Strategic Management Quarterly

Dissecting a Company’s Innovative Capabilities and Strategic Position in a Knowledge Economy
Robert Pech, Barry Lin, Bingsheng Yi, Chia-Wei Chen

Abstract
Innovation is critical to the long-term survival for any company in the knowledge economy. However, while many studies highlight the importance of companies’ innovative capabilities, a practical conceptual mapping with valuation measures has not been clearly demonstrated in the literature. Therefore, this paper proposes a formal conceptual model for evaluating a company’s innovative capability based on two dimensions that have been proposed in the literature so far. In addition, our multiplicative innovative value model incorporates a third factor that captures the critical internal “knowledge transfer” capability acting as the catalyst between a firm’s R&D innovation capacity and a firm’s capacity to generate value in the market place. This factor highlights the interaction and inter-connectedness between the two critical dimensions in terms of the success of a company’s innovation: invention and commercialization. We provide a practical and useful mapping for locating a firm in terms of its position in strategic innovation. Boards, managers and consultants pursuing a successful innovation strategy can use this map to identify their future strategic innovation trajectory based a firm’s current and desired position on this map. Thus we contribute to the literature and practice of both innovation and strategy.

Full Text: PDF     DOI: 10.15640/smq.v3n3a5