Distributed innovation is gaining attention as the digital economy transforms innovation from single organizations to a dynamic landscape spanning collaborative groups and external entities. However, the literature lacks an explicit exploration of how distributed innovation unfolds and how actors interact to achieve mutual goals. Collaborative efforts and co-creation among alliance actors pose challenges, requiring effective management across collaborative spaces to enhance engagement and optimize resource allocation. To address these gaps, we propose a conceptual model emphasizing reciprocal sociocultural alignment between external/internal actors' innovation capabilities. The model explores distributed technology innovation and value co-creation through dynamic capabilities and an extended resource-based view. The model incorporates critical concepts from earlier research identified using a concept-centric literature review approach and presents a framework, unveiling the distributed innovation and value co-creation processes by emphasizing the role of sociocultural alignment in the theoretical linkage between model concepts.