Innovation Culture and Organizational Capability: A Study of Their Interplay in Emerging Markets

In emerging markets, innovation capability is crucial for gaining a competitive edge. However, the factors contributing to its development remain largely unexplored, especially in the developing world. This study addresses the research question: What are the key components of an innovation culture that influence a company’s innovation capability in the context of an emerging market? Data were collected through an online survey of 57 companies in Kazakhstan, representing small (23%), medium-sized (33%), and large (44%) enterprises across various sectors, including mining, manufacturing, construction, and consulting. Kazakhstan serves as an exemplary case due to its strategic focus on innovation and efforts to transform its economy. Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed to analyze the data and examine the relationships among observed and latent variables. The results demonstrate that a strong innovation culture positively influences a company’s innovation capability, accounting for 46% of its variance. Leadership support emerged as a critical component, with its loading factor being 61% higher than risk acceptance and 38% higher than innovation rewards. These findings offer practical recommendations for fostering innovation in emerging markets by focusing on key aspects of innovation culture.