Later theories offered a less deterministic version of the argument. The existence of exploitable ‘technological opportunities’ plays a role in determining the rate and direction of innovation and these may depend on advances in science and technology in each industry. ‘Capabilities push’ emphasized changes in a firm’s ability to pursue particular technology paths. An implication is that firms must invest in scientific knowledge to develop their ‘capacity to absorb’ knowledge and exploit opportunities emerging from the state-of-the-art elsewhere (Mowery, 1983; Rosenberg, 1990; Cohen and Levinthal, 1990).
Page 50 Nemet (2008) in Foxon, Kohler and Oughton
In business administration, absorptive capacity has been defined as “a firm’s ability to recognize the value of new information, assimilate it, and apply it to commercial ends“.
[Biblically, ‘cast not your pearls before swine/ cast not your seeds on stony ground. Don’t talk t brick walls]
Can be divvied into Potential Absorptive Capacity and Realized Absorptive Capacity
There are also “learning processs” sub-components – exploratory, assimilative, transformative, exploitative. See Gebauer, H. Worch, H and Truffer, B. 2012. Absorptive capacity, learning processes and combinative capabilities as determinants of strategic innovation. European Management Journal, Vol. 30, pp.57-73.
Cohen, W.M., Levinthal, D.A., 1990. Absorptive capacity: a new perspective on learning and innovation. Administrative Science Quarterly 35, 128–152.
Aribi, A. and Dupouet, O. 2016.Absorptive capacity: a non-linear process. Knowledge Management Research & Practice, Vol. 14, pp.15-26.