Revisiting Absorptive Capacity with a Design Perspective

We examine how teams working on radical innovation develop a novel type of Absorptive Capacity (AC) to make use of external knowledge. In the setting of the semiconductor industry, which has long been an industrial reference for the literature on innovation, we are able to compare AC in incremental innovation and AC in radical innovation. Our central contribution is a framework of how radical innovation teams leverage external knowledge using a specific type of AC. By contrast with absorptive capacity in incremental innovation, which can be considered as an “epistemic AC” (EAC), based on a stable set of design-rules to address pre-identified problems, this other type, which we label “conceptual AC” (CAC), is based on “refined visions”. We identified three facets of CAC: 1) “desorptive capacity” enables radical innovators to overcome fixation effects and break from the known to “out-ofthe-box”, 2) “hook building” enables radical innovators to overcome cognitive crisis and isolation and link the unknown to multiple cognitive references and 3) “milieu stimulation” helps to overcome the temptation to limit exploration to existing knowledge by supporting the creation of new knowledge in the milieu. This capacity makes use of prior knowledge in multiple, counterintuitive ways, and is able to strongly influence organizations, strategy and mental models so that classical AC determinants become dependant variables in the CAC model. Our most important contribution is the reinvigoration of the study of the link between knowledge and innovation by underlining the role of creative concepts via a productive use of external knowledge in radical innovation. ha l-0 08 70 35 3, v er si on 1 9 O ct 2 01 3 Author manuscript, published in "International Journal of Knowledge Management Studies 5, 1/2 (2012) 10-44" DOI : 10.1504/IJKMS.2012.051939