Do not neglect the periphery?! - the emergence and diffusion of radical innovations

Abstract

While innovations have been acknowledged as a key factor for economic growth, it appears that they are unique features of central actors. Recently, especially the outstanding opportunities arising from rather radical innovations have been highlighted. These kinds of innovations combine knowledge pieces that have not been combined before and consequently create something radically new. While the influence of firms’ network position on innovativeness in general has already been investigated, it remains to be researched in the context of radical innovations. We address this research gap by empirically investigating the influence of firms’ network position on the emergence and diffusion patterns of radical innovations. By analysing a unique dataset evidence is found that central firms are essential drivers of the emergence and diffusion of radical innovations. However, the results also indicate that under certain conditions (e.g. high knowledge diversity) also peripheral firms can contribute to the emergence of radical innovations.