Managing people for innovation: leveraging dynamic capabilities in space startups

Startups in the space sector operate under uniquely volatile, uncertain, complex, and ambiguous (VUCA) conditions, compounded by rapid technological advancement, resource constraints, and regulatory pressures — a state this paper terms triple VUCA. Traditional management tools were not designed for rapidly evolving, growing high-tech sectors. Best practices often fail to fit these organisations or the industry. Traditional management approaches often rely on hierarchical decision-making and rigid processes. Startups within the space sector need a framework that will allow them to be proactive, agile, and innovative in rapidly changing environments. Dynamic and high-pressure contexts like startups in the space sector require adaptability and decentralised decision-making. However, despite acknowledging the importance of internal organisational agility, existing research primarily focuses on established organisations and overlooks the crucial role of employees in developing and implementing these capabilities. This literature review examines how space startups in the UK can leverage Dynamic Capabilities (DCs) to drive innovation and survival, with a particular emphasis on the role of people management. It argues that traditional hierarchical management approaches are misaligned with the fast-paced, informal structures of startups and that empowering employees through decentralised, flexible strategies is essential for developing effective DCs. By reframing the microfoundations of dynamic capabilities through a people-centred lens, this paper offers a revised perspective more suited to the needs of startups in high-tech, high-stakes environments. Future research must focus on building actionable, context-specific frameworks to support both organisational growth and human capital development within this critical sector.