Bilateral Collaboration and the Emergence of Innovation Networks

Abstract

In this paper, we model the formation of innovation networks as they emerge from bilateral decisions. In contrast to much of the literature, here firms only consider knowledge production, and not network issues, when deciding on partners. Thus, we focus attention on the effects of the knowledge and information regime on network formation. The effectiveness of a bilateral collaboration is determined by cognitive, relational, and structural embeddedness. Innovation results from the recombination of knowledge held by the partners to the collaboration, and its success is determined in part by the extent to which firms' knowledge complement each other. Previous collaborations (relational embeddedness) increase the probability of a successful collaboration, as does information gained from common third parties (structural embeddedness). Repeated alliance formation creates a network. Two features are central to the innovation process: how firms pool their knowledge resources, and how firms derive information about potential partners. When innovation is decomposable into separate subtasks, networks tend to be dense; when structural embeddedness is important, networks become cliquish. For some regions in this parameter space, small worlds emerge.networks, innovation, knowledge, collaborative R& D, embeddedness

Absorptive Capacity and Innovation: When Is It Better to Cooperate?

“…The aim is not to completely capture the motivations for cooperation; rather, we focus on a very specific effect, that is, knowledge sharing or what De Bondt (1996) termed the "voluntary exchange of useful technological information". In this sense our model shares the features of Cowan's et al (2007) model of bilateral collaboration where firms form alliances purely based on the production of shared knowledge.…”

“…In more recent models (Cowan et al, 2007;Baum et al, 2010), alliance formation is driven by its probability to succeed in terms of knowledge generation and innovation, as well as the proximity of the potential partner. Among other things, the studies demonstrate that knowledge sharing is a major motivation for alliance formation.…”

“…This consideration is beyond the scope of the present paper, but is considered in the companion work (Savin and Egbetokun, 2012). pressure to innovate quickly is high, or when productive activities require a rapidly expanding knowledge base, in which case firms need to cooperate so as to gain access to complementary knowledge (Cowan et al, 2007).…”

“…24 'a stable network is one in which for each agent (or pair of agents) there is a payoff maximizing decision about which link to form' (Cowan et al, 2007(Cowan et al, , p. 1052 lucrative partner. If the search path becomes cyclical (i → j → k → i...), we exclude the entire cycle (none of the firms builds a partnership) and continue the random search.…”

Sensemaking in Intelligent Health Data Analytics

“…[9]), by discovering and evaluating new technologies and opportunities. Foresight instruments that require a broad data basis have the potential to greatly benefit from a networked approach, especially in network organisations with a heterogeneous partner structure [35].…”