All these innovative leaps occurred in the face of rising costs, growing competition and the rapid diffusion of technology. The answer lies in the dense and flexible networks of tight relationships among entrepreneurs, venture capitalists, university researchers, lawyers, consultants, highly skilled employees and others who know how to translate ideas into new products and services fast enough to stay on the edge of the innovation curve. These complex networks continually connect people with good ideas and test the changing market, always searching for the next innovation. Assets may not be enough in the innovation economy. Innovative and the successful entrepreneurs that drive innovation are embedded in regional networks that connect assets in ways that create wealth and opportunity for both firms and individuals.
Innovation is a social process.
It rarely occurs because a single individual or firm takes an idea to market. Creative work, as opposed to routine production, requires close proximity. Innovation is not a linear process but an active process of learning through trial and error. Networks speed the innovation process by connecting people across boundaries and accelerating learning. It doesn't occur in a straight line, chain-link fashion from research lab to development to commercialization.