There are many definitions of technology. For example, Burgelman et al. (2004, p. 2) see technology as having both implicit and tacit attributes to derive the ‘the theoretical and practical knowledge, skills, and artifacts that can be used to develop products and services, as well as their production and delivery systems’. Christensen and Raynor (2003, p. 39) define technology as ‘the process that any company uses to convert inputs of labor, materials, capital, energy, and information into outputs of greater value’. Both of these definitions broaden the earlier description of technology propounded by Krajewski and Ritzman (2000, p. 17) as ‘the know-how, physical things, and procedures used to produce products and services’. Over the past two decades, the development of high technology-based firms has been actively encouraged by Governments and development agencies Westhead and Storey (1994)—as a source of competitive advantage as well as employment creation. In many cases, small high technology-based firms have effectively exploited market opportunities and play a pivotal role in the economy (Shane and Venkatraman, 2000; Makri et al., 2006). This important role has been helped by the emergence of generic technologies, most notably information technology that is knowledge intensive rather than capital and labor intensive (Rothwell, 1994, p. 12). Such technologies have been effectively used to open up new market niches for small and medium sized firms. Accordingly, high technology firms have become well established as sources of both competitiveness and employment creation (Oakey, 1991).
From an academic perspective, the trend in the establishment of high technology firms has been paralleled by the number of empirical studies investigating their success in aspects such as innovation potential (Monck et al., 1988), and growth potential (Phillips et al., 1991). Interestingly, a study by Westhead and Cowling (1995) suggested that not all high technology firms possess similar capabilities and accordingly achieve varying degrees of success. However, to date there is no commonly accepted definition of a high technology firm—see Goss and Vozikis (1994). Instead, all firms are classified at the industry level, which tends to be all inclusive rather than firm specific. In other words, the overall industrial classification of an industrial sector, such as heavy engineering, might be perceived as low technology orientated whereas some firms within this sector may have leading edge high technology products and/or processes. However, the demarcation line between high and low technology firms is often blurred, which arguably impacts on decision-making and investment decisions. For example, the product life cycles of high technology firms are far shorter than those of low technology firms (Balkin and Gomez-Mejia, 1987). This has implications for research and innovation-related activities. In addition, the blurring of demarcation lines between high technology and others firms is exacerbated by decisions by high technology companies such as Boeing to outsource product development and production, where Boeing itself is responsible for only 10% by value, and the remainder is provided by 40 partners worldwide. Arguably, the work of managers, investors and researchers in strategy formulation and the prediction of specific outcomes will be enhanced by clearer descriptions of high technology firms that include a number of well-developed variables.
Accordingly, this study examines the appropriateness of existing industrial classification methodologies and seeks to develop a ‘high technology footprint’ underpinned by a number of input and output criteria in order to identify high technology firms. The paper is structured as follows: first, we consider current methods of firm classification with reference to high technology firms. Second, we examine high technology firms from an input perspective by using the resource-based view (RBV) of strategy. Third, we examine high technology firms from an output perspective by focussing on company growth and financial performance. Fourth, we develop both input and output technology footprints. Finally, we test the proposed technology footprints and present the results derived. We also outline limitations and directions for further research.
