How to properly apply new external knowledge

Abstract

This article was an attempt to brief a new model of absorptive capacity and develop the concept of absorptive capacity which is a critical factor in applying, accumulating and linking new external knowledge to innovation. Through a comprehensive review of literature on absorptive capacity, authors ended up with the idea that the stream of new external knowledge in the waterfall model continually fosters all abilities of absorptive capacity. In addition, following knowledge spillover in each stage, abilities perform their activities. Knowledge accumulation is also another capability, which in this process, plays the role of linking absorptive capacity and innovation.