摘要：Industry 4.0 drives enterprises to transform their capabilities especially in innovation and their capabilities
to adapt with dynamic market. The capabilities can be fostered when the leader is oriented
towards digital technology and market orientation. The role of digital leadership has gained attention
for studies to develop innovation and dynamic capabilities based on market orientation. Studies
have been conducted on dynamic capabilities with focus on the strategy, management and economic
literature including the understanding of its driving key to success. However, the study on
the role of digital leadership on the development of dynamic capability based on innovation capability
and market orientation has not been intensively discussed. It is argued that the development
of dynamic capability and innovation capability is strongly driven from a combination of digital
leadership and market orientation. Data in this study is taken from a survey conducted on 88 Indonesian
telecommunication firms as a unit for analyses. The results show that digital leadership had
a strong direct and indirect relationship with dynamic capability, however the strong path in developing
capability is determined from the development of innovation capability that is driven from
digital leadership based on market orientation. The finding reinforces the role of digital leadership
as a critical influence on development of dynamic capability. Future studies are suggested to extend
the research by exploring the research model to elaborate more on the impact of collaboration,
leveraging a larger sample size and better statistical tools. A longitudinal study on the companies
that implement the transformation based on dynamic capabilities is also recommended for future
studies.
