In Search of Solutions: Inertia, Knowledge Sources and Diversity in Collaborative Problem-solving

Innovation is at the core of firms’ competitiveness. External knowledge is increasingly leveraged in the efforts to increase innovation performance by solving innovation related problems and thereby developing new technology, products or services. Using internal knowledge sources can be beneficial when pursuing minor performance improvements in existing technologies. However, reliance on internal knowledge sources carries a risk of organizational inertia related to problem understanding and solution development in the shape of path-dependencies and preferences for exploitation and reapplication of existing knowledge. Such inertia may imbue innovation processes related to the development of new technologies with reduced novelty and an inability to recognize alternative and potentially more attractive solutions. As a result, over-reliance on internal knowledge sources is likely to inhibit the ability to solve problems and reduce innovation performance related to the development of new technology. In contrast, a growing stream of research shows the positive effect on problem-solving and innovation performance from drawing on diverse knowledge sources outside the firm. Through collaborative efforts involving universities, customers, competitors and suppliers in problem-solving firms can gain complementary perspectives, insights and technological knowledge as they pursue the development of innovative technologies.