Tangential Innovation Communities

by Dan Robles on 07/17/2010

tangent.scream Tangential Innovation CommunitiesIn an earlier article (Cluster Funk) I argued that Industrial clusters can lead to stagnation, vulnerability to external shocks, and the erosion of social capital. Since I’m not one to complain without also providing an alternative, this article argues that the future will favor technology clusters rather than industrial clusters.

Make it up as you go along

Technology clusters serve what we call the tangential innovation market – or diversity innovation dynamics. Don’t worry if you have not heard of these things, I’m making this up as I go along.

For example; composite materials technology is very useful in many applications like aircraft, medical devices, transportation, recreation, and even musical instruments. The airplane company has no intention of building cellos and the automobile company has no intention of building snow boards.

Why compete when you can collude?

As non-competing industries, they can readily share technology and people. The system is naturally diversified and inoculated against stagnation, shocks and silos; if one industry encounters hardship, people and capacity can shift easily to another industry preserving knowledge and expanding social networking benefit while the damaged industry heals or dies off. Corporations may not like this idea, but social networks should.

The Ingenesist Project goes a step further by modeling the business structure of tangential innovation markets as an integrated financial system. Suppose and Originator Company has a promising new composite technology idea but is unable to meet the ROI requirements of their stockholders? Today, such innovation would be shelved. In an innovation economy, tangential markets are factored into the business case.

New applications of social media will identify other industries that would be most worthy borrowers of your technology, if developed. The Innovation Bank can estimate the return on investment that can be expected through the tangential market as if it were another customer. The additional revenue projection would allow the originator to meet the ROI requirement prior to committing development funds.

Intellectual Property can be managed with contracts enforced through social network vetting. The originator can hold an option to see further development conducted by tangential users effectively multiplying their R&D reach and further adding to the expected return.

Then something magical will happen. At some point, the value of the tangential innovation market would exceed the value of the origination market. The originator will begin to specialize in pure innovation as a primary product and airplane applications as the secondary product. As all industries in the technology cluster begin sharing technology among each other, R&D costs and risks are effectively spread across industries. As risk is diversified away, the cost of venture capital approaches single digit rates.

Then, another magical thing will happen. As the mixing of people and ideas accelerates, the definition of corporate boundaries will become more fluid. Ownership will exist in the form of contracts among entrepreneurs now defined by social networks, options, and derivatives in a diverse innovation enterprise.

While the boom bust cycle of Industrial Clusters has brought us a great distance in economic development, technology clusters in an Innovation Economy supported by social networks may turn out to be vastly more efficient at economic growth without the perils of Cluster Funk.

{ 26 comments }

Alex Hall July 18, 2010 at 9:27 pm

Tangential Innovation Communities – http://www.relationship-economy.com/?p=11125

Melanie Thompson July 18, 2010 at 4:48 pm

Tangential Innovation Communities http://om.ly/obph

Peter Lang July 18, 2010 at 4:24 pm

Tangential Innovation Communities http://om.ly/obkt

Holt Communications July 18, 2010 at 8:57 am

This was interesting Tangential Innovation Communities http://bit.ly/9QFSQ8 #socialeconomy

Holt Communications July 18, 2010 at 8:57 am

This was interesting Tangential Innovation Communities http://bit.ly/cefl8W #socialeconomy

lora brain July 17, 2010 at 10:08 pm

Tangential Innovation Communities |: Ownership will exist in the form of contracts among entrepreneurs now defined… http://bit.ly/cefl8W

THE IDEA AGENCY July 17, 2010 at 9:39 pm

TweetDiscovered: Tangential Innovation Communities |: http://bit.ly/cefl8W

Ben Shoemate July 17, 2010 at 9:11 pm

Tangential Innovation Communities | http://bit.ly/boh8Iu

innovation ideas July 17, 2010 at 9:11 pm

Tangential Innovation Communities |: Ownership will exist in the form of contracts among entrepreneurs now defined… http://bit.ly/cefl8W

andrew washington July 17, 2010 at 8:38 pm

Tangential Innovation Communities | http://bit.ly/aqD4Kh

ingenesist July 17, 2010 at 3:11 pm

RT @JDeragon: Tangential Innovation Communities ##socialmedia ##socialstrategy ##socialbusiness http://bit.ly/cMBpfp

Allen Howell July 17, 2010 at 1:14 pm

RT @JDeragon: Tangential Innovation Communities http://bit.ly/cMBpfp

AllThingsM July 17, 2010 at 11:41 am

Tangential Innovation Communities http://bit.ly/c29tyT

TechVC News Eqentia July 17, 2010 at 10:48 am

Tangential Innovation Communities: Source: The Relationship Economy http://bit.ly/aK0cE3 #venture

Social Media Insider July 17, 2010 at 10:23 am

Tangential Innovation Communities http://bit.ly/9v1F5q #Socialmedia

JobShoots July 17, 2010 at 10:23 am

Tangential Innovation Communities http://bit.ly/beLBuq #news #socialmedia

JobShoots July 17, 2010 at 10:23 am

Tangential Innovation Communities http://bit.ly/beLBuq #news #socialmedia

Alltop July 17, 2010 at 10:23 am

Tangential Innovation Communities http://bit.ly/drFttt Social-Media.alltop

StarGazon July 17, 2010 at 10:01 am

Tangential Innovation Communities via The Relationship Economy – In an earlier article (Cluster Funk) I … http://tinyurl.com/29vhz6f

Joe Grasso July 17, 2010 at 9:46 am

Tangential Innovation Communities: Ownership will exist in the form of contracts among entrepreneurs no… http://bit.ly/cefl8W [email protected]

Aron Stevenson July 17, 2010 at 9:46 am

Tangential Innovation Communities http://bit.ly/cefl8W #socialmedia

Achievers Network July 17, 2010 at 9:46 am

Tangential Innovation Communities: Ownership will exist in the form of contracts among entrepreneurs now defined b… http://bit.ly/boh8Iu

smconnection July 17, 2010 at 9:46 am

Tangential Innovation Communities: Ownership will exist in the form of contracts among entrepreneurs now defined b… http://bit.ly/boh8Iu

prblogs July 17, 2010 at 9:46 am

RelationshipEcon: Tangential Innovation Communities: Ownership will exist in the form of contracts among entrepren… http://bit.ly/boh8Iu

Angela Suddarth July 17, 2010 at 9:46 am

[email protected] Tangential Innovation Communities:
In an earlier article (Cluster Funk) I argued that Industrial clus… http://bit.ly/bP82N9

The Social CEO July 17, 2010 at 9:46 am

The Social CEO Tangential Innovation Communities:
In an earlier article (Cluster Funk) I argued that Industrial c… http://bit.ly/bP82N9

Comments on this entry are closed.

{ 6 trackbacks }

Previous post:

Next post: