The process of emergence of innovation capabilities: A case study

Mainstream Technology and Innovation Management (TIM) literature considers firms in a race competition on innovation activities to lead their markets requiring strong innovation capabilities. In this environment latecomer firms confront an additional challenge, to learn how to innovate that requires the development of their first innovation capabilities. Studies on the emergence of innovation capabilities in emerging economies showed up the difficulties that they confront and identified the cumulative character of the process to acquire the ability to innovate. However TIM literature does not explain how this process is developed, neither has it explained the heterogeneity in innovativeness that it is found among firms and inside it, as why some strategic capabilities are more suitable to develop innovative activities than others. This paper analyzes innovation management literature, and then includes the technological capabilities creation literature that adds the accumulation of knowledge and abilities, in order to explain the process of generating innovation capabilities. This research uses a single embedded case study design, and it covers the history of a Mexican steel company that could develop world class innovation capabilities, even it started as a laggard. It concludes illustrating a long process of generating innovation capabilities, distinguishing distinctive stages in the process.