Abstract
A company's growth depends not only on its achievements but also on how it can recover from failures. The study of innovation failure and learning-from-failure has gained attention over the years. Described as a complex problem, the dynamic of learning occurs as a non-linear phenomenon. Therefore, this study develops an agent-based model to examine and investigate, as a complex system, the impact on firms' performance of two main possible strategies of learning-from-failure, i.e. (1) the leveraging of the own experience and (2) the use of external resources. The findings suggest that embracing a learning-from-failure strategy in the innovation process enhances the firms' performance. In addition, the innovation intensity of the sector influences the impact of the strategy chosen. Comparing the use of internal vs external resources, the former seems to be a better strategy for enhancing the company's performance.
•Learning from failure is a window of wisdom but it is an understudied phenomenon.•Learning from failure can be addressed by leveraging internal or external resources.•An ABM has been developed to examine learning from innovation failure.•Adopting a learning-from-failure strategy enhances firm performance.•The developed ABM support managers to learn from failures by means of simulations.
