Information Technology Innovations: The Role of Cumulative Experience and Performance Feedback

We draw upon theories of organizational learning to empirically test whether prior experience of an organization with implementing information technology (IT) innovations creates momentum that increases its proclivity for future such innovations. We justify our hypothesis by explaining how experience with IT implementations builds crucial capabilities which strengthen managerial preferences for engaging in more IT innovations. We also hypothesize a similar relationship between past experience with product and process (business) innovations and future business innovations. Analyses of a detailed, longitudinal establishment-level data spanning eight years and 2,312 workplaces finds support for our hypotheses and also further reveals two novel insights. First, IT innovation experience also subsequently increases the level of business innovations because of overlap in innovation capabilities between the two types of innovations. Second, perceived performance improvements from a recent IT innovation creates cr...