How is utility firm dealing with disruptive technologies? An empirical research of Indonesia Electricity Company

Although some studies have investigated the role of both technology and market to disruptive innovation and then its effect to firm competitive advantage, it is still few studies analyzing the moderating factors of disruptive technology to competitive advantage. This study is to explore empirically how firm dealing with the disruptive technology in power utility industry. Three disruptive technologies have been selected which are renewable energy, battery storage technology and smart grid. In addition, three moderating factors have been identified: entrepreneurial leadership, absorptive capability, and technology adoption. Based on 99 measured indicators using 336 innovators’ feedback representing 118 business unit of Indonesia Electricity Company (PLN), it is found that disruptive technology is negatively affect the firm competitive advantage. However the empirical test shows that the impact can be reduced by firm’s excellent absorptive capability. The interrelation between push and pull factors of disruptive technology is positively significance. The finding is highly relevant to Board of Directors (BOD) or top management team (TMT) who is struggling to find strategy for dealing with the effects of disruptive technology which has dramatically changed the recent business competition landscape.