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This investigation is related about the impact of dynamic capabilities on competitive advantage of manufacture small and medium enterprises that are in Panama District. The need for the study will be explained, current problems, also concepts and dimensions of dynamic capabilities and competitive advantage, besides the theory of resources and capabilities and theory of organizational learning both will be explained. The investigation is quantitative, descriptive, and correlational, to gather objective information so it could be replicated in different contexts. The instrument to obtain data is the survey, built with eight dimensions and within those dimension twenty-eight questions. The surveys were applied to one hundred and eight individuals that were the sample, the total population are eight hundred eighty-eight manufacture enterprises. After processing the obtained data, it will be sought whether or not there is a relationship between dependent and independent variables.