A recent article in Wharton's Knowledge @ Wharton publication features an interview with Larry Huston, managing partner of 4INNO and a Senior Fellow at Wharton’s Mack Center for Technological Innovation on how innovation networks function.
His definition of innovation networks: “people, institutions and companies that are outside the firm….[who] are intellectual assets that companies can link up with to solve problems and find ideas…and therefore quickly create top-line growth and bring new things to the marketplace.”
I think that is an accurate definition. Huston explains that there is going to be what the interviewer calls a “major disruptive change, affecting all companies in the future.”
Those companies that are best able to identify the right outside assets and that are able to build good relationships with them will be the ones with the competitive advantage.
He uses an example of P&G as a company that has built an effective innovation network. He also points to Boeing, Microsoft and IBM. He is quick to point out that it’s not just these bigger companies that can build the networks – the smaller ones can, too. He adds that 35% of the world’s patents are now being given to small companies.
More on this great Q&A in my next post….