The Future Of Innovation Is Powered By Trust

Dr Kirsimarja Blomqvist

Trust is an all encompassing force making innovation possible. It works for innovation at all levels, from individual’s self-confidence to macro-level institutions supporting intellectual and economic exchange. For people to be willing to share their knowledge, and to participate in implementation of other people’s ideas, trust matters.

Innovation is a social activity that knowledgeable individuals with different ideas, skills and knowledge make happen. They come from various backgrounds that differ in work practices and culture. By nature innovation is characterized by information asymmetry and complexity. Trust acts as a threshold condition making it possible to accept the risks and vulnerability involved. It is relevant in all phases of the innovation process, from brain storming and R&D to experimenting and launching new products. It is vital for leadership, cross-functional and virtual team work, selling innovative services and products, consulting, change management and alliances. The higher the risk, the higher the need for trust is.

Basically trust is a threshold condition for any effective communication and cooperation. At its simplest, trust is the willingness to accept vulnerability. In the innovation context it can be defined as actor's cooperative behaviour based on expectation of the other party's competence, goodwill and self-reference. Relevant competence (substance knowledge, skills and know-how) is a necessary antecedent and base for trust in innovation, where the complementary knowledge and resources are key motives behind cooperation. Signs of goodwill (moral responsibility and positive intentions toward the other) are also necessary for the trusting party to accept the risk involved.

Innovation demands also an ability to see the value in other peoples’ ideas. Sharing and synthesizing non-redundant knowledge and diverse views is necessary for innovation. A strong self-reference (identity) makes it possible to connect at a deep level with those different from oneself.

Competence, goodwill and self-reference characterize trustworthiness both in individuals and organizations. At organizational level clear values, strategy, structures and fair processes provide the complementary mechanisms for stronger trust combining both interpersonal and impersonal trust. At inter-organizational level trust complements contracting and provides the flexibility and commitment needed. At macro-level trustworthy institutions, such as legal system, monetary and political institutions support the intellectual and economic exchange.

In contemporary knowledge-based network economy trust is critical yet an intriguing and paradoxical issue. Levels of trust in large organizations and institutions have decreased world-wide. Trust is valuable, increasingly rare, and in innovation it is non-substitutable. For those able to build – and increasingly also re-build trust, trust gives a competitive advantage.

Future of innovation is in trusting networks of knowledgeable individuals coming from different professional backgrounds, organizations and cultures. Trust makes it possible to share and create knowledge and simultaneously build norms and contracts that make fair value creation possible.

Article © 2009 Dr Kirsimarja Blomqvist. All rights reserved.

about the author...

Dr Kirsimarja Blomqvist

Dr Kirsimarja Blomqvist

affiliation:   Lappeenranta University Of Technology; School Of Business

position:  Professor for knowledge management

country:  Finland

area of interest:  trust, networks

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