Contents lists available at ScienceDirect Technological Forecasting & Social Change journal homepage: www.elsevier.com/locate/techfore Disruptive innovation and dynamic capabilities in emerging economies: Evidence from the Indian automotive sector Deepak Pandit a,c , Maheshkumar P. Joshi b,⁎ , Arun Sahay c , Rajen K. Gupta d a Fortune Institute of International Business, New Delhi, India b George Mason University, Fairfax, VA, USA c Birla Institute of Management Technology, Greater Noida, Uttar Pradesh, India d Management Development Institute, Gurgaon, Haryana, India ARTICLE INFO Keywords: Emerging economies Disruptive innovation Dynamic capabilities Reva Mahindra Electric vehicles India ABSTRACT The phenomenon of frugal and reverse innovation has brought emerging economies into focus. However, dis- ruptive innovation (DI) is rarely observed in this context. This study outlines the evolution of DI in the Indian automotive sector through an instrumental case study. Our study reinterprets the phenomenon in the context of emerging economies by investigating how dynamic capabilities (DCs) at the firm level actuate DI manifestation, and offers a set of takeaways that focus on the dimensions of DCs required for such manifestation. In addition, we identify any additional constructs that may play a role in catalysing DI in emerging economies. While not hypothesised, we do find that larger firms actuate DI in emerging economies actively, and a turbulent or VUCA environment enables the identification of disruptive opportunities. Further, managerial implications include the importance of managing innovation policy in a turbulent environment and the necessity of different dimensions of DC as an overlay on the operational capabilities of a firm in achieving DI. 1. Introduction The term VUCA (an acronym for ‘Volatility Uncertainty Complexity Ambiguity’) describes the dynamic and turbulent environment. Volatility relates to speed, magnitude and dynamics of change; Uncertainty is the lack of predictability of events and issues; con- founding issues faced by an organisation (military or otherwise) lead to Complexity; and Ambiguity is the lack of clarity about conditions faced by the organisation (Horney et al., 2010). In the global automobile industry, researchers have found that after a long stretch of stability, the current environment exhibits all the components of VUCA as “the industry has been experiencing significant turbulence due primarily to changes in markets, regulatory requirements, and technologies” (Schulze et al., 2015:605) driven by the process of globalization, changes in government policies, and convergence among many distinct technologies that can now be used in running an automobile. Johansen and Euchner (2013) suggest that Disruptive Innovation (DI) assists a manager in navigating the VUCA environment. Recently, researchers have started examining emerging economies in the context of DI (Hang et al., 2015). When focusing on emerging economies, au- thors have recognised that DI – as defined by Christensen (1997) and intended for advanced economies – ‘…needs to be adapted and reinterpreted to be useful in analysing new business that originates from emerging economies’ (Corsi and Di Minin, 2011:7). As the VUCA environment plays a role in DI manifestation (Johansen and Euchner, 2013), we wish to contribute to the extant DI literature by conducting a grounded case study on DI in an emerging economy to address our primary question: How do dynamic capabilities (DCs) at the firm level help actuate DI manifestation? In addition, we also explore a) Which DC dimensions play a role in DI manifestation? b) Are there additional factors helping firms in emerging economies in the identification of disruptive opportunities or new markets? We use India as a representative sample of emerging markets be- cause the VUCA environment is further exaggerated in the context of the Indian automobile industry. Besides global trends, additional trends add to complexity and volatility, such as economic liberalization, which was initiated in 1991 and has continually impacted the competition, market structure and customer preferences in the auto industry (D'Costa, 2004; Joshi, 2016; Pandit et al., 2017). Additionally, gov- ernment policies prompted the reduction in automobile emission levels to better preserve historic monuments such as the Taj Mahal (Burke, 2010). This research explores how DI manifestation is influenced by the capability for DI at the firm level, with Mahindra Reva of India as a http://dx.doi.org/10.1016/j.techfore.2017.09.035 Received 22 November 2016; Accepted 17 September 2017 ⁎ Corresponding author. E-mail addresses: Deepak@iseed-edu.in, deepak@practicingstrategists.com (D. Pandit), mpjoshi@gmu.edu (M.P. Joshi), arun.sahay@bimtech.ac.in (A. Sahay), rajenkgupta@gmail.com (R.K. Gupta). Technological Forecasting & Social Change xxx (xxxx) xxx–xxx 0040-1625/ © 2017 Elsevier Inc. All rights reserved. Please cite this article as: Pandit, D., Technological Forecasting & Social Change (2017), http://dx.doi.org/10.1016/j.techfore.2017.09.035