Drivers of entrepreneurial orientation and innovation capabilities in African young innovative companies

Abstract

ABSTRACT Nearly 90–95% of young innovative companies (YICs) experience business closure within their initial 12 months, primarily due to a lack of understanding regarding the essential business capabilities to nurture, particularly in African nations. Recognizing this challenge, extensive emphasis has been placed on identifying internal capabilities that YICs can cultivate to significantly enhance their chances of success. This study delves into the interplay between top management capabilities, technological competence, organizational learning, and performance, while also investigating the impact of entrepreneurial orientation and innovation capabilities on this relationship. By employing Teece's SST (sense, seize, transform) approach, the research comprehensively analyzes the combined effect of these capabilities on YIC performance. The study involved 254 managers from YICs operating in four African countries (South Africa, Nigeria, Kenya, Ghana) who actively participated in online surveys. The findings of this study are threefold: firstly, it offers a holistic perspective on the dynamic capabilities that YICs must cultivate to bolster their likelihood of success; secondly, it establishes a direct correlation between these capabilities and organizational performance, highlighting the significant contributions of innovation capabilities and entrepreneurial orientation; and finally, it underscores the pivotal importance of developing top management capabilities and technological competencies within YICs.