Digital transformation and innovation performance: on the importance of interorganizational collaboration

This study examined the role of interorganisational collaboration in the relationship between digital transformation and innovation performance. By defining two elements of digital transformation (digital strategy and digital capability), the study built on the premise that digital transformation enables firms to collaborate inter-organisationally, which in turn enhances innovation performance. The proposed research model was tested with structural equation modelling using data from 135 firms operating in construction industries in Finland. This study adds to the literature on digital transformation and innovation by questioning the assumption that digitalization directly improves innovation performance. The findings suggested that neither digital strategy nor digital capability is directly associated with innovation performance. However, interorganisational collaboration fully mediated the association between digital transformation and innovation performance. Digital transformation can therefore be understood as a resource that creates opportunities for innovation rather than something that produces innovation on its own. This understanding also suggests that research on digital transformation should look beyond the adoption of digital technologies and consider how firms use their digital resources in relationships with other organizations. The findings of this study suggest that managers need to embrace building interorganizational collaboration to improve coordination among different stakeholders to enhance innovation performance. In terms of managerial implications, the findings of this study suggest that managers need to embrace building interorganizational collaboration to improve coordination among different stakeholders to enhance innovation performance.