Analysis of technology services growth: an innovation capabilities approach

Abstract

Services have been playing a crucial role on world’s economy, especially with the widespread usage on ICT throughout business sectors. There is a need for strong dynamic capabilities that drive firms’ growth and superior performance. However, innovation studies traditionally have paid attention on manufactured goods and technological advancement, including innovation capabilities theory. Thus, this paper aims to collect empirical evidence of what sustains technology service firms’ growth and how innovation capabilities impact firm’s performance. Two technology service firms were selected for a case study. They are small firms and operate in an emerging country. To evaluate these firms we used an innovation capabilities model (Zawislak et al., 2012) based on four capabilities: development (DC), operations (OC), management (MC) and transaction (TC). It became clear that “development areas” of these firms actually involve a group of activities that are related to OC, which is an ordinary capability. In fact, MC and TC are considered dynamic capabilities and are able to drive service firms growth trajectories, along with DC. In terms of scholar contributions, this paper turns evident the necessity of a service innovation capabilities framework that addresses service innovation specificities. For practitioners, this paper presents insightful information on how to sustain growth on software firms. Superior performance and competitive advantages are essentially enhanced by DC, MC and TC.