Innovation network

Innovation, the creation of new, technologically feasible, commercially realisable products, processes and organisational structures (Schumpeter, 1912; Fagerberg, Mowery and Nelson, 2006), is the result of the continuous interactions of innovative organisations such as universities, research institutes, firms such as multi-national corporations and small-to-medium-sized enterprises, government agencies, venture capitalists and others. These organisations exchange and generate knowledge by drawing on networks of relationships (innovation networks) that are embedded in institutional frameworks on the local, regional, national and international level (Ahrweiler 2010). For innovations to emerge, agents require not only financial resources to be invested in R&D, but the ability to recombine their own with external knowledge, to design interfaces to related knowledge fields and to meet customer needs.

Because agents engaged in innovation processes are confronted with a high degree of complexity, which is related to their competitors’ behaviours, the overall knowledge development, and dynamic changes in their customer needs, it is very unlikely that single firms will master all relevant knowledge fields in isolation. Innovation networks are considered to be an organizational form of R&D, which allows for mutual knowledge exchange and cross-fertilization effects among the heterogeneous actors involved.

References:

Ahrweiler, P. (Ed.)(2010), Innovation in complex social systems, London: Routledge.

Fagerberg, J., Mowery, D. and Nelson, R.R. (2006), The Oxford Handbook of Innovation, Oxford: Oxford University Press.

Schumpeter, J. (1912) The Theory of Economic Development, Oxford: Oxford University Press.