The turn of the millennium is marked by rapid developments in digital technologies. The ubiquity of digitalization is one of the primary forces behind innovations across a wide range of product and service categories. In order to create an initial forum for scholars from different fields, and to establish a preliminary theoretical framework that can guide future scholarly research on digital innovations, we organized an interdisciplinary research workshop, entitled “Digital Challenges in Innovation Research”, held on October 18 – 20, 2008 at Temple University. This report documents major themes from the workshop, highlighting the new opportunities and challenges associated with digital innovation. The workshop participants identified three design characteristics of digital technology that play pivotal roles in facilitating digital innovations: (1) the homogenization of digital data, (2) the programmable digital computing architecture, and (3) the self-referential nature of digital technologies. Furthermore, the participants saw digitalized products as having seven material properties: programmability, addressability, senesability, memorability, communicability, traceability, and associability, which lead to the emergence of loose coupling across the four layers of a digital service architecture, which includes devices, networks, services and contents. The main challenges and opportunities for innovation outcomes emerge primarily from convergence and digital materiality. First, new research opportunities lie in understanding different forms and capabilities of ongoing digital convergence. Second, another set of research issues are associated with new entrepreneurial opportunities that emerge from embedding digital capabilities into non-digital products and services. Finally, the increased use of digital tools and the interpenetration of digital and physical materiality in work practices offer new sets of challenges and opportunities that need to be carefully investigated. The primary factors that affect innovation processes are heterogeneity, generativity, locus of innovation and pace. First, the combination of heterogeneity, generativity, and distributed locus of innovation leads to the emergence of dynamic, non-linear patterns of digital innovation. Developing and validating analytic models to understand how heterogeneous actors at the periphery of digital innovation networks are related to innovation patterns will be an important challenge for innovation scholars. Second, understanding the temporal dynamics of digital innovations provides another important opportunity for future innovation research. Finally, future research should investigate the multi-layered nature of organizational transformations that are associated with the digitalization of products. The report concludes with six broad recommendations for future research: multi-disciplinary research, design scholarship, multi-methods approach, taking data seriously, understanding infrastructure, and theorizing digital technology
