The themes of technological innovation, entrepreneurship, and organizing

INNOVATION AND SUSTAINABILITY

Innovation and sustainability go hand in hand. Innovations and the development of new technol­ogy provide a way for humans to improve their lives (social progress) through better, smarter ways of conducting their activities. According to Nidumolu, Prahalad and Rangaswami (2009), sustainability is now the key driver of innovation. These authors say that contemporary innovation, with sustainability at the core, takes on a cyclical process with evaluation of sustainability chal­lenges, competencies and opportunities for any given business. Their key findings are highlighted in Figure 4.

Energy systems (photovoltaic cells, biomass, geothermal) are one ofthe innovative technologies that provide clean, renewable energy to humans, thereby reducing carbon dioxide emissions from fossil fuel use and contributing to a sustainable planet. Innovative energy systems are a tremen­dous business opportunity for companies. Under­standing these emerging energy systems, what materials works best, how to increase their life span spurs further innovation. Competing busi­nesses emerging with similar, product possibly of a higher quality and increased life span yet spurs further innovation. Where innovations are concerned, there is a need for calculated and strategic management of resources; particularly human resources. This is one key area where the application of Social Network Analysis (SNA) can assist; in the development of the best innova­tion network to ensure a business has the best competitive advantage possible. SNA is used widely in the social and behavioral sciences, as well as in economics, marketing, and somewhat for project management in industrial engineering (Taagepera, 2008). The social network perspective focuses on relationships among social entities and is an important addition to standard social and behavioral research, which is primarily concerned with attributes of the social units (Wasserman & Faust, 1994). Management, of any kind, refers to the use of people (i. e. social units), in some level of seniority to others, to control some commod­ity. According to some measuring indices of SNA, characteristics of each actor’s interaction or man­agement activities will affect the holistic manage­ment of assets in terms of sustainability and structure (Li & Chen, 2006). Thus an understand­ing of the actual and perceived managerial struc­ture for arriving at innovations will allow for altering the social network to reduce ‘processing time’ for innovative product development. This reshuffling of human resources for optimum yield of innovative throughput necessitates continuous monitoring of internal social networks through the calculation of key SNA indices such as cen­trality, adjacency, relationship, reachability, net­work density, boundary spanners, betweeness and closeness. Table 2 describes these in some depth.

Innovation needs to be influenced by a popu­lation’s current mental model with regards to any

Figure 4. Sustainability challenges, competencies and opportunities in relation to innovation (adapted from Nidumolu, Prahalad & Rangaswami, 2009)

product expected to be developed for use within this population. Thus there is a need for develop­ers to be connected with the population for which the innovation is intended. So as a major pre­innovation step, a needs assessment of the popu­lation should be done and used as the driving force of the innovation research and development.

Table 2. Quantitative measures and relational characteristics of strength of management in SNA (adapted from Freeman, White & Romney, 1989; Hassan, 2009; Outhwaite & Turner, 2007)

Numerical

measure

Definition

SNA matrices

Adjacency - Adjacency tells us whether there is a direct connection from one actor to another (or between 2 actors for un-directed data).

Relationship - This matrix shows the relations between actors using integers that represent the strength of the rela­tion between 2 actors. The resulting matrix represents the sum of frequencies or the ‘frequency of contact’ required between 2 actors.

Reachability - Reachability is a measure of path distance, the “length” or number of unique walks between actors. The reachability matrix is the product of the adjacency matrix with itself and it uncovers the number of paths that an actor can be reached. To determine path distances of more than one, the adjacency matrix is multiplied by itself as many times as the path requires. Reachability tells us whether two actors are connected or not by way of either a direct or an indirect pathways of any length.

Centrality ratio

(Ci)

This ratio is the ratio of the aggregate relations involving the actor over all relations in the management structure.

The centrality can be found from:

E (Zij + Zj)

— where C. is the centrality of the ith actor; Z.. is the value of a relation from the ith actor

i N N i J ’4

E E*.

i—1 j—1

directed to the jth actor in the kth network. Note that i Ф j and N is the number of actors in the network.

Network density

This is a measure of the percentage of all the possible ties present and varies from 0 to 1. This gives a ready index of the degree of dyadic connection in a population. For binary data this is simply the ratio of the number of adjacencies that are present divided by the number of pairs i. e. the proportion of possible dyadic connections actually present. Simply put it is the proportion of ties present to the maximum number of ties possible. It can be calculated by:

T

Network density -

N(N -1)/ 2

where T is the number of ties present; N is the number of actors in the network.

Betweenness

This refers to the extent to which an actor acts as a ‘broker’ or ‘gatekeeper’ in the network.

Closeness

An actor is considered to be close when it has the shortest paths to all others. This means that actor can avoid the potential control of others.

Boundary span­ners

A boundary spanner refers to an actor that has access to other networks.

Centrality

Centrality identifies the most important actors in a social network, which are usually nodes located in strategic locations within the network. The centrality value of the actors in asset management will therefore depend on the frequency of contact of an actor relative to that of other actors.

Within this assessment key understanding of the population’s knowledge, beliefs and notion of complexity should be revealed for consideration of what the innovated product needs to appease. This is key to the sustainability of the innovation. During the innovation development process this is where the proponent of the innovation has the
overarching power to infuse sustainability into the design ofthe product/technology/strategy. For example, the innovation developer should con­sider the life cycle analysis (LCA) of the mate­rial chosen with regards to where the raw materi­als come from through to how the materials can impact the environment at the end of life (i. e. a cradle to grave analysis). Here all the pillars of sustainability should be considered, in tandem with the pre-innovation mental models of the population, in achieving an innovative product that attains the company’s triple bottom line. The post-innovation sustainability hinges upon ac­ceptance of the product by the target population through a change in their mental models. This necessitates aggressive strategic marketing (i. e.

diffusion) to lead the population to adoption of the product.

In addition, once a strategy or an innovative technology that addresses sustainability has been developed/identified, decision-making be it from the top-down or bottom-up is critical to its diffu­sion and adoption within an organization and into mainstream. The mental models of individuals play a critical function on how they weigh the alternatives, what they weigh their alternative on, and their eventual decision. The high cost of photovoltaic cells and lack of governmental incen­tives mean that companies and individuals will not adopt it even though it is sustainable, because it is not economically viable compared to other alternatives such as fossil fuel. In the preceding paragraphs we discussed key parameters that link innovation to diffusion and adoption to achieve sustainability. These include mental models of individuals that lead to diffusion and adoption, social networks, and the role management.

Social Network theory and methods of SNA are being increasingly used to study real-world networks in order to support knowledge manage­ment and decision making in organizations (Hu,

2009) . SNA has been used since the early 1970’s as the theoretical basis for the examination of general social and behavioral science communities (Wasserman & Faust, 1994). The importance of SNA is highlighted by the demonstration that an individual’s behavior can often times be catego­rized by their relations with others. According to Rogers (2003), social network research can range from small-scale studies (i. e. micro level) of a person’s intimate social network to system stud­ies (i. e. macro level) focusing on larger societal and community organizational structure. SNA is inherently based on the underlying premise that “the structure of relations among actors and the location of individual actors in the network have important behavioral, perceptual, and attitudinal consequences both for the individual units and for the system as a whole” (Knoke & Kuklinski, 1982).

The themes of technological innovation, entrepreneurship, and organizing

About the Contributors

Farley S. Nobre (PhD, MSc, BSc) is Professor at the School of Management of Federal University of Parana, Brazil. His research interests include organizations, knowledge management systems, innova­tion and sustainability. …

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