Returns from refining what works are immediate and certain; returns from searching are distant and uncertain, so organisations systematically underinvest in search.
March's 1991 formulation. The asymmetry is structural: exploitation's returns are near, certain and attributable, exploration's are distant, uncertain and often credited elsewhere.
In practice
- A firm's best team is fully booked on the work that pays now, so nobody is on the work that would pay in three years.
- A researcher with a productive line of work has every incentive to extend it and none to start the risky one.