The Impact of Digital Capabilities on Enhancing Organizational Innovation: An Applied Study in government banks in Babylon

This study aims to explore the impact of digital capabilities on the increase in organizational innovation in government banks in Babylon Governorate, Iraq. The study was descriptive-analytical with a structured questionnaire distributed to 200 employees in government banks for data collection. Digital capabilities were analyzed based on their major aspects such as digital technology capability and digital data and analytical capability, and organizational innovation was considered as the dependent variable. Data were collected using Cronbach’s alpha, descriptive statistics, Pearson correlation coefficient, and regression analysis in the Statistical Package for the Social Sciences (SPSS) and used for measuring the value of digital capabilities in order to understand how digital capabilities are contributing to organizational innovation in government banks to better navigate technological and organizational changes. According to the findings, digital capabilities have a strong positive impact on organizational innovation. This suggests that we should enhance technological capabilities and the effective use of digital data in government banks to create innovative practices and improve organizational performance. Digital infrastructure should be reinforced, employees’ digital skills increased, and data and analysis technologies should be used to drive innovation in the organizations.