Technological Innovation Capability and Firm’s Performance in New Product Development

Abstract

INTRODUCTION A critical issue for industrialization and governments everywhere is the need to encourage innovation and change among industry members in order to increase productivity and enhance the industry's competitive position. In order to achieve this objective, it is important that all those involved in making decisions that affect productivity improvement and industry development understand the complex processes and dynamics that are at work within and between organizations and individuals that are also involved in the context of the innovation system. It has been argued that the success of today's businesses increasingly, depends on their intellectual assets as opposed to their tangible resources (Stewart, 1997). Among other things, these assets include attitude, knowledge and skills of the workforce. According to American Society for Training and Development (ASTD), these assets are known as competences. It is a general believe that managing individual competencies is one important element in the management of strategic competitive advantage, and technological innovation has become an important competence of individuals. The purpose of technology innovation is to create business value, the value, that can take many different forms such as incremental improvements to products, the creation of entirely new products and services and reducing costs. Drucker (2001) emphasizes that every organization needs one core competence innovation, and further stresses that every organization needs a way to record and appraise its innovative performance: Mohanty (2006) outlined that for an economy or a nation to achieve preeminent position and superior status, it has to pioneer the culture of innovation. In the history of business, it is clear that the effective innovators have a better chance of surviving and non-innovators tend not to survive at all. The method of innovation is to develop ideas, refine them into a useful form and bring them to fruition. Amabile (1996) define technological innovation as the successful implementation of creative ideas within an organization while Tidd, Bessant, and Pavitt (2001) says that technological innovation is the process of turning opportunities into new ideas and of putting them into widely used practice. Freeman and Carloza (1988) sees this as a process that includes the technical, design, manufacturing, management and commercial activities involved in the marketing of a new or improved product. Afuah (1998) suggests that innovations do not have to be breakthrough or paradigm shifting. Roberts (1988) suggests that the overall management of technological innovation includes the organization and direction of human and capital resources towards effectively creating new knowledge, generating ideas aimed at new and enhanced products, manufacturing processes and services, developing those ideas into working proto types and finally transferring them into manufacturing, distribution and use. The conclusion is that innovation is concerned with the process of commercializing or extracting value from ideas. From this perspective, innovation would be expected to be closely linked to firm performance. Objectives In this study, we aim to explore innovations and their effects on firm performance on new product development by examining product, process and marketing, as well as by focusing on various aspects of firm performance such as innovation performance, production performance, marketing and financial performance respectively. In essence, the widespread application of technology has become an important factor in structuring an industry, with technological innovation providing a competitive advantage for a company. This study conducted a questionnaire survey on the plastic manufacturing industry in Nigeria to collect empirical data, in order to discuss issues such as the relationship between a company's technological innovation, new product development and firm's performance. …