Exploring the relationships between dynamic capabilities and IT governance: Implications for local governments

Information technology (IT) constitutes an important driver for innovation in the public sector. However, taking advantage of IT to innovate requires the existence of other organizational and institutional capabilities within the public organization. Using absorptive capability theory, the purpose of this study is to explore the relationship between principles for IT governance and dynamic capabilities across semi-urban (between 10,000 and 149,000 inhabitants), urban (between 150,000 and 600,000 inhabitants) and metropolitan (more than 600,000 inhabitants ) municipal governments in Mexico.,This study reports on three workshops involving 34 chief information officers (CIOs) from semi-urban, urban and metropolitan municipalities. The workshop agenda included a series of brainstorming exercises to discuss – among other topics – the capabilities required for digital government innovation. The capabilities collected during the workshops were codified by the authors based on their relationship to the six IT governance standardized principles and the four dynamic capabilities identified in the literature. The authors used descriptive and correlation analyses to show the importance of governance principles and dynamic capabilities for innovation, as well as the relationships between those two dimensions, in each type of municipality.,This study shows that specific IT governance principles may enhance innovation capabilities linked with knowledge acquisition, assimilation, transformation and exploitation. Moreover, the ways in which IT governance principles support innovation are linked to size, resources and complexity of the local government. In conclusion, this study discusses the primary IT policy implications to improve possibilities to innovate in the public sector.,Although researchers and practitioners agree that following principles of good governance may enhance performance and innovation in the provision of public services, the link between the principles of IT governance and capabilities to spur innovation has not yet been fully established in the literature. Thus, in this study, empirical evidence of this linkage is provided.