Capturing Values at the Boundaries

Novelty is not a sufficient condition for innovation. For new ideas and products to succeed, they must be integrated into the collective understanding and existing infrastructure, illustrating how the past determines the future. Here, we develop a comprehensive framework to understand how the structure of accumulated past successes curves the adjacent possible trajectory of future innovations. We observe that certain technological building blocks, upon frequent combination, coalesce into noticeable clusters manifested as well-defined domains within the exploration landscape. These clusters compress the space around them, thus bending the trajectory of exploration towards them as if exerting a gravitational pull on new ideas and actions. Our methodology quantifies this effect, mapping out the curvatures within the adjacent possible space of actions and identifying significant curvatures that define the boundaries of consensus domains. These domains, serving as knowledge repertoire, guide inventors towards proven solutions and past successes, explaining why the most commercially successful inventions often emerge at the fringes of established domains. Through a case study of Edison's patents, we demonstrate his well-known design strategy of leveraging institutionalized domains, manifested as high curvature in this space. In contrast, Tesla's inventions are predominantly located in low-curvature areas. Our further analysis reveals that innovations in areas of high curvature are indeed more likely to capture market values, supporting our observations. Our framework provides insights into how new ideas interact with and evolve alongside established structures in institutional frameworks and collective understanding, illustrating the complex dialogue between innovation and convention.Comment: 59 pages, 5 main figures, 13 supplementary figure