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Integrated dairy sheep system in Castilla La Mancha (Spain) suffers from a crisis based on lack of profitability. Technological innovation is a key factor to increase farm's viability. It requires the identification of the appropriate technologies to develop, later on, a set of technological indicators associated to results that support the decision-making process. The objectives of this research were: First, the selection of innovations and its grouping in a technological innovation set. Second, assess the relationship with other indicators; mainly technological and structural, productive and economic performance data set. Information from 157 dairy sheep farms in Castilla La Mancha was used. The questionnaires included 77 pre–selected technological innovations and 150 questions on productive, economic and social data. The selection of innovations and its grouping into technological innovation areas, took place according to a qualitative, consensus and participatory methodology. Canonical correlation is a multivariate statistical technique used for analyzing the relationship amongst different set of indicators. 38 technologies were identified, grouped into a set of six indicators (T 1 , management; T 2 , feeding; T 3 , animal health; T 4 , land use; T 5 , milking equipment; T 6 , reproduction-genetic). Results derived from the canonical correlation showed a robust relationship between technological and structural, productive and economic performance data set. Land use, reproductive-genetic and management were amongst the main technologies that mainly explained this relationship, followed by those associated to milking equipment and dairy. Technological innovation demands a proper structure and an integral vision of dairy system that considers interactions amongst technological areas. It would be necessary to go deep in its knowledge in order to increase farm's viability. • Innovation is a strategic option for the improvement of competitiveness. • To identify the most innovative practices, there is a need to provide a set of technology indicators. • The set of technology indicators has to be appropriate, low cost and easy to implement. • The set of technology indicators presented a strong relationship with firm's results. • The set of technology indicators could be regarded as a predictable measure of performance. [ABSTRACT FROM AUTHOR]