Capability-driven international scale-up: the moderating role of co-creation and technology

Purpose This paper investigates how small and medium-sized enterprises (SMEs) in resource-constrained regions build international scale-up intentions and convert them into internationalization performance. Drawing on a dynamic capabilities perspective, the study examines how capability-related activities associated with sensing, seizing and reconfiguring influence international scale-up and whether co-creation and technology adoption strengthen international outcomes. Design/methodology/approach A quantitative survey research design was employed using data from 740 SMEs operating in the UK's most deprived areas. Within the constraints of secondary survey data, capability-related activities were operationalized using proxy indicators for market competition, R&D investment and process innovation. International scale-up was measured through overseas recruitment intentions, while internationalization performance was captured through export-related outcomes. Hypotheses were tested using PLS-SEM, including moderation analysis for co-creation and technology adoption. Findings The findings indicate that R&D investment and process innovation are positively associated with SMEs' international scale-up intentions, whereas market competition shows a negative association in resource-constrained contexts. International scale-up intention was positively related to internationalization performance. In addition, co-creation and technology adoption positively moderated this relationship, suggesting that collaborative engagement and digital business practices may provide modest support for SMEs seeking to strengthen international outcomes under conditions of structural disadvantage. Originality/value This study extends international entrepreneurship research by contextualizing dynamic capabilities within deprived regional environments. The findings provide exploratory evidence that capability-related activities may operate differently under structural disadvantage. The study further highlights the potential enabling role of co-creation and technology adoption in supporting SME international scale-up and internationalization performance in resource-constrained settings.