Collaborative Innovation in Early-stage Startups: Insights from Nova Scotia's Innovation Ecosystem

Abstract

Early-stage startups face significant innovation challenges from resource constraints, limited network access, and restricted external knowledge. While critical, how startups integrate external expertise, funding, and technology in product development is largely underexplored in current literature. This study, therefore, aims to investigate collaborative innovation in Nova Scotian early-stage software startups, focusing on design decision factors and product development challenges. Grounded in Dynamic Capability and Absorptive Capacity theories, this study analyzed 26 semi-structured interviews with startup founders and developers. The findings show that iterative feedback, user-centered design, and ecosystem engagement are key to overcoming funding instability, staff turnover, and technical hurdles. Thematic analysis shows that external collaboration improves access to resources, reduces time-tomarket, and improves innovation performance. The study's results extend dynamic capability and absorptive capacity theories to early-stage startups and offer practical guidance to improve innovation performance in dynamic environments.