152 Food product development Table 4.2 Product and process innovations in European companies Percentage of firms introducing Product Product and process Innovation Innovation Mechanical 91.6 Food drink 63.9 tobacco Source: From Evangelista, 1999, by permission of Rinaldo Evangelista and Edward Elgar Publishin on process innovation in the food industry was clearly shown(Evangelista, 1999) One recognises that food manufacturing is essentially a supplier-dominated industry with ingredients from the chemical industry and large food ingredients processors and equipment from mechanical/electrical manufacturers. Knowl- edge is bought in by food manufacturers from the suppliers, there is often less creation of knowledge than in the supplier industries(Hood et al, 1995). This knowledge generation and transfer is emphasised at the food congresses where a large number of suppliers not only exhibit their products and equipment but also give or sponsor many of the papers at the meeting. An interesting recent example demonstrating the limitations of product development when relying heavily on outside sources of technology was shown by Martinez and Burns (1999) when studying the Spanish food and drink industry. They found product technology was predominantly in-house generated, process technology com- bined internal development with external acquisition mainly from equipment suppliers. Purchase of equipment emerged as the main source of external technology acquisition as opposed to information gathering procedures. This eliance on externally generated technological developments had brought about low levels of technological independence in general and process technology in particular. The importance of in-house technological capabilities in product and process innovation, indicates the problems in product development a company and indeed an industry faces if it relies largely on external sources as opposed to internal developments. Is it time for food manufacturing to include more R&D and D&e in product development so as to produce a more sophisticated technological content in consumer food products? The food manufacturing industry is probably never going to be a high technological industry but there is a need for a different balance between R&d, d&E and capital investment in plant as these are joint determinants of the performance of companies. Wallace and Schroder(1997) made the following statement which the management of food industry development might ponder:on process innovation in the food industry was clearly shown (Evangelista, 1999). One recognises that food manufacturing is essentially a supplier-dominated industry with ingredients from the chemical industry and large food ingredients processors and equipment from mechanical/electrical manufacturers. Knowl￾edge is bought in by food manufacturers from the suppliers, there is often less creation of knowledge than in the supplier industries (Hood et al., 1995). This knowledge generation and transfer is emphasised at the food congresses where a large number of suppliers not only exhibit their products and equipment but also give or sponsor many of the papers at the meeting. An interesting recent example demonstrating the limitations of product development when relying heavily on outside sources of technology was shown by Martinez and Burns (1999) when studying the Spanish food and drink industry. They found product technology was predominantly in-house generated, process technology com￾bined internal development with external acquisition mainly from equipment suppliers. Purchase of equipment emerged as the main source of external technology acquisition as opposed to information gathering procedures. This reliance on externally generated technological developments had brought about low levels of technological independence in general and process technology in particular. The importance of in-house technological capabilities in product and process innovation, indicates the problems in product development a company and indeed an industry faces if it relies largely on external sources as opposed to internal developments. Is it time for food manufacturing to include more R&D and D&E in product development so as to produce a more sophisticated technological content in consumer food products? The food manufacturing industry is probably never going to be a high technological industry but there is a need for a different balance between R&D, D&E and capital investment in plant as these are joint determinants of the performance of companies. Wallace and Schroder (1997) made the following statement which the management of food industry development might ponder: Table 4.2 Product and process innovations in European companies Percentage of firms introducing Product Process Product and process innovation innovation innovation Mechanical 92.8 69.8 62.6 machinery Chemicals 91.6 75.5 67.1 Food, drink 70.3 93.6 63.9 & tobacco Source: From Evangelista, 1999, by permission of Rinaldo Evangelista and Edward Elgar Publishing Ltd. 152 Food product development