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Strategy scholars have long argued that breakthrough innovation is generated by recombining knowledge from distant domains. Even if firms have the ability to access and absorb knowledge from distant domains, however, they may fail to pay attention to such knowledge because it is seemingly irrelevant to their tasks. We draw attention to this problem of knowledge relevance and develop a theoretical model to illuminate how ideas from seemingly irrelevant (i.e., peripheral) domains can generate breakthrough innovation through the cognitive process of analogical reasoning, as well as the conditions under which this is more likely to occur. We situate our theoretical model in the context of teams in order to develop insight into the microfoundations of knowledge recombination within firms. Our model reveals paradoxical requirements for teams that help to explain why breakthrough innovation is so difficult.

Though STEM-related jobs have become a critical sector in the United States economy, there remains a severe employment shortage of eligible workers in these fields (Beyer, Rynes, Perrault, Hay, & Haller, 2003; National Science Foundation, 2009). The shortage of workers who possess the necessary skills to fulfill this growing sector of the economy are at a level last reached the middle of the 20th century (ACT, 2006; Jackson et al., in press). Even so, approximately 1.6 million supplementary workers with degrees in the computing sciences will be required to satisfy workforce demands according to the U. S. Department of Labor (Beyer et al., 2003; Hecker, 2001). Social misfortunes have played a significant role in the disproportioned participation rates of ethnic minorities in STEM fields. Although it could be argued that the field of computing sciences has moved to the forefront of STEM within this information-based global economy, very few African Americans productively contribute to the field (Carver, 1994; Gilbert, Jackson, George, Charleston, & Daniels, 2007).