Feature

Building bridges


Not long ago, firms preferred to go it alone on R&D. Research stars were jealously guarded, laboratories locked down, knowledge hidden away. Yet, as Royal Philips Electronics, a world leader in healthcare, lifestyle and lighting, notes, "the days of innovating in isolation are over".
Instead, companies now favour interfirm collaborations such as technology alliances. Between the early 1970s and the mid 2000s, the yearly number of new technology alliances rose from fewer than 50 to more than 900 globally.
The question is, how do you maximise innovation while minimising any potential downside? Research by Dr Hans Frankort, Lecturer in Strategy at Cass, offers some answers.
Technology alliances have had a progressively powerful influence on how organisations approach research and development. They demonstrate the innovative potential and possible competitive advantage of collaborative efforts, especially in technology-intensive industries such as pharmaceuticals and in information and communications technology.

Cost sharing
"It can be very expensive to bear all the costs of R&D, so there is an element of cost sharing," says Dr Frankort. "Plus linking up with other organisations can give you greater access to markets globally."
In industries such as ICT, "new products typically contain a vast range of technologies, yet the development of such technologies has become more scattered across firms". For example, since 2000, Apple has filed 1,300 patents related to the iPhone and each of these builds in turn on technologies developed elsewhere. One patent concerned with the iPhone's touchscreen incorporates the technologies of companies such as Fujitsu, IBM, Logitech, Microsoft, Nintendo, Philips and Sony.
Once firms have decided to share, they have to determine the best mechanism to govern their technology alliances. There are, says Dr Frankort, considerable risks. "One issue, for example, is to do with the expropriation of knowledge; that your collaborative partner will take your know-how."
In the early days of technology alliances, most were organised as joint ventures. "You are looking to achieve alignment of interests to prevent people from stealing your ideas. Many firms opted for a joint venture because the partner firms share equity, so in theory the interests of the two parties are aligned. This was considered more appropriate for the exchange of technological knowledge."
There are some downsides to a joint venture, though. One is that they are expensive to set up, especially if a company needs to set up several.

Sharing knowledge
Alternatively, the two parties could enter into a contract that specifies how they will share and develop knowledge. For example, in 2011 the British McLaren Group, already in technology alliances with, among others, ExxonMobil, SAP and Pirelli, entered into a contractual arrangement with GlaxoSmithKline to work in areas such as analytics, data management, strategy modelling and telemetry.
Data gathered by John Hagedoorn, Professor of Strategy and International Business at Maastricht University, shows that between the early 1970s and the mid 2000s contractual arrangements rose from about 10 per cent of all newly established technology alliances to well over 90 per cent.
However, a contractual technology alliance is problematical. Dr Frankort says: "Although firms will try to be as specific as possible in these contracts, the emergent nature of R&D means you cannot specify beforehand what the exposed knowledge will be, or fully anticipate the expropriation hazards that you will face."
So is it better to have a contractual arrangement or a joint venture? Dr Frankort says: "In dynamic industry environments you need to be able to adapt. A firm may want to change direction, but its partner may not. Multiply that up across a number of joint ventures and you are limiting your ability to adapt your portfolio."
A study by Dr Frankort, Technology Alliance Governance, Partner Selection and Firm Innovativeness, looked at 25 years of technology alliances in ICT and followed about 100 firms and their technology alliance portfolios, using the number of patents successfully applied for as a measure of innovation. He noticed a striking pattern: the greater the share of joint ventures in a portfolio, the less likely it was that a firm would form alliances with new partners. This was significant, as firms that formed alliances with new partners produced more innovations than firms that stuck with existing partners.

Unfair advantage
However, a second study by Dr Frankort, Open Innovation Norms and the Relationship between Technology Alliance Governance and Interfirm Knowledge Transfer, suggests that although it may be impossible to anticipate how events will unfold, and how knowledge might be mis-appropriated, industry norms about collaboration may ensure neither party seeks an unfair advantage.
"If you are progressively dependent on alliances for your innovativeness, you think twice before you appropriate a partner's knowledge … if you do, you preclude the possibility of collaborating with other firms in the future if word spreads in the industry."
So what is the message from his research? "It tells us at least two things," says Dr Frankort. "Investing heavily in individual alliances limits your ability to change your portfolio. So don't just consider the appropriation concerns and coordination challenges within individual alliances, also consider your ability to change your partnership portfolio.
"And decisions about alliance governance shouldn't just consider dimensions of the alliance and characteristics of the partner … if there are strong collaborative norms at the industry level, you may not need to invest in a joint venture; you can do with a contractual arrangement instead."


Steve Coomber is a freelance business writer. He can be contacted at s.coomber@virgin.net

For more information on the research, contact Dr Christina Makris, Business Development Manager. E: christina.makris.1@city.ac.uk T: +44 (0)20 7040 3273

Thanks you very much for sharing these links. Will definitely check this out..
https://rebelmouse.com/boostyourbustjennybolton

Nice to read your article! I am looking forward to sharing your adventures and experiences.
http://www.rebelmouse.com/onlinealluremichaelfiore

I wanted to thank you for this excellent read!! I definitely loved every little bit of it. I have you bookmarked your site to check out the new stuff you post.
high pr backlinks

ecig accessories E-Cigs And Eliquids starter kits and accessories for all vaping products

I used to be more than cheerful to search out this web website. I needed to much obliged in your time for this heavenly read!! - buy punching bag

Probably there is also a good evolutionary reason for having also this type of humans still around. girlsdoporn

t is imperative that we read blog post very carefully,I would like to thank you for this excellent information!!Learn Forex

I used to be more than cheerful to search out this web website. I needed to much obliged in your time for this heavenly read!! - caterers cheshire

Much obliged concerning posting Really Such Things. I ought to prescribe your site to my friends.i concur with you. xarelto bleeding

This is a very good article, I discovered your blog checking aol for a related subject matter and came to this. I couldnt find to much other information on this article. Read More

This is excellent work! I was really hoping to seek some of your brilliant insights on this matter and you have provided me that. Please, continue to do this kind of work in the future as well. Cheers! weblink

Your post is worth my time and I sincerly thank you for spreading and sharing your valuable knowledge and information, which many less people do these days! attract wealth

Bad jokes aside, this can be very disheartening if you love sea food, as it covers a wide variety of fish, mollusks and crustaceans. Scaly fish are a culprit here and this can include salmon, anchovies, tuna, and trout as an example. For mollusks, potential hazards can be clams, mussels, oysters, octopus, cuttlefish, squid, slugs, and snails. Finally, for crustaceans you've got shrimps, lobster, crab, and crayfish just to name a few. go to website

Thanks for a wonderful share. Your article has proved your hard work and experience you have got in this field. Brilliant .i love it reading. New York Web Development

This is such a great information for me, because i do an online job thats why i need fast Internet connection, regal assets gold coins

This is absolutely amazing. I really love this and I think that this just might be your best article yet. Wonderful job done here and I hope I will see more jobs like these. Cheers, mate! power church

This is excellent work! I was really hoping to seek some of your brilliant insights on this matter and you have provided me that. Please, continue to do this kind of work in the future as well. Cheers! thinning

I really be grateful for your blog, you have completed the great job. Thanks for the bunch of excellent resourceful site. used hifi

I think you have a great knowledge especially while dealings with such subjects ...esta visa

Awesome and interesting article. Great things you've always shared with us. Thanks. Just continue composing this kind of post.
http://www.twitter.com

I think you have a great knowledge especially while dealings with such subjects. photographers in turkey

Industry norms about collaboration may ensure neither party seeks an unfair advantage.bubblegum casting

The information you have posted is very useful. The sites you have referred was good. Thanks for sharing..
testimonials

The yearly number of new technology alliances rose from fewer than 50 to more than 900 globally.Backlinks

But in trying to figure out which foods cause eczema, there are a few more in this category that may merit your attention. These include processed foods that contain milk, such as certain salad dressings, pasteries and snacks. If the condition is recent (within 24 hours) a good rule of thumb is to go through what you ate the day earlier and narrow the possibilities down. makeup to makeup

Excellent write-up, the item proved quite helpful! I just now were being merely available in that as well as I am just seeing the idea greater! find a sugar daddy website

I am in the middle of working on a school report on this topic and your post has helped me with the information I needed to complete it. Thanks. Modern Finans

My business is simply pleased to obtain discovered the one you have. Searching in advance pertaining to publish next the one you have. eszybkapozyczka.pl

Great write-up, I am a big believer in commenting on blogs to inform the blog writers know that they've added something worthwhile to the world wide web!..

https://www.facebook.com/textyourexbackreview

Thank you for this very helpful guide on the right way. This will be very helpful for those you are just starting to blog. Maytag microwave repair

Eczema is generally a body's reaction to what it perceives as a threat. Studies have shown that a main cause for eczema can be different food allergies, so once you've identified the type of eczema you have, it then becomes very important to figure out which foods cause eczema. homepage

I completely agree with the above comment,and its due to sites like this that ideas are spreading so quickly. income tax preparation encinitas ca

This is such a great resource that you are providing and you give it away for free. I love seeing blog that understand the value of providing a quality resource for free HQ Backlinks

Wonderful illustrated information. I thank you about that. No doubt it will be very useful for my future projects. Would like to see some other posts on the same subject!
defooz.com

I really happy to scrutinize this post,i was just imagine about it and you provided for me the right information. recipe template

This is the sort of manual that needs to be given and not the irregular deception that is at alternate web journals. new songs

Do you want to take your fitness a new level? Contact us now to organise a free trial session! Meet the group at the lovely and diverse All Nations Park, opposite KMart at the rear car park of Northcote Shopping Plaza dampvask Aalborg

It was wondering if I could use this write-up on my other website, I will link it back to your website though.Great Thanks.
ice cream scoops

Pro-Ject MaiA This is a fantastic website and I can not recommend you guys enough. I really appreciate your post. It is very helpful for all the people on the web.

Thanks For sharing this Superb article.I use this Article to show my assignment in college.it is useful For me Great Work.
https://rebelmouse.com/girlfriendsystemreview

I am doing a report on this subject. Your article is full of really useful information. I will make sure to come back to check out your posts for my next report. Cheers NJ Office Space

carders forum This is a great inspiring article.I am pretty much pleased with your good work.You put really helpful information.

This new article of yours is a mind-blowing one. There are not many articles which impress me. But, this one has by quite a lot of impressing. I really liked all of the elements in this article and I hope I will see the quality of this article continued in the other articles that you will publish in the future as well rengøring af bil Aalborg

This is such a great resource that you are providing and you give it away for free. I love seeing blog that understand the value. Im glad to have found this post as its such an interesting one! I am always on the lookout for quality posts and articles so i suppose im lucky to have found this! I hope you will be adding more in the future...
https://www.rebelmouse.com/michaelfioresecretsurveyreview/

These are some great tools that i definitely use for SEO work. This is a great list to use in the future..
manhattan beach bail bonds

Part of my job requires me to stay on top of this subject. The article you have written has been beneficial in my research. Thanks a lot WoW

First of all Good day! I would just like to give thanks to the admin who posted this one I really appreciate it thank you. Satılık Hoparlör

This is a great inspiring article.I am pretty much pleased with your good work.You put really very helpful information. Keep it up High PR Web 2.0

Once firms have decided to share, they have to determine the best mechanism to govern their technology alliances. There are, says Dr Frankort, considerable risks. "One issue, for example http://iphone6priceinindia.com

buy twitter followers cheap I am genuinely thankful to the holder of this web page who has shared this wonderful paragraph at at this place