Technology competence creates competitive advantages (2/2)

[Deutsche Fassung]

In a former blog entry I presented key results of the study “Technologische Kompetenz und nachhaltiger Wettbewerbsvorteil” (“Technology Competence and Sustained Competitive Advantages”, available only in German) published by the Institute of Technology and Process Management at Ulm University in March 2012. Of a total of 175 German companies – mostly from the mechanical engineering, automobile and metalworking sectors – which participated in the study, 12 out of 114 SMEs (11%) and 5 out of 61 larger companies (8%) belong to the benchmark group.

Clear gap between benchmark group and stragglers

Both the SMEs and the large companies which belong to the benchmark group

  • have ampler resources (R&D budget, number and qualification of employees, quality of the equipment) at their disposal,
  • have a significantly higher technology competence,
  • are significantly more successful in terms of innovation (as measured by successful product and process innovation) and
  • are in the long run more successful in the market (as measured by market shares, EBIT and return on sales)

than the stragglers.

The charts below show the differences between the benchmark group and the stragglers in five areas of technology competence (idea/knowledge management, production management, technology management, technology outlook and culture/ability to learn) and in terms of resources.

Technology competence - small and medium-sized companies

Technology competence – small and medium-sized companies (SME)

Technology competence - larger companies

Technology competence – larger companies

The benchmark groups, both for SMEs and larger companies, are much more successful in terms of innovation than the stragglers, include innovations much more efficiently and effectively in their internal procedures and are more successful in the market in the long run (see the two charts below).

Innovation success - small and medium-sized companies (SME)

Innovation success – small and medium-sized companies (SME)

Innovation success - larger companies

Innovation success – larger companies

There are clear differences between SMEs and larger companies in terms of patent activities and patent management. While only 64% of the SMEs file patents, 80% of the larger companies do so (in comparison to the aggregate number of SMEs and larger companies, respectively). Generally speaking, SMEs do not have a process-based patent management, whereas such procedures are well-established in large companies. In both categories the benchmark companies file more patents and are more successful in terms of patent activities overall.

Patents - small and medium-sized companies (SME)

Patents – small and medium-sized companies (SME)

Patents - larger companies

Patents – larger companies

Technology competence > successful innovation > competitive advantages

Overall, the study confirms the link between technology competence, successful innovation and sustained competitive advantages. Birgit Stelzer, a researcher at the Institute for Technology and Process Management at Ulm University and the project manager for the study, summarises the results as follows: “Technology competence is a bundle of abilities which enable a technology-based company to effectively and efficiently realise its goals and thus obtain sustainable, long-term competitive advantages in the market.”

[Allow me a final word of pride: The company for whose technology sector I am responsible clearly beats the average of the group as a whole in terms of technology competence, successful innovation and competitive advantage; in three out of five technology competence categories and in terms of competitive advantages it even beats the average of the other benchmark companies.]

2 Gedanken zu „Technology competence creates competitive advantages (2/2)

  1. Pingback: Technologische Kompetenz schafft Wettbewerbsvorteil (Teil 2/2) | BeyssOnManagement

  2. Pingback: Innovation management – possibilities and limits (part 3/3) | BeyssOnManagement

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