Same Diversity, Different Impact: Decomposing Team Knowledge Diversity

Research on innovation has long emphasized the benefits and challenges of knowledge diversity within inventor teams. However, prevailing conceptualizations of team knowledge diversity tend to aggregate knowledge across and within individuals, obscuring fundamentally different knowledge structures that may lead to teams recombining their knowledge in different ways. We address this limitation by decomposing team knowledge diversity into two theoretically distinct components. Compactness captures the extent to which team knowledge is concentrated within relatively specialized individuals. Commonality captures the extent to which team members possess a substantive and evenly distributed base of common knowledge. We theorize that these components create distinct opportunities and constraints for knowledge recombination and, consequently, invention outcomes. Using U.S. patent inventor teams and inventors’ prior experience across technological domains, we find that Compactness is negatively associated with invention impact, whereas Commonality is positively associated with impact, with the latter association substantially larger in magnitude. Commonality is also associated with inventions that are more closely connected to existing scientific knowledge, and narrower in technological scope. In contrast, Compactness is negatively associated with a variety of different invention outcomes. Our findings show that aggregate portrayals of team knowledge diversity can conceal consequential differences in how knowledge is structured within teams. By decomposing team knowledge diversity into attributes reflecting how knowledge is distributed within and across individuals, we integrate perspectives on individual knowledge specialization and team knowledge heterogeneity and provide a more granular account of how team knowledge structures shape knowledge recombination and inventive performance.