No single location alone can provide all the knowledge required for innovation, in particular for discontinuous innovation in the form of new products and solutions or new business models. The innovation process is becoming global, requiring companies to access and combine knowledge that is available in different locations around the world. Certain knowledge elements can be codified and accessed at a distance , but other knowledge elements are of a tacit and context-specific nature, and remain embedded in their original localities.

The increasingly complex nature of innovation requires companies to tap knowledge, intangible resources and talent from across the world; collaborate across borders and continents; and become meta-national innovators with an integrated global “innovation chain”.

Companies must therefore ensure that they are present in one way or another in their relevant lead markets and have local sources to technologies, which are required in order to innovate. Companies can do this by setting up local units or subsidiaries, or by forming collaborative arrangements with local companies, universities, or other research institutions. To this end, companies can collaborate with their users, customers, suppliers, or partners to access knowledge globally.

While large companies have had the advantage of their multiple locations, smaller companies today are able to use digital technology and international communities to access certain kinds of knowledge from anywhere in the world, thus enabling them to exploit new knowledge in a way similar to much larger transnational (or multinational) companies. Indeed, established transnational companies may be hindered by the traditional reliance on their home base for innovative products and business models.