Testing whether major innovation capabilities are systemic design capabilities: analyzing rule-renewal design capabilities in a case-control study of historical new business developments

Abstract : In this paper, we empirically test the proposition that major innovation (MI) capabilities are systemic, dynamic capabilities. We rely on design theories and characterize the systemic, dynamic capabilities as design capabilities that renew a core of stabilized design rules. For the specific case of projects leading to new business development, we conducted a case-control study of 46 historical projects; 26 of these led to new business development, and 20 do not lead to new business development. Utilizing this sample, we show that our measurement model, based on rule-reuse vs. rule-renewal design capabilities, has a good fit. We find that rule-renewal design capabilities are positively related to new business development, whereas rule-reuse design capabilities (maintaining an invariant set of design rules) are independent of new business development. We discuss different combinations of rule-reuse and rule-renewal design capabilities. This paper contributes to the literature on MI capabilities. It also theoretically and methodologically contributes to the analysis of the dynamic capabilities of design activities