Social Networks and the Multiplier Effect on Innovation

If we combine the parallel transaction with the series transaction we have what now looks like a neural network. In practice, we know that strong networks of people freely exchanging ideas make organizations better, smarter, and more efficient. Networks are where knowledge and wisdom is literally stored. A network is fault tolerant, if one person leaves, the network survives. For a relatively small input into a network, we can produce a large output of new knowledge – we have a learning organization.

However, in society, these interactions are largely accidental; people meet at Church, Starbucks, and Social Events or by word of Mouth. Other times, these interactions are concentrated inside a single community of very similar people such as a technical conference, group meeting, or lunch buddies and are often not well diversified.

Suppose the interactions among people were not random, instead, they could be designed by the entrepreneur to produce a unique outcome. The Innovation Bank will combine people of complementary knowledge assets in a calculated manner in order to arrive at specific business approaches and applications.

A special case of the above business method and resulting social network is called the Multiplier Effect. A financial bank enjoys a multiplier effect with the ability to lend the 10 times more money than they hold in reserve. Money changing hands has a multiplier effect on an economy. Again, financial analogies hold.

Suppose that a company owns composite material technology for use on aircraft. Since they specialize in airplanes, they have no intention of pursuing other applications such as recreational equipment, energy production, or health care products.

Suppose that the company could deposit this asset in a bank and collect interest. The Search Engine can scan the business landscape to find companies with a knowledge deficit in the area of your technology and make loans of your technology. As the originator, you have the option to see what those other companies invent and you hold the right to use their new ideas in your aircraft application.

With an innovation Bank, you can reduce your Research and Development costs and create additional revenue in a tangential innovation market. With reduced cost and risk of innovation, you are likely to specialize more and more in innovation as your enterprise. In the event of a cyclic downturn in the business of an originator, instead of “laying off” knowledge assets, people can work in tangential industries where they will continue developing – literally putting “Knowledge in the Bank” – to be called back when market conditions improve. A mobile knowledge asset increases in value becoming smarter and more productive over time.

2 thoughts on “Social Networks and the Multiplier Effect on Innovation

  1. L’ Orizzonte Europeo che si allontana. La Crescita socio-economica e come una medaglia a due facce: pertanto non capire come , che senza lo sviluppo sociale in conoscenze e cultura, l’ economia chiusa n se stessa si restringe come un orizzonte disertificato che progressivamente diventa un punto privo di vita e di benessere sociale ed economico. Questo e’ in sostanza quello che sta accadendo in quanto si applicano le teorizzazioni liberali sulla competitivita’ ad un mercato imperfetto come quello ormai basato fondamentalmente sulla speculazione finanziaria. Infatti la dove ci vorrebbe maggior collaborazione e condivisione , il terrorismo liberale divenendo liberticida , applica sistematicamente i criteri di competitivita’ fino a renderli asociali ed privi di alternative di innovazione culturali e scientifiche . Cio’ inibisce ogni tipo di crescita fino alla disertificazione della produzione e del lavoro e delle capacita creative. L’ orizzonte futuro e’ quindi inesorabilmente il deserto. Paolo Manzelli pmanzelli.lre@gmail.com 

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