One Foot in, One Foot Out: How Does Individuals’ External Search Breadth Affect Innovation Outcomes?

Abstract

The ‘variance hypothesis’ predicts that external search breadth will lead to innovation outcomes, but time for search is fixed and cultivating breadth takes time. How does individuals’ external search breadth affect innovation outcomes? We match survey data with complete patent records, to examine the search behaviors of elite experts at one of the world’s most innovative firms. Counter to expectations, individuals who spent more time inside the firm were more likely to be innovative. Individuals with high external search breadth were more innovative only when they allocated more attention to those sources. Our research identifies limits to the ‘variance hypothesis’ and reveals two successful approaches to innovation search: ‘cosmopolitans’ who cultivate and attend to external sources and ‘locals’ who draw upon internal sources.