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206 MANAGING KNOWLEDGE WORK AND INNOVATION

Knowledge
integration

Network
formation
Meaning
power

Process
power

Resource
power

Figure 9.4 Dynamics of networked innovation (after Swan and Scarbrough, 2005)

uninterrupted (as indicated by the dotted line). Sometimes this spiral may even
be vicious rather than virtuous (hence the two-way arrow) – as, for example,
where different forms of power are applied to resist, rather than promote, inno-
vation and knowledge sharing (compare with, for example, the Research Team
case in Chapter 4).

>> OPEN INNOVATION

The phenomenon of networked innovation moves our understanding of the
innovation process far away from the kind of closed sets of actors and contexts,
predefined objectives and sequence of knowledge flows seen in the linear model.
Conversely, as innovation processes become more complex and knowledge-
intensive, and networks enable the much more rapid flow of knowledge across all
kinds of organizations, innovation has itself become much more open-ended. As
we have seen in the case of smart products (e.g. automatic collision avoidance,
smart phones, personal health monitoring devices) and many types of service
innovation (e.g. online services, Ebay, iTunes) it can be difficult to tell where
design (or invention) ends and use (or implementation) begins. The growth of
the open-source software ‘movement’ – Linux being a good example – high-
lights this conflation of design and use and the power of an open-ended innova-
tion approach.
In the recent period, a number of organizations have begun to embrace
the idea of ‘open innovation’ more formally. The term was coined by Henry
Chesbrough to describe a ‘paradigm shift’ in the way companies go about
commercializing knowledge (Chesbrough, 2003a, b). The old paradigm –
referred to as ‘closed innovation’ – is the linear mode in which companies
are self-reliant in terms of creating knowledge and introducing it in the form

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