Building dynamic capabilities with the internet of things

Abstract

In this study, we propose internet of things (IoT) capabilities as dynamic capabilities through their effect on a firm's competitive advantage. We argue that the importance of the IoT lies on its ability to identify new opportunities, address them, and reconfigure the existing and/or new technology assets in rapid technology change environments. Firms with strong IoT capabilities will be able to create, (re)shape, and transform their business ecosystems through innovation. Using data collected from 184 companies, the proposed framework was tested. The results show IoT capabilities, manifested in sensing, seizing, and reconfiguring capabilities, are positively associated with a firm's competitive advantage. This study can help scholars and practitioners understand the elements of the IoT that may lead to competitive advantage from the dynamic capabilities perspective.