To stay abreast of change and speed the commercialization process, the walls that once separated public and private institutions, education and business, and large and small firms must come down. Separation and hierarchy do not work when speed is of the essence. Increasingly, the process of innovation is not conducted simply within an individual company, but through knowledge-creating networks of individuals with ideas in companies, universities and other institutions. The key is the sharing of tacit knowledge through interactive processes based on trust, willingness to share and mutually beneficial exchange over time. Through a wide variety of formal and informal relationships, networks organize the sharing and distribution of knowledge.
Networks distribute know-how and ideas among a community of professionals that transcend companies.
Programmers, for example, express their loyalty to the Java programming language, rather than to their particular employer. The networks at the heart of the new innovation model function most effectively when their components are clustered geographically in a region. Geographic clustering of people, companies, and institutions is a powerful mechanism for transferring and augmenting personal knowledge quickly. Sharing knowledge, skills and experience is simply easier when the components of the learning network are in the same place. Although electronic communication is important, it is not a substitute for the trust, sharing and intense interpersonal interaction essential for the innovation process.