How do megaprojects build open innovation capabilities?

Governments around the world are increasingly using megaprojects to deliver services to communities. However, most megaprojects fail; they are delivered late, with significant cost overruns and/or diluted benefits. Researchers have suggested implementing open innovation (OI) to improve megaproject performance. However, implementing OI requires an organization to build new capabilities. This study contributes to the literature on megaprojects by adapting the dynamic capabilities concept to develop a theoretical framework for implementing OI. A combination of a literature review and expert judgement was used to extract twenty-nine elements that are the micro-foundations of the capability to implement OI in megaprojects. A grey number theory-based mathematical model was developed to measure and objectively monitor the OI implementation index (O3I) for megaprojects. This study presents a case study that indicates the ease of implementation of the developed model and its transferability to other megaprojects across domains. This study intersects three areas of inquiry: megaproject management, OI, and dynamic capabilities and makes two key contributions to the growing body of knowledge in megaproject management: (1) we adapt the dynamic capabilities concept to develop a framework to implement OI in megaprojects and (2) we develop a scale to qualitatively assess the level of OI implementation in an organization.