Abstract
The aim of this paper is to transfer the innovation system (IS) approach to the microeconomic level, creating a conceptual framework which helps individual actors to explain, identify, and predict the origin of innovations. Based on the ongoing discussion about the applicability of boundedly rational search and, in particular, the metaphor of an opportunity landscape, the author has developed a conceptual framework for the origin of economic innovations, structured along three dimensions. First, the adjacent possible defines a narrow space of potential first-order combinations of exiting knowledge, which is the trajectory for the new developments in technology and science. Second, the adjacent feasible defines an area of expected cost reduction which enables the exploitation of the new technologies within a threshold. Finally, the adjacent acceptable represents a small area on the current edges of socially accepted behavior, which currently only innovators embrace, but soon will reach the early majority of adopters. It is, however, the moment when all three dimensions achieve an intersecting area, when the opportunity vacuum (OV) is created. The OV is a space, which strongly attracts innovation and often creates multiple inventions at the same time emerging independently. While this model is aimed at explaining the origin of economic innovations in retrospective, it can also be applied as a framing method to anticipate future economic novelty.
Highlights
The development and exploitation of breakthrough ideas, concepts, and technologies, generally referred to as innovation, is the driver of human advancement and prosperity
If there is a “natural limit” to innovation, how can we describe the field of possible innovations?
While the innovation system (IS) framework can help identify a network knowledge flow by analyzing the interactions among stakeholders on a macro level, the opportunity vacuum (OV) framework explains the origins of innovations as a constellation of processes on three different dimensions on a micro level
Summary
The development and exploitation of breakthrough ideas, concepts, and technologies, generally referred to as innovation, is the driver of human advancement and prosperity. The central idea behind this theory is the notion that what appears as innovation at the macro level is in reality the result of an interactive process that involves many different actors at the micro level In this view, the innovation system is a continuous process where habits and practices of institutions, as well as networks, play a central role in generating innovation and technological change. Felin et al (2014) recommend that emerging innovations are best captured by focusing more carefully on the endogenous nature of organisms, including economic actors, and by focusing on the constraints that enable the occurrence of future innovations In this line of reasoning, the overall contribution of this paper is to transfer the innovation system (IS) approach to the micro level and develop a conceptual model for the framing of microeconomic opportunities along the constraints of economic and social development. The model is aimed at providing an explanation for the emergence of innovation in retrospective but will provide a framework for the search of future entrepreneurial activity
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