Importance of tacit knowledge in incremental innovation

Abstract

PurposeThe purpose of this paper is to examine the role of tacit knowledge in incremental innovation, which has hitherto been neglected.Design/methodology/approachQualitative case analysis was used to focus on two large Japanese pharmaceutical companies’ development of new antihypertensive drugs. The study uses interview data and documentary research materials to explore the knowledge bases of the companies’ research teams as they refined an existing drug to produce new products – a process of incremental innovation.FindingsExplicit knowledge (chemical structure of preceding drug) was used in both successful and failed cases of drug discovery. In the two successful cases, the tacit knowledge of key researchers, based on their long-term experience of related research, provided insight into developing compounds with good in vivo efficacy, which led to successful clinical development.Practical implicationsThe findings suggest that tacit knowledge may play an important role in incremental innovation processes, and that its influence on product development should be considered in such ways as team and organization structure.Originality/valueThis study addresses a gap in the literature regarding the impact of tacit knowledge on incremental innovation processes. It is often assumed that incremental innovation is based on existing technology. This study suggests that tacit knowledge may play a hitherto largely unrecognized role in incremental product development.