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Proximity matters for knowledge spillovers

I am at my most creative when I’m in the same room with other people and we are bouncing ideas around. There’s a compounding effect that takes place. One person says something and that then triggers a new idea. I find the whole experience very rewarding and, for me, it’s a reminder that creativity can be a process. It is also a reminder that proximity is important for those of us who have jobs that deal in creativity.

We have spoken a lot about this on the blog, but here is an interesting and recent study that looked at knowledge transfers across different tech startups within one of the largest co-working spaces in the US. For context, the co-working space itself consisted of five floors, about 100,000 square feet, and housed 251 different startups. To measure knowledge transfer, the researchers looked at instances of a startup adopting a component of a peer’s technology stack.

What they found was the following:

  • Knowledge exchange is greater amongst startups that are dissimilar
  • Close physical proximity greatly influences the chance of knowledge spillovers; however, this effect quickly falls off
  • After 20 meters or so, there’s almost no difference between being down the hall or being on a separate floor within the building
  • One of the ways you can counteract this last finding is to create shared spaces; startups with overlapping common areas, such as a kitchen, saw greater distances of influence

In short: proximity matters.

If you’d like to download a full copy of the study, click here.

1 Comment so far

  1. doug pollard

    The compounding effect is why the IDP (Integrated Design Process) has proven to create the most innovative (and cost effective) design solutions. I used to conduct community design charrettes all across Canada also for that reason and with the same result … much more creative solutions in much less time (a few days) plus with less objection since every one got a chance to participate. We also found that groups any larger than 8 or perhaps ten at a stretch were not effective the group tended to divide itself in two. Multiple groups of 8 in the same room and overlapping/sharing what they were up to on a regular basis however works really really group sparks another


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