1 17 th Bled eCommerce Conference eGlobal Bled, Slovenia, June 21 - 24, 2004 Governance, Leadership, And Management In Adaptive And Inventive Digital Communities: A Research Agenda To Reduce Waste In Graduate Education Richard T. Watson, Marie-Claude Boudreau, Martina Greiner, Donald Wynn, Paul York, Rusen Gul University of Georgia, United States rwatson@terry.uga.edu Abstract Building on transaction cost economics, this work describes the four different forms of communities and introduces transaction benefits as a means of explaining their existence. A research project to investigate governance, leadership, and management in two of the four forms of communities, adaptive and inventive, is described. It is argued that these digital communities are a way of engaging graduate students in wealth creation and thus ‘waste’ in graduate education can be reduced. 1 Introduction Market economies center their activities on wealth creation, and foster governance mechanisms (primarily markets and hierarchies) that are efficient wealth builders. The success of market economies depends on their ability to continue to create customer value in a competitive global environment. A major source of the talent that they need in order to remain successful is the higher education system. Ironically, most of what students produce while in graduate school is ‘thrown away.’ Assignments are usually discarded once completed, with the exception of the doctoral thesis. In effect, society discards much of the work of its most important next generation of wealth creators. We believe that one of the reasons for this ‘waste’ is the lack of deployment of a governance mechanism that can harness the economic value of graduate student work. In this paper, we analyze the different forms of a new governance structure, the community, and discuss its potential to create wealth. We describe two projects in different types of communities that are the focus of our research effort to understand digital community success and their potential for wealth creation.