Dynamic and integrative capabilities for profiting from innovation in digital platform-based ecosystems

Abstract

For firms at the center of platform-based ecosystems, Teece (2018) argues that dynamic capabilities can enable the firms to create and capture value by building ecosystems and designing appropriate business models. In line with the original Profiting From Innovation (PFI) framework, Teece (2018) also argues that complementary asset providers may be able to capture substantial value. Here we provide a theoretical analysis that explains the ways in which dynamic capabilities underpin not only value creation but also value capture by platform leaders. We propose that three types of dynamic capabilities at a minimum are critical for platform leaders: innovation capabilities, environmental scanning and sensing capabilities, and integrative capabilities for ecosystem orchestration. We further argue that integrative capabilities play a key role in improving the ability of platform leaders to capture value.