Wharton professor David Hsu's presentation on Networked Business Innovation at Supernova Forum 2010

1. Networks and Innovation
David Hsu
Associate Prof. of Management
dhsu@wharton.upenn.edu

2. Discussion areas
! What is driving the importance of networks for innovation?!
! What type of organizations are likely to appropriate value
created by networks of innovators?!

3. What is driving the importance of networks for innovation?
! Knowledge specialization!
! Low hanging fruit already picked!
! No single organization or individual has a monopoly on the
inputs to innovation !
! Intellectual capital (great ideas, IPR)!
! Evaluation expertise & financial capital!
! Increased competitive pressure!
! E.g., faster product cycle times!

4. Knowledge & resources are distributed, so collaboration across the
network might be important for innovation
Source:
Powell,
et
al.
AJS
(2005)

5. Networks for idea circulation
! Locus of knowledge: people, organizations and institutions as
knowledge repositories!
! Circulation to maximize probability that holder of knowledge will
be exposed to the problem, or!
! Circulation to build better ideas and ventures!

6. Successful commercialization goes beyond successful invention

7. Appropriating value from networked innovation
! Who has the knowledge & what is the basis for participation?!
! Non-commercial (Wikipedia; OSS) vs. commercial efforts!
! Designing incentives!
! How do you control the platform and drive usage?!
! Apple App Store!
! Facebook | LinkedIn | Twitter | Yelp | Foursquare | …!
! Innocentive | Netflix Prize!