The implementation of dynamic capabilities for small and medium-sized enterprises in creating innovation

Purpose The purpose of this paper is to analyse the adaptation process of small and medium-sized enterprises (SMEs) to volatile environment supported with learning, knowledge and innovation. Design/methodology/approach This study used an inductive approach to analyse qualitative data obtained from an SME operating in the international market. Various data collection methods, including interview, focus group discussion and observation, were used to allow the researchers to undertake triangulation. Findings This study demonstrates that managers should be eager to adjust their innovation to a changing environment and continually update pre-determined plans. Learning is an ongoing process required for innovation, requiring up-to-date support from knowledge produced via learning. For this reason, learning is required in all dynamic capability processes. Research limitations/implications The single case study design offers deep and detailed insights regarding the process of how firms create innovation based on learning in an uncertain environment. Future research could investigate whether the findings of this study are generalisable using a large number of subjects and a cross-sectional method. Originality/value This study offers insight to relatively empirical evidence on how firms respond and adjust to volatile environment using an integrative perspective covering learning, knowledge and innovation. In addition, this offers insight regarding how knowledge can be developed based on learning from the environment and converted into innovation through dynamic capabilities.