Exploratory and exploitative innovation: To what extent do the dimensions of individual level absorptive capacity contribute?

• Published in: Technovation 2017-02, Vol.60-61, p.29-38
• Main Authors: Enkel, Ellen, Heil, Sebastian, Hengstler, Monika, Wirth, Henning
• Format: Article
• Language: English
• Subjects: Absorptive capacity; Absorptivity; Ambidexterity; Assimilation; Competence; Data; Exploitation; Exploration; Handedness; Individual differences; Individual level; Innovation strategy; Innovations; Least squares method; Mathematical models; Open innovation; Search process; Strategy
• ISSN: 0166-4972; 1879-2383
• DOI: 10.1016/j.technovation.2016.08.002

Individuals are considered the frontline that allows firms to learn from external sources. However, a firm can only benefit from individual efforts if it understands to what extent the dimensions of individual-level absorptive capacity are related to its innovation strategy. A firm's innovation strategy is characterized by the notions of exploration and exploitation, which result in either radical or incremental innovation. This study examines the driving factors of individual-level absorptive capacity regarding a firm's exploration versus exploitation strategy. Using quantitative data from 104 individuals, partial least squares structural equation modeling (PLS-SEM) analysis was conducted, verifying individuals' competencies in identifying external knowledge as a trigger for both exploratory and exploitative innovation. Consequently, these specific abilities also contribute to organizational ambidexterity. Furthermore, the results show the dichotomous contribution of individual competencies in assimilating external knowledge. While exploratory innovation thrives with individual assimilation efforts, realization of exploitative innovation is not significantly related to these efforts. Ultimately, individuals' competencies in utilizing external knowledge are significantly related to neither exploratory nor exploitative innovation. Moreover, this study provides means for managers to systematically position individuals in the external search process. •This study examines absorptive capacity at the individual level.•Quantitative data from 104 individuals was used for PLS-SEM analysis.•Identification efforts contribute to both exploratory and exploitative innovation.•Assimilation efforts contribute to exploratory but not to exploitative innovation.•Utilization efforts contribute to neither exploratory nor exploitative innovation.