One of my gurus, Gary Hamel first wrote about this concept in his landmark book Leading the revolution.

Knowledge arbitrage can be as simple as applying what is working great
in one industry in another industry. In other words borrow concepts
from an unrelated industry.

A good example is a company my friend Steve founded called Bag Borrow or steal, Inc. Steve borrowed the inspiration from online video rental business Netflix.
Applied this concept to something new – renting luxury handbags online.
Check them out. It looks obvious now – not when Steve first
conceptualized it.

The business is booming. This is a classic case of knowledge arbitrage in action.

Here are some quick first steps towards taking advantage of knowledge arbitrage:
a) Read material outside of your domain expertise
b) Attend conferences and other events outside of your domain expertise
c) Develop curiosity on variety of topics and interests
d) Watch for trends across the board
e) Whenever you see something really intriguing in another industry,
stretch your imagination on how to apply this in your industry or
business.