Firms’ Dynamic Capabilities, Innovative Types and Sustainability: a Theoretical Framework

Sustainability of innovations reflects not only the economic aspect, but also the social and environmental concerns embedded on innovation, whilst dynamic capability indicates the sources of knowledge to achieve that sustainability. Hence, this paper places an emphasis on innovation as the means to add not only economic value, but also to the environment and society and also in capabilities that bring about sustainability-related innovation in firms. Its goal is to delineate a conceptual model about the relationship amongst firms' dynamic capabilities, innovative outcome and innovation performance. This model will be applied to test whether differences in dynamic capabilities dimensions namely, adaptive capability (ability to identify market opportunities), absorptive capability (ability to absorb external knowledge) and innovative capability (ability to create knowledge), at the business unit-level, are related to technological innovations types and to variations in sustainability of innovations, regarding economic, social and environmental results. Hence, a bibliographical research about the themes was carried out and an in-depth study of the selected literature was undertaken. Specifically, we revise the proposed theoretical approaches; critically assess the suggested analytical models; and conclude with an integrative model focusing on the relationship above. The research question: are the outcomes of firms' innovative activities in terms of types and sustainability performance affected by differentiation in dynamic capabilities? After the evaluation of the literature, this paper's proposal is that a firm possessing higher levels of adaptive, absorptive and innovative capabilities focuses on developing innovations which bring not only high profits, but also social equity and environmental protection. In this case the firm is orientated by an innovative strategy focused in sustainable outcomes, its dynamic capabilities may direct toward concentrating its assets on developing capabilities, which results in higher levels of sustainability in new products or services. In contrast, the lower levels of adaptive, absorptive and innovative capabilities lead the firm to focus on a cost leadership innovative strategy, which results in lower levels of sustainability in new products or services. Hence, the sustainability of the innovation outcome is greater in firms with high levels of adaptive, absorptive and innovative capabilities, which in turn is steered by firm 2 innovative strategy. From this defined framework, we will research how firms evolve on adaptive, absorptive and innovative capabilitie Palavras-chaves: dynamic capabilities, sustainability, innovation