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Organisations, Innovation and Complexity: New Perspectives on the Knowledge Economy

9^th-10^th September 2004
University of Manchester, Manchester,
England, UK.

Applying complexity principles to innovation processes in firms: a complex innovating systems (CIS) approach

Petra Wagner, Barbara Heller-Schuh & Karl-Heinz Leitner

ARC systems research GmbH,
A-2444 Seibersdorf, Austria

Abstract

In our contribution we will first review recent contributions to innovation and organization research literature from complexity science. Second, we will explore how complexity theories offer useful perspectives for understanding innovation processes in a firm following a complex innovating systems (CIS) approach.

Innovation is an essential part of firm’s competitiveness. Innovation management in firms is concerned with the questions of how to bring an idea to the market in the form of new products and processes. Modern innovation management reflects the process-orientation and interactive nature of innovation. Innovation is recognized as an interactive process between of a diversity of actors (R&D, marketing, production, sales, etc.). Evolutionary approaches put emphasis on variation and selection phases in the innovation process. Systemic approaches recognize the importance of knowledge-based interactions whereby the social structure of the actor network and the exchange of knowledge in terms of accessibility and speed, i.e. the adoption and exchange structure within a firm’s innovation system, is vital.

More recently, principles from the complexity sciences have re-introduced the truly risky character of innovation. Complexity theories emphasize emergent and unpredictable aspects of self-organizational processes and the creative potential within complex systems. Complexity principles are emerging in guiding research and applied management practice and offer new perspectives from which to explore organizational change and transformation involved in firm’s product innovation processes. Complex adaptive systems (CAS) have been introduced lately as a novel approach to address knowledge production and knowledge sharing in organizations. Innovation emerges in self-organization on the basis of the interaction of heterogeneous agents. CAS are used as models of innovation development in order to make predictions regarding the emergent characteristics of the system by applying simulation techniques. Firms, like other organizations, are social systems. Social systems theories offer additional concepts such as second-order cybernetics to describe innovation processes in firms.

What can we learn from complexity science and social systems theory about how firms develop and transform in the search for new products? How might elements of the complexity theories and social systems theory contribute to the development of a framework from which innovation systems and processes of firms can be constructed? By applying principles of complexity sciences and social systems concepts to innovation processes in firms, a complex innovating systems (CIS) approach will be introduced.

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