Abstract: We explore the double-edged sword of recombination in generating breakthrough innovation: recombination of distant or diverse knowledge is needed because knowledge in a narrow domain might trigger myopia, but recombination can be counterproductive when local search is needed to identify anomalies. We take into account how creativity shapes both the cognitive novelty of the idea and the subsequent realization of economic value. We develop a text-based measure of novel ideas in patents using topic modeling to identify those patents that originate new topics in a body of knowledge. We find that, counter to theories of recombination, patents that originate new topics are more likely to be associated with local search, while economic value is the product of broader recombinations as well as novelty.
Sarah Kaplan’s interview with Knowledge@Wharton: Are You Brainstorming the Right Way for Innovation?
Listen to amazing Sarah Kaplan discussing our paper on Knowedge@Wharton:
Ideas for Leaders
A summary for practitioners by Ideas for Leaders: Broad Knowledge or Narrow Expertise: What Works Best for Innovation?
Rotman School of Management
See a brief overview of our findings in this video created by the Rotman School of Management at University of Toronto.