Key factors affecting technological capabilities in small and medium-sized Enterprises in Taiwan

Abstract

Technological capability is a core resource and distinctive competency that enables firms to create firm value. With greater technological capability, firms have more unique resources and skills and engage in more strategic activities and thus can gain competitive advantages and increase their profitability while enhancing their organizational performance. However, small and medium-sized enterprises (SMEs) invariably lack resources required to develop technological capabilities. This study explored the determinants of improvements to technological capabilities based on data regarding SMEs in Taiwan. By following this line of literature, we developed a structure with five independent constructs (“Knowledge Sharing,” “Talent Train,” “Cooperative Relationships,” “Innovation,” and “Government Support”) and one dependent construct (“Technological Capabilities”). We conducted multiple correspondence analysis (MCA) to analyze data collected from questionnaires issued to 77 manufacturing SMEs in Taiwan. MCA can map variables and individuals and therefore enables the construction of complex visual maps and the interpretation of their structures. The findings of this study revealed that technological capabilities can improve firm performance.

This is a preview of subscription content, access via your institution.

Fig. 1
Fig. 2
Fig. 3

References

  1. Audretsch, D.B., & Link, A.N. (2019a). The fountain of knowledge: An epistemological perspective on the growth of U.S. SBIR-funded firms. International Entrepreneurship and Management Journal, https://doi.org/10.1007/s11365-019-00596-3.

  2. Audretsch, D. B., & Link, A. N. (2019b). Entrepreneurship and knowledge spillovers from the public sector. International Entrepreneurship and Management Journal, 15(1), 195–208.

    Google Scholar 

  3. Bartel, A. P. (1994). Productivity gains from the implementation of employee training programs. Industrial Relations, 33(1), 411–425.

    Google Scholar 

  4. Becheikh, N., Landry, R., & Amara, N. (2006). Lessons from innovation empirical studies in the manufacturing sector: A systematic review of the literature from 1993–2003. Technovation, 26(5/6), 644–664.

    Google Scholar 

  5. Benavides-Espinosa, M. M., & Roig-Dobón, S. (2011). The role of entrepreneurs in transferring knowledge through human resource management and joint venture. International Journal of Manpower, 32(1), 117–131.

    Google Scholar 

  6. Branstetter, L., & Sakakibara, M. (2002). When do research consortia work well and why? Evidence from Japanese panel data. American Economic Review, 92(1), 143–159.

    Google Scholar 

  7. Carnevale, A. P., & Goldstein, H. (1990). New developments in worker training: A legacy for the 1990s. Industrial Relations Research Association series. America: Madison.

    Google Scholar 

  8. Dyer, J. H., & Nobeoka, K. (2000). Creating and managing a high-performance knowledge-sharing network: The Toyota case. Strategic Management Journal, 21(3), 345–367.

    Google Scholar 

  9. Dyer, J. H., & Singh, H. (1998). The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Academy of Management Review, 23(4), 660–679.

    Google Scholar 

  10. Esmaelian, M., Tavana, M., Caprio, D. D., & Ansari, R. (2017). A multiple correspondence analysis model for evaluating technology foresight methods. Technological Forecasting and Social Change, 125, 188–205.

    Google Scholar 

  11. Everitt, B. S., & Dunn, G. (2001). Applied multivariate data analysis. London: Arnold.

    Google Scholar 

  12. Flynn, B. B., Schroeder, R. G., & Sakakibara, S. (2004). A framework for quality management research and an associated instrument. Journal of Operations Management, 11(4), 339–366.

    Google Scholar 

  13. Friar, J., & Horwitch, M. (1985). The emergence of technology strategy: A new dimension of strategic management. Technology in Society, 7(2/3), 143–178.

    Google Scholar 

  14. Fritsch, M., & Meschede, M. (2001). Product innovation, process innovation, and size. Review of Industrial Organization, 19(3), 335–350.

    Google Scholar 

  15. Gatarik, E. (2019). The value of knowledge sharing in decision-making and organisational development: A model-theoretic systemic analysis of an intervention in an Austrian SME. Economic Research-Ekonomska Istraživanja, 32(1), 148–167.

    Google Scholar 

  16. Grant, R. M. (1996). Toward a knowledge-based theory of the firm. Journal of Strategic Management, 17(7), 109–122.

    Google Scholar 

  17. Gray, P. H. (2001). The impact of knowledge repositories on power and control in the workplace. Information Technology & People, 14(4), 368–384.

    Google Scholar 

  18. Hill, R. C., & Hellriegel, D. (1994). Critical contingencies in joint venture management: Some lessons from managers. Organization Science, 5(4), 479–625.

    Google Scholar 

  19. Hoffman, D. L., & de Leeuw, J. (1992). Interpreting multiple correspondence analysis as a multidimensional scaling method. Marketing Letters, 3(3), 259–272.

    Google Scholar 

  20. Höflinger, P. J., Nagel, C., & Sandner, P. (2018). Reputation for technological innovation: Does it actually cohere with innovative activity? Journal of Innovation & Knowledge, 3(1), 26–39.

    Google Scholar 

  21. Howell, J. M. (2005). The right stuff: Identifying and developing effective champions of innovation. Academy of Management Perspectives, 19(2), 108–119.

    Google Scholar 

  22. Hsu, C. W., & Chiang, H. C. (2001). The government strategy for the upgrading of industrial technology in Taiwan. Technovation, 21(2), 123–132.

    Google Scholar 

  23. Hu, M. W., & Chi, S. (1998). The changing competitiveness of Taiwan’s manufacturing SMEs. Small Business Economics, 11(4), 315–326.

    Google Scholar 

  24. Huang, Y. A., Chung, H. J., & Lin, C. (2009). R&D sourcing strategies: Determinants and consequences. Technovation, 29(3), 155–169.

    Google Scholar 

  25. Jun, S. P., Seo, J. H., & Son, J. K. (2013). A study of the SME technology roadmapping program to strengthen the R&D planning capability of Korean SMEs. Technological Forecasting and Social Change, 80(5), 1002–1014.

    Google Scholar 

  26. Koc, T., & Bozdag, E. (2009). The impact of AMT practices on firm performance in manufacturing SMEs. Robotics and Computer-Integrated Manufacturing, 25(2), 303–313.

    Google Scholar 

  27. Kogut, B., & Zander, U. (1992). Knowledge of the firm, combination capabilities, and the replication of technology. Organization Science, 3(3), 383–397.

    Google Scholar 

  28. Krishnaswamy, K. N., Bala-Subrahmanya, M. H., & Mathirajan, M. (2010). Process and outcomes of technological innovations in electronics industry SMEs of Bangalore: A case study approach. Asian Journal of Technology Innovation, 18(2), 143–167.

    Google Scholar 

  29. Lambe, C. J., & Spekman, R. E. (1997). Alliances, external technology acquisition, and discontinuous technological change. Journal of Product Innovation Management, 14(2), 102–116.

    Google Scholar 

  30. Leong, E. K. F., Huang, X., & Stanners, P. J. (1998). Comparing the effectiveness of the web site with traditional media. Journal of Advertising Research, 38(5), 44–51.

    Google Scholar 

  31. Liebowitz, J. (2001). Knowledge management and its link to artificial intelligence. Expert Systems with Applications, 20(1), 1–6.

    Google Scholar 

  32. Lin, F. J., & Lin, Y. H. (2012). The determinants of successful R&D consortia: Government strategy for the servitization of manufacturing. Service Business, 6(4), 489–502.

    Google Scholar 

  33. Love, J. H., & Roper, S. (2015). SME innovation, exporting and growth: A review of existing evidence. International Small Business Journal: Researching Entrepreneurship, 33(1), 28–48.

    Google Scholar 

  34. Maranto-Vargas, D., & Gómez-Tagle Rangel, R. (2007). Development of internal resources and capabilities as sources of differentiation of SME under increased global competition: A field study in Mexico. Technological Forecasting and Social Change, 74, 90–99.

    Google Scholar 

  35. Mathews, J. A. (2002). The origins and dynamics of Taiwan’s R&D consortia. Research Policy, 31(4), 633–651.

    Google Scholar 

  36. Maximova, T., Alnafrah, I., & Bogdanova, E. (2019). Text mining as a facilitating tool for deploying blockchain technology in the intellectual property rights system. International Journal of Intellectual Property Management, 9(2), 120–135.

    Google Scholar 

  37. McKelvie, A., & Wiklund, J. (2010). Advancing firm growth research: A focus on growth mode instead of growth rate. Entrepreneurship: Theory and Practice, 34(2), 261–288.

    Google Scholar 

  38. Mital, A. (1999). The need for worker training in advanced manufacturing technology (AMT) environments: A white paper. International Journal of Industrial Ergonomics, 24(1), 173–184.

    Google Scholar 

  39. Muscio, A. (2007). The impact of absorptive capacity on SMEs’ collaboration. Economics of Innovation and New Technology, 16(8), 653–668.

    Google Scholar 

  40. Nieto, M. J., & Santamaría, L. (2010). Technological collaboration: Bridging the innovation gap between small and large firms. Journal of Small Business Management, 48(1), 44–69.

    Google Scholar 

  41. Nooteboom, B. (1994). Innovation and diffusion in small firms: Theory and evidence. Small Business Economics, 6(3), 27–347.

    Google Scholar 

  42. Pan, X., Zhang, J., Song, M., & Ai, B. (2018). Innovation resources integration pattern in high-tech entrepreneurial enterprises. International Entrepreneurship and Management Journal, 14(1), 51–66.

    Google Scholar 

  43. Pérez-López, S., & Alegre, J. (2012). Information technology competency, knowledge processes and firm performance. Industrial Management & Data Systems, 112(4), 644–662.

    Google Scholar 

  44. Rogers, M. (2004). Networks, firm size and innovation. Small Business Economics, 22(2), 141–153.

    Google Scholar 

  45. Romijn, H., & Albaladego, M. (2002). Determinants of innovation capability in small electronics and software firms in Southeast England. Research Policy, 31(7), 1053–1067.

    Google Scholar 

  46. Roxas, B. G. (2008). Social capital for knowledge management: The case of small and medium-sized enterprises in the Asia-Pacific region. Asian Academy of Management Journal, 13(2), 57–77.

    Google Scholar 

  47. Sandulli, F. D., Baker, P., & López-Sánchez, J. I. (2013). Can small and medium enterprises benefit from skill-biased technological change? Journal of Business Research, 66(10), 1976–1982.

    Google Scholar 

  48. Sarker, M. B., Echambadi, R., Cavusgil, S. T., & Aulakh, P. S. (2001). The influence of complementarity, compatibility, and relationship capital on alliance performance. Journal of the Academy of Marketing Science, 29(4), 358–373.

    Google Scholar 

  49. Schroeder, R., Bates, K. A., & Junttila, M. A. (2002). A resource-based view of manufacturing strategy and the relationship to manufacturing performance. Strategic Management Journal, 23(2), 105–117.

    Google Scholar 

  50. Schumpeter, J. A. (1934). The theory of economic development. Cambridge: Harvard University Press.

    Google Scholar 

  51. Shuman, J. C., & Seeger, J. A. (1986). The theory and practice of strategic management in smaller rapid growth firms. American Journal of Small Business, 11(1), 7–19.

    Google Scholar 

  52. Talay, M. B., Seggie, S. H., & Cavusgil, E. (2009). Exploring correlates of product launch in collaborative ventures: An empirical investigation of pharmaceutical alliances. Journal of Product Innovation Management, 26(4), 360–370.

    Google Scholar 

  53. Tsai, K. H., & Wang, J. C. (2009). External technology sourcing and innovation performance in LMT sectors: An analysis based on the Taiwanese technological innovation survey. Research Policy, 38(3), 518–526.

    Google Scholar 

  54. Wade, R. (1990). Governing the market: Economic theory and the role of government in east Asian industrialization. Princeton University Press: Princeton.

    Google Scholar 

  55. Wesley, R. S., & Skip, S. (1999). Training and its impact on organizational commitment among lodging employees. Journal of Hospitality & Tourism Research, 23(2), 176–194.

    Google Scholar 

  56. Whetten, D. A. (1989). What constitutes a technological contribution? Academic Management Review, 14(4), 490–495.

    Google Scholar 

  57. Wilderman, L. (1998). Alliances and networks: The next generation, international. Journal of Technology Management, 15(1/2), 96–108.

    Google Scholar 

  58. Zahra, S. A., & Bognerb, W. C. (2000). Technology strategy and software new ventures' performance: Exploring the moderating effect of the competitive environment. Journal of Business Venturing, 15(2), 135–173.

    Google Scholar 

  59. Zaim, H., Ekrem, T., & Selim, Z. (2007). Performance of knowledge management practices: A casual analysis. Journal of Knowledge Management, 11(6), 54–67.

    Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Feng-Jyh Lin.

Additional information

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Appendix

Appendix

Table 3 References for each construct

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Lin, FJ., Lai, C. Key factors affecting technological capabilities in small and medium-sized Enterprises in Taiwan. Int Entrep Manag J 17, 131–143 (2021). https://doi.org/10.1007/s11365-019-00632-2

Download citation

Keywords

  • Small and medium-sized enterprise
  • Technological capability
  • Multiple correspondence analysis