The relentless emergence of digital technologies is catalyzing a profound transformation in the essence of core competencies and the foundations of competitive advantages. As the world's largest digital market, China stands as a testament to the global digital influence, while a growing cohort of emerging smart manufacturing enterprises exhibits remarkable adaptability in swiftly navigating the tumultuous business terrain. These enterprises are achieving commendable competitive advantages within the dynamic crucible of digital innovation. Yet, the pivotal question persists, awaiting a comprehensive answer: What specific capabilities must emerging smart manufacturing firms cultivate to seize and sustain their competitive edge in this digital era? In our pursuit of this crucial inquiry, we employ a robust research approach amalgamating the single-case study methodology with the Gioia methodology. Our research unveils a novel category of capability primed to bestow a competitive advantage in the realm of digital innovation. We introduce the concept of 'Information Interaction Capabilities (IICs),' an innovative construct that unfurls across four distinct dimensions: variability capability, self-cognition capability, empathy capability, and ecology capability. Moreover, we embark on a journey to decipher the intricate mechanisms governing the formation of IICs, shedding illuminating insights on how these capabilities are nurtured and astutely leveraged by forward-thinking enterprises in this digital epoch.
