One interesting concept is “absorptive capacity” and “developmental capacity.” Absorptive capacity refers to the ability to identify, evaluate, and assimilate external knowledge that is potentially profitable and useful to the organization. Developmental capacity refers to the ability to develop and exploit knowledge. Both are important. For the organization, it must be developed. The ability to allow new knowledge to be used in the “mind” of the organization. And not to reject it, is the key to the ability to create and innovate new concepts. Organizations must find better ways to provide appropriate paths to absorb knowledge, insights, and potential connections well. Organizations usually design Innovation lines that become narrower because they want to reject ideas that don’t fit their criteria quickly.
Moreover, absorptive capacity plays a vital role in innovation. As innovation depends on the awareness of external ideas and innovations known in the market. Also, by collecting, exploring, and exploiting new knowledge, we enhance and multiply its value from a single idea to the potential for multiple innovations. Knowing that absorbing knowledge fuels our innova tive ideas. Having an organized framework can dramatically transform random ideas or observations into valuable concepts that enhance our innovation potential.
Adoption and Adaptation of New Knowledge
Every organization combines its knowledge in different ways, each with unique characteristics, systems, and ways of doing so. Finding knowledge is often random. In many cases, the knowledge we seek already exists in the organization. Sometimes, exiting an organization sends us down a path that leads us back into the organization. When this happens, we often feel confused and wonder why the organization does not have a documentation and recording system. The absorptive capacity allows knowledge to flow in different and opposite directions.
Accordingly, the innovative power of organizations combines two broad sets of capabilities: their absorptive and developmental ability. The conceptual and analytical framework combines both the absorptive capacity of organizations to access external knowledge, consolidate it. And work to spread it through its dissemination and distribution. As well as the developmental ability of organizations to create, develop, and exploit this knowledge. It is traditionally assumed that most of the knowledge needed for innovation will be found within the organization. In contrast, a more modern view emphasizes the importance of harnessing external knowledge to improve an organization’s innovation ability.
Adoptive Innovation
Innovation through adoption is an essential channel for innovation. Whereas the external knowledge that flows into the organization turns into one or more of the following outputs:
1. Create an innovation
2. Create new knowledge
3. New economic and social value
Thus, the new value can be a direct or indirect result. Where the innovation process comes from is the adoption of external knowledge. It turns out that the absorptive capacity poses significant challenges to the institution. Dealing effectively with its absorption of knowledge determines its ability to innovate and its attractiveness to the learning environment. An organization’s uptake capacity and power to recognize, assimilate, and apply the value of new external information to business objectives is critical to its innovation capabilities.
Absorptive Capacity Value
The value of absorptive capacity lies when organizations have prior knowledge. Which is usually exogenously stimulated, they are more receptive to adding new concepts and ideas. Whereas organizations that encourage and consolidate the principle of learning are perceptive and learning organizations. It indicates that they are aggressively looking for new ideas. Because solid understanding prepares them to absorb new knowledge or associate ideas quickly. These organizations are better than others by recognizing new ideas that may lead to transformative innovation. It encourages them to develop their understanding of communicating, integrating, and experimenting with this new knowledge.
The Relationship Between Knowledge and Learning
The value of absorptive capacity is that when organizations have some prior knowledge. Usually externally motivated, they are more receptive to adding new concepts and ideas. Organizations that encourage and embed the principle of learning are aware and learning organizations. This suggests that they actively seek out new ideas because already-established learning prepares them to quickly absorb new knowledge or associate ideas. These organizations are better than others at recognizing new ideas, that may lead to transformative innovation. Which encourages them to develop their understanding of communicating, integrating, and experimenting with this new knowledge.
Moreover, the greater an organization’s ability to extract learning and acquire new knowledge. The greater the power of leadership to create innovative practices and norms through increased capabilities and capabilities. Therefore, by having a solid idea management system in place, organization leadership develops these common points of understanding. That form part of their routine and practice to contribute to developing their innovations and capabilities for future innovation activity. In addition, acquiring continuous knowledge encourages continuous learning. It also has positive feedback because it builds energy and capabilities for future innovation activity.
Allowing knowledge within the organization to flow more openly
We need to turn off the “cognitive blinders,” where we can often fall into the trap of thinking we “know,” when we don’t. So, by being open we add additional insights and knowledge. We must equally avoid stifling different concepts or abilities. We must also be given full vision and expression. And this encourages the creation of a positive. More open environment for working on these concepts, and therefore we must push for the exploration of knowledge.
A more inclusive open innovation practice is valuable for advancing beyond current incremental approaches. So, we need to avoid “cognitive blinders” to encourage the flow of knowledge. It is also best to embrace open innovation internally and externally for this newly acquired knowledge to flow and assimilate. Then, we can better translate this knowledge into a new or value-added application. Knowing that there are many important barriers in the pursuit of open innovation today that need to be resolved. Sharing knowledge freely often breaks barriers and builds the innovative identity of the organization.
By implementing the absorptive capacity system, the flows needed to keep our search for new ideas motivated. And drive our innovations forward, and allow others to benefit further and build on this knowledge can be generated.
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