Technological Capability and Sustainability
Abstract
The rapid change in technologies, increasing globalization, shifting demographics and greater regulatory oversight are combining to create fundamental shifts in business environment that has led to new opportunities, challenges and risks for the managers. Businesses are in constant lookout for sources of competitive advantage, therefore intangible resources and technological capability are of great strategic potential for the firm. Studies in technological capabilities, although limited, are being carried for both developing and developed countries at national level, and at industry sector or firm level. Amongst the studies on firm level, there is a wide consensus that building technological capability is influenced by both internal and external factors to the firm. Technological capability comprises of the soft aspect (intangible), which is the skills, knowledge and experience, the hard aspect, which refers to systems, machines and equipment (tangible) and also the organizational alignment that provide the basis for competitive advantage by enabling organizations to reshape their skills and structures. Literally, technological capability is the ability of firms to undertake a set range of productive tasks aimed at improving their ability to operate specific functions and compete in specific markets and industries. Despite the importance of technological capability, there is still a scarcity of research on the integration of technological capability into the performance measurement system in order to quantify the causal impact of technological capability on the business performance. Existing methodologies, concepts, models, tools and techniques do not provide rigorous tools to allow managers to make investment decisions to enhance their technological capability whilst maximising its impact on business performance. This paper describes the development of an assessment model for assessing the impact of technological capability on the sustainability of the firm. Therefore, effective combination of appropriate operational capabilities enhances the strength of firm’s technological capability.
Keywords: Technological capability, Sustainability, Performance
