Understanding how a firm’s scientific capability influences its technology development has important implications on the firm’s research and development (R&D) strategies.
However,the current literature reveals a puzzling outcome in its empirical investigations on the science–technology relationship.
While many studies show the positive influence of a firm’s scientific capability on its technological performance, a few others indicate that if a firm focuses its attention more on cutting edge science, its overall technological performance will suffer.
We suggest that these findings can be reconciled by conceptualizing and measuring the scientific capability of the firm differently. This paper attempts to demonstrate how different notions of scientific capability are associated with different performance outcomes. Furthermore, a firm’s scientific capability facilitates the integration of new knowledge to produce valuable technologies when a firm broadens its search for new knowledge.
The paper highlights the nuances of conceptualizing and measuring the firm’s scientific capability in two different ways: number of scientific publications and nonpatent references.
The findings also shed light on the mechanism through which science accelerates technological progress inside a Firm.