Innovation Networks

Briefly, explain the characteristics of networks and how they help facilitate innovation in organisations.

Innovation networks are a way to manage necessary knowledge interactions. They can be defined as a diverse group of agents who voluntarily contribute knowledge and other resources (money, equipment, and land, for example) to jointly develop or improve a social or economic process or product. Innovation networks are a special form of organization with a non-hierarchical structure, a collaboration-based culture, consensus-based coordination (because members are free to leave the network at any time), usually no legal personality (especially in their early stages), and often relatively blurred boundaries between functions and business units to facilitate multi-directional knowledge sharing.. They evolve with market opportunities and the technologies they develop. Different types of actors participate in innovation networks; in fact, membership changes in response to emerging problems and opportunities or the development and diffusion of innovations

These kinds of networks are advantageous because it improves horizontal, cross functional and inter-organisational level knowledge sharing. More innovative: through better linking and integration of dispersed organisational knowledge. It also improves knowledge searching: through knowledge developed from cross-functional and inter-business interactions. There is more flexibility which is better suited for contemporary dynamics and competitive business environments.

An example of the use of innovation networks can be seen with Procter & Gamble. They spent a lot of time defining the assets outside that could help them in their various science areas and business areas and set about developing, in different regions of the world, assets, hubs where they could link into those. They also developed a proprietary network of individuals who could contact others in different parts of the world.