Most of the comparative organizational research on product innovation has focused on external sources of ideas. In particular, there has been a great interest in the efficiency of the journal as a method of transfer of technology. From recent studies engineers and technologists appear to be prone neither to read nor use scientific journals and not even engineering or technical journals are entirely accepted as sources of ideas. In accordance with this, we ask the question; What kind of internal structure and process docs it take, to use the knowledge available to anyone as a source of idease for new productsν The major hypothesis confirmed in this comparative study of 31 factories in two quite different industries (foor and electronics) is; The more channels of communication between bottom and top, and the wider the band of communication, the more innovative the output of the organization. Furthermore the influence of the degree of centralization and the number of foreign journal subscriptions upon innovative behaviour are evaluated