Collective Innovation Processes

Principles and Practices

Dimitri Uzunidis

• Publisher: Wiley-ISTE
• Year: 2018
• Print ISBN: 9781786303776
• eBook ISBN: 9781119557951
• Edition: 1
• Topic: Business
• Subtopic: Management
• Index: Business

In macro-, meso- and micro-economic systems, the concept of innovation involves a variety of resources and functions. It includes all formal and informal institutions, networks and actors that influence innovation and act as innovation boosters within companies, at the territorial level, at the level of innovation networks or in national economies.

This book deals with innovation in a globalized context in terms of the entrepreneur, enterprise, territorial and sectoral systems and national systems of innovation in which collective innovation processes are formed.

1
Enterprise Knowledge Capital and Innovation: Definition, Roles and Challenges¹

The economic analysis of innovation has significantly developed since the 1950s. Classical economists had however already set down the essential foundations in the 18th Century. For example, Adam Smith (1723–1790) observed and described the forms of division of labor in the first factories and highlighted the importance of divided and combined labor, as well as the significance of learning through practice and interaction in the emergence of technological ideas and artifacts. Jean-Baptiste Say (1767–1832) emphasized the characteristics and role of entrepreneurs as well as the institutional conditions that could help or hinder the development and dissemination of knowledge. Karl Marx (1818–1883) analyzed mechanization and its effects on large-scale industry, and also underlined the importance of collective workers in their organization and the gradual integration and incorporation of science at the service of capital. These essential contributions were overshadowed by the increasing popularity of the neoclassical approach, based on the market sphere, in which technological progress did not figure prominently since the main factors of production, capital and labor, were regarded as homogeneous. It was only in the 1950s that Robert Solow’s growth models integrated, although imperfectly, technological progress into the neoclassical analysis of economic growth [SOL 56, SOL 57]. As a factor external to the economic sphere, it constitutes “manna from heaven” representing the global productivity of the factors. Technological progress, a residual factor of the production function, was an explanation for the differences observed between GDP growth and the growth in the quantities of factors employed in the production process in the period of strong growth after the Second World War. However, some authors, such as Schumpeter (1883–1950), regarded innovation as the main driver of the change inherent in the capitalist production method, associating it with the adventurous spirit of entrepreneurs. Yet, the origins of technological progress remained murky or, in other words, technological progress was still a black box, and no-one was sure what it contained.

The developments of industrial economy, which first focused on researching and explaining the actors’ performances in relation to their behaviors, as well as the structures within which they evolve, made it possible to gradually open up the black box of technology, to use the title of Nathan Rosenberg’s 1982 work ² . In the theory of the firm, theoretical approaches also diverge from the restrictive perspective of neoclassical economists, who limit a business to the rational and maximizing individual. Behaviorist and management theories interpret a company as a complex organization with different goals, where innovation progressively becomes an essential factor in differentiation and performance. Since the 1980s, evolutionary theories and theoretical approaches based on resources have enriched the study of the origin of innovation in companies. Knowledge, its characteristics as an economic good and the conditions for its production, accumulation and appropriation are at the center of current theoretical developments.

This chapter is built on these theoretical foundations. Its goal is to present the concept of enterprise knowledge capital, which makes it possible to study how a company combines resources made of knowledge and information. It also contributes to the identification of the actors, inside and outside the company, involved in the innovation process. The first part of this chapter (section 1.1) provides a general definition of knowledge capital, while also linking it to current and topical concepts. The second part (section 1.2) presents the roles knowledge capital plays in the production process and the specific functions of information in this context.

1.1. Knowledge capital: definition and roles

1.1.1. Information and knowledge

To understand the concept of knowledge capital, it is useful to recall the difference and complementarity between information and knowledge. In economics, and more generally in social sciences, Information and Knowledge were for a long time considered to be synonymous, then as being separate, but they can also be considered complementary.

In the first case, economists have highlighted the common features of information and knowledge, often regarding them as synonymous. According to Fritz Machlup [MAC 84], knowledge (like information) is characterized by high fixed production costs and zero or close to zero reproduction costs. This can be explained in relation to the characteristics of these specific goods, especially their non-excludability (namely the inability to exclude a user from using the goods, even if he does not help finance them) and non-rivalry (in other words, an individual consuming the goods does not decrease their availability for other users). This is the root of the issue involving the companies’ incentive to invest in the production of knowledge [ARR 62a].

Others have attempted to highlight the differences between information and knowledge and to separate the two ideas, correctly relying on the meaning that cybernetics gave to information, namely “a set of data”. For example, according to Dominique Foray, “Knowledge is fundamentally a matter of cognitive capability. Information, on the other hand, takes the shape of structured and formatted data that remain passive and inert until used by those with the knowledge needed to interpret and process them” [FOR 04, p. 6].

Finally, we can consider them as complementary. A such, knowledge is traditionally associated with individuals and defined as a set of more systematized bodies of knowledge, acquired through consistent mental activity. Knowledge is associated with individuals. It is the product of intellectual understanding, learning and behavioral processes. Knowledge is first incorporated in individuals and in the collective memory of the social community. In the case of companies, scientific and technological knowledge is incorporated in individuals (researchers, engineers, workers) and in the collective memory of the company (the “routines”, if we use an evolutionary vocabulary, that are embodied, for example, in specific production processes). Knowledge is also integrated in the machines, objects and products created by the company’s members and then employed in its scientific and technological activity.

Information, as a set of data, can be considered a part of knowledge. The whole knowledge (“savoir” in French) may be subdivided taking into account the degree of systematization or structuration which is linked to the degree – high or low – of mental activity involved in its construction. In this case (Figure 1.1), the whole knowledge looks like a Russian nesting doll. Knowledge appears as a set of structured information. Information corresponds to a set of data, and the data correspond to a set of facts. Information and knowledge thus appear to be complementary.

Figure 1.1. Knowledge: a Russian nesting doll

(source: author)

This complementarity may also be studied in terms of the way they are being accounted for, as a stock or as a flow. In this view, knowledge can be viewed as a stock, and information as a flow. This approach is important when we want to study the innovation process within a company, and the role that knowledge and information play in this process (and thus the concept of knowledge capital). In a company, innovation can be considered as an endogenous process as it results from a motivated investment in human (researchers, engineers), material (scientific and technological tools, machines) and immaterial (databases, software, more or less applied research activities) resources. However innovation is not only a matter of internal knowledge production (knowledge as a stock). This would conceal all the economic intelligence activity, which is essential. Information as a flow is central in the building of our concept of knowledge capital, and in the understanding of the innovation process within firms. The creation of what we name “knowledge capital” in fact requires researching and acquiring scientific, technological and business information with the potential to enrich as well as “structure” or “systematize” the bodies of knowledge produced within a company.

Figure 1.2. Information, input and output of knowledge

(source: author)

The set of scientific and technological knowledge of a company then constitutes a stock that the company can use. This stock is constantly evolving in a changing economy, and this evolution tends to question the existence of a marginal cost close to zero, which goes hand in hand with the identical reproduction of the stock of knowledge. Here the role of scientific and commercial information appears clearly. Scientific and technological information, as a flow, then appears to be simultaneously an input and an output of knowledge (Figure 1.2). Therefore, information and knowledge are not synonymous, nor are they dissociable: they are complementary. Information is a description, whether written, visual or sound-related, of codified or tacit knowledge. It includes established, published and disseminated images of events, behaviors and facts of the physical, biological, natural and human world. The words “inform” and “information” come from the Middle English enforme or informe, meaning to “give form or shape to” and also “form the mind of, teach”, as well as from the Old French enfourmer, from the Latin informare, meaning “to give a form, a meaning”³. Therefore, information has a structuring power.

Thus, knowledge and information are intrinsically linked: the information flows coming into a company have a...

Table of contents

• Cover
• Table of Contents
• Introduction
• 1 Enterprise Knowledge Capital and Innovation: Definition, Roles and Challenges
• 2 The Non-economic Values of Innovation
• 3 Long-term Survival of Innovative Organizations
• 4 The Resources Potential of the Innovative Entrepreneur
• 5 Innovation Spaces: New Places for Collective Intelligence?
• 6 The Innovative Territory
• 7 The “Eco-innovative” Milieu: Industrial Ecology and Diversification of Territorial Economy
• 8 Responsible Innovation
• 9 Innovation Capacities as a Prerequisite for Forming a National Innovation System
• List of Authors
• Index
• End User License Agreement