Over the past decade much evidence has been available on firms not relying solely on internal research and development, as well as knowledge to solve organisational problems. Globalisation of innovation is based on internal exploitation of technology along with employment of innovations being generated globally. The current and ongoing dialogue …
Over the past decade much evidence has been available on firms not relying solely on internal research and development, as well as knowledge to solve organisational problems. Globalisation of innovation is based on internal exploitation of technology along with employment of innovations being generated globally. The current and ongoing dialogue in the field of innovation says, “No matter who you are, most of the smartest people work for someone else.” This is known as Joy’s Law, accredited to Sun Microsystems co- founder Bill Joy who explains that solutions to many of the problems, faced by organisations today, will be found outside its boundaries.
The commercialisation of knowledge assets is not a very new phenomenon. In 1945, Hayek argued that macro level knowledge of the market economy is unevenly distributed in society and centralised models for co-ordination are prone to failure due to this scattered knowledge. Cohen and Levinthal have talked about ‘absorptive capacity’, which explains the importance of recognising the value of new, external information and investing in internal research to utilise this outside technology. In the knowledge economy today, a big increase can be seen in the attempt made by companies towards external acquisition and exploitation of information with the aspiration to compliment or capitalise their knowledge bases.
Many terminologies exist in the world of innovation design, management, and culture around this idea of going external due to it providing to be a more profitable way to innovate. Its capacity to reduce costs, speedy reach to the market, ability to increase the capacity to differentiate in a market place and thus generating new revenue flows for companies. Today, it has become important for organisations to embrace concepts such as Open Innovation, Co-creation, Crowsourcing, and User Innovation, which help capture distributed knowledge. With the growth of the World Wide Web it has become easier for companies to reach out to consumers and effectively collaborate with them. Author Chales Leadbeater says,
“In most fields- science, culture, business, academia- creativity emerges when people with different vantage points, skills and know-how combine their ideas to produce something new. The web provides a platform for us to be creative together on a scale previously unimaginable. It is changing how we share ideas and so how we think.”
From start-up firms to big corporations, companies of any shape and size are trying to benefit from the knowledge lying outside their organization and taking the help of users, consumers, enthusiasts and the public at large.