An innovation intermediary’s role in enhancing absorptive capacity for cross-industry digital innovation: Introducing an awareness capability and new intermediary practices

Abstract

Emerging digital technologies enable the combination of data from different industries to create new innovation opportunities. Many firms, particularly those with underdeveloped absorptive capacity, rely on innovation intermediaries to facilitate this process. However, current theory does not fully explain how intermediaries achieve this in cross-industry settings where digital technologies drive innovation. This study investigates the question: How does an innovation intermediary contribute to the absorptive capacity of firms that collaborate in cross-industry contexts to develop digital innovations? This research examines how one intermediary enhances absorptive capacity for cross-industry digital innovation. We provide a definition for cross-industry digital innovation, a concept previously undefined in the literature. Results show the intermediary develops potential absorptive capacity but has less impact in the exploitation phase. The concept of “awareness capability,” which triggers firms’ search for new knowledge, is introduced. Additionally, specific practices of intermediaries are identified for each absorptive capacity phase.