ANALYZING THE IMPACT OF ABSORPTIVE CAPACITY ON TECHNOLOGICAL CAPABILITY IN THE DEFENSE INDUSTRY: A DESCRIPTIVE APPROACH WITH MEDIATING ROLES OF ORGANIZATIONAL INNOVATION AND TECHNOLOGY MANAGEMENT CAPABILITY

Abstract

This study examines the relationships between absorptive capacity, organizational innovation, technology management capability, and technological capability within the Indonesian defense industry. Utilizing Structural Equation Modeling (SEM) with SmartPLS, data were collected from 35 defense firms, involving 251 respondents. The findings reveal that absorptive capacity significantly influences technological capability, both directly and through the mediating roles of organizational innovation and technology management capability. The results emphasize the critical role of continuous knowledge acquisition and integration in fostering innovation and technological advancements. Additionally, the study highlights the necessity of strategic technology management practices to sustain long-term competitiveness in the defense sector. These findings have significant implications for industry practitioners, policymakers, and researchers, suggesting that investments in R&D, innovation-driven policies, and structured knowledge management programs are essential for enhancing technological capabilities. Future research should explore external environmental factors and industry collaborations to further understand their impact on technological advancements.