Designing and Testing an AHP Methodology to Prioritize Critical IC Elements for Product Innovation

Abstract

Intellectual capital has for thepast decadesbeen evidenced as na importante source of competitive advantages and differentiation at the firm level. At the same time, innovation has become a critical factor for companies to ensure their sustainability and even their survival in a globalized market. Having in mind these two crucial concepts for business success, this study intends to build on the relationshipsbetween intelectual capital and product innovation at the firm level. Specifically, we will design and test a model based on the Analytic Hierarchy Process (AHP), whose aim istoallowthe prioritization of intelectual capital elements according to their relative importance for product innovation performance at the firm level. The main goal of this research is to build a diagnosis and action tool that helps business managers incorporate na intelectual capital perspective to their product innovation initiatives. This framework will help managers to better understand which intelectual capital elements are more critical to their product innovation efforts, and thereby systematize actions and clarify resource allocation priorities to improve their product innovation capabilities. In order to validate the practicability of this proposal, the methodology was empirically applied to a Portuguese innovative small and médium enterprise (SME).