Product and process innovation is a key component in the success of industrial firms. Therefore, this paper focuses on the main drivers of innovation in large-scale firms such as idea generation, internal technological environment and technology acquisition/exploitation. This study examined 119 large-scale firms in Turkey. The results indicate that firms focus on the technology strategy, idea quality, idea generation, technology acquisition and exploitation rather than factors such as teamwork, learning organization, management participation and delegation as the route to developing innovative capacity. (C) 2005 Elsevier Ltd. All rights reserved.