Why Do Firms Not Collaborate? The Role of Competencies and Technological Regimes

Abstract

Determinants and effects of innovation are topics of intense research interest, particularly since the fundamental relationship between economic and technological change has become acknowledged more widely. As a result, the contributions of research and development activities (R&D) to innovation and industrial evolution, especially in the manufacturing industries are well appreciated. However, in economic models, as well as in many empirical studies, R&D is often conceptualized as an innovation production function. Such treatment may be a useful first approximation of the innovation process within a linear model of innovation. However, in qualitative empirical studies since the 1980s it has been observed that the organization of R&D is a critical determinant of both innovation (for example, Mowery, 1983) and economic performance (for example, Teece, 1986). Informal models of innovation emphasize feedbacks and complementarities among a firm’s activities and knowledge bases (Kline and Rosenberg, 1986; Rothwell, 1994). Organizational choices, for instance, whether to organize knowledge-creation activities internally or outsource them, have a considerable impact on the strength of the interactions among the necessary sources of knowledge.

I am grateful for the comments by the participants of the TSER Workshop on Innovation and Economic Change at Delft University of Technology, the Netherlands, especially Pierre Mohnen, Chris Walters, and Jose M. Labeaga, and comments by seminar participants at INRA, Toulouse and Amos Tuck School, Dartmouth College. Steven Wolf provided valuable editing assistance Remaining errors are mine alone. This research was funded by TEKES, the National Technology Agency of Finland. Statistics Finland compiled the data. I thank both for their support.