Structure and Dynamics

Foundational to this discussion are two papers on "identity" by George A. Akerlof and Rachel Kranton [2000, 2005]. We contribute to their development of this issue with additional factors that are arguably essential to the analysis of identity formation. While they indicate the importance of norms as the bases of identity, we suggest additionally the relevance of independence, individual creativity and the exploration of behaviors beyond norms. A violation of normative expectations has the potential of entering and affecting the social terrain interactively with positive feedbacks, generating non-linear processes of innovation and social change.

Our most important finding is that when individuals promote innovation in the performance of a social role, the innovation is unlikely to be mimicked by other role incumbents unless the formal rewards to those innovators are perceived to be more than proportional to the significance of the innovation. If those formal rewards are less than proportional to the significance of the innovation, a general disapprobation of the innovators may arise that potentially vitiates the benefits to innovators, retards the diffusion of the innovation and frustrates further innovation.

Contrary to Fordist notions of cost-minimization, our model suggests the development of challenging career paths where all workers of a given category are rewarded for innovation, rather than restricting rewards to specific innovators, in order to create dynamic innovative environments. Our results echo the achievements of Apple and Google, who have created heterogeneous teams of employees, rewarding all members of such teams for advancing innovation.