The Impact of Technological Innovation Capabilities on the Competitiveness of a Mature Industry

The main objective of the present study is to understand the way in which Technological Innovation Capabilities of an industry at the level of its firms, affect the efficiency and the potential of small and micro firms that have to gain their competitive advantage through differentiation and innovation, rather than cost leadership. It attempts to draw on theoretical literature and empirical studies on Innovation Management and Technological Capabilities in an effort to explore the role of Technological Innovation Capabilities (TICs) in the Furniture Industrial sector. The paper examines the relevance of seven TICs to the performance of the firms, while explanations and conclusions are supported by further explanatory questions. Empirical data was acquired through a recent study of 45 Greek and Cypriot small and very small (micro) firms. Regression analyses were employed to examine the correlation between TICs and innovation rate, sales growth, and product competitiveness among these firms. The survey findings verify the existence of correlation between TICs and the competitive performance and provide empirical evidence and insights of current TIC status in Greek and Cypriot Furniture firms. Marketing Capabilities prove to be the most powerful ones to safeguard the sales growth and product competitiveness. Strong Strategic Planning and Learning Capabilities enhance the innovation performance, while micro firms cultivate the Resources Allocation Capability to achieve product excellence. Especially the Learning Capability is regarded to be the most important and helpful one to dynamically expanding firms. However, the absence of R&D and Manufacturing Capabilities and the weak existence of Organizing Capabilities can be further investigated. The audit results, as well as the homogeneity of the sample, stress the need for the testing of new operating strategies that may contribute to more rapid technological change in mature industries.