Sunday, 5 January 2014

14. Absorptive capacity

Absorptive capacity is the capacity to absorb knowledge from others. That is needed for firms to absorb innovations produced elsewhere. It is important for the diffusion of innovations. It is also important for collaboration.

To maintain absorptive capacity firms have to do research even if they do not themselves make direct use of the outcome for new products etc. That explains the otherwise puzzling phenomenon that firms continue to do research in areas that they have outsourced. They need it to judge the offer of suppliers.

Absorptive capacity is needed for collaboration, and collaboration is needed for innovation, as I will discuss in more detail later in this blog. In the preceding item on scripts I discussed how people construct their knowledge differently on the basis of thinking developed in different circumstances. This yields cognitive distance, and the ability to understand others is not self-evident.

The kind of knowledge one needs, for absorptive capacity, is not only substantive, in the narrow cognitive sense of knowing facts or understanding mechanisms, but also in the wider sense of understanding how people evaluate things, how they see things normatively. Are they oriented towards trust or mistrust, towards only the self or also towards others, do they value not only the instrumental value but also the intrinsic value of relationships, not only the short but also the long term, etc.

As a result, absorptive capacity is not only a matter of research but also of experience in collaboration with people who think and act differently.

The notion of absorptive capacity can be elucidated with the help of the notion of scripts, discussed in the preceding item in this blog. If understanding entails insertion of observations into mental scripts, then the relevant scripts must be available for absorption.

The coin of mutual understanding in collaboration also has another side: next to absorptive capacity also communicative capacity, the ability to help others to understand what one is doing or saying.

For this, one needs empathy: the ability to look at what one is doing from the perspective of the other. Also, it helps to employ fitting metaphors. A metaphor is seeing something in terms of something else: ‘Shall I compare thee to a summer’s day’ (Shakespeare). In this case: trying to picture what one does in terms of how the other thinks. In terms of scripts: Trying to fit what one does into the scripts that one thinks the other has.
How the other thinks is often not obvious, even to him/herself. Much knowledge is tacit: we can do more than we know. Much of our activity is routine. We may once have had explicit knowledge of how to do something, but it has developed into tacit routine.
Once I learned French grammar. I no longer know the rules but I recognize a correct sentence when I see one. Because I can drive a car by routine I can think of other things when I drive.
This is very practical, but it makes it difficult to tell someone else what I am doing, and how. Then tacit, implicit knowledge must first be made explicit. Helping another to do that is also a skill. Socrates was famous for it, in his dialogues, evoking tacit knowledge in ‘intellectual midwifery’.

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