This study examines the impact of a major advance in information and communication technologies (ICTs) on the exploration of new knowledge in innovation. While some scholars have emphasized that ICTs should increase exploration because it reduces the costs of searching for and integrating new knowledge, mounting evidence that ICTs are leveraged to exploit and build on familiar knowledge instead raises questions about whether ICTs are effective tools for exploration. We propose that the distinct motivational challenges arising from the relatively uncertain, distant, and diffuse returns to exploring new knowledge may constrain the response to ICTs, increasing exploration despite the lower cost. Therefore, we hypothesize that whether ICTs increase exploration critically depends on the management of innovation, specifically R&D unit autonomy and, for non-autonomous (managed) R&D units, the quality of monitoring. We examine the impact of the staggered introduction of broadband, a landmark ICT, on R&D unit exploration in multinational firms. We find that R&D units increase exploration post-broadband, but only when their managing unit also has access to broadband, thereby enabling the managing unit to provide high-quality monitoring. The data indicate that difference in exploration between autonomous and managed R&D units narrows post-broadband, suggesting that ICTs may disrupt the strategic value of autonomy for R&D unit innovation by improving monitoring.
