Knowledge creates value. Or does it? All knowledge does not create value in commercial terms. It’s only the one that is based on an innovative idea and which involves people.

Not only the one which involves people but also the one that engages the people to trade value with each other. If we need to understand the dynamics of knowledge that creates value in an ever-growing marketplace of ideas we need to dig deeper.

To make it to the marketplace and create value, an idea has to satisfy two parallel but connected realms: the economic realm and the physical reality of the universe. They appear to be worlds apart, but they share a critical juncture.

We cannot change the physical laws of energy, momentum and motion, for example. Someone may have an idea that they can build a time machine but they have to satisfy the physical boundaries and limitations of laws of nature.

On the other hand, people may not be ready to pay a price for a ridiculous idea no matter how hard you try. So the boundary condition is set in the middle for anyone who wants to make an innovation — an idea that has an impact and some potential to sit in the marketplace to create value. The creation of knowledge that has a commercial value is heavily reliant on the comprehension of this paradigm.

This seems very simple. We have to stay within the boundary conditions of what people essentially do and deliver value to one another. And while doing all this, we have to make sure that we don’t violate principles of the universe. That looks commonplace.

An innovative idea relating to the physical realm of science tends to ignore the cost. The innovator is keenly focused on the technological aspects of the product while remaining oblivious of the economic environment.

As simple as it sounds, for many people who prime themselves as innovators, this is deterministic failure. When you violate the conditions of any of the realms, the innovation cannot enter the marketplace.

Let me give you an example. An innovative idea relating to the physical realm of science tends to ignore the cost. The innovator is keenly focused on the technological aspects of the potential product while being oblivious of the economic environment. Worse, many innovators picture themselves as users or customers. This is a common mistake.

The scientists or the engineers who are working in a lab environment frequently lack the understanding of customer needs and wants in a fiercely contested marketplace. They often have poor knowledge of what a customer wants. The inverse is equally true. Sometimes people think that they know what people want. Consider the time machine example.

Some experts in market dynamics may say that they know what people want and how their aspiration of time travel can be commercially exploited. However, the expert is ignoring the technical limitations and the physical boundaries of the universe.

There are plenty of examples in the world where innovators have ignored either of the two limitations and still been successful. Steve Jobs is one example. But we all agree that these examples are very few and far between. They are not representative of the marketplace. What we are talking about here is creating knowledge through innovation that has a value over time in commercial terms, and not random one-off shots.

Unfortunately, these examples which are extra ordinary – and may not be reliably or consistently repeated – tend to drive human behaviour in their market environment. Innovators, therefore, appear to ignore the physical boundaries of human realm or the economic order of the commercial realm.

A former Intel CEO, Andy Grove, used to refer to this as “intellectual integrity“ - the ability to see the reality and face it, too. We know that Intel, the technical giant of this century, constantly encountered the physical reality, Grove was of the view that we cannot suspend the realities of either realm. We, the humans, have a tendency to “look the other way, hoping that it works”.

So, if you are an innovator or driving to lead an innovative environment for knowledge creation you need to develop intellectual integrity to see the intricacies of both the realms and tell the place where they meet.

If you are going to be involved in an innovation or in a growing economy – and you are not in an abnormal growth paradigm – to work in this kind of the world, it takes a tremendous amount of integrity to be intellectually honest.

The writer is Pro Rector at NUML University