The AC components that deepen the capacity to innovate
Generally, absorptive capacity should be focused on the capacity to make use of existing knowledge both internally and externally, placing the emphasis on the capacity to assimilate and transform it (often differently). It deepens the capacity that lies within an organization for exploring innovation further.
The importance is to develop the ability to achieve “new value recognition”in new and different ways.
How do you go about to recognize value when it is not linked to existing thinking? Absorptive capacity can be a paradox. You require more external knowledge to ‘push’ beyond your existing knowledge learning and so absorbing from it; you are demanding more absorptive capacity to be in place. Equally you need to combine this with the need to break down that “prior related knowledge” radically differently, so it can stimulate breakthroughs in your thinking. Absorptive Capacity can pose significant challenges to the organization. How you deal effectively with the absorption of knowledge determines it’s potential to be transformed for new innovative ability and this will be determined partly by how you structure the attractiveness for a learning environment so it ‘takes hold’ and can be absorbed differently, for different needs.
Explaining the key components shown in the above diagram
These components make up the essential elements of a ‘knowledge adoption’ innovation system.