Background Rapid developments in digital technology have brought several challenges in innovation research. First, digital technology has radically reduced the communication cost for remote collaboration and coordination, which has led to the emergence of new organizing structures that transcend the traditional organizational boundaries and space limitations. Open innovation, for example, allows organizations to tap into a much broader source of new ideas by democratizing the innovation process and taking advantage of reduced communication cost and access to shared digital resources. By overcoming constraints on communication and coordination, the use of digital technology has enabled organizations to radically decentralize the way they manage innovation across networks of increasingly heterogeneous actors. Examples of such networked, distributed innovation abound: from software engineering companies that work with the global hacker community to improve their software, to manufacturing companies sourcing innovation from customers and suppliers, to mass media companies drawing on digital content created by users. Second, change in the innovation process is also taking place due to digital convergence. The integration and embedding of digital technologies into nondigital artifacts is opening up vast new avenues for radical innovation. Integration of digital technologies, often in the form of computing, memory, and transmission capability, not only allows the products and services to become “smarter,” but also potentially transform the way the products are consumed and experienced. The embedding of global position systems chips and radio frequency identification tags into ordinary products, for example, enables the production of streams of digital data that can be combined with other forms of digital information— such as digital map on Google Earth or social networks on MySpace.com. Therefore, the notion of digital convergence that is often used to describe the bundling of phone, Internet, mobile, and TV services need to be expanded to all forms of artifact design, process change, and experience creation to theorize about these kinds of “radical” digital innovations. Radical digital convergence blurs the boundaries across industries and commerce, as exemplified by the collaboration between Apple and Nike when they introduced Nike shoes that interact with iPods. Here, organizations are confronted with heterogeneous knowledge resources that are often embedded in different pockets of the organizational hierarchy. Third, the advances in digital technologies and software platforms now allow organizations to “digitize” multiple aspects of work processes that were previously supported by analogue tools. Digitized work practices can be modularized, integrated, and reconfigured. In the construction industry, for example, building information management systems have started to leverage new kinds of digital information infrastructures that integrate activities related to design, budgeting, scheduling, material management, and human resources. Again, we see the challenge of managing heterogeneity across organizational borders as a result of digital innovation. We believe these and many other challenges related to rapid and radical digitization will dominate the concerns of managers in this century. Studying the full impact of digital technology on innovation, however, requires genuine cross-disciplinary dialogue. Given the novelty and speed of this phenomenon, we need richer vocabularies, diverse theoretical perspectives, new research methodologies, and novel data analysis techniques allowed by access to digital data and traces. We also need to increase the breadth of research as the impact of digital technologies can be found in many different industries,
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