Impact of Dynamic Knowledge Capabilities in Multinational Innovation Ecosystems

Today the global Information Technology industry offers immense opportunities for industry players owing to increased IT spending in sectors like healthcare, transportation, retail, etc. The global market for IT industry is expected to reach an estimated value of US $2,147 billion by the year 2022 with a Compound Annual Growth Rate of around 5 per cent in a span of five years ranging from 2012 to 2017. Global Outsourcing countries like India, Vietnam, China and the Philippines are pivotal to the global industry as they provide skilful and relatively inexpensive manpower to the industry.

The key competencies developed by Information Technology sector in India have placed it on the international canvas, there by transforming image of the country on the global platform and facilitate its emergence as the largest sourcing destination for IT industry worldwide. Information Technology sector has contributed remarkably to India's foreign reserves and presence in the global landscape in terms of qualified workforce and exports in the sector, thereby signifying the huge potential the industry holds in the global arena.

The concept of Innovation Ecosystems

Innovation ecosystems foster an active flow of information and resources that allows ideas to become a reality. We are creating a process through which more innovators and entrepreneurs can develop and launch solutions to real-world problems faster. This process fosters expertise in new areas, aids in economic diversification, and enables businesses to meet their customers where they are. Furthermore, an innovation ecosystem allows for economic stability and resource sharing. Furthermore , an innovation ecosystem allows for economic stability and resource sharing and innovation ecosystem allows for economic stability and resource sharing.

Driving Innovations, Leveraging Technology in Indian Business Ecosystem

Due to innovation ecosystems indian startups are also generating employment and opportunities. However, we must not forget that they are also developing new technologies that are applicable across industries and audiences. They are communicating with everyone in the ecosystem, identifying key partners, and transforming in-kind and monetary investments into tangible products that will change the way we all live, work, and play. The value of an innovation ecosystem is found in the availability of resources for startups and the flow of information for ecosystem stakeholders. This information flow opens up more investment opportunities for the right institutions to connect with the right ideas for their businesses and portfolios at the right time and for the right reasons. The success of Indian startups is becoming increasingly dependent on skills & experience.

Innovation ecosystems are subsystems of innovation meta-networks and knowledge meta-clusters that serve as building blocks for the knowledge and innovation architecture. Innovation ecosystems also differ in terms of knowledge configurations, entity specialisations, innovative capacity, and spatial distribution there is no one-size-fits-all solution for success. Although knowledge and innovation are not interchangeable concepts, there are areas where they coexist to express mutual interaction, which is referred to as knowledge-based innovation. According to research, the ability to innovate faster, better, and smarter, as well as transform and adapt to new contexts through knowledge management, provides a competitive advantage.

Dynamic capabilities and the role of organizational knowledge to produce superior capabilities and dynamism

The advanced paradigm of Knowledge-Based Dynamic Capabilities has emerged as an edifice to existing business and management in light of the knowledge-economy, where knowledge can thus be profitably leveraged to produce superior capabilities and dynamism. KBDC emphasises knowledge and knowledge-related practises as fundamental to positive innovation performance, particularly where interconnected and interdependent networks are at play, based on the theoretical premise of the Resource-Based View and dynamic capabilities. Successful innovation necessitates knowledge integration across a broad set of competencies within the innovation environment, with collaborators exchanging and combining different combinations of knowledge to foster innovation.

In a rapidly changing world where markets, products, and technology are in constant flux, the dynamics of knowledge as a valuable, and irreplaceable resource , have increasingly gained prominence as a driver of innovation performance. This perspective ascribes to a system-theoretic perspective of, among other factors, socio-economic conditions, that shape the co-evolution of knowledge with the “knowledge-based and knowledge-driven, global/local economy and society.

Resource-based view and dynamic capabilities

Dynamic capabilities theory arose as both an extension of and a reaction to the resource-based view's inability to interpret the development and redevelopment of resources and capabilities in response to rapidly changing environments.It could be viewed as a source of competitive advantage. DC theory extends beyond the notion that a firm's acquisition of valuable, rare, unique, and non-substitutable resources results in long-term competitive advantage. Organizations rely on dynamic capabilities to integrate, marshal, and reconfigure their resources and capabilities in order to adapt to rapidly changing environments. Thus, DCs are processes that enable a company to reconfigure its strategy and resources in order to achieve long-term competitive advantages and superior performance in rapidly changing environments. Despite of studies on the concept of Dynamic Capabilities , the theory requires a collaborative effort on the part of researchers to illustrate concepts related to the theory as well as how to link them with empirical practises within organisations.

Evaluating the Influence of Dynamic Capabilities on a organization’s Performance

Strategically, businesses are thriving to gain a competitive advantage by becoming more focused on a specific area known as their core value. Aside from a specific focus, they have recognised the importance of dynamic capacities that integrate with core competencies to provide a competitive advantage. Core competencies include not only a firm's working and track records, but also the difficulties in how competitors bring similarities in their products. Furthermore, such capabilities include expansion and diversification strategies. Multiple capabilities, also known as dynamic capabilities, are more advanced than core capabilities. Dynamic capabilities examine the speed and process of implementing effective changes in response to changes in the external environment, in order to keep up with the dynamism of competitors.

They also assist in taking full advantage of opportunities such as unparalleled technological know-how, intellectual property rights, business process reengineering (BPR), and the extent of long-term customer and partner relationships, strengthening value and culture systems, and the potential of employee, physical assets, and financial resources. SWOT/SCOT analysis and interpretations of the aforementioned resources would greatly assist an organisation in identifying areas of risk and opportunity.

Understanding Business Networks & market Dynamics for a new growth phase

Innovation is now regarded as essential for all economies. However, the formula for successful innovation remains a mystery to many. Four constructs are operationalized and hypothesised to have an impact on the innovation performance of several countries at various stages of economic development using the concept of Knowledge-based dynamic capability as drivers of innovation performance in innovation ecosystems. The findings show that knowledge-based dynamic capabilities have a significant impact on innovation performance in various market economies.

The findings, which are consistent with the evolving innovation ecosystem approach to understanding business networks and market dynamics, suggest that innovation performance is context dependent and driven by diverse factors with varying influences on innovation outcomes. The classification of innovation ecosystems based on the prevalent KBDC serves as a point of reference for achieving a competitive advantage in a specific market environment.