Researchers at the University of Washington and New York University who examined networks of companies in relation to their creative strengths have discovered that it is, indeed, a small world.
Corey Phelps, an assistant professor of management and organization at the UW Business School and co-author of the study, says that when companies are indirectly linked in a network of strategic alliance relationships with only a few degrees of separation, they are more innovative.
Phelps and Melissa Schilling, an associate professor at NYU, analyzed the innovative performance of 1,106 companies in 11 different industries over a six-year period. They examined the pattern or structure of strategic alliance relationships among companies in each industry. They found that how firms are connected to one another influences the number of patented inventions they obtained. Those that secured more patents were classified by Phelps and Schilling as being more creative.
“Most social networks, whether we're talking about friendships among individuals or alliances between companies, are typically clustered,” Phelps says. “Generally speaking, we only know a very small number of people and these individuals mostly know each other. As we know from high school, the world is cliquish. This is the essence of clustering.
“Because of this clustering, we might expect that it would take many connections to link two people or two firms from different parts of the world. However, if only a small number of individuals have ties that bridge clusters, then the average degree of separation between any two individuals in the network decreases dramatically. This is the essence of a small world. We know a small subset of people well, who also know each other, but thanks to a few boundary spanners, it only takes a few links to connect anyone in the world.”
According to the researchers, companies reap greater benefits when they are part of a network that exhibits a high degree of clustering and only a few degrees of separation, both of which are characteristic of a small world network.
They found that clustering enables information to travel quickly and accurately because it creates redundant paths between companies and increases the level of cooperation among them. Clusters within networks are important structures for making information exchange meaningful and useful, they add. Clustering can make firms more willing and able to exchange information. A network in which companies are directly or indirectly connected to many others by only a few degrees of separation has high reach. Reach increases the amount and diversity of information available by increasing the number of companies that provide information and by decreasing the length of the path the information has to travel. Based upon their analysis, the authors conclude that companies involved in large-scale alliance networks that exhibit high levels of clustering and reach are more innovative.
"When a small-world network structure emerges within an industry, all companies in the network benefit in terms of increased innovation, Phelps says. “Our results are particularly important because in today's knowledge economy, innovation is king. Without the ability to continually create and commercialize new products and services, companies often wither and die. This study helps us understand how large-scale alliance networks influence innovation. It improves our understanding of why some industries and regions are more innovative than others.”
Nancy Gardner | EurekAlert!
Europe's microtechnology industry is attuned to growth
10.03.2017 | IVAM Fachverband für Mikrotechnik
Preferential trade agreements enhance global trade at the expense of its resilience
17.02.2017 | International Institute for Applied Systems Analysis (IIASA)
Astronomers from Bonn and Tautenburg in Thuringia (Germany) used the 100-m radio telescope at Effelsberg to observe several galaxy clusters. At the edges of these large accumulations of dark matter, stellar systems (galaxies), hot gas, and charged particles, they found magnetic fields that are exceptionally ordered over distances of many million light years. This makes them the most extended magnetic fields in the universe known so far.
The results will be published on March 22 in the journal „Astronomy & Astrophysics“.
Galaxy clusters are the largest gravitationally bound structures in the universe. With a typical extent of about 10 million light years, i.e. 100 times the...
Researchers at the Goethe University Frankfurt, together with partners from the University of Tübingen in Germany and Queen Mary University as well as Francis Crick Institute from London (UK) have developed a novel technology to decipher the secret ubiquitin code.
Ubiquitin is a small protein that can be linked to other cellular proteins, thereby controlling and modulating their functions. The attachment occurs in many...
In the eternal search for next generation high-efficiency solar cells and LEDs, scientists at Los Alamos National Laboratory and their partners are creating...
Silicon nanosheets are thin, two-dimensional layers with exceptional optoelectronic properties very similar to those of graphene. Albeit, the nanosheets are less stable. Now researchers at the Technical University of Munich (TUM) have, for the first time ever, produced a composite material combining silicon nanosheets and a polymer that is both UV-resistant and easy to process. This brings the scientists a significant step closer to industrial applications like flexible displays and photosensors.
Silicon nanosheets are thin, two-dimensional layers with exceptional optoelectronic properties very similar to those of graphene. Albeit, the nanosheets are...
Enzymes behave differently in a test tube compared with the molecular scrum of a living cell. Chemists from the University of Basel have now been able to simulate these confined natural conditions in artificial vesicles for the first time. As reported in the academic journal Small, the results are offering better insight into the development of nanoreactors and artificial organelles.
Enzymes behave differently in a test tube compared with the molecular scrum of a living cell. Chemists from the University of Basel have now been able to...
20.03.2017 | Event News
14.03.2017 | Event News
07.03.2017 | Event News
24.03.2017 | Earth Sciences
24.03.2017 | Life Sciences
23.03.2017 | Life Sciences