From Absorptive Capacity to Innovation: Breakthroughs in New Technology-Based Firms and Startups

This novel study advances the absorptive capacity and innovation in new technology-based firms (NTBFs) and startup discussion. Expanding the seminal absorptive capacity (ACAP) literature, this qualitative study undertakes a review of the theory by analyzing 167 existing publications until June 2023. The significant findings identify new theoretical insights related to the occurrence and focus of absorptive capacity in NTBFs and startups. The findings identify the search for complementary knowledge and assets, resource-based capacities, and especially dynamic capabilities, as being essential sources for innovation processes. The study establishes that alliances and collaborations for innovation through ACAP present a strong and common approach in the literature and business practice that enhances new knowledge acquisition and technological diversification. Finally, the study provides a rich research agenda comprising 55 topics and directions that academics, managers, and policymakers can observe to leverage the innovation absorption and capabilities in organizational policies, processes, and practices, helping organizations cope with intractable problems while staying true to their purpose for the future. Four significant research gaps are identified related to absorptive capacity and innovation strategies; absorptive capacity, internal-external factors, and resources; antecedents, potential, and realized absorptive capacity; and absorptive capacity and networks.