Abstract:

Increasingly it is acknowledged that innovation is critical for firm level success and broader economic development. Dynamic capabilities for innovation are said to enable organisations to build competitive advantage for today while creating sustainable competitive advantage for tomorrow. Yet while the significance of dynamic capabilities is well recognised, there is less understanding of the mechanisms of how dynamic capabilities are created and operate (Kraatz and Zajac, 2001; Barreto, 2010).  In addressing this issue, this study focuses on the internal dynamics of innovation in organisations. In particular, drawing on employee insights from a national survey the study finds that a climate for creativity is a key factor and micro-foundation in building dynamic capability for innovation.