1. Networks of Innovation
Ilkka Tuomi
ilkka.tuomi meaningprocessing.com
© I. Tuomi 14.9.2005 page: 1

2. Agenda
• The great socio-economic transformation, in a historical context
• The new social dynamics of innovation
• Diffusion of innovative products and applications
• The new meaning processing paradigm
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3. Modernity According to Durkheim
Norms and Networks
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4. The Constant Revolution
• “The bourgeoisie cannot exist without constantly revolutionizing the
instrument of production, and thereby the relations of production, and
with them the whole relations of society.
The need of a constantly expanding market for its product chases the
bourgeoisie over the whole surface of the globe.
The bourgeoisie, by the rapid improvement of all instruments of production, by
the immensely facilitated means of communication, draws all nations, even
the most barbarian, into civilization. “
“All that is solid melts in air.”
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5. “And the modernity came,..
…with bridges,
flows, and
networks”
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6. The founders of Silicon Valley
semiconductor firms
Castilla, E.J., Hwang, H., Granovetter, E., & Granovetter, M. (2000). Social networks in Silicon Valley. In
C.-M. Lee, W.F. Miller, M.G. Hancock, & H.S. Rowen (Eds.), The Silicon Valley Edge (pp. 218-247).
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7. Weak IPR
• ... semiconductor processes are a long series of steps and the patents had
gotten pretty broadly spread because all of the people working on the
technology had some of them. And the net result was in order for any of us to
operate we had to be cross-licensed so the participants tended to all cross-
license one another. So, there was not a tremendous advantage to having
more patents... with a couple of exceptions, there wasn't much net benefit
from it. (Moore, 1995)
Tuomi, I. (2004) Industrial structure and policy choice: notes on the evolution of semiconductors and open source.
http://www.meaningprocessing.com/personalPages/tuomi/articles/IndustrialStructureAndPolicyChoice.pdf
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8. Knowledge Organizations
Interest group
Community of Practice
Team A
Interest group
Interest group
Team B Community of Practice
Business Processes
Process Team
© I. Tuomi 14.9.2005 page: 8 Source: Tuomi, I. (1998) Collaborative learning as a source of corporate competence.

9. The Organic Innovation Model
NWG
FTP Graphics
NMG
USING Telnet
IWG
IRG ICB
ICCB
end-to-
end IETF
routers IAB
arch OSI
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10. Rapid Growth is Possible in the
Organic Model
Kerne l distribution size
(com pressed)
25
20
15
10
5
0
07- Ma y- 90 19- S e p- 91 31- J a n- 93 15- J un- 94 28- Oc t - 95 11- Ma r - 97 24- J ul- 98 06- De c - 99 19- Apr - 01
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13. Internet Users in Korea
100%
45 Internet Users 90%
Internet users (millions)
Internet penetration rate
40 Internet Penetration Rate 80% Wired Internet Users
35 70% 31.30 million
30 60%
25 50%
20 40% Wireless Internet
15 30% Users
10 7.18 million
20%
5 10%
0 0%
December 2004
0
J u r -01
ec 0
p 1
ec 2
ec 3
ec 4
4
D c-94
D c-95
D c-96
D c-97
O -98
M -00
D -01
J u -01
J u -02
J u -03
M -99
Au r-0
D g-0
S e -0
D -0
D -0
D -0
-0
n
n
n
n
ec
ec
ct
a
a
e
e
e
e
D
12 million broadband
subscribers in March
2005
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15. Korea: Social and cultural factors
Lee, O'Keefe & Yun, Park & Yoon, 2005 Lee, N-C., 2002 ITU, 2003 DTI, 2002 Kim, T-G., 2005
2003
Socio-cultural environment
homogeneous ethnicity;
demography shared language
low subscription prices;
flat fee subscription; low-
purchasing power
cost access through PC
Bangs
high-density dwellings; unique urban geography 80% in urban 80% in urban areas, urban structure, high-
closeness to local areas; 48 % in 49% in large apartment rise apartment buildings
geography
exchanges large buildings close to switching
apartments stations
dial-up users; PC high level of PC Bangs as a location
human capital Bangs; online gaming education of skill development
existing dial-up users PC Bangs as
absorptive capacity commercial market for
content developers
"keeping up with shared values
neighbors"; competitive
enthusiasm for
values children's education;
preference for using the
Internet for social
communication
unsatisfied dial-up demand for education, games, 1998 Miss Korea sex
online customers; entertainment and access to information, video
entertainment for early- network games; financial transactions,
latent demand
adopters, e-commerce existing dial-up users time-shifted TV content,
for majority on-line communities
1997 financial crisis;
timing
Internet boom
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16. Great Technology: No Demand
“Because everything in her home is waterproof, the
housewife of 2000 can do her daily cleaning with a hose.”
“Miracles You'll See In The Next Fifty Years," Popular Mechanics, 1950
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17. Good Idea, Wrong Timing
“Only part of the machine was completed before his death in 1871.”
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18. The World Wide Network, 1935
• From afar anyone would be able to read any passage, expanded or limited to
the desired subject, that would be projected onto his individual screen. Thus
in his armchair, anyone would be able to contemplate the whole of creation or
particular parts of it.
– Paul Otlet (1935). Monde: Essai d'Universalisme.
• Cinema, phonograph, radio, television - these instruments considered to be
substitutes for the book have become in fact the new book, the most powerful
of means for the diffusion of human thought. …From his armchair, everyone
will hear, see, participate, will even be able to applaud, give ovations, sing in
the chorus, add his cries of participation to those of all the others.
– Paul Otlet (1934), Traité de Documentation. Le Livre sur le
Livre: Théorie et Pratique.
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19. Demand: No Idea
• Who the hell wants to hear actors talk?
– H.M. Warner, Warner Brothers, 1927
• There is no reason anyone would want a computer in their home.
– Ken Olson, president, Digital Equipment Corporation, 1977
• I see no advantage whatsoever to the graphical user interface.
– Bill Gates, 1983
• I see little commercial potential for the Internet for at least 10 years.
– Bill Gates, Comdex 1994
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20. Configuring the Society
• So, what is holding back the change?
• Lack of imagination, corrected by research, new knowledge, and new
perspective
“…aha, maybe the Internet could be used for something, after all…”
• Lack of competence and capability
“…but now we can make very very small cogs and put them together
so that the computer starts to crank numbers! And we can even
rotate electrons, instead of cogs!”
• Mutual adjustment of interests and collaborative design of reality
“Lets not use the hose. The television would burn the house, the
ashtray would fall to the floor, and the books are going to get really
wet.
Or, lets chat with the ashtray manufacturer.”
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21. The Dynamics of Innovation:
Schumpeter I-II
I
1. Scientists and innovators create technological opportunities
2. Entrepreneurs see the profit potential of technological opportunities and grab
them
3. Followers swarm in and erode profits
• In the process, investments are made in the emerging technologies, and industry
and market structure change
(Theory of Economic Development, 1912)
II
• Big corporations become main investors in technology creation
• Innovation becomes mechanized and routinized in corporate R&D laboratories
(Capitalism, Socialism and Democracy, 1943)
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22. “Schumpeter” III-IV
III
• A global sphere of financing emerges, loosely coupled to technology creation
• Venture capitalist become an important engine of re-engineering
• Investments “swarm” to fastest growing industries
• Equity-based incentives (=options) are invented
• Big corporations try to renew by acquisitions, internal venturing, and new innovation
management models
IV (circa 2000)
• Internet changes the balance between labor and capital
• Mature industries live in Schumpeter II (+III)
• New businesses emerge in Schumpeter III
• Social institutions are adapted to Schumpeter II, except in Silicon Valley
• Important new technologies are created in Schumpeter V
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23. “Schumpeter” V
• Collective production of technology and experience
• open source SW, blogs, social software with images, music, games…
• Loosely coupled to economic investments and interests
• Requires broadband networks
• New rules for competition
• “Symbiotic economy”
• New “medieval villages” of the Internet
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24. Towards the New Economy of Meaning
• The social and cultural infrastructure is becoming increasingly important
• Diversified communities interact across global networks
• Value is created by communications that produce meaningful social
interactions
• The traditional epistemology of the information processing paradigm
(objective, empirical, universal) will be replaced by a new epistemology
• It will be based on theories of social construction, hermeneutic
phenomenology, linguistic genres, communities of practice, situated &
distributed cognition, socio-cultural activity theory…
• The design of future ICT architectures and applications will require new types
of knowledge and new types of collaboration across scientific disciplines
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25. Thank You
Related material available at
http://www.meaningprocessing.com
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