Exploring the relationships between knowledge sources in the innovation process: evidence from Finnish innovators

Abstract

Innovation is a costly, risky, and uncertain process, and one of its most central components is knowledge as has been emphasised in the innovation literature. Notably, such knowledge tends to be distributed across different internal and external sources. That is, innovation processes involve diverse relationships between knowledge that originates from a myriad of different sources such as customers, suppliers and universities. While such relationships are distinctive to modern – distributed – innovation processes, little is still known about their implications on the search for new knowledge. This paper proposes that since the innovation process is inherently an uncertain and costly activity, a deeper understanding on the relationships between knowledge sources can help firms to better master the risks and costs related to their search activities. In other words, given that not all knowledge is equally combinable with each other, it claims that complementarities among knowledge sources increase the likelihood (over non-complementarities and substitutes) that such sources encompass mutually combinable knowledge, and hence decrease the uncertainties, risks and costs involved in distributed innovation processes.