Absorptive capacity, learning processes and combinative capabilities as determinants of strategic innovation

SummaryThe current paper focuses on absorptive capacity in the context of strategic innovation. Strategic innovation aims at a re-conceptualisation of business models, the creation of uncontested market spaces, and leaps in customer value. By using the learning-process perspective of absorptive capacity (exploratory, assimilative, transformative, and exploitative learning processes), we suggest that transformative learning processes in particular, play a key role in strategic innovation. In addition, a follower strategy and participative role in the knowledge network, instead of a first-mover strategy and a dominant role in the knowledge network, do indeed promote strategic innovation. Companies should not only manage the accumulation of external knowledge, but also adapt their combinative capabilities (systematisation, coordination, and socialisation of knowledge) in order to succeed with strategic innovation. The findings yield a set of research propositions for further academic and managerial consideration. Two longitudinal case studies of European electricity providers form the empirical background.

► We show innovative ways to manage absorptive capacity and learning processes.
► We examine the contribution of combinative capabilities to strategic innovations.
► Maintaining a first mover strategy hinders strategic innovation.
► Absorptive capacity determines business models, uncontested markets, and customer value.
► We concentrate on a neglected empirical field of innovation in electricity utilities.