Behind the Sharing Economy: Innovation and Dynamic Capability

The aim of this chapter is to show how dynamic capability constitutes a primary engine of the sharing economy and how important this concept is in terms of enabling firms to manage their resources proactively in order to compete by forming new asset combinations. Dynamic capabilities enable businesses to adapt to changes in the environment and secure competitive advantages. They create innovation connected to the development of completely new capabilities through the exploration and path-creation of new processes, products, and services. This chapter focuses on incremental innovation and disruptive innovation. Innovation as a concept is relative to the experience and knowledge of a country, community, or group. As a recent economic innovation, the sharing economy has improved people’s access to several services and products. The sharing economy includes social innovations in addition to process, product, and service innovations. Dynamic capability emphasizes the analysis of knowledge management problems and the combination of economic and behavioral aspects of sharing economy organizations. While dynamic capabilities have been extensively discussed in the literature, the way that organizations in the sharing economy use dynamic capabilities to help fulfill the requirements of stakeholders has not been extensively investigated.