Technology brokering and innovation in a product development firm

Administrative Science Quarterly, Dec, 1997 by Andrew Hargadon, Robert I. Sutton

Knowledge is imperfectly shared over time and across people, organizations, and industries. Ideas from one group might solve the problems of another, but only if connections between existing solutions and problems can be made across the boundaries between them. When such connections are made, existing ideas often appear new and creative as they change form, combining with other ideas to meet the needs of different users. These new combinations are objectively new concepts or objects because they are built from existing but previously unconnected ideas. This paper presents an ethnographic study of a product design firm that routinely creates new products by making such connections.

The role these connections can play in the innovation process is evident in inventions by Thomas Edison's laboratory. Edison and his colleagues used their knowledge of electromagnetic power from the telegraph industry, where they first worked, to transfer old ideas that were new to the lighting, telephone, phonograph, railway, and mining industries (Hughes, 1989; Millard, 1990). Edison's products often reflected blends of existing but previously unconnected ideas that his engineers picked up as they worked in these disparate industries, The phonograph blended old ideas from products that these engineers had developed for the telegraph, telephone, and electric motor industries, as well as ideas developed by others that they had learned about while working in those industries. Edison's inventions were not wholly original. Like most creative acts and products, they were extensions and blends of existing knowledge (Merton, 1973). As Usher (1929; quoted in Petrovski, 1992: 44) argued, "invention finds its distinctive feature in the constructive assimilation of pre-existing elements into new syntheses, new patterns, or new configurations of behavior."

Social network theory suggests that Edison's laboratory could innovate routinely because it occupied a "structural hole" (Burt, 1992a, 1992b), a gap in the flow of information between subgroups in a larger network. For Edison, these gaps existed between industries where there was and was not knowledge about the newly emerging electromagnetic technologies. Actors filling these gaps are brokers who benefit by transferring resources from groups where they are plentiful to groups where they are dear (Marsden, 1982; Gould and Fernandez, 1989; Burt, 1992a; DiMaggio, 1992). Brokers have an advantage over competitors because "nonredundant contacts are linked only through the central player, [so brokers] are assured of being the first to see new opportunities created by the needs in one group that could be served by skills in another group" (Burt, 1992a: 70). Edison's laboratory acted as a broker of technological ideas because it had connections to many industries, rather than being central in one, and it linked industries that had few other ties (DiMaggio, 1992).

By highlighting the structure of resource flows across group boundaries, researchers have shown that brokers benefit from disparities in the level and value of particular knowledge held by different groups, but they have not explicated the process by which information is transformed or combined within these flows. Valuable solutions seldom arrive at the same time as the problems they solve, they seldom arrive to the people working on those problems, and they seldom arrive in forms that are readily recognizable or easily adaptable. Edison's laboratory did more than just transfer knowledge from groups where it was plentiful to groups where it was dear; this organization acquired such information, stored it, and retrieved it to create new combinations of old ideas. Walsh and Ungson (1991: 61) described these processes (i.e., acquisition, retention, and retrieval) as routines supporting an organization's memory, which they defined as "stored information from an organization's history that can be brought to bear on present decisions." This perspective suggests that a technology broker depends on both its network position as a broker and on an organizational memory that allows it to acquire, retain, and retrieve new combinations of information obtained through such a position.

The notion that brokers transform and blend information is implicit in DiMaggio's (1992) description of how Professor Paul Sachs used his strong connections to the previously weakly connected worlds of museums, universities, and finance to help create New York's Museum of Modern Art. This notion is also implicit in writings on technology transfer (Rosenberg, 1982, 1994; Rogers, 1983), which recognize that existing technologies are often adapted and transformed before they become usable in a new field. But these writings do not focus on the role that individual actions and organizational routines play in recognizing, storing, blending, and transforming those technologies to make diffusion possible. Except for Attewell's (1992) description of how consultants facilitated the diffusion of a business computing technology, we don't know of any empirical or conceptual work that weaves together macro perspectives on external networks with micro perspectives on internal routines to describe the role of brokering in innovation.