New research: what determines innovation performance at the micro-foundations level?

Today’s international business environment is filled with information – so much information that it can be difficult to make use of it. In this world of abundant data, it can be hard to distinguish what information is useful. Firms’ ability to innovate largely depends on their employee’s ability to find useful information and integrate it into products and services. This ability is generally referred to as absorptive capacity. Most research investigates absorptive capacity at the organization level. Little knowledge investigates absorptive capacity at the individual level by examining how individuals within firms recognize, understand, and utilize new knowledge.

New research, conducted in part at the House of Innovation, focuses on the absorptive capacity and innovative performance in team contexts. In this study, researchers developed and tested a model to examine absorptive capacity at the individual level and how interactions between individuals determine innovative performance of collectives.

The study offers two significant findings. The first is that employees that are curious about mastering their workplace and that desire to work more effectively will have a higher absorptive capacity than those who aren’t. These individuals are valuable because they will generally strive to generate new ideas and make sure that ideas are commercialized.

The second finding is that adding together the absorptive capacities of individuals does not necessarily have a big effect on collective innovation outcomes. Individuals' absorptive capacity improves collective innovation only when these individuals are effectively coordinated.

These findings were the result of an original theoretical model being tested on a dataset collected from 648 knowledge workers from 126 functional areas. Research like this is important because it expands our understanding of absorptive capacity as well as the managerial practices that positively impact firms’ innovative performance.

Researchers:

Emre Yildiz^a, Adis Murtic^b, Magnus Klofsten^c, Udo Zander^b, Anders Richtnér^b

^{a. Mälardalen University, Sweden
b. Stockholm School of Economics, Sweden
c. Linköpings University, Sweden}