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Innovation Inside Out

There has been some very interesting research on the impacts of intellectual capital on innovation. Specifically, Subramaniam & Youndt studied the impacts of three forms of IC on two forms of innovation. Their findings were published in the June 2005 Academy of Management Journal article “The Influence of intellectual capital on the types of innovative capabilities.”

There has been some very interesting research on the impacts of intellectual capital on innovation. Specifically, Subramaniam & Youndt studied the impacts of three forms of IC on two forms of innovation. Their findings were published in the June 2005 Academy of Management Journal article “The Influence of intellectual capital on the types of innovative capabilities.”

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IC can exist as human capital (brilliant individuals), social capital (groups that exchange ideas), and organizational capital (patents and databases of knowledge). Innovation is typically characterized as incremental (improving existing products or services) or radical (creating entirely new products).

Subramaniam & Youndt found that incremental innovation was primarily driven by organizational capital — the historical knowledge-base of the firm building itself up one brick at a time. However, radical innovation was NOT primarily driven by human capital — the brilliant individual was insufficient for creating radical innovations. Instead, the primary driver for radical innovations was social capital — groups of people sharing their ideas, insight, and experiments was more effective that the application of brilliant individuals alone.

They took a very scientific approach to this problem and worked hard to gate out external influences.

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Conclusion — If you want to develop radical innovations you had better invest in social interactions and collaboration first. You can spend the money you have left over hiring Giant Brains.

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