Technological Innovation and Competitive Advantage: Empirical Evidence from Large Telecommunication Firms

Abstract

Empirical research demonstrating the influence of technological innovation on competitive advantage has produced inconclusive results. This paper, therefore, aims to investigate the association amidst technological innovations and competitive advantage. Significant transformations have been evident in Kenya’s telecommunication industry for the last two decades, which has resulted in intense competition, and technological innovation has become the new face of competition among firms. The study applied the positivism philosophy and adopted the descriptive cross-sectional survey design. The target population comprised all 83 large licensed telecommunications service providers where census method was used. Both descriptive and inferential statistics were utilized in the analysis of data. Descriptive statistics comprised of frequencies, percentages, means, and standard deviations while inferential statistics used linear regression analysis which was employed in testing the hypothesis. Findings reveal a significant and positive influence of technological innovation on competitive advantage. Technological innovation explained the variations in competitive advantage. It is deduced from the findings that more technologically innovative telecommunication firms are likely to produce better products and services and consequently able to acquire more customers earning competitive advantage compared to less innovative telecommunication firms. The study presented notable implications on the policy framework, the strategic management practice, and theory implications in the telecommunication industry and beyond. At policy level, the Government of Kenya would benefit from the study by ensuring that policy makers and regulatory authorities in the telecommunication sector formulate policies that would promote technological innovation for enhancing competitive advantage. Managerial practitioners may consider institutionalizing innovation by creating the requisite direction and controls that enable the emergence of innovation and value creation for sustainable competitive advantage. The study findings’ implications further extended, supported, and added value on the theory adopted by the study.