Shaping Digital Innovation Via Digital-related Capabilities

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Shaping Digital Innovation Via Digital-related Capabilities Mina Nasiri 1

&

Minna Saunila 1 & Juhani Ukko 1 & Tero Rantala 1 & Hannu Rantanen 1

Accepted: 3 November 2020 # The Author(s) 2020

Abstract The aim of this research was to explore the conditions under which digital innovation opportunities emerge in small and mediumsized enterprises (SMEs). The research answered the question of what capabilities are required to shape the exploitation of digital innovation, namely market offerings and the digital business process. To address the research question with a quantitative research method, data were collected through survey questionnaires distributed among 280 SMEs operating in the service and manufacturing industries in Finland. The results revealed that among four digital-related capabilities—namely human, collaboration, technical, and innovation capabilities—human, technical, and innovation capabilities contribute to market offerings, while human, collaboration, and technical capabilities contribute to the business process. Keywords Digital innovation . Digital-related capabilities . Digital transformation . Market offerings . Digital business process

1 Introduction As digital transformation is shaping the business environments of contemporary companies, companies need the adjust their operations and find ways to respond to the changes. To operate in increasingly digitalized business environments, and as a part of the digital ecosystems (Delgosha et al. 2020; Pappas et al. 2018), companies need to not only find innovations and innovative ways to change their businesses but also develop capabilities to exploit innovation in changing surroundings. Further, Mikalef et al. (2020), argued that to derive value from the growing opportunities of digitalization, such as big data, companies need to develop the organizational capacity to recognize how their businesses can benefit from data-

* Mina Nasiri [email protected] Minna Saunila [email protected] Juhani Ukko [email protected] Tero Rantala [email protected] Hannu Rantanen [email protected] 1

School of Engineering Science, Department of Industrial Engineering and Management, LUT University, Mukkulankatu 19, 15210 Lahti, Finland

driven insight, as well as develop capabilities to implement these recognized possibilities. In other words, companies need to find ways to exploit digital innovation. Therefore, the dominant role of digital innovation is being increasingly observed in the business environment due to new opportunities that offer firms the potential to broaden into new and special experiences (Jahanmir and Cavadas 2018; Kolloch and Dellermann 2018; Nylén and Holmström 2015), leading to high profit potential and customer satisfaction (Bednar and Welch 2019; Parida et al. 2015). The origins of digital innovation can be traced to digitalization (Chan et al. 2019), which acts as an enabler of and creates essential conditions for exploiting digital innovation (Yoo et al. 2010). Such exploitation requires capabilities, relevant to digitalization, t