Simulating the Impact of Community Culture and Governance in Virtual Innovation Communities

There is no substitute to the intellectual disposition to innovate. To increase the value of creative thinking, ideas have to be transformed into wealth production through generation, promotion, and distribution of appreciated products and/or services in a timely and competitive way. To achieve these goals, philosophies of institutions and (virtual) organizations need to be nurtured to promote collective creativity and transformation of ideas into wealth production. The main objectives of the study are to explore and identify design principles for virtual innovation communities and to model innovation as an evolutionary process. A simulation study is conducted to systemically study and generate hypotheses regarding governance mechanisms that improve innovation output. Findings suggest that decentralized coordination schemes such as emergent selection that are observed in utility communities along with moderate degrees of assertiveness and cooperation for conflict management result in higher incidence of innovation.