Changing Nature of Networks and Their Importance

"The dynamics of our society and particularly our new economy will increasingly obey the logic of networks. Understanding how networks work will be the key to understanding how the economy works."

—Innovation Networks: Cooperation in National Innovation Systems (OECD)


The Changing View of Networks

Networks as a concept are not new. In many ways they have operated since the beginning of history. What is new is an increasing recognition of the strategic importance of networks in providing substantial impact on organizations struggling to improve performance in a complex, fast-changing, paradoxical universe.

The Nature of Networks
In the literature, networks are seen as standing somewhere between totally informal teams and hierarchical organizations. Wolfgang Polt describes them as "representing coherence without contract or command, and as such they signal a new stage in organizational forms."
The pace of change today makes it difficult for many traditional institutions, given their inherent bureaucracy, to innovate quickly and take advantage of windows of opportunity that open only briefly. It also makes it difficult for individual experts to stay current in their fields, much less create new knowledge on their own.
There is a dramatic shift underway from centralized systems to distributed systems. The importance of this shift is only starting to be recognized by many groups. In this context, people tend to come together in networks to form communities of interest to fill perceived voids.
Thse networks run the gamut from loosely structured interest groups (sometimes little more than an email distribution list) to more formal communities of practice with membership criteria, mandates and internally imposed performance metrics.
The Innovation Expedition is involved in helping diverse stakeholders (often public-private partnerships) create and manage innovation networks which allow various groups to collaborate in a vehicle which is not constrained by geography or by complex legal arrangements—yet is capable of collaborative action.
These special network organizations are increasingly being referred to in the innovation literature as the "soft infrastructure" required to support innovation systems as opposed to "hard infrastructure" of traditional organizations.
Networks are Key to Supporting Many Innovation Initiatives
Current thinking and writing on innovation stresses:
  • that more and more innovations originate from a complex pattern of interactions, rather than from individuals or individual organizations
  • that many things currently delivered by centralized institutions will become self-organized
Innovation Knowledge Networks Practice New Ways of Organizing Which Requires:
  • new mindsets that are in tune with the operating principles of the knowledge economy
  • leaders who are instinctive collaborators adn who have the courage to share and receive ideas and experiences
  • acceptance of the idea that authority is gained not from the ascribed status of a hierarchical position but from the recognition of an individual's knowledge and skills
  • a capacity amongst their members to build trusting relationships and to connect people across sectoral and geographic boundaries
  • a recognition of the new imperative for innovation and the capacity to trust one's imagination to lay the foundation for useful innovations
  • an ability to continue focused actions that flow from a network in which members and structures change rapidly in response to changing circumstances
  • a recognition of the importance of continually exploring what the key challenges are and how to collaborate in creating responses rather than following rigid predefined processes