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Abstract: Innovation and organizational change are important in today's dynamic and complex digital environment. However, the extant research on digital innovation lacks apposite operationalizations of the relationship between innovation and digital capability. In this paper, we operationalize digital innovation capability as an institutionally manifested, multi-level and multifaceted phenomenon. Our construct is a practicable and systematic, yet lightweight, framework for digital innovation management. The framework would inform innovation leaders how digital data and technologies can be adaptively applied at different institutional levels to create new value. This allows companies to develop their innovation activities and digital strategy in a more targeted way, assess the effectiveness of innovations in a more timely and accurate manner, and provide a scaffolding for digital innovation.
Keywords: Innovation; innovation management; digital innovation; innovation capability; digital capability; digitalization; levels of innovation; levels of digitalization; framework.
1Introduction
Innovation and organizational change are important in today's dynamic and complex digital environment. Innovation is about developing new, creative solutions that are commercially viable and create new value for customers. The affordances of liquefied digital data and advanced new technologies enable new ways of combining and manipulating digital representations to commercial ends.
Digitalization has raised questions about the explanatory power and usefulness of existing innovation theories and literature (Nambisan et al., 2017). It has been widely noted (e.g. Henfridsson et al., 2014, Nylen and Holmström, 2015) that digital technology enables new type of innovation processes. However, the manifestation of digital innovation at different institutional levels seems underexplored.
We view that innovation is a purposeful and systemic organizational practice to develop new ideas for economic or social value. It is inherently embedded in the organizational work: sensing, sense-making, decision-making, and action. The institutional levels would seem to provide an appropriately granular and practicable gradation of innovation. Such "levels of innovation" appear to be scant in the literature
We operationalize digital innovation capability as an institutionally manifested, multi-level and multifaceted phenomenon. Our construct, INDICA, is a practicable and systematic, yet lightweight, framework for digital innovation management. The framework allows companies to better assess their performance, to develop their innovation activities and digital strategy in a more targeted way, to assess the effectiveness of innovations more accurately, and to scaffold digital innovation.
2INDICA: Multi-Level Framework for Innovation and...