Is more diverse always the better? External knowledge source clusters and innovation performance in Germany

ABSTRACT

This study gives a new identity to a knowledge search mode named search diversity and investigates how it is more rigorous in capturing knowledge heterogeneity in comparison to general assessment of search breadth. By distinguishing between diversifying and expanding search domain as building blocks of broadening search scope, this study proposes a hybrid search strategy when it comes to analysis of the link between external search and innovation performance. While a positive trend is found for search breadth and innovation in this article, search diversity indicates a curvilinear pattern but with a steeper positivity than search breadth. A prerequisite extension of this article is to use a clustering method among different external sources acting as a reference to codify a diversity index for measuring the new search scheme. In addition, the effect of usage of each cluster on innovation is empirically illustrated. This article suggests that the optimal hybrid search outlook in respect to innovation is built up by initially increasing diversity in search up to the downturn point and then shifting into usage of same source clusters without helping diversity. This analysis provides practitioners with additional insights for managing external sourcing strategies and leveraging innovativeness.

KEYWORDS:

• Search breadth
• search diversity
• search scope
• knowledge heterogeneity
• source clustering
• innovation performance

JEL CLASSIFICATION:

• O₃
• C₁

Acknowledgement

Special thanks go to Prof. Dr. Oliver Budzinski for his consistent support and precious contributing comments which contributed to the quality of final research and empowered the decision for publication. In addition, Mr. Eng. Mahdi Mousavi is appreciated for editing improvements.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 E.g., if the percentages of firms in plastic products industry (between 2014-2016) which have explored suppliers, private clients and public clients are 10.5%, 37% and 1.4% respectively then $U_1$= 48.9. If the percentage of firms in that same industry which have explored competitors is 10.5% then $U_2$= 10.5. If the percentages of firms in this industry which have explored consultants, the government, private research institutes and professional associations are 0.7%, 1.4%, 1% and 1.8% respectively then $U_3$= 4.9. If the percentages of firms in the same industry which have explored universities, conferences and scientific journals are 7.9%, 6.7% and 7.4% respectively then $U_4$= 22. For plastic products industry KDI = ${\displaystyle \frac{1}{{\left({\displaystyle \frac{48.9}{86}}\right)}^2+{\left({\displaystyle \frac{10.5}{86}}\right)}^2+{\left({\displaystyle \frac{4.9}{86}}\right)}^2+{\left({\displaystyle \frac{22}{86}}\right)}^2}}$ = 2.26

2 https://www.zew.de/en/publications/zew-expertises-research-reports/research-reports/innovations/mannheim-innovation-panel-the-annual-german-innovation-survey

Additional information

Funding

This research did not receive any specific grant from funding agencies in the public, commercial or not-for-profit sectors.