Anatomy of the 3D Innovation Production with the Cobb-Douglas Specification

This paper focuses on verifying the relevance of two theoretical propositions and related empirical investigation about the relationship between creativity and entrepreneurship. It draws upon a creativity process that considers three “dimensions” or “disciplines” (3D) critical for creative organizations—within discipline expertise, out of discipline knowledge, and a disciplined creative process. The paper first explores the Cobb‐Douglas production function as a relevant tool for modeling the 3D creative process. The next part discusses the 3D process as a production function, which is modeled following the well‐known Cobb‐Douglas specification. Last, the paper offers implications for future research on disciplined creativity/innovation as a method of improving organizations’ creative performance. The modeling shows that labor and investment can readily enter into the 3D creativity process as inputs. These two inputs are meaningful in explaining where innovation outputs come from and how they can be measured, with a reasonable theoretical decomposition. It is not true that the more capital investments in the creativity process, the better the level of innovation production, but firm’s human resource management and expenditures should pay attention to optimal levels of capital and labor stocks, in a combination that helps reach highest possible innovation output.