Transformative capacity: Continual structuring by intertemporal technology transfer

Abstract

The ability to maintain internally developed technology over time is important for corporate vitality. We label this ability transformative capacity and suggest that it depends on how well a firm accomplishes three tasks, These tasks are: the choice of technologies, their maintenance over time, and their reactivation and synthesis when required. To establish the need for transformative capacity, we first discuss time lags in the development of technologies and markets to suggest that not all technologies developed by firms can be utilized immediately. We then examine dimensions of technological knowledge that affect knowledge transfer over time. Next, we build on the resource‐based view of the firm to discuss how firms can create transformative capacity. The concluding discussion focuses on the implications of transformative capacity for the analysis and management of technological investments as a way to maintain corporate vitality.