The art of innovation: How arts-based initiatives can nurture innovation dynamic capabilities

The role of the arts in fostering organisational creativity and driving corporate innovation has long been recognized as an area of interest for both academics and practitioners. Yet, the mechanisms through which arts-based-interventions (ABIs) contribute to building dynamic capabilities remain underexplored. By drawing on 21 in-depth interviews with business managers and experienced artists, our study provides concrete insights into how artistic engagement enhances an organization's ability to sense opportunities, seize resources or capabilities, and transform structures, routines or processes to boost long-term innovation. We investigate the underlying mechanisms by creating a rich and contemporary taxonomy of ABIs for innovation. The findings offer a nuanced understanding of how artistic engagement can strengthen organisational adaptability and innovation capacity. This research advances theoretical perspectives on dynamic capabilities and provides practical guidance for managers seeking to leverage the arts as part of their innovation strategies. • Identifies how arts-based initiatives (ABIs) aid development of dynamic capabilities. • Reveals how ABIs enable mechanisms that support sensing, seizing, and transforming. • Introduces “Hubbing”: new ABI practice for cross-boundary innovation. • Actionable insights for managers embedding ABIs into innovation strategies. • Extends dynamic capabilities theory by integrating ABIs in organisational innovation.