Internal Innovation Capability and ICT Use in the Innovation Process from the View of Connectivity in Japanese SMEs

Hidenori Shigeno, Taisuke Matsuzaki, Masatsugu Tsuji


Since new information necessary for innovation mainly comes from outside the firm, it is essential that the firm should innitially obtain such information, and then integrate it with indigenous resources for innovation owned by the firm. During these two processes, it is needless to say that ICT (Information and Communication Technology) has important roles to play. The research questions of this study are to examine how internal innovation capability such as the technological level and R&D (Research and Development), contributes to the innovation and how it is promoted by ICT use. Using the survey data of about 650 SMEs (Small Medium Enterprise) from all over Japan, this study constructs two models with ICT or without ICT and focuses on how SEMs (Structural Equation Modeling) obtain information from external linkages and the role of ICT in the innovation process. SEM is employed to show the causality among factors to promote innovation.  The estimation results show that (i) top management is important to promote innovation; (ii) SMEs use two channels to connect to external linkages with and without ICT; and (iii) ICT is the basis of other factors which promote innovation.


Keywords: External linkages, SEM, causality, R&D, technology

Full Text:



Argyres, N.S. & Silverman, B.S. (2004). R&D, Organization Structure, and the Development of Corporate Technological Knowledge. Strategic Management Journal, 25 (8-9), pp. 929-958. Crossref

Booz, Allen, & Hamilton. (1982). New product management for the 1980’s. New York: Booz, Allen & Hamilton, Inc.

Brynjolfsson, E. & Hitt, L. (2000). Beyond computation: information technology, organizational transformation and business performance. Journal of Economic Perspectives. 14(4), 23-48. Crossref

Brynjolfsson, E. & Saunders, A. (2009). Wired for innovation: how information technology is reshaping the economy. Cambridge, MA: MIT Press

Chesbrough, H. W. (2003). Open Innovation: the new Imperative for Creating and Profiting from Technology. Boston, MA: Harvard Business School Press.

Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35 (1), pp. 128-152.

Colquitt, J. A., & Rodell, J. B. (2011). Justice, trust, trustworthiness: A longitudinal analysis integrating three theoretical perspectives. Academy of Management Journal, 54 (6), pp. 1183-1206.

Cooper, R. (2001). Winning at new Products: Accelerating the Process from Idea to Launch (3rd ed.). Massachusetts: Perseus Publishing.

Crawford, C. (1987, 1997). New Product Management (2nd ed. and 5th ed.). Illinois: Richard D, Irwin

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

Freeman, L. C. (1979). Centrality in Social Networks: Conceptual Clarification. Social Networks, 1(3), pp. 215-239.

Greenleaf, R. K. (1977). Servant Leadership: A Journey into the Nature of Legitimate Power and Greatness. Paulist Press.

Iansiti, M. (1998). Technology integration. Boston, MA: Harvard Business School Press.

Kahn, K. (2013). The PDMA handbook of new product development (3rd ed.). Hoboken, New Jersey: John Wiley & Sons Inc.

Lawson, B., & Samson, D. (2001). Developing innovation capability in organisations: a dynamic capabilities approach. International Journal of Innovation Management, 5 (3), pp. 377-400.

Lerner, J., & Wulf, J. (2007). Innovation and Incentives: Evidence from Corporate R&D. Review of Economics and Statistics, 89 (4), pp. 634-644.

Leonard-Barton, D. (1988). Implementation as mutual adaption of technology and organization. Research Policy, 17(5), pp. 251-267.

Leven, D. Z., & Cross, R. (2004). The strength of weak ties you can trust: The mediating role of trust in effective knowledge transfer. Management Science, 50 (11), pp. 1477-1490.

Mariano, N. & Pilar, Q. (2005). Absorptive capacity, technological opportunity, knowledge spillovers, and innovative effort. Technovation, 25 (10), pp. 1141-1157.

Nadia, B. (2011). A framework for successful new product development. Journal of Industrial Engineering and Management, 4 (4), pp. 746-770. Crossref

Perdomo-Ortiza, J., lez-Benitob , J.G., & Galendeb, J. (2009).The Intervening Effect of Business Innovation Capability on the Relationship between Total Quality Management and Technological Innovation. International Journal of Production Research, 47 (18), pp. 5087–5107. Crossref

Smith, P.G., & Reinertsen, D.G. (1998). Developing Products in Half the Time ( 2nd ed.). New York, NY: John Wiley and Sons.

Szulanski, G., Cappetta, R., & Jensen, R.J. (2004). When and How Trustworthiness Matters: knowledge Transfer and the Moderating Effect of Causal Ambiguity. Organization Science, 15(5), pp. 600-613

Sundgren, M., Dimenas, E., Gustafsson, J., & Selart, M. (2005). Drivers of organizational creativity: a path model of creative climate in pharmaceutical R&D. R&D Management, 35(4), pp. 359-374.

Todo, Y., Matous, P. & Inoue, H. (2016). The strength of long ties and the weakness of strong ties: Knowledge diffusion through supply chain networks. Research Policy, 45(p), 1890-1906.

Tsuji, M., Ueki, Y., Idota, H., & Akematsu, Y. (2013). The Formation of Internal Innovation Capability and External Sources in ASEAN Economies. Proceedings of 6th Annual Conference of the Academy of Innovation and Entrepreneurship (AIE) 2013, Oxford University, UK.

Tsuji, M., Idota, H., Ueki, Y., Shigeno, H., & Bunno, T. (2016). Connectivity in the Technology Transfer Process among Local ASEAN Firms. Contemporary Economics, 10 (3), pp. 193-203.

Tsuji, M., Ueki, Y., Shigeno, H., Idota, H., & Bunno, T. (2018). R&D and non-R&D in the innovation process among firms in ASEAN countries Based on firm-level survey data. European Journal of Management and Business Economics, in Press.

Zahra, H. and George, G. (2002). Absorptive Capacity: A Review, Reconceptualization, and Extension. Academy of Management Review, 27 (2), pp. 185-203.



  • There are currently no refbacks.

Copyright (c) 2018 STI Policy and Management Journal

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Copyright of Journal of STI (Science Technology Innovation) Policy and Management Journal (e-ISSN 2502-5996 p-ISSN 1907-9753). Powered by OJS.