Absorptive capacity for radical innovation: A case study in the semiconductor industry

Abstract : Absorptive capacity is one of the most important constructs to emerge in organizational research in recent decades for gaining insight into the link between knowledge and innovation. In 1989, Cohen and Levinthal analyzed the role of R&D in this context and distinguished "information generation" and the "ability to assimilate and exploit existing information" for innovation purposes [5]. They proposed a model of this second, less recognized capacity. They define Absorptive Capacity (AC) as the organizational capability to organize value and assimilate external knowledge in order to increase firm innovativeness. They assume that AC is a dynamic capability that depends on prior related knowledge in the form and combines value recognition of the missing knowledge, its assimilation and application.