Revisiting absorptive capacity from a design perspective

We examine how teams working on radical innovation develop a novel type of absorptive capacity (AC) to make use of external knowledge. In the setting of the semiconductor industry we compare AC in incremental innovation and AC in radical innovation, relying on the most recent theory of design reasoning. We are led to propose a framework of how radical innovation teams leverage external knowledge using a specific type of AC. AC in incremental innovation can be described as 'epistemic absorptive capacity' (EAC), based on a stable set of design rules to address pre‐identified problems; AC in radical innovation, which we label 'conceptual absorptive capacity' (CAC), is based on 'refined visions' with three facets: 1) 'rule‐breaking', to move from known to out‐of‐the‐box; 2) 'hook building', to overcome cognitive crises by linking the unknown to multiple cognitive references; 3) 'milieu stimulation', to support the creation of new knowledge in the milieu.