http://www.smallbusinessinstitute.biz A B S T R A C T Keywords: Journal of Small Business Strategy 2020, Vol. 30, No. 02, 72-92 ISSN: 1081-8510 (Print) 2380-1751 (Online) ©Copyright 2020 Small Business Institute® w w w. j s b s . o rg Introduction Samia El Hanchi1, Lamia Kerzazi2 1Mohamed V University, Ecole Mohammadia d’ Ingénieurs, Avenue Ibn Sina, BP765, Agdal, Rabat, Morocco, samia.elhanchi@gmail.com 2Mohamed V University, Ecole Mohammadia d’ Ingénieurs, Avenue Ibn Sina, BP765, Agdal, Rabat, Morocco, lamia_kerzazi@yahoo.fr Startup innovation capability from a dynamic capability-based view: A literature review and conceptual framework Innovation capability, Dynamic capability, Startup, Entrepreneurship APA Citation Information: El Hanchi, S., Kerzazi, L. (2020). Startup innovation capability from a dynamic capability-based view: A litera- ture review and conceptual framework. Journal of Small Business Strategy, 30(2), 72-92. Innovation has been associated with entrepreneurship since the seminal work of Schumpeter (1934) and work from recognized management scholars such as Drucker (1985) along with studies in entrepreneurship theory (Ste- venson & Jarillo, 1990). Additionally, there are overlap- ping boundaries and multidisciplinary approaches to both concepts (Zhao, 2005). The success of startups, as new en- trepreneurial ventures, is dependent on their ability to in- novate (Alvarez & Busenitz, 2001; Pellegrino, et al., 2012; Velu, 2015). Much has been said in the psychological school of entrepreneurship regarding the motivations, traits, and profiles of entrepreneurs as drivers for innovation or entre- preneurial success, but this perspective cannot explain, in an isolated manner, entrepreneurial behavior (Stevenson & Jarillo, 1990; Venkataraman, 1997). In the innovation man- agement field, several measurements of innovation and its determinants at the firm level have been studied (Adams et al., 2006; Becheikh et al., 2006; Hult et al., 2004; Romijn & Albaladejo, 2002), and innovation audits (Björkdahl & Börjesson, 2012; Chiesa et al., 1996) have been devised. But while startup innovation capability (IC) definitions and components are often implicitly addressed in different re- search fields, IC is barely identifiable as a distinct construct (Lawson & Samson, 2001). Explicit accounts conceptualizing IC often adopt a capability-based view, building on organization capability theories and the strategic management field (Christensen & Overdorf, 2000; Crossan & Apaydin, 2010; Narcizo et al., 2017; O’Connor, 2008; Smith et al., 2008). However, an emergent stream of research applies a dynamic capability (DC) perspective (Barreto, 2010; Helfat, 2011; Helfat & Peteraf, 2009; Teece, 2007) to address IC (Forsman, 2011; Kindström et al., 2013; Lawson & Samson, 2001; Lin et al., 2016; Salunke et al., 2011; Wu, 2016). While there is a rich body of literature on innovation, the concept of innovation capability (IC) is barely identifiable as a distinct construct. Startup IC is tacitly covered in innovation management, entrepreneurship, or small business literature. We suggest a dynamic capability (DC) approach to study innovation as a distinctive capability of startup firms. A semi-structured literature re- view of 125 articles combining various theoretical backgrounds is discussed, including the IC conceptualizations and operation- alization that we extracted and clustered into a comprehensive yet synthetic framework. This paper suggests an IC construct as a higher order DC composed of three DCs—sensing, seizing, and transforming—and three layers of foundations—core IC, support- ing IC, and startup entrepreneurial capabilities. This work adds to the emerging capability-based view of the innovation stream by addressing the specific case of startups. It recognizes their entrepreneurial nature and the important role of the entrepreneur’s capabilities and behaviors. It also contributes to the entrepreneurship theory by identifying the capabilities contributing to op- portunity sensing and seizing and the capabilities required for transforming and shaping new opportunities. For practitioners, the IC framework offers a practical tool to assess startup ICs and identify strengths, weaknesses, and external complementarities. http://www.smallbusinessinstitute.biz http://www.jsbs.org 73 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 Moreover, most research on IC, and DC as well, con- cern large or established firms with existing resources and organizational capabilities. Startups, with their newness and small size, have received less attention, with scarce and of- ten exploratory studies (Zahra et al. 2006). Thus, knowl- edge about capability development in new ventures is still limited (McKelvie & Davidsson, 2009). The objective of this review is to contribute to the emerging capability-based approach to IC by applying a DC lens and developing a comprehensive IC construct consid- ering the idiosyncrasies of startups. At the intersection of innovation management, strategic management, and entre- preneurship research, this paper seeks to advance our un- derstanding of the IC required for startup firms. In this paper, we will review the literature for defini- tions and extant conceptualizations of IC to understand its nature and components. We then discuss the congruence of DC as a framework for studying IC, and we identify start- up characteristics and challenges for IC capability building. After this narrative, we describe a more structured method for building a startup IC framework, outlining its compo- nents, and then discussing its implications and further re- search agendas. Literature Review Innovation Capability (IC) Definitions IC is often addressed implicitly in the literature, but an emerging stream attempts to offer an explicit definition. Narcizo et al. (2017) reviewed 19 definitions addressing IC from three different perspectives: innovation results, pro- cesses, and the organizational capabilities involved. IC is seen as a firm’s aptitude to turning market opportunities into real advantages (OECD/Eurostat, 2005), identifying new ideas (Aas & Breunig, 2017a) and transforming them into new products, services, or processes with economic value (Noordin & Mohtar, 2013) or a benefit to the firm (Aas & Breunig, 2017a) and its stakeholders (Lawson & Samson, 2001). Accordingly, IC is defined as the aptitude to perma- nently transform knowledge, ideas, technological condi- tions, and market conditions into new products, processes, or systems (Lawson & Samson, 2001; Lazonick, 2000). Rajapathirana and Hui (2018) viewed IC as the ability to identify current and future customer needs and to respond appropriately while applying internal organizational con- ditions and supporting culture. Fernez-Walch and Romon (2006) coined the term “innovation potential” to refer to the set of knowledge and know-how that an enterprise can leverage to launch innovations. In sum, IC explains why “some firms prove to be better at reproducing innovation success than others” (Aas & Breunig, 2017a, p. 8). As such, IC is not a single event but rather an organiza- tional capability that can be fostered in a dynamic and sus- tainable manner through a continuous and conscious learn- ing process, allowing for a robust and repeatable innovation process or an innovation engine (Aas & Breunig, 2017a; Albort-Morant et al., 2016; Camisón & Monfort-Mir, 2012; Cheng et al., 2016; Christensen et al., 2002; Forsman, 2011; Lawson & Samson, 2001). IC has been addressed from several perspectives, with no dominant theory (Lawson & Samson, 2001) to date, but through these definitions, we can see an agreement on the existence of a tacit intrinsic organization ability, aptitude, potential, or capability to continuously innovate. However, an emerging body of re- search adopts a capability-based approach to the study of IC (Aas & Breunig, 2017a, 2017b; Lawson & Samson, 2001; Narcizo et al., 2017; Salunke et al., 2011; Tesfaye & Ki- taw, 2018; Ukko et al., 2016; Vicente et al., 2015), with the increasing use of a DC perspective. In the following, we provide a brief literature review on DC and explain its rele- vance as a framework for studying IC. Dynamic Capabilities (DC) as an Innovation Capability (IC) Framework DC is defined as a “firm’s ability to integrate, build, and reconfigure internal and external competences to ad- dress rapidly changing environments. DCs thus reflect an organization’s ability to achieve new and innovative forms of competitive advantage” (Teece et al., 1997, p. 516). For DC scholars, competitive advantages do not rely solely on the possession of resources and capabilities but build on them to develop specific new capabilities to seize oppor- tunities in order to respond to changes in dynamic environ- ments and even to shape the environment (Teece, 2007). As a relatively new branch of the literature, DC re- search has suffered from heavy criticism for its ambiguity, presumed link with success, poor operationalization, and lack of empirical evidence (Barreto, 2010). To overcome such criticisms, Teece (2007) proposed one of the most in- fluential models of DC, outlining its nature and detailing its micro-foundations. In this model, DC is described as three groups of interrelated capabilities: (a) sensing opportunities, (b) seizing opportunities, and (c) transforming capabilities. We selected DC as the theoretical framework for study- ing IC for two main reasons. First, DC is a conceptualiza- tion of a firm’s intrinsic capabilities in relation to a desired state. Second, we find that DC thinking is strongly linked with the innovation concept not only because innovation contributes to competitive advantage (Kay, 1995) but also for the emphasis DC scholars put on continuous renewal 74 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 and innovation (Brown & Eisenhardt, 1995; Eisenhardt & Martin, 2000; Helfat, 1997; McKelvie & Davidsson, 2009). While innovation is central to DC, the relationship be- tween IC and DC is not explicitly stated, and they often overlap (Aas & Breunig, 2017a). An increasing number of authors agree on a strong association between IC and DC (Aas & Breunig, 2017b; Chen & Jaw, 2009; Dixon et al., 2014; Kindström et al., 2013; Lawson & Samson, 2001; Lin et al., 2016; Michailova & Zhan, 2015; Narcizo et al., 2017; O’Connor, 2008; Pavlou & El Sawy, 2011; Salunke et al., 2011; Strønen et al., 2017; Wu et al., 2016), but they con- sider this relationship in different ways. In the first perspec- tive, DCs support and explain innovation (Teece, 2014). As a collection of competences and capabilities, DCs support the creation of new products and processes as well as re- sponses to dynamic market conditions (Helfat, 1997; Zahra et al., 2006). This relationship has been established in some exploratory empirical studies (Kindström et al., 2013; Lin et al., 2016; Salunke et al., 2011; Wu et al., 2016). A second perspective views IC as a component of DC, where IC is seen as an ordinary capability (Winter, 2003), or a first-or- der capability, that is acted upon and reconfigured through DCs (Pavlou & El Sawy, 2011). In this case, IC is described as the processes of product development rather than as a comprehensive construct of IC. With the third perspective, IC is considered to be a DC. Innovation is, per se, a DC that integrates with, modifies, and extends other DCs (Breznik & Hisrich, 2014; Dixon et al., 2014; Eisenhardt & Martin, 2000; Helfat, Finkelstein, Mitchell, Peteraf, Singh, Teece, & Winter, 2007; Kay, 1995; Lawson & Samson, 2001; O’Connor, 2008; Strønen et al., 2017). In this case, IC is conceptualized as a higher order capability integrating and configuring key resources and ca- pabilities to achieve innovation (Lawson & Samson, 2001; Michailova & Zhan, 2015). Michailova and Zhan (2015) present IC as a third-order DC consisting of second-order DCs, which are, in turn, composed of basic or first-order organizational routines and processes. We will adopt this view because we are interested in finding an explanation of IC and identifying its lower order components. While we confirm the congruity between the DC framework and the IC concept, its applicability for the case of startups could be questioned since the DC approach was initially rooted in large, established firms with exist- ing resources and capabilities. Some scholars have, how- ever, bridged the gap between DC and entrepreneurship by addressing the DC of new ventures (George et al. 2004; McKelvie & Davidsson, 2009; Newbert, 2005; Zahra et al., 2006). For McKelvie and Davidsson (2009), the resource flow, or the changes in resources, is more important than the stock of resources in new ventures. According to Zahra et al. (2006), new ventures have few, simple, and rapidly changing DCs versus the many, complex, and resistant to change DCs in established firms. A new venture’s DCs are based on improvisation and trial and error, versus the plan- ification and accumulated learning of an established firm’s DCs. New ventures develop and reconfigure their DCs to overcome limitations and seek growth opportunities, whereas established firms leverage and stretch their exist- ing capabilities. Startup characteristics in relation to IC and capability development will be discussed later in this paper. IC Conceptualization and Dimensions Several scholars, drawing on numerous research per- spectives and on the field of innovation management, in particular, have identified different overlapping and com- plementary sets of IC dimensions (Christensen & Overdorf, 2000; Crossan & Apaydin, 2010; Forsman, 2011; Lawson & Samson, 2001; O’Connor, 2008; Smith et al., 2008; Tidd er al., 2006). This includes innovation processes, techno- logical capabilities, culture and leadership, managerial ca- pabilities, knowledge and learning, organizational structure, resource management, external linkages, strategies, and marketing capabilities (see Table 1). Forming an integrat- ed system supporting innovation (O’Connor, 2008), these interrelated capabilities (Smith et al., 2008) illustrate the multidimensional aspect of IC and the difficult task of sep- arating it from its supporting practices (Lawson & Samson, 2001). An emergent stream of research applies a DC perspec- tive to address IC as a capability (Forsman, 2011; Kind- ström et al., 2013; Lawson & Samson, 2001; Lin et al., 2016; Salunke et al., 2011; Wu et al., 2016). In Table 2, we identify 11 conceptual models where IC is considered to be a DC, is a result of DCs, or is an ordinary capability interacting with DCs. In all cases, DCs related to innova- tion have been identified, including (a) sensing capability, opportunity-recognizing capability, and exploration capa- bilities; (b) seizing capability, opportunity capitalization capability, and exploitation capabilities; (c) reconfiguring, integration, combinative, and coordination capabilities; (d) knowledge capability, learning capability, and absorptive capacity; (e) relational capability, and (f) entrepreneurial capability. Lower order capabilities have also been identi- fied from the listed models, forming an interrelated set of micro-components of IC. This new stream is still at an exploratory stage, and there is a pressing need to reach a consensus about prop- er conceptualization and a comprehensive set of IC drivers (Aas & Breunig, 2017a; Narcizo et al., 2017). Startup ICs and DCs have gained less attention than those in large firms 75 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 Table 1 Organizational capabilities supporting innovation Organizational Capabilities Examples of Works Resources (Christensen & Overdorf, 2000; Crossan & Apaydin, 2010; Lawson & Samson, 2001; OECD/Eurostat, 2018; Salunke et al., 2011; Smith et al., 2008) Innovation process (Christensen & Overdorf, 2000; Crossan & Apaydin, 2010; Forsman, 2011; Kline & Rosenberg, 1986; Lawson & Samson, 2001; OECD/Eurostat, 2018; Smith et al., 2008; Tidd et al., 2006) Technological capability (Kline & Rosenberg, 1986; Lawson & Samson, 2001; OECD/Eurostat, 2018) Culture & leadership (Christensen & Overdorf, 2000; Crossan & Apaydin, 2010; Forsman, 2011; Hult et al., 2004; Lawson & Samson, 2001; O’Connor, 2008; OECD/Eurostat, 2018; Smith et al., 2008) Knowledge & learning (Alegre & Chiva, 2008; Calantone et al., 2002; Chesbrough & Appleyard, 2007; Cros- san & Apaydin, 2010; D’Souza & Kemelgor, 2008; Forsman, 2011; Hult et al., 2004; Johannessen et al., 1999; Lawson & Samson, 2001; Smith et al., 2008; Tidd et al., 2006) Organization (Crossan & Apaydin, 2010; Forsman, 2011; Smith et al., 2008; Tidd et al., 2006; Yam, Guan, Pun, & Tang, 2004) External linkages (Chesbrough & Appleyard, 2007; D’Souza & Kemelgor, 2008; Evers et al. 2012; Fors- man, 2011; Lawson & Samson, 2001; OECD/Eurostat, 2005) Strategy (Adams et al., 2006; Boly et al., 2014; Crossan & Apaydin, 2010; Lawson & Samson, 2001; Smith et al., 2008; Yam et al., 2004) Marketing capability (Evers et al., 2012; Forsman, 2011; Hult et al., 2004; Kline & Rosenberg, 1986; Leal- -Rodríguez & Albort-Morant, 2016) 76 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 Table 2 Innovation capability (IC) models from a dynamic capability (DC) view Authors DCs and Their Micro-Foundations/Components Research Setting Lawson and Samson (2001) Dynamic IC: Vision & strategy, harnessing the competence base, organizational intelligence, creativity & idea management, organizational structures & systems, culture & climate, & management of technology Case study: Large high-tech firm Focus: Innovation management O’Connor (2008) Major dynamic IC: Organizational structure; interface with the mainstream organization, exploratory processes; talent development, governance, & decision-making; performance metrics; culture & leadership Conceptual: Established firms Focus: Radical/significant innovation Salunke et al. (2011) Dynamic relational learning capability, dynamic episodic learning capability, dynamic client-focused lear- ning capability, dynamic combinative capability, service entrepreneurship Case studies: Service organizations Focus: Service innovation Lin et al. (2016) Relational capability, sensing capability, absorptive capacity, integrative capability Quantitative: Chinese manufacturing firms Focus: Management innovation Wu, Chen, and Jiao (2016) Opportunity-recognizing capability: Customer’s needs detection, competitor monitoring, cooperation with suppliers, technology monitoring, knowledge transfer Opportunity-capitalizing capability: Options selection, integration, learning, reconfiguring networks, operations redesign, organizational structure Quantitative: Chinese multinationals Focus: International diversification Kindström et al. (2013) Sensing: Customer-linked sensing, system sensing, internal service sensing, technology exploration Seizing: Customer interaction & co-creation, delivery process, service development process, new revenue mechanisms Reconfiguring: Orchestration, balancing product & service innovation, service-oriented mental model Qualitative: Established manufacturing firms Focus: Service innovation in product-cen- tered firms Michailova and Zhan (2015) Dynamic knowledge capabilities: Generative capabilities, sourcing capabilities, integrative capabilities Conceptual: MNC subsidiaries Focus: Knowledge capabilities driving inno- vation Dixon, Meyer, and Day (2014) Dynamic ICs: 1) Exploration processes: search, experimentation, risk taking; 2) Implementation proces- ses: project selection, funding, project implementation Case study: Russian oil company Focus: Innovation in a transitioning economy Pavlou and El Sawy (2011) Sensing capability: Generating, disseminating, & responding to market intelligence Learning capability: Acquiring, assimilating, transforming, & exploiting knowledge Integrating capability: Contribution, representation, & interrelation of individual input Coordinating capability: Resource allocation, task assignment, & synchronization; new product development (NPD) capability (as ordinary capability); technical capability, marketing capa- bility, managerial capability Quantitative: NPD business units Focus: NPD Forsman (2011) IC: Entrepreneurial capabilities, networking, utilization of knowledge, risk management, change manage- ment, business development, customer & market knowledge Quantitative: Finnish small manufacturing & services firms Focus: Service vs. manufacturing comparison McKelvie, Wiklund, and Short (2007) Absorptive capacity: Market/technological knowledge acquisition, assimilation, transformation, exploita- tion Quantitative: Swedish new tech ventures Focus: Absorptive capacity and innovation 77 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 and, in some respects, even those in small established firms. We argue that the construction of a comprehensive startup IC construct should consider the intersection of traditional innovation management (with the identified organizational capabilities), the DC view (with the higher order generic ca- pabilities), and entrepreneurship theory to properly address the context of startup firms, with their challenges and entre- preneurial characteristics. IC and Startup Characteristics Since capability-based research focuses primarily on large established firms with an existing base of resources, organizational capabilities, and innovation processes (Zahra et al., 2006), we argue that the study of startup IC should draw from the entrepreneurship literature to identify startup characteristics in relation to IC. Startups and the Liabilities of Smallness and Newness We define startups as new innovation-driven entrepre- neurial ventures seeking a scalable business model (Blank, 2013), that have been in business for less than 10 years, were created by individuals as a “stand-alone firm” (OECD/ Eurostat, 2018), and are not a subsidiary of an established company (Hvide & Meling, 2019). At the birth of a new business, startups can be compared to small businesses due to similarities in terms of size and scarce resources: a sim- plistic organization with limited capital, few employees, and few, if any, alliances (Freeman & Engel, 2007). The relationship between firm size and innovativeness is con- troversial. Most empirical results see size as an advantage for large firms with access to more resources for R&D and marketing and more room for risk taking. However, other study results find a negative relationship explained by more efficiency with innovation development in smaller firms (Becheikh et al., 2006; Camisón-Zornoza et al., 2004). Yet other studies reveal no remarkable effect of size on a firm’s IC (Becheikh et al., 2006; Saunila & Ukko, 2014). Reflect- ing a complex size–innovation relationship, these diverg- ing results are explained by contextual factors, such as the country, the industry, or the innovation network (Becheikh et al., 2006), as well as by innovation operationalization as a quantitative outcome. But there is a lack of research on the relationship between size and the intangible IC concept (Saunila & Ukko, 2014). What we can conclude, however, is that there is a lack of resources and a need for effective management for startups, as small sized enterprises. This is referred to as the “liability of smallness” (Freeman & Engel, 2007). Similarly, startups all suffer from a risk of failure or mortality in the first years due to low efficiency, lack of experience, nonexistent reputation, absence of innovation processes, need for cooperation and social relations with external actors, and dependence on the external macro envi- ronment (Abatecola, er al., 2012; Burns, 2016; Freeman & Engel, 2007; Liao, Welsch, & Moutray, 2008; Stinchcombe, 1965). Yet the chances of a startup’s survival is influenced by their IC (Alvarez & Busenitz, 2001; Pellegrino et al., 2012; Velu, 2015), supported by learning from external sources, networking, and raising funding as a means of overcoming their liabilities (Becheikh et al., 2006; Burns, 2016; Irwin et al., 2019; Liao et al., 2008). Startups as Innovative and Entrepreneurial Firms New ventures and small businesses share several char- acteristics and constraints, but what differentiates startups is their entrepreneurial nature and their capacity to create, discover, and exploit opportunities to create new products, services, or business models (Alvarez & Barney, 2013; Burns, 2016; Foss & Klein, 2017; Shane & Venkataraman, 2000; Zahra et al., 2006). This capability is central to the entrepreneurial firm (Zahra et al., 2006), as is the role of the entrepreneur (Alvarez & Busenitz, 2001; Burns, 2016; D’Souza & Kemelgor, 2008; Venkataraman, 1997). For Shane & Venkataraman (2000) and Venkataraman (1997), entrepreneurship involves the “nexus” of entrepreneurs and opportunities. The cognitive and behavioral capabilities of the entrepreneur determine their ability to discover and exploit opportunities (Alvarez & Busenitz, 2001; Shane & Venkataraman, 2000). This includes innovativeness, risk taking, proactiveness (Naman & Slevin, 1993; Weerawar- dena, 2003), leadership, knowledge acquisition (Chang et al., 2015), education, experience (Baptista et al., 2007), in- tuition, and vision (Carland, 2015). An entrepreneur’s role is also recognized in the creation and use of DCs through the perception of opportunities, willingness to embrace change, and ability to implement it (Zahra et al., 2006). Aside from these entrepreneurial capabilities, sensing, seizing, and transforming DCs are also supported by a founder’s/manag- er’s dynamic managerial capabilities (DMCs): perception, attention, problem solving, reasoning, communication, and social cognition (Helfat & Peteraf, 2014). Another characteristic of entrepreneurial startups, as opposed to rent-seeking small conservative businesses, is their strong ambitions for growth and innovation by contin- uously spotting and exploiting opportunities (Burns, 2016; Carland, 2015; Carland et al., 2007; Murphy et al., 2019; Sonfield & Moore, 1990). Startups go through several stages from inception to maturity, with different challenges for entrepreneurs at each 78 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 stage (Burns, 2016; Churchill & Lewis, 1983; Greiner, 1972; Scott & Bruce, 1987). This evolution in a firm’s size and structure goes together with an evolution of the firm’s IC (Christensen & Overdorf, 2000) and DC development (Zahra et al., 2006). The capabilities required at the early stages of startup are different from those needed for running the business over the long term (Freeman & Engel, 2007). Startup Capability Development While exploiting and reconfiguring existing capabili- ties is key to a DC view, the absence of formal capabilities can be a source of entrepreneurial advantage, according to entrepreneurship research (Autio et al., 2011). For Drucker (1985), entrepreneurship is about developing new capacity from limited resources, starting from what is available in a kind of “bricolage” to overcome a scarcity of resources (Baker & Nelson, 2005). This is in line with Sarasvathy’s definition of effectuation, where the entrepreneurial process starts from given resources by opposition to managerial causation, which starts with an end state and select means to achieve it in a predictable manner (Berends et al., 2014; Chandler et al., 2011; Sarasvathy, 2001). In the early stag- es, a startup’s IC and DC development follows an effectu- ation logic, leveraging the entrepreneur’s own resources and individual capabilities in a creative way to identify op- portunities, while collaborating with stakeholders for com- plementary external resources, to create and develop new capabilities (Alvarez & Busenitz, 2001; Autio et al., 2011; Baptista et al., 2007; Berends et al., 2014; Christensen & Overdorf, 2000; Evers et al., 2012; Freeman & Engel, 2007; McKelvie & Davidsson, 2009; Saiz-Álvarez et al., 2013; Zahra et al., 2006). As they grow, new ventures, may turn to causation logic, with more planning, formalism (Berends et al., 2014; Read & Sarasvathy, 2005), structure, standardized activi- ties, internal processes, planification, decision-making, coordination, and reconfigured capabilities (Christensen & Overdorf, 2000; Evers et al., 2012; Freeman & Engel, 2007), thus transforming an entrepreneur’s individual re- sources into an organizational resource base and DCs (Al- varez & Busenitz, 2001; Brush et al., 2002). At the maturity stage, the startup transforms into an established business with capabilities becoming rooted in the enterprise values and culture, which can constitute rigidities and barriers to innovation (Christensen & Overdorf, 2000; Freeman & En- gel, 2007) if the entrepreneurial orientation is not nurtured (Burns, 2016; Wiklund & Shepherd, 2003). Startups and External Dependence To survive and to innovate, startups depend on access to external and complementary assets (Berends et al., 2014; Paradkar et al., 2015; Rajapathirana & Hui, 2018). They need financing to grow (Burns, 2016; Freeman & Engel, 2007), they must gain support and legitimacy from stake- holders (Cornelissen & Clarke, 2010; Zahra et al., 2006), and they have to absorb technical knowledge from external sources since they have no formal R&D activities (McK- elvie et al., 2007; Pellegrino et al., 2012). Startups oper- ate with cost-consciousness and risk-sharing with similar organizations and rely on research and financial institutions (Antolin-Lopez et al., 2015). To tackle all of these issues, it is a priority for startups to develop relationship capabilities, build their networks (Paradkar et al., 2015; Spender et al., 2017; Teece, 2010; van de Vrande et al., 2009), and adopt open innovation (OI) as a means of overcoming the liabili- ties of smallness and newness (Spender et al., 2017). As op- posed to the traditional resource-based view (RBV), for the OI school, enterprises are not required to rely solely on their own resources to innovate; rather, they need to seek oppor- tunities outside of their boundaries (Baranès et al., 2009; Chesbrough, 2003; Chesbrough & Appleyard, 2007). Ini- tially targeted at large firms, the OI concept (Chesbrough, 2003) is also appropriate for startups to acquire knowledge from external networks (Spender et al., 2017; van de Vrande et al., 2009) and to form alliances, broadening their pos- sibilities by leveraging external capabilities using an ef- fectuation logic (Frederiksen & Brem, 2017; Sarasvathy, 2001) and tapping potential synergies with large companies (Burns, 2016). Based on the capabilities of exploration of the environment, opportunity identification, and opportuni- ty exploitation (Baranès et al., 2009), OI is strongly adapted for entrepreneurship. Using DC terminology, we can state that OI consists of “sensing” and “seizing” opportunities and transforming a startup’s capabilities by integrating in- ternal and external capabilities. Method: Building the Conceptual Framework We used a semi-structured literature review on IC, combining: (a) a non-structured literature review, (b) a sys- tematic review, and (c) an iterative search (Figure 1). In the non-structured literature review, we conducted searches in the areas of innovation management and DC using vari- ous sources such as Science Direct and Google Scholar, as well as innovation and entrepreneurship journals, applying backward and forward snowballing techniques (Jalali & Wohlin, 2012; Webster & Watson, 2004). The second step was a systematic search (Tranfield et al., 2003) in the Sci- ence Direct database, including journal articles in business, management, and accounting, ranging from 2001 to 2016. The search keywords were “innovation” and “capability” in title, abstract, and keywords: (innovat* OR “product de- 79 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 velopment”) AND (capabilit* OR capacit* OR abilit* OR competenc*). We used these keywords initially to capture relevant work on IC in general before digging further and progressively combining them with startup-specific key- words to zoom in on startup ICs: (start*up, SME, “small business,” “new venture,” “young firm,” entrepreneur*). This wide inclusion strategy of both startup and non-startup related publications is explained by the emerging nature of the IC construct in general (Aas & Breunig, 2017a, 2017b; Forsman, 2011; Lawson & Samson, 2001; Narcizo et al., 2017) and the scarcity of capability-based startup IC re- search. We also considered articles on small business, given the similarities with startups in terms of resource limitations and the overlapping entrepreneurship and small business re- search. As a result of the combination of structured and non-structured searches as well as the inclusion of recent updates, we analyzed a total of 125 articles from various journals, including Technovation, Journal of Strategic Man- agement, Journal of Small Business Strategy, and Journal of Entrepreneurship Management and Innovation, to name a few. Using a qualitative approach to suit the conceptual aim of this paper, the theoretical background, methods, re- search setting, and relevant findings were scrutinized. IC models and components were extracted and summarized. Idiosyncratic startup or small business capabilities were identified. The following steps were followed for building the IC framework (Figure 2): • Identifying all IC and DC components found in defi- nitions, findings, or measurement variables from each article (Step 1). • Clustering of all identified capabilities into the three DCs (sensing, seizing, and transforming) from Teece’s (2007) framework. Each component was assessed against Teece’s “micro-foundations” and mapped ac- cordingly to one of the three DCs (Step 2). For exam- ple, customer needs detection is considered a compo- nent of the sensing capability, while problem solving is part of the seizing capability. Table 3 illustrates an example of capabilities clustered into the seizing DC. • Clustering all of the capabilities identified in Step 1 into meaningful groups. Each item was examined through the dimensions outlined in Table 1 as a start- ing point for creating categories. Other dimensions emerged from the literature, such as learning capabil- ity, cited by 30% of authors in our sample. Other di- mensions that are more relevant to large or established companies were reviewed and adapted with an entre- preneurship theory lens, generating new dimensions, such as the founder’s entrepreneurial and managerial capability. After a few iterations, we obtained nine fundamental themes we call IC foundations (Step 3). Table 4 illustrates an example of capabilities clustered into relational capabilities as one of the identified IC foundations. • Mapping capabilities belonging to the intersection of each DC and each IC foundation and constructing a 9 × 3 matrix (Step 4), where IC foundations form the first dimension (lines) and DCs the second (columns). For example, customer needs detection belongs to the intersection of sensing DC and marketing capability. Individual components of the matrix cells are called micro-components in the remainder of this paper. • Several iterations were necessary to reach a synthetic view and reduce redundancies. As a result, a total of 111 micro-components were generated, constituting the lowest order of IC. • For readability, the IC foundations were grouped into three capability domains, and the matrix was subdivid- ed into three sub-matrices for each capability domain (Step 5) (cf. Findings section and Tables 5–7). Figure 1. Hybrid Literature Review Systematic literature review Snowballing Non structured literature search Figure 2. Conceptual Model Construction Capabilities identification Clustering capabilities to DCs and IC foundations Mapping IC foundations micro- components to DCs Synthesizing the IC framework 80 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 Table 3 Excerpt of capabilities clustering into a DC—example of seizing capability Capability D e s c r i p t i o n , Variations Authors Identified Components Se iz in g Opportunity capitalization Teece (2007) Barreto (2010) Eisenhardt and Martin (2000) Teece (2018) Forsman (2011) Helfat and Petraf (2014) Tidd et al. (2006) Christensen and Overdorf (2000) Cooper and Kleinschmidt (2007) Rohrbeck and Gemünden (2011) Kindström et al.(2013) Chen and Jaw (2009) Wu et al. (2016) Adams et al. (2006) Forsman (2011) Sulistyo and Siyamtinah (2016) Boly et al. (2014) Branzei and Vertinsky (2006) Leal-Rodríguez & Albort-Morant (2016) Solution & business model design Adopting new revenue mechanisms, defining boundaries and com- plements, building loyalty and commitment Decision-making protocols, timely decision-making, market-ori- ented decision-making, strategic decision-making, selecting options capability Commit resources; defend intellectual property Risk management capabilities, Business development capability Problem solving and reasoning Strategic alignment, product strategy, innovation strategy, strategic guidance, shared vision Technological concept creation through engineering and R&D Execution capability (NPD project management), implementation capability, product development process, project management, strategy Deployment capabilities: innovation, commercialization, differen- tiation Processes: patterns of interaction, coordination, communication, and decision-making) Managing innovation portfolio Service interactions: managing the service delivery process, struc- turing the service development process, aligning routes to markets Business development capability, commercialization Transfer external knowledge, integrate knowledge Empowerment: decision-making authority, information sharing, short- and long-term planning Design Market orientation 81 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 Table 4 Excerpt of capabilities clustering into an IC foundation—example of relational capability Capability Description, Variations Authors Identified Components R el at io na l C ap ab ili ty Relationships and social capital Linkages Relational learning Networking capabilities Lin et al. (2016) Christensen and Overdorf (2000) OECD/Eurostat (2005) Romijn and Albaladejo (2002) Urueña et al. (2016) Sulistyo and Siyamtinah (2016) Saunila and Ukko (2014) Paradkar et al. (2015) Rothaermel and Hess (2007) Chang et al. (2012) Lall (1992) Fan (2006) Salunke et al. (2011) Nassimbeni (2001) Kazadi et al. (2015) Eisenhardt and Martin (2000) Eisenhardt and Martin (2000) Caloghirou et al. (2004) Albort-Morant et al. (2016) Forsman (2011) Antolin-Lopez et al. (2015) Boly et al. (2014) Tidd (1997) Becheikh et al. (2006) Relationships with suppliers, distributors, and customers Linkages: with institutions, private sector, universities, other firms External interactions Stakeholder networking Relational capital: relationships with customers, institutions, suppliers, shareholders, and investors External sources for information Access to complementary resources from alliances: distribution, finance, manufacturing, R&D capabilities, software, hardware components, brand Strategic alliances, firms’ acquisitions Openness capability Linkage capabilities: use of knowledge from external sources External alliances Relational learning: from networks and external linkages Interorganizational relationships: cooperative supplier relationship, co- operative customer relationship, affiliation to consortia, external services utilization Stakeholders co-creation Stakeholders competence mapping, networking capability, rela- tional capability, knowledge management capabiliAllianc- ing Leverage external networks Strategic alliances, collaboration, openness Relationship learning capability: information sharing capabili- ty, joint sense-making capability, knowledge integration capability Networking capabilities Cost-economizing and risk-sharing logic cooperation Network management, customer relations management Position within innovation networks Relationships with other organizations, networking 82 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 This representation offers an operationalization of the IC construct as a third-order DC (Michailova & Zhan, 2015), aggregating three second-order DCs—sensing, seiz- ing, and transforming (Teece, 2007)—and nine first-order capabilities (foundations), in turn composed of micro-com- ponents as zero-order capabilities. Findings We analyzed the body of literature according to our op- erationalization of IC as a third-order capability. For the sec- ond order, we adopted the three DCs from Teece (2007), and for the first order, we built mainly on the previous research synthesized in Table 1 to cluster the identified capabilities in nine IC foundations. We also used entrepreneurship theory as an interpretive lens to identify startup-related capabilities and select or reformulate appropriate micro-components (zero order). The sensing capability included all micro-components related to scanning the environment, opportunity recog- nition, and knowledge acquisition. The seizing capability covered all micro-components supporting implementation, opportunity capitalization, project execution, and so on. The transforming capability is concerned with micro-com- ponents involved in startup growth, scalability, business de- velopment, and profound transformations to adapt to and create change. In terms of foundations, we distinguished three capability domains: core IC, defining the ability to produce and manage innovations; supporting IC, constitut- ing strong drivers and enablers; and startup entrepreneurial capabilities, which are specific to the startup context and entrepreneurial behavior. Core Innovation Capabilities Core ICs are directly involved in the creation of in- novation outputs, considering the different and interrelat- ed types of innovation: technology, product, process, and business model innovations (El Hanchi & Kerzazi, 2019). Drawing from the extensive literature on new product de- velopment and stretched to include different innovation typologies, this domain, which is synthesized in Table 5, includes the following IC foundations: • Technology IC relates to all capabilities required for sensing technology, conducting research and develop- ment, seizing technological opportunities, exploiting new technologies, and managing technologies to re- spond to change and shape new technological situa- tions. • Product and process IC includes all capabilities al- lowing the detection of product/process opportunities; generating ideas; seizing opportunities through design, conception, development, and implementation of new products and processes; and transforming product strategy to respond to and shape new market condi- tions. • Business model IC encompasses all capabilities sup- porting the identification, development, and transfor- mation of new business models. Supporting Innovation Capabilities The learning perspective stands out as a common back- ground for IC, particularly through the absorptive capacity concept supporting the knowledge acquisition, assimila- tion, and transformation required for innovation (Cohen & Levinthal, 1990; Zahra & George, 2002). Similarly, link- ages and networking are present as main capabilities in several IC models and reported as priority for startups due to external dependencies. Marketing capability and market orientation are also acknowledged as important enablers of innovation and new market creation (Leal-Rodríguez & Albort-Morant, 2016; Weerawardena, 2003). Moreover, these capabilities are often interrelated in the literature, with some overlap. For instance, learning capability includes the ability to source (market) knowledge from external sources (partners), thus involving relationship capability and con- tributing to marketing capability. The interlay of these three capabilities offers a support base for the core ICs (Table 6). Three IC foundations are covered in the supporting ICs domain: • Learning capability includes all capabilities by which new knowledge is identified, acquired, exploited, and transformed. • Relational capability refers to all capabilities involv- ing networks and linkages. It goes from sensing oppor- tunities and obtaining knowledge from the network, developing alliances, and accessing external resources to transforming and shaping the network. • Marketing capability covers all capabilities geared toward the customer and the market. It starts from sensing the market and customers’ needs to market experimentation, innovation, commercialization, and brand and social media capabilities, to reconfiguration of marketing strategies for developing barriers to com- petition and shaping market conditions. Startup Entrepreneurial Capabilities In the case of startups and their “liabilities of newness 83 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 Table 5 Core innovation capabilities Sensing Seizing Transforming Technological IC Sensing technology Detecting emerging technology R&D Exploiting technology Technical solution development Design Experimentation Acquisition of technology licenses Technology management Defend intellectual property Focus on core technologies Manage technology portfolio Product and Process IC Detecting opportunity Ideation Understanding customer needs Concept creation Solution design Product differentiation Experimentation Implementation Operation design Production capability Improvisation Imitation Outsourcing Extending product range Product and process Flexibility Business Model IC Identifying new business models Customer needs sensing Solution and business model design Adopting new revenue mechanisms Managing the service delivery process Business development Reinventing business model Table 6 Supporting innovation capabilities Sensing Seizing Transforming Marketing Capability Market sensing Competitor sensing Customer needs sensing Experimentation Customer relationship management Go to market Innovation commercialization Market-oriented decision-making Customer service Brand innovation Product differentiation Advertising effectiveness Sales and distribution management Social media capability Developing barriers to competition Internationalization and market extension Learning Capability Acquiring knowledge Assimilating knowledge Exploiting knowledge Trial and error Transforming knowledge Learning from past projects Improving the knowledge base and skills Relational Capability Acquiring knowledge from external sources Detecting opportunity from networks Identifying com- plementarities and synergies Information sharing Networking capability Co-creation Alliancing, partnerships develop- ment Getting support from the ecosystem Information sharing Accessing external resources Risk-sharing cooperation Cost-economizing cooperation Customer and supplier involvement Reconfiguring the network Network positioning Shaping the ecosystem 84 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 and smallness” (Abatecola et al., 2012; Freeman & Engel, 2007, p. 94), a startup’s ability to construct a resource base including human capital and financial capital is fundamen- tal for IC. Research on entrepreneurship focuses on the indi- vidual capabilities of the entrepreneur and the capability to transform the founder’s resources into organizational assets through effectuation (Alvarez & Busenitz, 2001; Brush et al., 2002; Burns, 2016; D’Souza & Kemelgor, 2008; McK- elvie & Davidsson, 2009; Shane & Venkataraman, 2000; Venkataraman, 1997). This capability domain builds on en- trepreneurship theory and includes startup capabilities that are necessary for building and managing innovative and en- trepreneurial startups (Table 7). This category replaces the widely recognized set of organizational capabilities of large, established firms consisting of organizational structure and resources, culture, and management team, with appropriate startup management capabilities and entrepreneurial indi- vidual capabilities. Three IC foundations are included: • Innovation funding capability involves capabilities for identifying, attracting, and managing funding opportu- nities to finance innovation and startup growth. • Resource management capability includes capabilities to identify, attract, and develop resources and to trans- form individual resources into organizational assets. • Founder entrepreneurial and managerial capabili- ty builds on entrepreneurial behavior theory and the DMC and covers a set of entrepreneurial and mana- gerial capabilities, competences, and attitudes of the startup founder. The Startup Innovation Capability (IC) Framework Finally, we present the startup IC as a bi-dimensional and multilayered framework (Figure 3). The IC construct consists of capabilities for sensing the environment for op- portunities and knowledge, seizing opportunities through innovation development and commercialization, and trans- forming founders’ individual capabilities into organization- al assets through effectuation. These DCs are supported by a system of interdependent foundations: (a) Core ICs, in- cluding technological IC, product IC, and business model IC; (b) Supporting ICs, recognizing the role of marketing capability, learning capability, and relational capability; and Table 7 Startup entrepreneurial capabilities Sensing Seizing Transforming Founder’s Entrepreneurial and Managerial Capability Entrepreneurial orien- tation Risk taking Creativity Attention and percep- tion Proactiveness Decision-making Strategy Leadership Collaboration Problem solving and reasoning Communication Social cognition Management experience Industry experience Agility Entrepreneurial capability Vision Values Flexibility Innovation Funding Ca- pability Detecting opportunities Attracting investors Startup funding Investment decisions Equity decision-making Investor alignment Growth funding Resources Management Capability Attracting resources Identifying needed resources Constructing a resource base Managing resources and com- petences Human capital development Integration of internal and external resources and compe- tences Stakeholders’ competence mapping Engaging resources Transforming individual resour- ces into organizational resources Transformation of competences New competence acquisition Evolution of resources 85 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 (c) Startup entrepreneurial capabilities, covering the found- er’s entrepreneurial and managerial capabilities, innovation funding capability, and resources management capabili- ty. Figure 3 shows a macro representation of the proposed capability-based IC, and Table 6 and Table 7 represent de- tailed views of the framework, mapping the IC foundations to the DCs. Discussion and Implications Theoretical Contributions From a conceptual perspective, this paper has three contributions. First, it offers a theoretical background for studying IC from a capability-based view, recognizing inno- vation as a DC of the entrepreneurial firm and a higher-level construct aggregating and integrating different foundations and components (Lawson & Samson, 2001; Michailova & Zhan, 2015). This capability-based view conceptualizes IC as the internal innovation engine (Christensen et al., 2002) that transforms opportunities into innovation outcomes. We developed a comprehensive yet synthetic IC framework combining literature in the fields of DC, innovation man- agement, and entrepreneurship and adding to the emerging capability-based stream of research on innovation (Fors- man, 2011; Kindström et al., 2013; Lawson & Samson, 2001; Lin et al., 2016; Salunke et al., 2011; Wu et al., 2016). Second, the paper adds to the entrepreneurship theory by focusing on startups as innovative and entrepreneurial firms. Startups generally start small with a strong growth mindset (Burns, 2016; Carland, 2015; Carland et al., 2007; Freeman & Engel, 2007; Murphy et al., 2019; Sonfield & Moore, 1990). While innovation management and DC re- search consider large corporations and involve organiza- tional factors such as culture (Adams et al., 2006; Cooper & Kleinschmidt, 2007; Lawson & Samson, 2001), manage- ment team (Becheikh et al., 2006; Cooper & Kleinschmidt, 2007), and resource allocation (Yam et al., 2004), research on entrepreneurial firms focuses on the founder’s individual capabilities and human capital (Alvarez & Busenitz, 2001; Baptista et al., 2007; Burns, 2016; D’Souza & Kemelgor, 2008; McKelvie & Davidsson, 2009; Romijn & Albaladejo, 2002; Shane & Venkataraman, 2000; Venkataraman, 1997), as well as on opportunity discovery, creation, and exploita- tion (Baranès et al., 2009; Zahra et al., 2006) and on the entrepreneurial process, allowing the firm to do more with less through effectuation (Baker & Nelson, 2005; Chandler et al., 2011; Sarasvathy, 2001). Our contribution to entre- preneurship theory is to combine ICs from both the enter- prise level as a unit of analysis and the entrepreneur level, using entrepreneurship theory. At the early stages, IC will be mainly related to the founder’s individual capabilities. Figure 3. A Proposed Framework for Startup Innovation Capability (IC) from a Dynamic Capability (DC) Perspective     Startup Entreprenrurial  Capabilities Sensing Seizing Transforming Technological IC Product and Process IC Business Model IC Innovation Capability Marketing Capabilty Learning Capability Relational Capability Supporting Capabilities Founder Entrepreneurial and Managerial Capability Innovation Funding Capability Resources Management Capability 86 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 The growth will be dependent on the ability to transform the founder’s resources and capabilities into startup DCs (Brush et al., 2002; McKelvie & Davidsson, 2009) by following an effectuation logic. In our framework, the founder’s entre- preneurial and managerial capability, innovation funding capability, and startup resource management capability are considered building blocks for developing a firm-level ca- pability, thus bridging the gap between DCs and entrepre- neurship. Third, the IC framework builds on, and adds to, the Oslo Manual guidelines for innovation surveys (OECD/ Eurostat, 2005, 2018). By considering startup-specific ca- pabilities such as the founder’s entrepreneurial and mana- gerial capability and innovation funding capability, surveys on startup innovations would be more comprehensive and tailored to this category of firm. In addition to these concep- tual contributions, this work has practical implications as discussed in the following. Practical Implications The IC framework offers a practical and simplified multidimensional tool for entrepreneurs to assess their start- ups’ ICs and identify their strengths and weaknesses. It will also help them identify complementarities and the external support required to address the liabilities of smallness and newness. The framework also highlights the capabilities re- quired to transform a startup for growth. In fact, by applying the three DCs, the focus is not only on how to detect (sense) and grasp opportunities (seize) for innovation but also on how to reconfigure (transform) on a continual basis to grow and maintain the IC of the startup at different stages of its development. For ecosystem stakeholders, the IC framework pro- vides a common ground to identify and close the gap be- tween the current state and a desired startup IC in a given country or region. The IC framework can also be used as a basis to develop evaluation criteria considering the various and interrelated ICs for the selection of eligible startups for a given program or funding opportunity. Future Research This paper offers a conceptual contribution to the re- search on IC. It is based on a combination of a structured and a non-structured literature review. While this method reduces researcher bias, it presents some inherent limita- tions. Mainly, it does not guarantee an exhaustive collection of works will be included in the review. Although we select- ed the Science Direct database for its richness and its large span of subjects, and we also completed the search using Google Scholar and snowballing searches, we might have omitted a significant number of works. We are confident, however, about the comprehensiveness of the concepts because we have reached theoretical saturation (Glaser & Strauss, 1967) due to redundancy of the concepts encoun- tered during the analysis. This review can be completed by including other databases and more entrepreneurship and new venture sources. This work offers multiple venues for research. The framework offers a 9 × 3 matrix of ICs and their individual micro-components. Each element of the matrix offers a ven- ue for specific research questions to study a well-framed as- pect of IC and advance the knowledge about this construct. The IC framework can be used to conduct exploratory stud- ies within startups to understand their ICs at different stages of their life cycle. It can also support qualitative research and detailed case studies. Additionally, we have identified many relationships between the nine IC foundations during our analysis of the literature, but we did not include them in the present paper for reasons of length. The framework can be further devel- oped by including these relationships to develop a detailed conceptual model and build hypotheses for conducting quantitative research on specific ICs and how they interact to shape a startup’s overall IC. Note References include only authors cited in this paper. Other articles not directly cited in the present document were included in the hybrid literature review selection (as shown in the excerpt in Table 3 and Table 4). References Aas, T. H., & Breunig, K. J. (2017a). Conceptualizing inno- vation capabilities: A contingency perspective. Jour- nal of Entrepreneurship, Management and Innova- tion, 13(1), 7-24. https://doi.org/10.7341 Aas, T. H., & Breunig, K. J. (2017b). Innovation capabil- ities: Affirming an oxymoron? Journal of Entrepre- neurship, Management and Innovation, 13(1), 1-166. Abatecola, G., Cafferata, R., & Poggesi, S. (2012). Ar- thur Stinchcombe’s “liability of newness”: Con- tribution and impact of the construct. Journal of Management History, 18(4), 402–418. https://doi. org/10.1108/17511341211258747 Adams, R., Bessant, J., & Phelps, R. (2006). Innovation management measurement: A review. International Journal of Management Reviews, 8(1), 21–47. https:// doi.org/10.1111/j.1468-2370.2006.00119.x Albort-Morant, G., Leal-Millán, A., & Cepeda-Carrión, G. 87 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 (2016). The antecedents of green innovation perfor- mance: A model of learning and capabilities. Journal of Business Research, 69(11), 4912–4917. https://doi. org/10.1016/j.jbusres.2016.04.052 Alegre, J., & Chiva, R. (2008). Assessing the impact of organizational learning capability on product inno- vation performance: An empirical test. Technovation, 28(6), 315–326. https://doi.org/10.1016/j.technova- tion.2007.09.003 Alvarez, S. A., & Barney, J. B. (2013). Epistemology, op- portunities, and entrepreneurship: Comments on Ven- kataraman et al. (2012) and Shane (2012). Academy of Management Review, 38(1), 154-157. https://doi. org/10.5465/amr.2012.0069 Alvarez, S., & Busenitz, L. W. (2001). The entre- preneurship of resource-based theory. Jour- nal of Management, 27(6), 755–775. https://doi. org/10.1177/014920630102700609 Antolin-Lopez, R., Martinez-del-Rio, J., Cespedes-Lorente, J. J., & Perez-Valls, M. (2015). The choice of suitable cooperation partners for product innovation: Differ- ences between new ventures and established compa- nies. European Management Journal, 33(6), 472–484. https://doi.org/10.1016/j.emj.2015.09.002 Autio, E., George, G., & Alexy, O. (2011). International en- trepreneurship and capability development: Qualita- tive evidence and future research directions. Entrepre- neurship Theory and Practice, 35(1), 11–37. https:// doi.org/10.1111/j.1540-6520.2010.00421.x Baker, T., & Nelson, R. E. (2005). Creating something from nothing: Resource construction through entrepreneur- ial bricolage. Administrative Science Quarterly, 50(3), 329–366. https://doi.org/10.2189/asqu.2005.50.3.329 Baptista, R., Karaöz, M., & Mendonça, J. (2007). Entre- preneurial backgrounds, human capital and start-up success. Jena Economic Research Papers, 2007(045), 1-39. Baranès, E., Lescop, D., Madden, G., & Yan, X. (2009). Open Innovation. Communications & Strategies: DigiWorld Economic Journal, 74(2nd quarter), 9–14. Barreto, I. (2010). Dynamic capabilities: A review of past research and an agenda for the future. Jour- nal of Management, 36(1), 256–280. https://doi. org/10.1177/0149206309350776 Becheikh, N., Landry, R., & Amara, N. (2006). Lessons from innovation empirical studies in the manufactur- ing sector: A systematic review of the literature from 1993–2003. Technovation, 26(5-6), 644–664. Berends, H., Jelinek, M., Reymen, I., & Stultiëns, R. (2014). Product innovation processes in small firms: Combining entrepreneurial effectuation and manage- rial causation. Journal of Product Innovation Man- agement, 31(3) 616-635. Björkdahl, J., & Börjesson, S. (2012). Assessing firm ca- pabilities for innovation. International Journal of Knowledge Management Studies, 5(1-2), 171–184. https://doi.org/10.1504/IJKMS.2012.051970 Blank, S. (2013). Why the lean start-up changes everything. Harvard Business Review, 91(5), 63-72. Boly, V., Morel, L., Assielou, N. G., & Camargo, M. (2014). Evaluating innovative processes in French firms: Methodological proposition for firm innovation ca- pacity evaluation. Research Policy, 43(3), 608–622. https://doi.org/10.1016/j.respol.2013.09.005 Branzei, O., & Vertinsky, I. (2006). Strategic pathways to product innovation capabilities in SMEs. Jour- nal of Business Venturing 21(1), 75-105. https://doi. org/10.1016/j.jbusvent.2004.10.002 Breznik, L., & Hisrich, R. D. (2014). Dynamic capabil- ities vs. innovation capability: Are they related? Journal of Small Business and Enterprise Devel- opment, 21(3), 368–384. https://doi.org/10.1108/ JSBED-02-2014-0018 Brown, S. L., & Eisenhardt, K. M. (1995). Product develop- ment: Past research, present findings, and future direc- tions. Academy of Management Review, 20(2), 343– 378. https://doi.org/10.5465/amr.1995.9507312922 Brush, C. G., Greene, P. G., & Hart, M. M. (2002). From initial idea to unique advantage: The entrepreneurial challenge of constructing a resource base. Academy of Management Perspectives, 15(1), 64-78. https://doi. org/10.1109/EMR.2002.1022409 Burns, P. (2016). Entrepreneurship and small business (4th ed.) London, UK: Palgrave Macmillan Limited. Calantone, R. J., Cavusgil, S. T., & Zhao, Y. (2002). Learn- ing orientation, firm innovation capability, and firm performance. Industrial Marketing Management, 31(6), 515–524. https://doi.org/10.1016/S0019- 8501(01)00203-6 Caloghirou, Y., Kastelli, I., & Tsakanikas, A. (2004). Inter- nal capabilities and external knowledge sources: Com- plements or substitutes for innovative performance? Technovation, 24(1), 29–39. https://doi.org/10.1016/ S0166-4972(02)00051-2 Camisón, C., & Monfort-Mir, V. M. (2012). Measuring in- novation in tourism from the Schumpeterian and the dynamic-capabilities perspectives. Tourism Manage- ment, 33(4), 776–789. https://doi.org/10.1016/j.tour- man.2011.08.012 Camisón-Zornoza, C., Lapiedra-Alcamí, R., Segarra-Cip- rés, M., & Boronat-Navarro, M. (2004). A me- ta-analysis of innovation and organizational size. 88 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 Organization Studies, 25(3), 331-361. https://doi. org/10.1177/0170840604040039 Carland, J. (2015). Seeing what’s not there: The enigma of entrepreneurship. Journal of Small Business Strategy, 7(1) 1–20. Carland, J. W., Hoy, F., Boulton, W. R., & Carland, J. A. C. (2007). Differentiating entrepreneurs from small business owners: A conceptualization. In A. Cuer- vo, D. Ribeiro, & S. Roig (Eds.), Entrepreneurship: Concepts, theory and perspective (pp. 73–81). Berlin, Heidelberg: Springer. https://doi.org/10.1007/978-3- 540-48543-8_3 Chandler, G. N., Detienne, D. R., McKelvie, A., & Mum- ford, T. V. (2011). Causation and effectuation pro- cesses: A validation study. Journal of Business Ven- turing, 26(3), 375–390. https://doi.org/10.1016/j. jbusvent.2009.10.006 Chang, J., Bai, X., & Li, J. J. (2015). The influence of lead- ership on product and process innovations in China: The contingent role of knowledge acquisition capa- bility. Industrial Marketing Management, 50, 18–29. https://doi.org/10.1016/j.indmarman.2015.04.014 Chang, Y. C., Chang, H. T., Chi, H. R., Chen, M. H., & Deng, L. L. (2012). How do established firms improve radical innovation performance? The organizational capabilities view. Technovation, 32(7–8), 441–451. https://doi.org/http://dx.doi.org/10.1016/j.technova- tion.2012.03.001 Chen, C. L., & Jaw, Y. L. (2009). Building global dynamic capabilities through innovation: A case study of Tai- wan’s cultural organizations. Journal of Engineer- ing and Technology Management, 26(4), 247–263. https://doi.org/http://dx.doi.org/10.1016/j.jengtec- man.2009.10.002 Cheng, C. C. J., Yang, C., & Sheu, C. (2016). Effects of open innovation and knowledge-based dynamic capabilities on radical innovation: An empirical study. Journal of Engineering and Technology Management, 41, 79–91. https://doi.org/10.1016/j.jengtecman.2016.07.002 Chesbrough, H. W. (2003). Open innovation the new imper- ative for creating and profiting from technology. Bos- ton, Massachusetts: Harvard Business School Press. Chesbrough, H. W., & Appleyard, M. M. (2007). Open inno- vation and strategy. California Management Review, 50(1), 57–77. https://doi.org/10.1002/smll.201000755 Chiesa, V., Coughlan, P., & Voss, C. A. (1996). Develop- ment of a technical innovation audit. Journal of Prod- uct Innovation Management, 13(2), 105–136. https:// doi.org/10.1111/1540-5885.1320105 Christensen, C. M., Johnson, M. W., & Rigby, D. K. (2002). Foundations for growth: How to identify and build disruptive new businesses. MIT Sloan Management Review, 43(3), 22. Christensen, C. M., & Overdorf, M. (2000). Meeting the challenge of disruptive change. Harvard Business Re- view, 78(2), 66–77. Churchill, N. C., & Lewis, V. (1983). The five stages of small business growth. Harvard Business Review, 61(3), 30-50. Cohen, W. M., & Levinthal, D. A. (1990). Absorptive ca- pacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1), 128-152. Cooper, R. G., & Kleinschmidt, E. J. (2007). Winning busi- nesses in product development: The critical success factors. Research-Technology Management, 50(3), 52–66. Cornelissen, J., & Clarke, J. (2010). Imagining and ratio- nalizing opportunities: Inductive reasoning and the creation and justification of new ventures. Academy of Management Review, 35(4), 539–557. https://doi. org/10.5465/AMR.2010.53502700 Crossan, M. M., & Apaydin, M. (2010). A multi-dimension- al framework of organizational innovation: A system- atic review of the literature. Journal of Management Studies, 47(6), 1154–1191. https://doi.org/10.1111/ j.1467-6486.2009.00880.x D’Souza, R., & Kemelgor, B. (2008). Does expertise mat- ter in an ever-changing and uncertain environment? A study of the entrepreneurial process of serial and nov- ice entrepreneurs. Journal of Small Business Strategy, 19(2), 51–68. Dixon, S., Meyer, K., & Day, M. (2014). Building dynam- ic capabilities of adaptation and innovation: A study of micro-foundations in a transition economy. Long Range Planning, 47(4), 186–205. https://doi.org/ http://dx.doi.org/10.1016/j.lrp.2013.08.011 Drucker, P. (1985). Innovation and entrepreneurship: Prin- ciples and practices. New York: Harper. Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capa- bilities: What are they? Strategic Management Jour- nal, 21(10/11), 1105–1121. El Hanchi, S., & Kerzazi, L. (2019). A multidimensional framework for innovation typology : The case of Mo- roccan entrepreneurs. Academy of Entrepreneurship Journal, 25(1), 1–11. Evers, N., Andersson, S., & Hannibal, M. (2012). Stake- holders and marketing capabilities in international new ventures: Evidence from Ireland, Sweden, and Denmark. Journal of International Marketing, 20(4), 46–71. Fan, P. (2006). Catching up through developing innovation capability: Evidence from China’s telecom-equip- 89 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 ment industry. Technovation, 26(3), 359–368. https://doi.org/http://dx.doi.org/10.1016/j.technova- tion.2004.10.004 Fernez-Walch, S., & Romon, F. (2006). Management de l’Innovation : De la stratégie aux projets (2nd ed.). Paris, France: Vuibert. Forsman, H. (2011). Innovation capacity and innovation development in small enterprises. A comparison be- tween the manufacturing and service sectors. Research Policy, 40(5), 739–750. https://doi.org/10.1016/j.re- spol.2011.02.003 Foss, N. J., & Klein, P. G. (2017). Entrepreneurial discovery or creation? In search of the middle ground. Academy of Management Review, 42(4), 733–736. https://doi. org/10.5465/amr.2016.0046 Frederiksen, D. L., & Brem, A. (2017). How do entrepre- neurs think they create value? A scientific reflection of Eric Ries’ lean startup approach. International En- trepreneurship and Management Journal, 13(1), 169– 189. https://doi.org/10.1007/s11365-016-0411-x Freeman, J., & Engel, J. S. (2007). California management models of innovation: Startups and mature corpora- tions. California Management Review, 50(1), 94-119. George, G., Zahra, S. A., Autio, E., & Sapienza, H. J. (2004). By leaps and rebounds: Learning and the development of international market entry capabilities in start-ups. Academy of Management Proceedings, 2004(1), B1– B6. https://doi.org/10.5465/ambpp.2004.13862820 Glaser, B. G., & Strauss, A. L. (1967). The discovery of grounded theory: Strategies for qualitative research. New Brunswick, US: Aldine. Greiner, L. E. (1972). Evolution and revolution as organi- zations grow. Harvard Business Review, 50(4), 37-46. Helfat, C. E. (1997). Know-how and asset complementari- ty and dynamic capability accumulation: The case of R&D. Strategic Management Journal, 18(5), 339– 360. https://doi.org/Article Helfat, C. E. (2011). Dynamic capabilities and strategic management: Organizing for innovation and growth. R&D Management, 2(41), 217–218. https://doi. org/10.1111/j.1467-9310.2011.00638.x Helfat, C. E., Finkelstein, S., Mitchell, W., Peteraf, M., Singh, H., Teece, D., & Winter,S. G. (2007). Dynamic capabilities: Understanding strategic change in orga- nizations. Malden, MA: Blackwell Publishing. Helfat, C. E., & Peteraf, M. A. (2009). Understanding dy- namic capabilities: Progress along a developmental path. Strategic Organization, 7(1), 91–102. https:// doi.org/10.1177/1476127008100133 Helfat, C. E., & Peteraf, M. A. (2014). Managerial cogni- tive capabilities and the microfoundations of dynamic capabilities. Strategic Management Journal, 36(6), 831-850. Hult, G. T. M., Hurley, R. F., & Knight, G. A. (2004). In- novativeness: Its antecedents and impact on business performance. Industrial Marketing Management, 33(5), 429-438. https://doi.org/10.1016/j.indmar- man.2003.08.015 Hvide, H. K., & Meling, T. G. (2019). Do temporary de- mand shocks have long-term effects for startups? Re- trieved from http://dx.doi.org/1-.2139/ssrn.3437270 Irwin, K. C., Gilstrap, C. M., Drnevich, P. L., & Tudor, C. M. (2019). From start-up to acquisition : Implications of financial investment trends for small- to medi- um-sized high-tech enterprises. Journal of Small Busi- ness Strategy, 29(2), 22–43. Jalali, S., & Wohlin, C. (2012). Systematic literature stud- ies: Database searches vs. backward snowballing. In Esem 12 Conference Committee 2012, Esem 12 Pro- ceedings of the ACM - IEEE International Symposium on Empirical Software Engineering and Measurement (pp. 29-38). New York, NY: ACM Press. Johannessen, J., Olsen, B., & Olaisen, J. (1999). Aspects of innovation theory based on knowledge-manage- ment. International Journal of Information Manage- ment, 19(2), 121–139. https://doi.org/10.1016/S0268- 4012(99)00004-3 Kay, J. (1995). Foundations of corporate success. Oxford: Oxford University Press. https://doi. org/10.1093/019828988X.001.0001 Kazadi, K., Lievens, A., & Mahr, D. (2015). Stakeholder co-creation during the innovation process: Identify- ing capabilities for knowledge creation among mul- tiple stakeholders. Journal of Business Research, 69(2), 525–540. https://doi.org/10.1016/j.jbus- res.2015.05.009 Kindström, D., Kowalkowski, C., & Sandberg, E. (2013). Enabling service innovation: A dynamic capabilities approach. Journal of Business Research, 66(8), 1063– 1073. https://doi.org/http://dx.doi.org/10.1016/j.jbus- res.2012.03.003 Kline, S. J., & Rosenberg, N. (1986). An overview of in- novation. In R. Landau & N. Rosenberg (Eds.) The positive sum strategy: Harnessing technolo- gy for economic growth (pp. 275–305). https://doi. org/10.1142/9789814273596_0009 Lall, S. (1992). Technological capabilities and industrializa- tion. World Development, 20(2), 165–186. https://doi. org/10.1016/0305-750X(92)90097-F Lawson, B., & Samson, D. (2001). Developing innova- 90 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 tion capability in organisations : A dynamic capabil- ities approach. International Journal of Innovation Management, 5(3), 377–400. https://doi.org/10.1142/ S1363919601000427 Lazonick, W. (2000). The theory of innovative enterprise: Organization of innovation in the “learning economy.” Druid’s Summer Conference on the Learning Econo- my - Firms, Regions and Nation Specific Institutions, June 15-17, 2000, Rebild, Denmark. Leal-Rodríguez, A. L., & Albort-Morant, G. (2016). Link- ing market orientation, innovation and performance: An empirical study on small industrial enterprises in Spain. Journal of Small Business Strategy, 26(1), 37–50. Liao, J., Welsch, H., & Moutray, C. (2008). Start-up re- sources and entrepreneurial discontinuance: The case of nascent entrepreneurs. Journal of Small Business Strategy, 19(2), 1–16. Lin, H. F., Su, J. Q., & Higgins, A. (2016). How dynam- ic capabilities affect adoption of management in- novations. Journal of Business Research, 69(2), 862–876. https://doi.org/http://dx.doi.org/10.1016/j. jbusres.2015.07.004 McKelvie, A., & Davidsson, P. (2009). From resource base to dynamic capabilities: An investigation of new firms. British Journal of Management, 20, S63–S80. https:// doi.org/10.1111/j.1467-8551.2008.00613.x McKelvie, A., Wiklund, J., & Short, J. C. (2007). The new venture innovation process: Examining the role of absorptive capacity. In G. T. Lumpkin & J. A. Katz (Eds.), Entrepreneurial strategic processes (pp. 159– 185). United Kingdom: Emerald Group Publishing Limited. Michailova, S., & Zhan, W. (2015). Dynamic capabilities and innovation in MNC subsidiaries. Journal of World Business, 50(3), 576–583. https://doi.org/10.1016/j. jwb.2014.10.001 Murphy, G., Tocher, N., & Burch, T. (2019). Small business owner persistence: Do personal characteristics matter? Journal of Small Business Strategy, 29(1), 92–107. Naman, J. L., & Slevin, D. P. (1993). Entrepreneurship and the concept of fit: A model and empirical tests. Strate- gic Management Journal 14(2), 137-153. Narcizo, R. B., Canen, A. G., Tammela, I., Aas, T. H., & Breunig, K. J. (2017). A conceptual framework to rep- resent the theoretical domain of innovation capability. Journal of Entrepreneurship, Management and Inno- vation, 13(1), 147-166. Nassimbeni, G. (2001). Technology, innovation capacity, and the export attitude of small manufacturing firms: A logit/tobit model. Research Policy, 30(2), 245–262. https://doi.org/10.1016/S0048-7333(99)00114-6 Newbert, S. L. (2005). New firm formation: A dynamic ca- pability perspective. Journal of Small Business Man- agement, 43(1), 55–77. https://doi.org/10.1111/j.1540- 627X.2004.00125.x Noordin, M. A., & Mohtar, S. (2013). Innovation capabil- ity: A critical review of its role in determining firm performance. Research Journal of Social Science & Management, 3(4), 220–226. O’Connor, G. C. (2008). Major innovation as a dynamic capability: A systems approach. Journal of Product Innovation Management, 25(4), 313–330. https://doi. org/10.1111/j.1540-5885.2008.00304.x OECD/Eurostat. (2005). Oslo manual: Guidelines for collecting and interpreting innovation data (3rd Edition). Paris: OECD Publishing. https://doi. org/10.1787/9789264013100-en OECD/Eurostat. (2018). The measurement of scientific, technological and innovation activities Oslo manual 2018: Guidelines for collecting, reporting and using data on innovation (4th Edition). Paris: OECD Pub- lishing. https://doi.org/10.1787/9789264304604-en Paradkar, A., Knight, J., & Hansen, P. (2015). Innovation in start-ups: Ideas filling the void or ideas devoid of resources and capabilities? Technovation, 41, 1–10. https://doi.org/10.1016/j.technovation.2015.03.004 Pavlou, P. A., & El Sawy, O. A. (2011). Understanding the elusive black box of dynamic capabilities. Decision Sciences, 42(1), 239–273. https://doi.org/10.1111/ j.1540-5915.2010.00287.x Pellegrino, G., Piva, M., & Vivarelli, M. (2012). Young firms and innovation: A microeconometric analysis. Struc- tural Change and Economic Dynamics, 23(4), 329– 340. https://doi.org/10.1016/j.strueco.2011.10.003 Rajapathirana, R. P. J., & Hui, Y. (2018). Relationship be- tween innovation capability, innovation type, and firm performance. Journal of Innovation & Knowledge, 3(1), 44–55. https://doi.org/10.1016/j.jik.2017.06.002 Read, S., & Sarasvathy, S. (2005). Knowing what to do and doing what you know: Effectuation as a form of entre- preneurial expertise. Journal of Private Equity, 9(1), 45–62. Rohrbeck, R., & Gemünden, H. G. (2011). Corporate fore- sight: Its three roles in enhancing the innovation ca- pacity of a firm. Technological Forecasting and Social Change, 78(2), 231–243. https://doi.org/10.1016/j. techfore.2010.06.019 Romijn, H., & Albaladejo, M. (2002). Determinants of innovation capability in small electronics and soft- ware firms in southeast England. Research Policy, 31(7), 1053–1067. https://doi.org/10.1016/S0048- 91 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 7333(01)00176-7 Rothaermel, F. T., & Hess, A. M. (2007). Building dynamic capabilities: Innovation driven by individual-, firm-, and network-level effects. Organization Science, 18(6), 898–921. https://doi.org/10.1287/orsc.1070.0291 Saiz-Álvarez, J. M., Cuervo-Arango, C., & Coduras, A. (2013). Entrepreneurial strategy, innovation, and cognitive capabilities: What role for intuitive SMEs? Journal of Small Business Strategy, 23(2), 29–40. Salunke, S., Weerawardena, J., & McColl-Kennedy, J. R. (2011). Towards a model of dynamic capabilities in innovation-based competitive strategy: Insights from project-oriented service firms. Industrial Mar- keting Management, 40(8), 1251–1263. https://doi. org/10.1016/j.indmarman.2011.10.009 Sarasvathy, S. D. (2001). Causation and effectuation: To- ward a theoretical shift from economic inevitability to entrepreneurial contingency. Academy of Manage- ment Review, 26(2), 243-263. https://doi.org/10.5465/ AMR.2001.4378020 Saunila, M., & Ukko, J. (2014). Intangible aspects of in- novation capability in SMEs: Impacts of size and industry. Journal of Engineering and Technology Management, 33, 32–46. https://doi.org/http://dx.doi. org/10.1016/j.jengtecman.2014.02.002 Schumpeter, J. (1934). The theory of economic develop- ment. Cambridge, MA: Harvard University Press. Scott, M., & Bruce, R. (1987). Five stages of growth in small business. Long Range Planning, 20(3), 45–52. https://doi.org/10.1016/0024-6301(87)90071-9 Shane, S., & Venkataraman, S. (2000). The promise of en- trepreneurship as a field of research. The Academy of Management Review, 25(1), 217–226. https://doi. org/10.1007/978-3-540-48543-8_8 Smith, M., Busi, M., Ball, P., & Van Der Meer, R. (2008). Factors influencing an organisation’s ability to manage innovation: A structured literature review and concep- tual model. International Journal of Innovation Man- agement, 12(04), 655–676. https://doi.org/10.1142/ S1363919608002138 Sonfield, M. C., & Moore, R. M. (1990). Innovative turning points in the path to entrepreneurial success. Journal of Small Business Strategy, 1(1), 60–64. Spender, J. C., Corvello, V., Grimaldi, M., & Rippa, P. (2017). Startups and open innovation: A review of the literature. European Journal of Innovation Manage- ment, 20(1), 4-30. https://doi.org/10.1108/EJIM-12- 2015-0131 Stevenson, H. H., & Jarillo, J. C. (1990). A paradigm of entrepreneurship: Entrepreneurial management. Stra- tegic Management Journal 11(4), 17-27. Stinchcombe, A. L. (1965). Organizations and social struc- ture. Handbook of Organizations, 44(2), 142–193. Strønen, F., Hoholm, T., Kvaerner, K., & Støme, L. N. (2017). Dynamic capabilities and innovation capabil- ities: The case of the “innovation clinic.” Journal of Entrepreneurship, Management and Innovation, 13(1) 89-116. Sulistyo, H., & Siyamtinah, (2016). Innovation capability of SMEs through entrepreneurship, marketing capa- bility, relational capital and empowerment. Asia Pa- cific Management Review, 21(4) 196-203. https://doi. org/10.1016/j.apmrv.2016.02.002 Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enter- prise performance. Strategic Management Journal, 28(13) 1319-1350. https://doi.org/10.1002/smj.640 Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2–3), 172–194. https://doi.org/10.1016/j.lrp.2009.07.003 Teece, D. J. (2014). The foundations of enterprise perfor- mance: Dynamic and ordinary capabilities in an (eco- nomic) theory of firms. Academy of Management Perspectives 28(4), 328-352. https://doi.org/10.5465/ amp.2013.0116 Teece, D. J. (2018). Business models and dynamic capabil- ities. Long Range Planning, 51(1), 40–49. https://doi. org/10.1016/J.LRP.2017.06.007 Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic ca- pabilities and strategic management. Strategic Man- agement Journal, 18(7), 509–533. Tesfaye, G., & Kitaw, D. (2018). An innovation capability development process for firms in developing coun- tries: A theoretical conceptual model. Journal of En- trepreneurship, Management and Innovation, 14(3), 87–110. https://doi.org/10.7341/20181434 Tidd, J. (1997). Complexity, networks & learning: Integrative themes for research on innovation management. Inter- national Journal of Innovation Management, 1(01), 1–21. https://doi.org/10.1142/S1363919697000024 Tidd, J., Bessant, J., & Pavitt, K. (2006). Management de l’innovation : Intégration du changement tech- nologique, commercial et organisationnel. Bruxelles: De Boeck & Larfcier. Tranfield, D., Denyer, D., & Smart, P. (2003). Towards a methodology for developing evidence-informed man- agement knowledge by means of systematic review. British Journal of Management, 14(3), 207–222. https://doi.org/10.1111/1467-8551.00375 Ukko, J., Saunila, M., Parjanen, S., Rantala, T., Salminen, 92 S. El Hanchi, & L. Kerzazi Journal of Small Business Strategy / Vol. 30, No. 2 (2020) / 72-92 J., Pekkola, S., & Mäkimattila, M. (2016). Effective- ness of innovation capability development methods. Innovation, Organization & Management 18(4), 513– 535. https://doi.org/10.1080/14479338.2016.1233824 Urueña, A., Hidalgo, A., & Arenas, Á. E. (2016). Identify- ing capabilities in innovation projects: Evidences from eHealth. Journal of Business Research, 69(11), 4843– 4848. https://doi.org/10.1016/j.jbusres.2016.04.041 van de Vrande, V., de Jong, J. P. J., Vanhaverbeke, W., & de Rochemont, M. (2009). Open innovation in SMEs: Trends, motives and management challenges. Techno- vation, 29(6–7), 423–437. https://doi.org/10.1016/j. technovation.2008.10.001 Velu, C. (2015). Business model innovation and third-party alliance on the survival of new firms. Technovation, 35, 1–11. https://doi.org/http://dx.doi.org/10.1016/j. technovation.2014.09.007 Venkataraman, S. (1997). The distinctive domain of entre- preneurship research. Advances in Entrepreneurship, Firm Emergence and Growth, 3(1), 119–138. Vicente, M., Abrantes, J. L., Teixeira, M. S. (2015). Mea- suring innovation capability in exporting firms: The INNOVSCALE. International Marketing Review, 32(1), 29-51. Webster, J., & Watson, T. (2004). Analyzing the past to prepare for the future: Writing a literature re- view. MIS Quarterly, 26(2), xiii-xxiii. https://doi. org/10.2307/4132319 Weerawardena, J. (2003). The role of marketing capabil- ity in innovation-based competitive strategy. Jour- nal of Strategic Marketing, 11(1), 15–35. https://doi. org/10.1080/0965254032000096766 Wiklund, J., & Shepherd, D. A. (2003). Knowledge-based resources, entrepreneurial orientation, and the perfor- mance of small and medium-sized business. Strategic Management Journal, 24(13), 1307–1314. https://doi. org/10.1002/smj.360 Winter, S. G. (2003). Understanding dynamic capabilities. Strategic Management Journal, 24(10), 991–995. https://doi.org/10.1002/smj.318 Wu, H., Chen, J., & Jiao, H. (2016). Dynamic capabilities as a mediator linking international diversification and in- novation performance of firms in an emerging econo- my. Journal of Business Research, 69(8), 2678–2686. https://doi.org/10.1016/j.jbusres.2015.11.003 Yam, R. C. M., Guan, J. C., Pun, K. F., & Tang, E. P. Y. (2004). An audit of technological innovation capa- bilities in Chinese firms: Some empirical findings in Beijing, China. Research Policy, 33(8), 1123–1140. https://doi.org/10.1016/j.respol.2004.05.004 Zahra, S. A., & George, G. (2002). Absorptive capacity: A review, reconceptualization, and extension. Academy of Management Review, 27(2), 185–203. https://doi. org/10.5465/AMR.2002.6587995 Zahra, S. A., Sapienza, H. J., & Davidsson, P. (2006). En- trepreneurship and dynamic capabilities: A review, model and research agenda. Journal of Management Studies, 43(4), 917–955. https://doi.org/10.1111/ j.1467-6486.2006.00616.x Zhao, F. (2005). Exploring the synergy between entrepre- neurship and innovation. International Journal of En- trepreneurial Behaviour & Research, 11(1), 25–41. https://doi.org/10.1108/13552550510580825