Where do new ideas come from?  Big Company and University R&D labs, sure.  Guys & Gals in their garage, occasionally.  The reality is and there is some great research on the subject by (insert here) .  It may be surprising but the bulk of new ideas come from people with problems.  To be sure, there are breakthrough ideas that required strict discipline, focus and lots of capital to create but by and large the type of new ideas that really drive our economy through the reduction of transaction costs and improved productivity are usually developed by people with problems that they take the initiative to apply themselves either independently or as a group.  Many of these inventions are often improvements to prior solutions to the same problem.  It is this evolution process that is what determines the pace of progress. 

An unfortunate fact is that much of the value of this knowledge is vastly distributed and requires enormous search costs that make it too costly to pursue.  The initial promise of Knowledge management tools and solutions was generally misguided and lacked requisite rewards and benefits to the individual participants.

The challenge is to develop the mindset, rewards and technology that make it easy and beneficial for everyone to participate in the Innovation Economy.  We can begin to dig into some details in future posts.