Handbook of Organizational Learning and Knowledge Management, Second Edition

Why External Knowledge?

The resource-based view of the firm suggests that internal knowledge, embodied within a firm’s resources is an important source of competitive advantage (Barney, 1991). The firm itself is often the source of much of the knowledge used in innovation. However, few firms possess all the inputs required for successful and continuous innovation. This is partly due to technological dynamism, reflected in an environment punctuated by competence destroying or altering technologies, that has forced firms to maintain a wide range of technological knowledge and skills (Tushman and Anderson, 1986). Very few firms can independently develop and master the wide range of knowledge and skills needed to compete in ever-changing innovative environments (D’Aveni, 1994; Lane and Lubatkin, 1998). Consequently, most organizations will develop a deficit within their boundaries as regards the critical knowledge needed to prosper and grow (Dussauge et al., 2000). Thus, although a firm’s own research efforts play an important role in innovation, firms must turn to external sources of knowledge to maintain their innovative processes.

The notion that firms must often turn to external sources to fulfill their knowledge requirements is hardly new and dates back over fifty years (Jewkes et al., 1958). Early research identifies that major contributions to a firm’s knowledge base often come from outside sources. In a classic study of seventeen research and development laboratories, Allen ...