Exploring the impact of technological competence development on speed and NPD program performance

Abstract

With growing levels of competition across industries, technological competence is increasingly viewed as crucial for businesses to maintain their long‐term competitive advantage. Although there are many theoretical arguments about how firms' competences can yield competitive advantage and performance improvement, we have a limited understanding of where the capabilities originate in the context of NPD or what kind of product portfolios, internal climate, and strategic alignment are required to build them. Moreover, empirical evidence for technological competence development is limited and comes primarily from case studies, anecdotal evidence, and management impressions. Accordingly, this research addresses these gaps by presenting and testing a conceptual model of technological competence development in NPD. This study makes advances in applying a dynamic capability approach to technological competence development in NPD, and investigates the impact of innovative climate, technological alignment, and project portfolio management on technological competence development as well as NPD speed. Moreover, the factors that might influence NPD program performance are also investigated. The analysis, based on data collected from 111 firms, shows that a firm's innovative climate, technological alignment, and portfolio management are positively associated with technological competence development. While technological alignment was found to be negatively related to NPD speed, portfolio management, and technological competence development were found to have positive effects on speed. However, innovative climate had no significant impact on speed. Moreover, technological competence development and portfolio management were found to be positively related to NPD program performance. Finally, no support was found for the relationship between speed and NPD program performance.