Chapter 8 Learning thorugh alliances

Acquiring technology Different mechanisms...internal and external Acquisition of a firm with knowledge Technology Transfer Reverse Engineering In-house formal R&D Contract R&D Licensing Joint-venture Strategic R&D partnership

Learning through alliances Why do firms collaborate? What types of collaborations are most appropriate? How do technological and market affect collaboration? How do organization and management affect collaboration? How can a firm exploit collaboration for learning?

Why do firms create alliances? 3 groups of motives: technological, market and organizational Cost and risk technological development market entry Economies of scale Time reduction to develop and commercialize Shared learning Dangers: information leakage, loss of control/ownership, conflict

Table 8.2 Forms of collaboration Types of collaboration ©2005 Joe Tidd, John Bessant and Keith Pavitt

Supplier relations and subcontracting Figure 8.2 How objectives and nature of supply market influence supplier relationships ©2005 Joe Tidd, John Bessant and Keith Pavitt

Technology licensing Exploit the intellectual property of another firm Payment Royalty Grant back improvements Seller decides specific applications and markets Lower development costs, lower technological and market risk, faster product development and market entry Loss of control, transaction costs

Research Consortia Organizations working on research projects together Cost and risk of research, resource mobilisation, performing early research, setting standards Different forms: pooled investments in common facility (Europe), coordinated in-house research (USA), hybrid (Japan) Competitors or non-competitors Difficulties: goals, commercialisation, coordination, technology transfer

Strategic alliances and joint ventures Co-development of a new technology or product Nearer market Specific end goal and timetable Do not become a separate company Joint ventures New company – legal entity Contractual – separate management Motives: To build critical mass – co-option To reach new markets – co-specialization To gain new competencies – learning

Innovation Networks Organizational response to the complexity and uncertainty of technology and markets A number of actors (individuals, firms, business units, universities, governments, customers, etc.) and interactions between them How these actors are influenced by their social context and how actors influence the social context… hence interaction and dependence! Regional, national, sectorial, technological Buzz words: Power, legitimacy, path dependency

Links require significant investment in resources Tight or loose depending in the quantity (number), quality (intensity) and type (closeness to core activities) of the links Links require significant investment in resources Different types of links or interactions: Product interactions Process interactions Social interaction within the organization Social interaction between organizations Formal and informal ties or links

Technological and market factors ©2005 Joe Tidd, John Bessant and Keith Pavitt

Two dimensions of technology accquisition Characteristics of the technology: Competitive significance Complexity Codifiability Credibility potential Organization’s inheritance: Corporate strategy Capabilities Firm’s culture Management comfort

Learning ©2005 Joe Tidd, John Bessant and Keith Pavitt

3 factors affect learning through alliance: Intent Learning as opposed to accessing resources Choice of partner Form of collaboration Transparency Openness and potential Corporate culture/skills Receptivity Capacity to learn Believe in abilities Gap in skills

Figure 8.1 A model for collaboration ©2005 Joe Tidd, John Bessant and Keith Pavitt

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