Abstract

Firms are under increased pressure to combine new knowledge and convert it into products at an accelerated rate. However, to generate adequate returns, such innovations must be more exploratory in nature. The necessity of exploration may result in decelerating effects in knowledge conversion processes, hence slowing up the conversion process. Yet, speeding up the process could result in increased returns for the firm. To address this duality of combining diverse knowledge and combining it at a faster rate, I propose that certain firms could be endowed with speed as a capability for successfully exploring at a faster rate. Extending prior literature on innovation speed, I propose four measures of innovation rates – speed, acceleration, pace, and scale. While speed and acceleration in prior product developments are important, pace refers to temporal distance between successive innovation events and density of such events. Scale refers to the variation in length of innovation times. I test the effects of these innovation rates measures on how they affect the speed of innovation for an innovation that is exploration or exploitation oriented.

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