Geography Reference
In-Depth Information
tion and innovation, with one of the authors subsequently describing why public
sector involvement has usually failed to create greater entrepreneurial activity and
supplies of the crucial venture capital (Lerner
2009
). Hence, it is important that a
receptive milieu exists for inventions and innovations, both within the firm or circle
within which the creator is working and within the eventual market.
11.5.4
Knowledge Acquisition
Overcoming the various constraints facing the creative process also involves un-
derstanding how the necessary knowledge to invent something and carry it into the
innovation phase occurs, which involves a demand and supply side.
On the
supply side
the most obvious source of obtaining the knowledge to cre-
ate innovations should lie within firms. The inevitable day-to-day focus on existing
products and processes in a competitive environment usually takes priority within
firms, so new ideas or products are usually limited, given the uncertainties that have
to be overcome. Many firms often lack initiative in pursuing new ideas and have
severe information deficits in their ability to create innovations. Indeed, most firms,
especially small and medium sized enterprises, are still reluctant to pay the costs
and engage the uncertainties of what amounts to research and development, cer-
tainly beyond their existing product range. So the 'culture' of the firms, their visions
and leadership become critical variables in the extent to which they are innovative.
Cooke and Morgan (
1998
) have argued that firms have very different capacities for
knowledge creation, as well as the desire to obtain, use and apply this knowledge
to innovations in a continuous learning sequence, or to share this information with
other firms, for in the last resort many of these may be competitors. Although the
focus of innovation is often on products from new firms, Govindarajan and Trimble
(
2010
) have shown that large companies do play a major role in innovation. They
suggested that it is the
implementation
of new ideas, rather than the initial inven-
tion, that is crucial. It is the execution that leads to new products or processes, and
this involves unacknowledged and often long, grinding work behind the scenes, a
phase that lacks the glamour of invention. The authors have also argued that big-
ger, successful firms have the resources to do both, but need to develop an effective
managerial approach to achieve such results. They suggest that companies need to
build what they call 'dedicated innovation machines', teams of employees recruited
from within or from outside the organization on the basis of their entrepreneurial
and creative skills, rather than by their rule-abiding qualities, an idea that could also
apply to cities. However, these units must share staff with the main company and
be able to convince other sectors within the firm of the need to support the process
of translating their ideas into products, rather than being allowed to become some
remote independent sector within the company, unrelated to the main organization.
The second way that knowledge is obtained, and then applied to create inno-
vation, comes from other
formal sources outside the firm
. Examples range from:
obtaining information from research laboratories—although private ones, unless
non-profit, rarely share their knowledge; higher educational institutions, whose re-
