Abstract
The research objective was to understand the main reasons that would impel firms to innovate. The firms analyzed in this study were medium-size firms of the plastic manufacturing sector in Chile. After the analysis of the theory related to technological innovation, a model of the drivers for technological innovation was developed and a set of hypotheses was proposed. A questionnaire was designed covering several factors that could influence the tendency of firms to engage in technological innovation activities. According to the data, the most influential factors that would encourage innovation in the set of firms studied are a high degree of competition in the industry, the availability of qualified workers, and a strategic relationship with customers.
Highlights
In the classical literature it has been shown that technological innovation ranks as one of the key drivers of competition across industries (Porter 1983; Burgelman and Maidique 1988 p. 1, Freeman 1989 p.3, Itami and Numagami 1992)
Medium sized firms were selected because their decision making is simpler and more straightforward than what happens in large firms, allowing for easier data collection, and their management practices are more professionalized compared to small firms, findings can be considered to apply to larger firms as well
Regarding products’ quality, 58% of managers either agreed or strongly agreed with the statement “When a product’s quality doesn’t allow being competitive, there is need to engage in innovative activities”; the rest of the managers were neutral and none disagreed with the statement. These results indicate that technological innovation is really stimulated by competition, and firms do consider technological innovative activities as a strategic means to deal with competitors
Summary
In the classical literature it has been shown that technological innovation ranks as one of the key drivers of competition across industries (Porter 1983; Burgelman and Maidique 1988 p. 1, Freeman 1989 p.3, Itami and Numagami 1992). In order for companies to maintain and improve their competitive position vis-à-vis other firms, they need to engage in a continuous process of technological innovation 417), where improved or new products and processes are systematically introduced in their operations and markets. As many managers and engineers can testify, the inception of change in existing technologies, or even more critically, the creation of radically new technologies, is no easy task (Ma et al 2010). There is always the risk of failure and even of bankruptcy if the effort is not managed properly. The purpose of this study was to understand what would induce medium sized firms to innovate in spite of the difficulties, costs and risks involved in the process. Medium sized firms were selected because their decision making is simpler and more straightforward than what happens in large firms, allowing for easier data collection, and their management practices are more professionalized compared to small firms, findings can be considered to apply to larger firms as well
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