In this conceptual article, we extend earlier work on Open Innovation and Absorptive Capacity. We suggest that the literature on Absorptive Capacity does not place sufficient emphasis on distributed knowledge and learning or on the application of innovative knowledge. To accomplish physical transformations, organisations need specific Innovative Capacities that extend beyond knowledge management. Accessive Capacity is the ability to collect, sort and analyse knowledge from both internal and external sources. Adaptive Capacity is needed to ensure that new pieces of equipment are suitable for the organisation’s own purposes even though they may have been originally developed for other uses. Integrative Capacity makes it possible for a new or modified piece of equipment to be fitted into an existing production process with a minimum of inessential and expensive adjustment elsewhere in the process. These Innovative Capacities are controlled and coordinated by Innovative Management Capacity, a higher-order dynamic capability.

Item Type:	Refereed Article
Keywords:	open innovation, absorptive capacity, capabilities, incremental innovation, process innovation, networks
Research Division:	Commerce, Management, Tourism and Services
Research Group:	Strategy, management and organisational behaviour
Research Field:	Innovation management
Objective Division:	Economic Framework
Objective Group:	Management and productivity
Objective Field:	Technological and organisational innovation
UTAS Author:	Robertson, PL (Professor Paul Robertson)
ID Code:	82885
Year Published:	2012
Web of Science® Times Cited:	140
Deposited By:	Australian Innovation Research Centre
Deposited On:	2013-02-21
Last Modified:	2014-11-10
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