Technological innovation is a vital aspect of operations and development for any business because it provides new opportunities and allows them to create better, more efficient products or services as well as adjust operations for better efficiency. In general, this concept refers to a multidimensional strategy of generating an idea and developing it to create new technology and introduce it to the market (Azar & Ciabusschi, 2017; Kogan, Papanikolaou, Seru, & Stoffman, 2017). Also, this can refer to a new process within the organization that improves efficiency and, therefore, allows saving costs or obtaining a competitive advantage.
Technological innovation is linked to changes that must occur within the structure of an organization. Azzar and Ciabusschi (2017) state that administrative systems must adjust to the demands of newly implemented technological innovation. The combination of these two factors allows for the successful implementation of new technology and suggests that companies continuously improve their processes, which is crucial in a modern-day competitive environment where globalization allows businesses in different parts of the world to compete with each other. Therefore, technological innovation is linked to organizational operations and affects all elements of it.
Competitive advantage is an important factor that makes technological innovation essential for businesses aiming to survive in a global environment and combat other companies operating in the same industry. One example of technological innovation that benefited the consumer and advanced the industry is the introduction of aggregation platforms, for example, Uber or Airbnb, which leverage the Internet to allow consumers to access housing or taxi services more easily (Mody & Gomez, 2018; Wang, 2016). Before this application’s establishment, the hospitality industry consisted of primarily small hotels, motels, and large hotel chains. The booking service, however, allowed people to rent their property, providing more options to the consumer.
Notably, these companies did not have to adjust their company structure to fit the demands of the new online-based platforms since they were created from scratch, and hotel owners in the United States aim to explore the platform-based model and own home-sharing attributes to their properties to mimic Airbnb’s approach (Mody & Gomez. 2018). Therefore, other businesses had to keep up with technological innovation to remain profitable. Overall, technological innovation allowed Uber and Airbnb to gain a significant competitive advantage over the well-established businesses that operated in the transportation and hospitality industries prior, which highlights the nuances of incorporating technological innovation in the company’s strategy.
By definition, the concept implies implementing new approaches, technologies, structures, and other ideas to Technological innovation is important to firms because, as was mentioned, it allows for growth and development, as well as enables adequate response to competition in the modern-day globalized environment. For example, Apple is a well-established company known for its innovative technology, from MacBook to Ipad and the newest Aipods (Safian, 2018). As an innovator, Apple often developed products that are either completely new to the consumer or are more efficient and better designed. The company did not begin its operations with a large investment. Instead, it had a new technology that would establish the personal computer industry. Therefore, innovation is important because it allows businesses to improve existing models and establish new industries, which contributes to their development.