Innovation Networks in Industries

Innovation Networks in Industries

Edited by Franco Malerba and Nicholas S. Vonortas

Innovation Networks in Industries provides an extensive study in the fields of industry structure, firm strategy and public policy through the use of network concepts and indicators. It also elucidates many of the complexities and challenges involved.

Chapter 5: Knowledge Search and Strategic Alliance: Evidence from the Electronics Industry

Stefano Breschi, Lorenzo Cassi and Franco Malerba

Subjects: economics and finance, economics of innovation, evolutionary economics, industrial organisation, innovation and technology, economics of innovation


Stefano Breschi, Lorenzo Cassi and Franco Malerba 1. INTRODUCTION The idea that searching for new knowledge is at the basis of firms’ innovative performance underlies the evolutionary perspective on industrial innovation. A central tenet is that search activities are highly “local” and path dependent, meaning that firms tend to search for new knowledge in areas closely related to the their established knowledge base and competencies. According to this view, far from emerging in isolation, current innovations build upon past innovations and may themselves become foundations for future innovations. In other words, it is assumed that technological development is a cumulative process. Viewed from the perspective of organizations, this process of knowledge accumulation may take place by building on the internal stock of knowledge of a firm or accessing novel and different domains of knowledge that reside just beyond firms’ immediate boundaries. The aim of this chapter is to provide an empirical investigation of firms’ knowledge search strategies in crowded technological areas. In particular, we argue that processes of competition and collaboration have to be taken into account when exploring impacts on innovative performance. On the one hand, competition from other firms that build on a firm’s knowledge base may hamper innovation in that the innovating firm finds reduced effectiveness in a local and cumulative search strategy and finds a more exploratory strategy increasingly attractive. On the other hand, forming alliances with competitors is a means to internalize the potential negative effects arising from competitors exploiting a firm’s knowledge base. In...

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