Opening the Black Box of Innovation in Healthcare: a Dynamic Capabilities Approach

This dissertation investigates how dynamic capabilities are conceptualized, developed, and linked to performance in public sector organizations (PSOs), with a particular focus on local healthcare entities. While dynamic capabilities have been extensively studied in private firms as a way to sustain competitive advantage in turbulent environments, their role in the public domain remains less clear. This thesis addresses this gap by combining a systematic literature review with original empirical analyses in the Italian healthcare system. The research is guided by three main questions: how dynamic capabilities are defined and applied in the public sector; what antecedent factors enable their development; and how they influence performance outcomes. To address these questions, the thesis adopts a multi-method design. First, a scoping literature review maps 179 studies on dynamic capabilities in public organizations and develops a framework that integrates definitions, antecedents, mechanisms, and outcomes. Second, an fsQCA study explores the antecedent conditions enabling sensing capabilities within the implementation of the Family and Community Nurse (FCN) model in Tuscany. Third, a quantitative analysis investigates the link between innovation capabilities and healthcare performance, focusing on the mediating role of resource base change and the moderating role of leadership. The findings show that dynamic capabilities in public organizations cannot be transferred wholesale from the private sector but must be adapted to public logics, where outcomes are framed not as competitive advantage but as the creation of public value. Antecedents such as organizational experience, structures, trust-based cultures, and inter-organizational collaboration matter, but no single condition is sufficient; rather, configurations of factors explain how sensing capabilities emerge. On the consequences side, innovation capabilities alone do not automatically lead to better performance. Improvements occur only when they translate into resource base reconfigurations, such as new governance arrangements and professional roles. Leadership further strengthens this process by enabling experimentation and supporting implementation, although its role is more as a facilitator than a decisive driver. The dissertation contributes to theory by clarifying how dynamic capabilities operate in the public sector and by highlighting the need for sector-specific conceptualizations. It shows empirically that capability development is contingent on institutional contexts and multi-level factors, challenging one-size-fits-all innovation models. Methodologically, it demonstrates the value of combining configurational and quantitative approaches to capture the complexity of public organizations. For policy and practice, the results suggest that public institutions should not rely solely on external pressures to spur innovation but should actively cultivate internal capabilities. Yet fostering innovation capabilities is not enough; reforms must be accompanied by resource reconfigurations and supportive leadership to yield tangible performance improvements. In healthcare, this means that introducing new professional roles such as the Family and Community Nurse is effective only when embedded in redesigned governance and collaborative practices. Overall, the dissertation positions public sector organizations not as rigid bureaucracies but as living organisms capable of adaptation and renewal. Dynamic capabilities provide a useful lens to understand how they can balance stability with adaptability, turning innovation into sustained improvements in performance and public value.