ABSTRACT
Using the lens of dynamic capabilities, this chapter explores the link between sustainable development and strategic capabilities for innovation. Starting with a discussion of the construct of dynamic capabilities, we discuss its relevance in the context of sustainability and introduce notion of Dynamic Capabilities for Sustainable Innovation (DCSI). We define DCSI as ‘a set of capabilities that an organization can employ, in line with its governance structure, to purposefully create, extend or modify its resource base and its business ecosystem in order to address sustainable innovation issues’. Analysing the results of a study of 34 European firms, we reveal two types of DCSI. A first series of capabilities (ecosystem orchestration capabilities) refer to the ability to guide the emergence of sustainable innovation ecosystems; a second series of capabilities (organizational orchestration capabilities) refer to the ability to identify appropriate governance and organizational structures, depending on the degree of disruption caused by sustainable innovations.
