The influence of strategic innovation management on firm innovation performance in the Indonesian mid-size telecommunication industry

Abstract

Background: The telecommunication industry was one of the Indonesian government's priorities in the national development plan 2015-2035. “Primary Industry” was the term for the priority industries with the central role as the prime mover in the future national economy. Various natural, human, technological, innovative, and creative resources were imperative in supporting the underlining national industry development plan. Strategic innovation management refers to the entire sequence of innovation practices, including competition mechanism analysis, such as creating an innovative vision, business strategy alignment, disseminating strategy at an entire organizational level, market tendency, technology, and competitor’s action. Firm innovation performance refers to the measurement of innovation efficiency (the number of new products, product novelty, new product development speed, and new product success rate) and innovation profitability (new product revenue proportion, quality enhancement, cost reduction, and value improvement) conducted by the firm. This study investigates the effect of Innovation Strategy, Organizational Structure, Innovation Culture, Technological Capability, and Customer-Supplier Relationship (these were the practice of Strategic Innovation Management mentioned in various literature) on Firm Innovation Performance. Methods: A quantitative method, from a practical perspective, was employed to investigate the causal relationship between strategic innovation management and firm innovation performance. Data was gathered through a validated and reliable questionnaire disseminated to 90 respondents. It included a representative from the four sub-sectors of the telecommunication industry, namely fixed networks, wireless networks, telecommunication services, and special telecommunication. Results: The survey found that firms within the telecommunication industry already employed Strategic Innovation Management practices. Moreover, this study also found that Innovation Culture, Technological Capability, and Customer-Suppler Relationship significantly influence Firm Innovation Performance. Conclusion: The implementation of Strategic Innovation Management in the mid-size companies within Indonesia's telecommunication industry appears to be relatively high. It indicates that firms within the industry were able to strategically compete by implementing Strategic Innovation Management.