The Effects Of Technology Innovation On Industry Competitive Advantage From A Perspective Of Consumption Utility

With the growth of China's industrialization and economic globalization, Chinese manufacturing firm's international competitiveness is rising continuously. However, China is not a strong but a large manufacturing country. The reasons lie in the following aspects: products with low-technology. So how to construct sustainable competitiveness through technology innovation is vital for our country to develop from large manufacturing country to strong manufacturing country. Consumer demands are playing an increasing role in the transformation from technology innovation to firm's competitive advantage. Specially, so many unreasonable consumption behaviors affect this process in our country. So it is significant to analyze this transformation process from a demand-based perspective.We analyze different characteristic of consumer utility and the role it plays in the transformation from technology innovation to firm's competitive advantage. We construct a model to investigate the relationship between technology innovation and the sustainability of competitive advantage that emphasizes demand-side factors. We analyze the process of how firms create value for consumers and link value creation and competitiveness by introducing consumer heterogeneity and marginal utility. Then we analyze different effects of process innovation, product performance improving and product development on the sustainability of competitive advantage through different consumer utility. We analyze the effects of technology innovation on the competitive advantage by using the related data of China's manufacturing industry from 1996 to 2007. After that we analyze how to choose innovation strategies. Finally, we put forward policy which can improve technology innovation capacity and international competitiveness of manufacturing industry in China.