any rate, the evolutionary and cyclical model of technological innovation by Anderson and Tushman (1990) would indicate that in North America, GM foods have transcended nearly all of the phases of the model and have reached the era of incremental change. This final and ultimate phase is characterized by the production, the final conception, introduction, and retention of the design. This comment is particularly true concerning the introduction and retention of the design given that North America is doubling its efforts to defend the applications of GM foods, not including the pressure that it has exerted on the European Union to lift the moratorium and establish the science as the industry standard elsewhere in the world. For its part, Europe has reached only the major technological innovation phase and to a lesser extent the second phase of this evolutionary and cyclical model, namely the era of fermentation. The discovery of this major technological innovation represented by GMO has overturned the foundations of the industry (Schumpeter, 1942), whereas in the USA, a major wave of restructuring of the pharmaceutical industry occurred. The era of fermentation is characterized by the fact that the discovery of this major technological innovation has encouraged several European pharmaceutical and
Gene technology in agribusiness
agrochemical firms to compete to position their own design on the dominance path (Anderson and Tushman, 1990). However, their efforts ended abruptly, following the array of protest and opposition movements that in 1999 and 2000 undermined the favourable climate of GMO. The consequences for the industry were harmful, in that European pharmaceutical companies were forced to divest their agrochemical branches because of their precarious outlook (Ekici, 2000).
90 Actor-network theory and GM foods In the USA and Canada, GM foods are not legislated as different foods, but instead are evaluated according to the principle of substantial equivalence. In these countries, even if some reluctance persists, the vast majority of North American consumers defer to the decisions of the top government authorities concerning GM foods. The influx of GM foods on North American market was perceived by American consumers to be a legitimate, alternative technological claim or proposal, on the way to becoming a generally recognized fact. In other words, the complex black box process of the transformation from claim to fact, and thus a dominant design, that characterizes the ANT appears less tumultuous in North America than in Europe. As mentioned earlier, when a dominant design emerges, it is not free of shortcomings (Latour, 1987). As a result, this may cause complaints and controversies. In Europe, particularly in France, these controversies or manifestations prevent the emergent design from evolving to the era of fermentation. Munir (2001) insists that one must imperatively resolve these deficiencies or controversies as quickly as possible because in these circumstances the market may hesitate, and alternative options are still available. Many authors could not clarify the adverse consequences of these controversies, whereas in Europe and France there is indeed a resurgence of organic foods and many consumers returned to buying locally grown foods, an recognized alternative to GM foods. Relative to the progression of GM foods as a dominant design, the European and North American positions can also be interpreted by making three strong empirical comparisons. First, unlike Americans, Europeans seem to have misapprehended the concept of GM foods as a concept and shown very little loyalty towards them (Boy, 2001; Laros and Steenkamp, 2004). Second, GM foods in North America were partially supported by a well-experienced and efficient network that fuelled its development (Constant, 1987). Networks to support the development of GM foods in Europe were almost inexistent. And finally, American consumers, to a certain extent, did not communally question the principle of genetically modified organisms, as they considered it to be the pinnacle of agricultural technology (Utterback, 1994). Some experts indicate that Americans have never had a food scare which would explain continental dissimilarities in risk aversion. Arguably, this was not the case in Europe. Based on Latour’s interpretation of the ANT, the generalized apathy in North America and unfriendliness to GM foods in Europe create a variable anthology of the black box. Therefore, we cannot claim, even in North America, that GM foods are truly a dominant design. Nevertheless, the North American continent is continuing to advance and is distancing itself from Europe in the race to establish GM foods as a dominant design. A tension in this area persists between the two continents. Technological changes greatly affect the organizational environment. These technological changes or technological innovations can be categorized as either competence enhancing, that is those based on existing technology or expertise, or
competence destroying innovations which represent an entirely new technology or expertise (Tushman and Anderson, 1986). Moreover, a continuous innovation promises enhanced performance compared with discontinuous innovation or radical innovation and can more easily attain the status of dominant design (Anderson and Tushman, 1990). These considerations aside, in North America GM foods do not require any special labelling and the issue was legislated around the principle of substantial equivalence. Therefore, until proven otherwise, a genetically modified organism is not different from its original counterpart. As a result, North Americans do not perceive GM foods as a fundamentally radical innovation but rather as a nearly acceptable evolution of their food habits (Bereano and Kraus, 1999). We can ascertain a connection between North Americans’ perception of GM food technology and the concept of continuous, non-radical innovation. This claim may suffice to explain the distancing between North America and Europe on the issue of GM foods as a dominant design. Indeed, continuous innovations tend to consolidate the leadership of the industries related to this type of innovation. They also tend to consolidate leadership in a given product class. Tushman and Anderson (1986) and Anderson and Tushman (1990) base their observations on analysis of the impact of continuous innovation on the temporal aspect of the era of fermentation in the evolutionary and cyclical model. These authors add that continuous innovation has an impact on the risk factors and uncertainty that consumers face when confronted with the design. Specifically, because a continuous innovation is partly based on existing technology or expertise, some of the technology of this design has already been proven to consumers, who can then adopt it more willingly and are less reluctant about such technology, which effectively reduces their feeling of uncertainty and the risk associated with the design. This situation is attributable to the fact that a design originating from a continuous innovation was able to stand out from competing designs. The confusion or the choice available to consumers of the design is thus more limited. According to the evolutionary and cyclical model of technological innovations, this implies that the era of fermentation characterized by the struggle and competition of designs is less intense. Conversely, this means that it takes less time to reach the threshold of dominance. The case of Europe is the opposite of that of North America. Whether in terms of labelling rules, moratoriums, or the recent introduction of strict and severe principles of GM food traceability, Europeans do not perceive GM foods with the same enthusiasm as North Americans do. The relaxation of the moratorium on GM foods by the European Union in 2004 did very little to help the commercialisation of GMOs on European soil (Oehmke and Tothova, 2005). Rather, Europeans see the issue of GM foods as a discontinuous or even a radical technological innovation. The result, according to the same logic, is that the era of fermentation is more tumultuous and the emerging design will have more difficulty taking its place in a more intensely competitive environment (Tushman and Anderson, 1986). More concretely, this competition is notably expressed by the fact that Europeans, in particular the French, react and tend to turn to organic foods given the proposal of GM foods as the emerging design. A risk factor then emerges, associated with the use of the design in addition to a situation of uncertainty over the optimal design to retain, which staggers the era of fermentation over a longer time frame. In the case of GM foods in Europe, some argue
Gene technology in agribusiness
that no possible debate on the adequate amount of risk of a technological improvement can occur unless a minimum level of utility has been demonstrated (Boy, 2001). To allow consumers to understand the risk through labeling increases costs. Under these circumstances, the dominant threshold is more difficult to attain. These elements are assuredly important in explaining the causes of the gap between Europe and North America, but we must also consider the environmental, social, and institutional forces that have influenced and continue to dictate the status of GMO and GM foods as a dominant design. A framework for agrifood emergent designs Since the costs of developing and licensing new biotechnology products are substantial, many biotechnology firms in North America have heavily invested into a variety of markets. On the contrary, European public policies or even private initiatives can be regarded as reflecting technological precaution, not progress (Isaac, 2002; Isaac et al., 2004). The policy change in 2004 by the European Union came to pass in order to comply with the World Trade Organization’s rules on providing domestic consumers with legitimate choices (Gaines and Palmer, 2005; Oehmke and Tothova, 2005). It did not appear to have had any impact on commercialization capabilities of foreign companies that wanted to import GM foods in Europe. Moreover, the European moratorium on GM foods prevented food manufacturers and retailers from becoming first movers, and prepare themselves to market GM foods on European markets (Scholderer, 2005), thus delaying the emergence of a dominant design. As mentioned earlier, many underlying reasons exist as to why Europe is unenthusiastic about GM foods. For one, the proportional representation-based electoral system found in Europe allows environmentalists parties and GM food-sensitive groups to be represented (Ekici, 2000). Lobbying has forever had an influence on the development agricultural public policies, and this proportional system greatly empowers anti-GMO activism. Secondly, in North America, the media also influences regulatory agencies in their role as dominant design catalyst. The North American media, for example, appears dependent upon corporate ownership intertwined with advertising revenues, which seems to manoeuvre broad communication strategies. It appears that it is not the case in Europe. Thirdly, with food safety concerns, the perception of risk is a key indicator of whether a product will achieve marketing success. Trust will influence how consumers will perceive risks, including those relating to GM foods (Lang and Hallman, 2005: Lusk and Coble, 2005). Nevertheless, some research has demonstrated their economical values. Chen and Tseng (2006) empirically revealed that humans need GMOs for economical and sustainable reasons. Results from that study show that GMO technology increases the quantity traded between nations and lessen the upward pressure on global food prices. However, unlike many studies indicating that poor countries would benefit from GM food technology, Chen and Tseng (2006) state that the main trading countries would get most of the benefits of this technology. Lastly, Isaac et al. (2004) argued that marketing managers need to adapt their conventional standardization entry mode strategy in order to accommodate a multi-mode entry strategy capable of distinguishing GM and non-GM crops through an effective identity traceability system. Still, such a system comes at a significant cost. The evolutionary and cyclical model of technological change and the ANT show that
practitioners should also consider the market’s perception of the technology itself and its relationship with influential actors that would influence the adoption process. Not only does a dominant design emergence provide power and influence to a technology within a given market, but also the outcome offers tool makers standardization so that production economies can be sought. Increasingly, rule makers will be exposed to a mounting critical worldview that claims that GM foods are unnatural, which in return will exhort pressure on any emerging dominant design in the food industry (Deckers, 2005). Therefore, a marketing strategy related to a dominant design in the food industry should primarily consider the evolutionary and cyclical model of technological change within the constriction of time. Also, the dominant forces which are brought forth by social interconnections of actors occur through a determining process of diffusion. Such a strategy ought to also consider the levers presented in Figure 2. While standardisation of technology in order to minimize costs is maintained, the projected model is expandable to any institutional or structural dissimilarity between aimed markets. The underlying assumption is that each foreign market has specific institutional differences. That is, actors will behave differently, as the nature of the technology itself may be perceived differently from one market to another. As well, each actor has principal objectives and principles under which they operate and may create a variety of responses to a given technology. These responses would, in return, create a continuum of interactions amongst actors, and at length, would have an impact on the market’s perception on the emerging technology, having consumers’ trust in the balance (Callon, 1999; Latour, 1987) (see Figure 3). A combination of the evolutionary and cyclical model of technological change with the ANT puts forward a systemic angle to technology development. Such a combination also suggests that a firm should be willing to interconnect with its institutional environment, which may have immeasurable influence on the emerging
Gene technology in agribusiness
Figure 3. Actors’ tasks associated with the emergence of a technological dominant design in the food industry
dominant design’s fate. The model in Figure 3 does not advise as to how to make the emergence of a dominant design successful, but rather presents a macro perspective of the institutional dynamics around the emergence of a dominant design when it enters any market. As prescribed by the ANT, tool makers, rule makers, and fact makers have a distinct function and carry out timely tasks based on the evolutionary model of a dominant design. Tool makers, represented by the technology creators, are primarily concerned with developing designs in the technology discontinuity stage (Anderson and Tushman, 1990). Technological innovation is largely the product of investments in research and development by individual firms. In the era of fermentation, European countries still seemingly need to be persuaded about the virtues of GM foods before being mass marketed across Europe (Lang and Hallman, 2005: Lusk and Coble, 2005). In North America, since the majority of biotechnology firms are American owned, tool makers transmitted the societal benefits of GM foods, and the market not only understood the tool makers’ intentions but implicitly agreed with them. The market understood that the biotechnology sector offers economical benefits for many regions, and agriculture would also profit by being more productive. As a result, no ideological conflict erupted since many consumers felt that society as a whole would gain from a value-driven emergence (Beverland, 2004). In contrast, Europeans favoured a precautionary approach to GM foods since these benefits were not understood and/or agreed to. Tool makers of an emerging dominant design should regard this step as crucial. As mentioned earlier, networks to support the marketing of a dominant design need to be built when the technology emerges as a dominant design (Lee and O’Connor, 2003). A network effect at this stage is important as more consumers accept the product. This is achieved through building distribution channels that efficiently carries and support the essence of the technology throughout the supply chain. Ultimately, tool makers consolidate their marketing position by safeguarding perceived values of the design in the period of incremental change (Constant, 1987). Rule makers can also play an important role in the process of technological innovation. Rule makers recognize that technological growth has historically been a key determinant of economic growth. Rule makers also recognize the significance of technological innovation in the creation of comparative advantage, for example. Rule makers have attempted to encourage or discourage technological growth (as the situation warrants) in a variety of ways. At first, rule makers perceive new technology as a source of uncertainty (Sood and Tellis, 2005). They cope by managing the scope and consequences of the emerging dominant design in the first stage. Uncertainty management can also bring rule makers to subsidize basic research to support tool makers. Rule makers also provide protection for intellectual property in the form of patents, trademarks, and copyrights. Implementation of new policies will come in the era of fermentation (Anderson and Tushman, 1990; Foster, 1986). Specific to the food industry is the component of public health that is intrinsically linked to policies and rule makers. In the era of fermentation, these policies can either destroy the trust of new technological change, or become leverage for growth. Again, as for tool makers, this represents a critical stage for rule makers. The appearance of a dominant design stage compels rule makers to monitor the health qualities and marketing practices related to the dominant design (West and Larue, 2005). In the period of incremental changes, the scope for monitoring is adjusted,
and rule makers scrutinize the industry as a whole and foresee other looming technological changes for the food industry. Fact makers, comprised of scientific communities and research centers, are the designers and promoters of unambiguous beliefs (Maguire, 2000). At first, during the stage of technological discontinuity, fact makers either diffuse information voluntarily, or generate recognized evidence meant for tool makers or rule makers (Callon, 1999; Latour, 1987; Law, 1999; Malarkey, 2003). In the era of fermentation, the intent is to curtail fears concerning human health created by the threatening technological change. Ethical matters by fact makers may spur intentions that can benefit either supply or the marketplace (Bruce, 2002). Again, unique to the food industry, as consumers increasingly recognize the design as the future benchmark in the industry, the research focus transcends from a research agenda motivated by public health concerns to an agenda driven by public policy. The research nucleus goes from societal survival to long-term sustainability; thus, with a longitudinal approach the coexistence between society and the dominant design can be appraised (Zackariasson and Wilson, 2004). Finally, GM foods came to market in 1994, and many are still unsure about the danger of GMOs and are quite convinced that they can harm mankind. In order to propagate GM technology, it will be necessary to give more beneficial information to consumers. Intrinsically, time is a variable that leads all actors towards a better understanding of GM foods. All actors have the onus of reaching their objectives and at the same time protect consumers. The success of the emergence of an agrifood dominant design depends on what happens in the era of fermentation, as it is the most significant stage of the four. But mostly, the future of GMOs lies in the hands of tool makers, rule makers and fact makers, and many believe that these actors should keep consumers better informed about the possible hazards of certain scientific or technological advances. Tool makers’ marketing strategies are vital, but the framework presented in this paper suggests that the level of congruity between all three kinds of actors can determine whether or not a dominant design will be successful with its emergence. Conclusion The notion of food itself is complex and difficult to convey. GM foods offer an opportunity to connect sustainable food with commonly held core values. Arguably, the issue on GM foods is complex and multifaceted, and its evaluation as a dominant design throughout the world will have long-term repercussions. The objective of this paper was to institute a conceptual framework that suggest a systemic view on the interconnections between corporate marketing strategies (i.e. tool makers), public policies (i.e. rule makers), and science (i.e. fact makers) when a dominant design emerges in the food industry. This research sought to address a gap in the literature on GM foods. In contrast to previous studies that defined the process of GM foods adoption in global markets, this research uncovered the reality that technology developers, policy makers, and research protagonists all have the capacity to change the outcome of a dominant design in the food industry. All operate under a strict set of values and objectives and may influence the adoption process. The model presents a macro perspective of the institutional dynamics of a dominant design in the food industry when it appears into any given market around the world.
Gene technology in agribusiness
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