Investing in new technology for competitive advantage

Richard Butler, Rob Turner, Phil Coates, Richard Pike and David Price

European Management Journal, 1993, vol. 11, issue 3, 367-376

Abstract: This paper questions the view, that underlies much of the literature on the management of new technology, which applauds companies that strive to be at the forefront of new technology for its own sake. With particular reference to the polymer processing industry, but with implications for all industries, the research reported investigated the objectives of firms investing in new technology. Seven categories of such reasons were discovered which, in order of importance, are: (i) market (e.g. to introduce new products), (ii) efficiency (e.g. cost reduction), (iii) image enhancement, (iv) developmental (e.g. keeping up with technology), (v) complying with regulatory demands, (vi) standardization (e.g. with customers) and (vii) loans and grants. The authors use two measures of company effectiveness, awareness of competitors and comparative performance. Market technological objectives are related to high awareness and performance, efficiency objectives are related to high awareness but low performance. One general conclusion from this research is that companies need to carefully think through why they are investing in new technology.

Date: 1993
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