A Study on Innovation Capabilities and its relationship with Firm Competitiveness: A Conceptual Framework

In today‘s rapidly changing environment, firms have to adapt to the dynamic conditions and be open to innovations in order to survive. Having a competitive advantage in the market, has become imperative and innovativeness is vital to achieve that status. Technological innovation capabilities make it possible for firms to response to changes rapidly and to acquire technological innovation strategies and innovative outputs. Innovation capability is defined as a comprehensive set of characteristics of a firm that facilities and supports its technological innovation strategies. An audit to evaluate the ICs of a firm may trigger improvement in its future practices. Such an audit can be used by the firm for self-assessment or third-party independent assessment to identify problems of its capability status. This study aims at developing a conceptual framework for innovation capabilities within a firm and how the firm can capitalise on these capabilities. The extensive literature review is undertaken to identify the key innovation capabilities that a firm must target to focus and strengthen on for better firm competitiveness.