Academic journal article Iranian Journal of Management Studies

The Impact of Technological Innovation Capabilities on Competitive Performance of Iranian ICT Firms

Academic journal article Iranian Journal of Management Studies

The Impact of Technological Innovation Capabilities on Competitive Performance of Iranian ICT Firms

Article excerpt

Introduction

Nowadays dynamic business environment gets firms to enhance their capabilities for developing and commercializing new technologies faster than their competitors and also facilitating the process of innovation and diffusion of internal innovation for strengthening competitive advantage. In such an environment, the inability to innovate leads to business stagnation and getting out of business (Yam et al., 2004). Scholl (2005), states that without innovation, it's not possible to speak about growth and competitiveness. The evolution of resource based view (RBV) in management and economics resulted in the development of the concept of technological innovation capability (TIC). Based on RBV, output discrepancies between firms are resulted from discrepancies in valuable, rent-generating, and difficult to be substituted resources or so called capabilities (Hamel & Prahalad, 1994: 236). In order to compete on new products, firms should compete on the capability of developing those (Prahalad & Hamel, 1990). Developing their own TICs can be helpful for firms and results in enhanced competitive performance (Romijn & Albaladejo, 2002). In UK, The Department of Trade and Industry (DTI) conducted a research in different manufacturing industries in order to find out the drivers of innovative performance. Technological innovation capabilities were found the most influential drivers that stimulate the innovative performance (DTI, 2003).

According to Shan and Jolly (2010) technological innovation capability has been widely studied in different fields, such as resource based view (Grant, 1991), distinctive competency (Hitt & Ireland, 1985), dynamic capability (Prahalad & Hamel, 1990; Nelson, 1991) and knowledge based view (Kogut & Zander, 1992; Grant, 1996). Many researchers in all of these literature streams indicate that TICs can be a source of competitive advantage. Almost all of these researches have been conducted in the context of manufacturing firms and try to develop a framework to describe the relevance of TICs and economic outcomes in this context (Camisón & Villar-López, 2014; Carlsson et al., 2002; Silvestre & Neto, 2013; Shan & Jolly, 2013; Voudouris et al., 2012; Collinson & Wang, 2012; Yam et al., 2010).

This manufacturing based approach by these literature streams in the fields of TICs is not consistent with the increasing role of service sector as based on the World Bank data, the service sector proportion of world GDP has been reached to over 68% and almost in majority of countries the service sector is the largest sector of the economy. Contrary to especial characteristics of service and the significant role of innovation in increasing competition in this sector, not enough attention has been paid to service sector in the field of TICs and there are very few studies that provide empirical evidence of the impact of TICs on competitive performance in this sector (e.g. Ortega, 2010; Kumar et al., 2008).This perspective has begun to change with the development and expansion of services and the increasing role of service sector in global economy (Ferraz & Santos, 2016). Along with the great strategic importance assumed by the concept of TIC in the service sector and high competitive rivalry in this sector, it seems that more attention should be paid to examining the relevance of TICs and competitive performance in service firms (Moreira et al., 2016).

As the importance of information and communication technology (ICT) has been grown in global economy since the 90's afterward, the researcher in the field of TICs have done more empirical research in the field of technological innovation capabilities of ICT sector (e.g. Collinsona & Wang, 2012; Banerjee, 2012; Gnyawali & Park; 2011; Lamin & Dunlap, 2011; Ortega; 2010; Tseng et al., 2012; Stuart & Podolny, 1996). In the most of these researches the manufacturing aspects of ICT industry have been considered. …

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