Strategic Innovation Capabilities and Their Effect on Business Growth and Competitive Positioning inEmerging Markets

Abstract

Background: Emerging markets have become a significant driver of global trade and economic growth, and local businesses need to shift from a cost advantage to developing solid innovation capacity to handle the increased competition and dynamism in the global market. The purpose of this study is to explore the relationship between strategic innovation capabilities and business growth and positioning in emerging markets. Research Problem: Firms in these areas face institutional weakness, resource constraints, and heavy competition; but the literature on innovation capability has tended to focus on it as a one-dimensional construct and has largely failed to consider which aspects of capability and which barriers are most important for performance. Methodology: A convergent mixed-methods design of 184 cross-sectional senior executive surveys and 28 semi-structured interviews. Results: Five capability dimensions are found: strategic orientation, market sensing, technological capability, resource reconfiguration, and collaborative networking. Collaborative networking is most influential on competitive positioning, while strategic orientation and technological capability are most influential on business growth. Moreover, barriers of regulatory uncertainty and shortages of finance become
the most significant constraints, which limit competitive positioning. Contribution: This study presents a comprehensive model that connects capability dimensions, external barriers and dual performance outcomes, suggesting priorities for managers and policymakers to promote innovation in the face of resource limitations.