Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Fewer degrees of separation make companies more innovative, creative

20.08.2007
“I read somewhere that everybody on this planet is separated by only six other people. Six degrees of separation between us and everyone else on this planet,” quips the character, Tess, in John Guare's 1990 play “Six Degrees of Separation.”

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!
Further information:
http://www.washington.edu

More articles from Business and Finance:

nachricht Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)

nachricht Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: A “cosmic snake” reveals the structure of remote galaxies

The formation of stars in distant galaxies is still largely unexplored. For the first time, astron-omers at the University of Geneva have now been able to closely observe a star system six billion light-years away. In doing so, they are confirming earlier simulations made by the University of Zurich. One special effect is made possible by the multiple reflections of images that run through the cosmos like a snake.

Today, astronomers have a pretty accurate idea of how stars were formed in the recent cosmic past. But do these laws also apply to older galaxies? For around a...

Im Focus: Visual intelligence is not the same as IQ

Just because someone is smart and well-motivated doesn't mean he or she can learn the visual skills needed to excel at tasks like matching fingerprints, interpreting medical X-rays, keeping track of aircraft on radar displays or forensic face matching.

That is the implication of a new study which shows for the first time that there is a broad range of differences in people's visual ability and that these...

Im Focus: Novel Nano-CT device creates high-resolution 3D-X-rays of tiny velvet worm legs

Computer Tomography (CT) is a standard procedure in hospitals, but so far, the technology has not been suitable for imaging extremely small objects. In PNAS, a team from the Technical University of Munich (TUM) describes a Nano-CT device that creates three-dimensional x-ray images at resolutions up to 100 nanometers. The first test application: Together with colleagues from the University of Kassel and Helmholtz-Zentrum Geesthacht the researchers analyzed the locomotory system of a velvet worm.

During a CT analysis, the object under investigation is x-rayed and a detector measures the respective amount of radiation absorbed from various angles....

Im Focus: Researchers Develop Data Bus for Quantum Computer

The quantum world is fragile; error correction codes are needed to protect the information stored in a quantum object from the deteriorating effects of noise. Quantum physicists in Innsbruck have developed a protocol to pass quantum information between differently encoded building blocks of a future quantum computer, such as processors and memories. Scientists may use this protocol in the future to build a data bus for quantum computers. The researchers have published their work in the journal Nature Communications.

Future quantum computers will be able to solve problems where conventional computers fail today. We are still far away from any large-scale implementation,...

Im Focus: Wrinkles give heat a jolt in pillared graphene

Rice University researchers test 3-D carbon nanostructures' thermal transport abilities

Pillared graphene would transfer heat better if the theoretical material had a few asymmetric junctions that caused wrinkles, according to Rice University...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Ecology Across Borders: International conference brings together 1,500 ecologists

15.11.2017 | Event News

Road into laboratory: Users discuss biaxial fatigue-testing for car and truck wheel

15.11.2017 | Event News

#Berlin5GWeek: The right network for Industry 4.0

30.10.2017 | Event News

 
Latest News

Antarctic landscape insights keep ice loss forecasts on the radar

20.11.2017 | Earth Sciences

Filling the gap: High-latitude volcanic eruptions also have global impact

20.11.2017 | Earth Sciences

Water world

20.11.2017 | Life Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>