Technological Networking and Innovation Implementation

This paper presents a theory of innovation which presumes that new technologies emerge from a firm's accumulated stock of skills. Among these we distinguish technological and networking skills. We examine two aspects of innovating firms: their inclination to adopt a technological innovation, and their propensity to implement innovation alone or with other firms. Historical conditions pertaining to organizational skills are examined to account for these aspects. Among the most important are a firm's cumulative stream of technological projects that have some affinity to the new technology. A second important antecedent can be inferred from a firm's history of technological networking. Networking includes licensing, joint ventures and long-term contracts and can be formed for technological reasons, or for reasons having to do with the delivery of products and services. Networking is deemed important for facilitating access to strands of technology that are alien to a firm. Linkages are also conducive for contemplating strategic partnerships through which a firm can share the risks of innovation with others and which make such partnerships comparatively easy. The study examined a sample of United States commercial banks during the period 1977–1987, some of which were engaged in a new technology: home banking. The findings indicate that technological networking is the best predictor of technological innovation. They reveal also that firms with extensive networking are more likely to implement the innovation with strategic partners. Finally, the paper discusses the implications of the findings for organization design and proposes an expanded theoretical framework for organizational innovation.