Samenvatting

Innovation is critical for the survival and competitiveness of family firms, yet the concept of innovative capacity (IC), the underlying ability to generate, absorb, and apply knowledge for sustained innovation, remains conceptually ambiguous. This paper addresses this gap by developing a dynamic, multi-level framework that integrates general innovation theories (absorptive capacity, entrepreneurial orientation, ambidexterity, dynamic capabilities) with family firm-specific perspectives (ability–willingness paradox, socioemotional wealth, openness). We argue that IC in family firms is not merely the presence of innovation-related resources but their activation, alignment, and orchestration over time. Activation depends on family-specific preferences (e.g., risk aversion, socioemotional wealth), alignment requires fitting IC to environmental demands through openness and strategic posture, and orchestration involves coordinating resources across generations. This framework resolves the paradox of family firm innovation by clarifying that while family firms may possess substantial IC and the willingness to leverage on this but that their ability to orchestrate resources to activate and to align it with external opportunities ultimately determine innovation outcomes. The paper contributes to theory by positioning IC as a layered, integrative construct and to practice by offering a diagnostic tool for family firms to assess and enhance their innovative capacity.