Importance of tacit knowledge in incremental innovation: Implications from drug discovery cases

Abstract

Purpose

The purpose of this paper is to examine the role of tacit knowledge in incremental innovation, which has hitherto been neglected.

Design/methodology/approach

Qualitative case analysis was used to focus on two large Japanese pharmaceutical companies’ development of new antihypertensive drugs. The study uses interview data and documentary research materials to explore the knowledge bases of the companies’ research teams as they refined an existing drug to produce new products – a process of incremental innovation.

Findings

Explicit knowledge (chemical structure of preceding drug) was used in both successful and failed cases of drug discovery. In the two successful cases, the tacit knowledge of key researchers, based on their long-term experience of related research, provided insight into developing compounds with good in vivo efficacy, which led to successful clinical development.

Practical implications

The findings suggest that tacit knowledge may play an important role in incremental innovation processes, and that its influence on product development should be considered in such ways as team and organization structure.

Originality/value

This study addresses a gap in the literature regarding the impact of tacit knowledge on incremental innovation processes. It is often assumed that incremental innovation is based on existing technology. This study suggests that tacit knowledge may play a hitherto largely unrecognized role in incremental product development.

Citation

Okuyama, R. (2017), "Importance of tacit knowledge in incremental innovation: Implications from drug discovery cases", Journal of Strategy and Management, Vol. 10 No. 1, pp. 118-130. https://doi.org/10.1108/JSMA-02-2016-0016