4 Innovation modes and learning relations

How can we conceptualize the strategies of innovation in the firm and understand how various strategic modes relate to the organizational learning frames and relations among the employees, which are expected to determine the level of innovation performance? From a theoretical perspective there are two different approaches firms can apply when building a strategy for product and service innovation. Both approaches imply careful management of knowledge in an organizational environment of learning (Christensen et al. 2004, Jensen et al. 2007). One approach “STI” (Science-Technology-Innovation) builds on research and development (R&D), which often are organized in a special department of the firm or perhaps distributed within a cluster of firms and related to research institutions such as universities etc. In this mode formalized and codified knowledge is developed and applied by utilizing scientific and professional agreed methods in the production of explicit intersubjective approved and transferable knowledge.

This knowledge is utilized in linear innovation processes by building prototypes, which are tested and veryfied in order to develop new products or services that are finally launched on the market. The other approach “DUI” (Doing-Using-Interacting) builds on inclusive problem solving and learning relations between functional and occupational groups of employees on various levels inside the firm and external related to customers and subcontractors. Fundamental for this strategy is organizing and managing a learning environment by creating organizational structures, cultures and processes encouraging practices of continuous improvements as well as empowering new ideas to more radical product or service innovations (Kanter 1983). The type of knowledge produced and used in this approach is more informal and perhaps even tacit. It is based on experience and experimenting with work related ideas and handling of complex problem solving. Being producer and user driven this mode depends on an all-embracing organizational consciousness of mobilizing learning and awareness of the value of knowledge sources in internal and external relations of the firm.

The two general approaches to innovation thus dependent on different types of knowledge and the challenges for handling learning processes and knowledge flows in the modes seems quite obvious. In fact the two innovation modes represent learning forms which are founded on fundamental different epistemologies (Lundvall 2008). The ‘STI’ learning form of research and development is based on specific professional educations and additional qualifications where scientific methods are essential for developing a formalized and codified body of knowledge. This body of knowledge relates conceptual systems of understanding to empirical problems and challenges continuously the received understandings by critically testing their empirical implications (Rasmussen & Nielsen 2011). The ‘DUI’ learning form of doing – using – interacting is based on utilizing organizational principles and relations, enabling and promoting diffusion of knowledge and problem solving in the interaction between various functional and occupational groups. Fundamentally it is organizational relations integrating various occupational or functional approaches to problem solving and confronting modes of understandings, which may produce various kinds of innovative solutions.

However different both approaches and their related learning forms demand careful strategic and tacit consciousness by management on the specific opportunities and implications of using the human resources and their various learning capacities in order to build knowledge resources and flows of problem solving practices in the firm. Empirical studies have shown that firms which are able to combine the two innovation modes have significantly highest chance of accomplished product and service innovation (Christensen et al. ibid. 2004). The empirical challenge of this combination of innovation modes is that the science and technology “STI” approach is found only in less than one fourth of the Danish private sector firms. According to Denmark’s Statistics 22% of private sector firms carry out research and development activities (DST statistic bank 2011). Building an operational research and development function in the firm is a resource demanding investment and certainly a challenge for medium and smaller firms. The doing – using – interacting mode “DUI” depends much more on organizational skills, culture of commitment and systematic conscious management of the potentials in human resource’s learning processes and knowledge flows in an integrative sense and is in principle accessible for all firms. This is the essential argument for the importance of investigating the conditions and principles of this human resource inclusive innovation mode.