Structural Capital, Innovation Capability, and Company Performance in Technology-Based Colombian Firms

In today's economy, innovation is considered to be one of the main driving forces behind business competitiveness, if not the most relevant one (Drucker 1988; Shapiro and Varian 1998; Sveiby 1997). The study of innovation has been addressed from different perspectives. Recently, the literature on knowledge management and intellectual capital has provided new insights (Subramaniam and Youndt, 2005). Along these lines, the aim of this paper is to analyze the impact of different organizational conditions - i.e. "structural capital" - on innovation capability and innovation performance, from an "intellectual capital" (IC) perspective. As regards innovation capability, two dimensions are considered: new idea generation and innovation project management. The population subject to study is made up of technology-based Colombian firms. In order to gather information about the relevant variables involved in the research, a questionnaire was designed and addressed to the CEOs of the companies making up the target population. The sample analysed is made up of 69 companies and is large enough to carry out a statistical study based on structural equation modelling (partial least squares approach) by means of PLS-Graph software (Chin and Frye, 2003). The results obtained show that structural capital explains to a great extent both the effectiveness of the new idea generation process and of innovation project management. However, the influence of each specific organizational component making up structural capital (organizational design; organizational culture; hiring and professional development policies; innovation strategy; technological capital; and external structure) varies. Moreover, successful innovation project management is the only innovation capability dimension that exerts a significant impact on company performance. From a practical perspective, the findings of this research could guide managerial decisions towards a better management of intangibles in order to increase the innovation capability of firms.