What is dynamic capabilities?

Dynamic Capabilities = an organization’s ability (‘O’ capability) to renew and recreate its resources and capabilities, to meet the needs of a changing environment. Dynamic capabilities is the capability to update capabilities; to create, extend, modify current capabilities. Ordinary ‘O’ capabilities are necessary to operate efficiently now; Dynamic ‘O’ capabilities are necessary to create competitive advantage in the future. Dynamic capabilities (ability to adapt to change and future) is part of O.