Ontological Uncertainty and Innovation

This paper explores the relationship between uncertainty and innovation. It distinguishes three kinds of uncertainty: truth uncertainty, semantic uncertainty, and ontological uncertainty, the latter of which is particularly important for innovation processes. The paper then develops some implications of ontological uncertainty for innovation processes at three levels of organization, by means of three theories: a narrative theory of action at the level of individual economic actors; the theory of generative relationships at the meso-level of agent interaction; and the theory of scaffolding structures at the macro-level of market systems. These theories are illustrated by means of examples drawn from a prospective study on the emergence of a new market system around a technology for distributed control. The paper concludes with a discussion of the relation between theory, stories and models. The authors would like to acknowledge the financial support for the research reported here from the European Commission IST-FET program, the Italian Ministry of Universities, Instruction and Research, and the Santa Fe Institute. We thank our colleagues in EC ISCOM research project and the participants in the SFI workshop on scaling and social organization for valuable comments and discussion.