An investigation of the complementary effects of technology, market, and design capabilities on exploratory and exploitative innovations: Evidence from micro and small-sized tech enterprises in China

摘要

Technology, market, and design are important driving forces for enterprise innovation activities. Unfortunately, their combined effects on exploratory and exploitative innovations are less clear, especially for micro and small businesses critical to the economy. By using data from a two-stage survey of 357 micro and small-sized tech enterprises (MSTEs) in the fast-developing region of Foshan, this study investigates how diverse complementarities between technology, market, and design capabilities contribute to exploratory innovation and exploitative innovation. The results reveal how distinct contributions from the capabilities affect exploratory and exploitative innovations in differentiated ways. Specifically, exploratory innovation benefits from the three-way complementarity of technology, market, and design capabilities, whereas exploitative innovation only benefits from the two-way complementarities between technology and market capabilities and between market and design capabilities. These findings contribute to the resource-based view (RBV) literature, while providing managers with guidelines to improve capability investment and allocation decisions that foster exploratory and exploitative innovations.