Understanding the micro-foundations of internal capabilities for open innovation in the minerals industry: a holistic sustainability perspective

Abstract

It is indisputable that achieving sustainability in the minerals industry requires a holistic approach to innovation that utilizes the breadth of knowledge found outside the industry. While providing a myriad of opportunities, this open approach to innovation would also be challenging in that companies need to have sufficient absorptive capacity, i.e. the ability to ‘recognize’, ‘assimilate’ and ‘exploit’ external knowledge when developing their processes and products. Despite recent theoretical advances, we do not yet fully understand the determinants of these three components of absorptive capacity for innovations aimed at sustainability. By employing a qualitative design with data obtained from 16 interviews conducted within Norway's minerals industry, this study explores the skills and routines that comprise micro-foundations of the capabilities for absorptive capacity. The analysis reveals that, in order to achieve recognition, companies need to firstly keep abreast of technological and market changes that emanate from sustainability transition, and secondly increase their awareness about social issues. Accordingly, assimilation depends on the established routines for facilitating dissemination of internal knowledge, whereas exploitation occurs by means of the piloting of innovative new solutions. This paper contributes to the sustainability-oriented innovation literature by demonstrating how companies in sustainability-sensitive industries could benefit from various types of external knowledge in their innovation activities. It also provides some insights into the nature of open innovation and absorptive capacity beyond high-tech industries and research and development-based knowledge.