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Abstract

The extant literature focusing on innovation capacity highlights the role of human capital formation and work design choices. Although this stream of literature is well developed, an emerging stream of literature has argued for the role of external business networks and the institutional ecosystems in fostering an organisation’s innovative capacity. Central to this latter approach is the diffusion and integration of new learning and information sharing from an organisation’s network partners to its ecosystem. Using qualitative case study evidence from four information technology (IT) enabled organisations in India, this study found that innovation capacity depends not only on human capital formation and work design choices but also on a firm’s capabilities to acquire, develop, integrate, and exploit new knowledge and information. To this end, the study employs an integrated approach highlighting the strategic choices some firms make in developing their human resource and organisational capabilities to improve their innovative capacity. Implications for theory and practice are also discussed.