Abstract:
This thesis addresses the research problem of "what are the key underpinning assets or drivers of technological innovation, and how can they be harnessed to create competitive advantage?"
Technological change is an evolutionary process. Research and technological innovation creates knowledge and technology that is irreversible in the sense that inventions can be superseded but not "uninvented". Technological innovation creates knowledge and technology that is cumulative because it lays a platform for further knowledge creation, or sets in place another rung in an ascending ladder of new performance characteristics or properties which are demonstrably superior to their antecedents. In turn, the asset specificity and irreversibility of technology and its cumulativeness create barriers to competitive entry. This allows a firm to earn the premiums that create market power and allow further innovation to be financed.
The model of technological innovation advanced in this thesis has at its core the strategic governance framework of a firm, within which the dynamics of significant new technology, human capital and social processes are catalysed and made productive by differentiated technological learning processes. No one type of technological learning applies universally, but rather learning is differentiated by variables such as firm size and structure, the past experience and core competencies of the firm, its human capital stocks, social processes, interactions with the external environment, and a host of market, institutional and technological factors.
It is argued that the dynamics of significant new technology, human capital and social processes are fundamental and necessary conditions of technological innovation. Technological learning processes underly and provide a connecting thread that integrates these necessary conditions into a model of technological innovation that can be applied by managers to create and sustain competitive advantage.
Technological learning both shapes and is shaped by the human capital stocks and social processes of a firm. Learning processes give rise to significant new technology, and the dynamics of that technology in turn helps catalyse and gives rise to further learning. The rate and direction of learning and of technological innovation is also driven by the firm's interaction with external sources of ideas and technology.
To create competitive advantage through technological innovation business managers must address a firm's strategy, human capital-related assets, social processes and technological learning abilities. Policy managers must ensure that the public technostructure is in place to foster human capital creation within an economy and to facilitate access to new ideas and sources of stimulus.
