Which innovation capabilities are relevant for technological and non-technological innovation? Implications for manufacturing firms' financial performance

Abstract

Purpose

This paper investigates which innovation capabilities are more important for driving technological and non-technological innovations and which of the two innovation types has the greatest impact on the financial performance of manufacturing companies.

Design/methodology/approach

Based on a theoretical model of four innovation capabilities – two technological: Technology Development Capability and Operations Capability, and two non-technological: Management Capability and Transaction Capability – a database of 1,331 Brazilian manufacturing companies was analyzed through partial least squares structural equation modelling (PLS-SEM).

Findings

The results indicate that technological capabilities (Technology Development and Operations) have a greater impact on technological innovation. However, both technological capabilities also affect non-technological innovation, with the Technology Development Capability being the most influential in this relationship. Results also indicate that non-technological capabilities (Management and Transaction) have a greater impact on non-technological innovation. Nevertheless, both non-technological capabilities also impact technological innovation, especially the Transaction Capability, which is the most influential in this relationship. Furthermore, it was identified that non-technological innovation has a more significant impact on financial performance than technological innovation, presenting a novel finding to the field of innovation in manufacturing.

Originality/value

This manuscript refutes prior discussions and opens new possibilities for the interconnection of dynamic and ordinary innovation capabilities in two different arrangements, each aimed at improving a specific type of innovation. A theoretical framework is proposed to highlight that, depending on the innovation type focused on, ordinary innovation capabilities can be more relevant than dynamic ones for innovation in the manufacturing sector. From these theoretical advancements, practitioners can understand that investments in non-technological resources, skills and routines can also boost technological innovation, as well as sales, profit and market share growth.

Citation

Nascimento, L.d.S., Trizotto, R.C.A., Pufal, N.A., Camboim, G.F. and Zawislak, P.A. (2024), "Which innovation capabilities are relevant for technological and non-technological innovation? Implications for manufacturing firms' financial performance", Journal of Manufacturing Technology Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JMTM-03-2024-0141