The newly created information must then be diffused throughout the firm
setting off further innovations. This diffusion within the firm is important
because it allows the firm to reap more of the benefits of its newly created
information. As Schumpeter observed, new innovations trigger other
innovations in an effect that resembles the dropping of a stone in a still pond. If
the company can internalize some of the resulting “ripples”, then it can secure
greater economic benefits. It should also be noted that often the “ripple”
effects that emerge cannot be predicted, but result in major economic
advantage. Thus, the innovation process becomes a moment in the constant
evolution and transformation of the firm.