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Shaking hands with knives behind their backs?
Open innovation amongst industry laggards in the auto industry
T. J. Hannigan, Temple University
Marcelo Cano-Kollmann, Ohio University
Ram Mudambi*, Temple University
Snehal Awate, Indian School of Business
Abstract
In oligopolistic industries, periods of technological discontinuity are characterized by two key elements: technological uncertainty and heterogeneity in the performance of the constituent firms in exploratory innovation. Technological uncertainty presents incumbent firms with a set of real options, and the optimal strategy is to take a position in each one corresponding to the probability of its becoming the dominant one. Heterogeneity in exploratory performance means that in each new technology the oligopolists are divided into leaders and laggards. Leaders are incented to go it alone to prevent knowledge leakage while laggards are driven to collaborate with one another in order to avoid being frozen out of a potentially dominant technology. In this paper, we study the case of hybrid drivetrains in the auto industry. Toyota’s early dominance of this technology was followed by the Global Hybrid Alliance amongst GM, Chrysler, Daimler-Benz and BMW. We argue that the diversity of partner capabilities and their product market rivalry ensured that the alliance was highly unstable so that its stated goal of developing a successful hybrid drivetrain was never a realistic objective. However, all partners learned from the alliance. Some directly applied knowledge generated, while others learned that alternative technological paths were better suited to their capabilities. Such negative learning is an important outcome of such “close but adversarial” open innovation programs.
Introduction
Oligopolistically competitive industries comprise a significant proportion of global
business activity. Innovation is a key element of such competition, especially as dominant
technologies mature. Such periods are characterized by a transition from the exploitation of
extant knowledge to the exploration for new knowledge1. Firms with the competencies to
* Address for correspondence: Ram Mudambi, Department of Strategic Management, Fox School of Business, Alter Hall, Temple University, Philadelphia PA 19122, USA Email: [email protected]
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appropriately manage this transition have been shown to exhibit superior innovation and
financial performance2.
Such transition periods are characterized by two key elements that will form the building
blocks of this paper: technological uncertainty and heterogeneity in the performance of the
oligopolists in exploratory innovation. Technological uncertainty presents incumbent firms with
a set of real options, and the optimal strategy is to take a position in each corresponding to the
probability of its becoming the dominant one. Heterogeneity in exploratory performance means
that in each new technology the oligopolists are divided into leaders and laggards.
Integrating the aforementioned dynamics gives us a fundamental understanding of the
nature of innovation strategy in oligopolistic industries. Analyzing these periods of technological
transition is important because it is precisely in these periods that incumbent firms face the
greatest risks. Developing the right approach to implementing a real options strategy can be the
key to successfully transition from one technological regime to the next.
Performance heterogeneity implies that it is unlikely to be cost effective for the firm to
“go it alone” in a technology space where it is a laggard. Therefore we predict an asymmetric
outcome with leaders and laggards following different innovation strategies. Leaders are likely to
go it alone and rely more on internal capabilities with a framework of closed innovation. In
contrast, laggards are likely to form a coalition – a form of open innovation – as they strive to
catch up with the leaders. Such open innovation amongst laggards becomes more likely the
greater the cost involved with developing and commercializing each technology option. In
virtually all oligopolistic industries from aircraft and pharmaceuticals to automobiles, this cost
has been escalating over the last few decades.
3
The cooperative open innovation coalition often occurs at the upstream end of the value
chain, with the constituent firms continuing to compete vigorously in downstream markets.
When companies involved in collaboration are also competitors, co-opetition ensues3. We argue
that open innovation of this form is fraught with difficulties. A co-opetitive scenario may lead to
“learning races”4, in which firms that form an alliance for learning, end up learning at different
speeds. As in all oligopolistic cooperative games, these collaborations between firms with
heterogeneous resources and levels of absorptive capacity are likely to be be unstable, with
"winners" and "losers". The end result is a "close-but-adversarial" set-up in which formal
commitment is accompanied by non-cooperative behaviour. Thus, the nature of competition
along the entire value chain enters into the pricing of the real option.
Technological leadership is typically composed of a combination of innovative
commercialization capabilities5. However, the path to a dominant design is by no means linear,
and firms compete vigorously for the technological high ground. The question we address here is
how firms organize to compete in the face of an emerging dominant design – and the timing of
their response.
The onset of significant innovation brings about a discontinuity in technology markets,
leading to an era of ferment. During this period of great uncertainty, success among early
adopters in the nascent, first generation technology does not always translate into continuing
success in the mainstream market. The best technologies may not always prevail (e.g., Betamax
vs. VHS), and firms with seemingly insurmountable advantages may fail to “cross the chasm”
that separates technology enthusiasts and early adopters from the majority of consumers,
succumbing along the way6. This provides compelling incentives for firms to utilize real options,
in order to minimize their response time along any technological trajectory.
4
As the period of ferment progresses, the field of viable technologies thins, and
competitive positions harden. For those on the outside, technological uncertainty means that a
pure imitation strategy is not optimal. However, the laggards cannot afford to ignore the
technology that has achieved early success. In the automotive sector, these dynamics are
especially acute. The explorative R&D that is germane to the early formation of technologies is
enormously expensive7 and no firm, no matter how big or cash-rich, can afford to undertake
closed innovation strategy encompassing every one. Thus leaves a fundamental tension: laggard
firms can’t afford to attempt catch up along every technological avenue, but as industries evolve
and the pace of technological change increases, they cannot afford to be left behind either.
As Ili et al. have noted8, the automotive sector, which has traditionally internalized much
of its core R&D, stands to benefit from a greater open innovation stance. The pressing questions
that follow this suggestion are: under which conditions might firms be more likely to pursue
open innovation, and what competitive dynamics that emerge from this? In a period of
technological transition, the uncertainty of future dominant design, the very high costs of
exploration and the complexity of inter-linkages among factors of production are key drivers that
cause laggard firms to pursue a unique type of open innovation: horizontal coalitions.
Open Innovation: Tracing the Roots of External Knowledge
Open innovation breaks apart the vertically integrated model of R&D that was so central
to the success of large firms in much of the late 19th and 20th centuries. Large, profitable firms
invest in in-house sizeable R&D projects in order to remain competitive9, thus building on
foundations laid by filling in public research10. The inclusion of external knowledge sources as
fully integrated components of the firm’s creative endeavor represents a fundamental shift in the
5
practice and study of innovation11. The basic notion that the firms that discover technology may
not have advantages – or capabilities – in the commercialization process creates powerful
incentives for collaboration with users, buyers, suppliers, competitors, universities and other
entities outside the firm12.
By partnering with a diverse set of external actors, firms increase the likelihood of
gaining access to valuable new knowledge and complementary assets, boosting their innovative
performance13. In the case of a horizontal open innovation coalition, partners’ interactions are
driven by both technological and strategic factors. Their contributions may vary based on the
level of complementarity and transferability of their technologies, but may also be motived by
opportunism14. Horizontal partners are more likely to misuse collaborative relationships to access
and exploit their rivals’ knowledge for their own advantage. The likelihood of opportunism
increases with the similarity between firms’ structures, processes, cultures, and knowledge
bases15. In other words, the process of knowledge search and transfer from outside of the firm to
final integration and commercialization is impacted by both technological realities and
competitive dynamics.
Looking for new ideas outside of the firm involves fortifying the core knowledge base in
one of two ways: (a) further specialization (deepening) or (b) integrating related knowledge
(widening)16. It is important to recognize that these are not strategic alternatives. Indeed, the
advance of science involves a delicate balance between the two17. There is enormous path
dependence in the search for new ideas: the routines of the firm can be very helpful in the
exploitation of its existing knowledge, but often constrain the exploration of new areas18.
Therefore catalyzing exploration often requires going beyond the boundaries of the firm and
view the entire external environment as a rich source of new ideas19.
6
The open innovation paradigm recognizes collaboration amongst horizontal
configurations of competing firms as one important structural form20. However, there is a paucity
of research examining the precise nature and cooperative dynamics of such open innovation
coalitions. Even industries that display seemingly unremarkable competitive environments can
witness the emergence of very unlikely sets of coalition partners. While collaborating with
competitors inevitably carries with it the fear of opportunism and knowledge leakage, these
concerns can be outweighed by the fear of simply falling too far behind in what could be the
industry shaping technology space. The laggard firms in such technologies face three
fundamental choices: (a) attempt catch up alone; (b) remain behind; or (c) band together and
open up. Strategically, options (a) and (b) are fraught with firm-extinguishing risk. Paraphrasing
Arthur Conan Doyle’s famous character Sherlock Holmes, once you eliminate the impossible
what remains, no matter how unpalatable must be the preferred option.
Open Innovation Amongst Lagging Rivals: A Path to Real Options
What happens when a group of lagging rival firms has little choice but to band together
and open their R&D practices? Two crucial factors may shed light on the underlying incentives
that permeate horizontal open innovation coalitions. First, while top management may place
great importance on firm-wide technological prowess, in practice knowledge transfer often
occurs at the R&D project level21. Open cooperation among rivals is likely to be focused on very
specific project level R&D outcomes. In other words, the collaborators are very mindful for their
product market rivalry, so that openness is contained within a well-defined technological space.
Second, the laggard firms in an emerging technology are likely to differ in terms of their broader
7
resource bases as well as their objectives. Thus, the members of the coalition expect to reap
different rewards from the open innovation alliance.
The real options approach is the appropriate lens to analyze situations of technological
uncertainty with high commitment costs22. However, in mature oligopolistic industries, each
explorative technology path is prohibitively expensive, so that laggard firms are forced to
collaborate in order to ensure that they cover all feasible options. Hence the real options
approach in this context takes on a unique form
In a traditional real options model of innovation, a single firm that takes beachhead
positions in range of nascent technologies. However, in the framework we have outlined, a group
of laggard firms takes a position in a single technology in which a leader has already established
a firmly defensible position. The common goal of overcoming laggard status serves as a unifying
framework under which all participating firms invest in what may be called a ‘catch up real
option’ which is a fundamentally open process. The convergence of these three factors suggests
that when a laggard position drives open innovation, the prism though which collaborative action
takes place is one of real options.
Real options theory suggests that firms can make R&D investments in uncertain
environments in sequential manner, rather than committing to a full program23. In other words,
firms can place bets on explorative R&D in such a manner that the substantial portion of the
investment is postponed until much of the technological uncertainty dissolves. Investments are
motivated strongly by the need to keep pace with the innovation trajectory of competitors: firms
face the prospects of being locked out at key junctures of technological emergence24. The ability
to make investment decisions in key stages of R&D programs allows firms to pursue a broader
explorative stance. However, the structured nature of the investments can sometimes inhibit
8
creative uses of research findings25, especially when the scale of the project is such that going it
alone is infeasible and the framework must be extended to encapsulate a group of rivals.
Real Options and Open Innovation: Bound by Close-But-Adversarial Relationships
The modern reality of global business is that firms maintain a series of close and
interwoven relationships as value chains are dispersed to efficient locations around the world26.
In many such arrangements take on a “close-but-adversarial” dynamic: firms possess formal
mechanisms for cooperation, but short term profit incentives bring about opportunistic behavior.
In other words, collaborators arrive knowing full well that their activities outside of the project at
hand are subject to intense rivalry.
We argue that an appropriate framework for analyzing a horizontal open innovation
coalition is the game-theoretic close-but-adversarial model as described by Mudambi and
Helper27. Within this model, partners in a horizontal open innovation coalition enter into formal
cooperative agreements whilst retaining their focus on their individual payoffs. In this
framework, formal collaboration is likely to be accompanied by opportunistic behavior. To the
extent that all firms may sign up for an alliance structure, different partners may gain from
different outcomes. Thus, open innovation policies may have heterogeneous incentives as
knowledge is developed and integrated. Thus, the real options framework emerges as participants
limit their investments in an adversarial-but-necessary open innovation alliance.
Empirical Setting: The Global Automotive Industry and Hybrid Electric Drivetrains:
The auto industry has long reached a mature stage, which is characterized by a large
market with slow growth rates, at least in developed economies. In the U.S., the car business as a
9
whole (including manufacturers, suppliers and dealers) employs at least seven million people and
accounts for more than 3% of the GDP28. In such mature industries, R&D is typically
incremental and process innovation tends to be at least as important as product innovation. In the
auto industry in particular, barriers to entry are very high, due to economies of scale and the
extraordinary cost to build manufacturing plants while developing and launching new platforms
and engines. In terms of technology, the industry had been relatively stable from the 1970s
through the the latter part of the following decade. Beginning in the 1990s, growing concerns
about the environmental impact of the internal combustion engine pushed governments to pass
increasingly strict mandates regarding mileage and emissions. While tighter fuel efficiency
standards motivated the search for new types of powertrain technologies and alternative fuels, it
also opened a period of uncertainty. At this point, many technological options were being
explored at the same time and there was no clarity as to which one would eventually dominate.
Hybrids were just one of several potential solutions being pursued.
Although the electric motor vehicle predated the internal combustion engine, it never
became the dominant technology that drove the automotive industry for the bulk of the 20th
century. A renaissance in alternative fuel technologies began in the early 1990s, and centered
around hybrid gasoline-electric engines. In a very general way, hybrid electric vehicles (or
HEVs) rely on a dual powertrain, driven by the marriage an internal combustion engine (running
on either gasoline or diesel) with an electric motor. The energy is stored both in the fuel of the
internal combustion engine and a battery set. HEVs can drive just with the electric engine but
when the batteries run low, the internal combustion engine starts. The internal combustion
engine is not used to move the vehicle, but rather to turn the alternator to power up the batteries.
Additionally, HEVs generally benefit from a more integral use of the energy generated by the
10
car, through mechanisms such as "regenerative braking". Instead of just applying brake pads,
HEVs can run their engines in reverse, allowing the wheels to power the engine to turn the
alternator and produce more electricity, which slows the car while charging the batteries. This
energy is wasted in a regular vehicle, which simply turns the motion of the wheels into heat. The
end result is a vehicle that still uses fossil fuels but obtains significantly increased fuel efficiency.
During the 1990s, four major automakers, Toyota, General Motors (GM), Honda and
Ford took the lead in the development of hybrid technologies (Figure 1). By 1995, GM was
leading knowledge generation in the industry, with a stock of 23 patents in hybrid vehicles (vs.
17 for Toyota, 16 for Ford and 8 for Honda). By 2000 however, Honda and Toyota had distanced
themselves from the American automakers: Honda had accumulated 170 patents in the areas
hybrid drivetrain technology and Toyota had amassed 166. Meanwhile, Ford had 85 and GM 56.
Despite the early investments in hybrid electric R&D, a crucial distinction remained.
Knowledge generation does not equate innovation as a whole. While the innovation process
starts with ideas, abstract concepts or discoveries derived from basic research, this is only the
first step of the process. The next stage – invention - is the act of transforming those discoveries
into an actual new product or process, or a modification or recombination or an existing one. To
transition from invention to innovation (i.e. commercialization), companies need to overcome a
number of obstacles. Some obstacles are technical (testing that the technology is free of major
problems, ensuring it can be manufactured at a viable cost), but others are commercial, like
finding a suitable market and making sure the product satisfies the needs of the majority of
consumers, beyond the early adopters. In sum, the path from discovery to commercialization is
fraught with difficulties – and is usually expensive, demanding significant resources.
11
As Figures 3 and 4 show, being a leader in technology is a necessary but not sufficient
condition to be a leader in the market. The volume of knowledge generation does not necessarily
correlate with sales. Toyota took the market lead early on, with the launch of the successful
Prius, of which 5,000 units were sold in 2000; only five years later, Toyota sales of all HEVs had
multiplied almost 30 times, to more than 146,000 units per year in the U.S. alone. Honda’s
Insight, which had been launched almost simultaneously with the Prius, never took off in the
market, but Honda was able to achieve moderate success with the Hybrid Civic, which
positioned the brand in a clear but distant second position in the American market, with 43,000
HEVs sold in 2005. Ford was in third place with less than 20,000 units sold in 2005. On the other
hand, GM, which had accumulated a significant volume of hybrid patents, had completely failed
to commercialize that knowledge. GM would only sell its first HEVs in 2007, and then with only
modest success. The resulting market structure was that of a technology-driven oligopoly, with
Japanese firms in a strong insider position.
Therefore, by the early 2000s, the development of hybrid vehicles was split into two clear
groups of companies. The first was the group of dominant players that had an early start in the
technology and in addition were able to successfully commercialize it to introduce hybrids to the
American market: Toyota, Honda and Ford. The second group can be characterized as laggards
which comprised two types of companies. The first type was composed of firms that had
developed technology, but failed to launch successful hybrid or electric vehicles. Examples of
this were GM, with its unsuccessful EV1 in 1996, and Chrysler, with the Dodge Hybrid minivan
in 1992. The second type of outsiders were those that had committed to other technologies. For
instance, BMW had focused its efforts on diesel and hydrogen engines instead.
12
For the group of laggard firms, the compelling urge to catch up with the insiders
competed with the need to explore other technological options. As a noted industry analyst put it,
"BMW can't afford not to look at other choices to learn which is the most economic and cost-
efficient.”29 It is common that in times of technological change, several technological paths are
explored, only to be abandoned once a clear dominant technology emerges. In the automotive
industry however, path dependence and switching costs make hopping between technologies not
only time consuming but also very costly. The magnitude of the strategic commitment needed to
explore each and every technology, both in terms of financial and human resources, is simply too
expensive for any companies to take unilateral action. Therefore, alliances may bring about a
‘real options’ approach, in which firms pool their resources and share the financial burden and
investment risk, in order to access the technology when and if needed.
When the BMW Group, DaimlerChrysler AG (and later, Daimler AG and Chrysler
Group) and General Motors Corporation signed a $1 billion deal in September 2005, to pool their
resources for the development of a two-mode hybrid drive system, the three companies came
from different backgrounds and brought different things to the table. GM was clearly the most
knowledgeable partner, but what GM had in knowledge, it lacked in resources. With $12 billion
in accumulated losses and much larger liabilities on its balance sheet, GM was in no condition to
pursue this venture alone. On the other hand, the BMW Group, had no observable knowledge on
hybrid technology, but held nearly 5 billion euros in cash and in 2004 had come off of a very
successful year, with more than one million vehicles sold and more than 2 billion euros of net
profit30. Similarly, DaimlerChrysler held $9 billion in cash and had accumulated net profits of
$19 billion over the previous four years31. Conversely, the leading firms enjoyed a much more
solid position, with Toyota having been very profitable for a long period of time (Figure 5).
13
The formation of the alliance can be characterized as a case of open innovation, which is
defined as a “purposive exchange of inflows and outflows of knowledge between a firm and
external parties, in order to accelerate internal innovation”32. As stated in the intentions of the
alliance partners, the goal was to share knowledge and resources in order to benefit from the
technologies created. This group of laggard firms were keenly aware of the need to catch up to
the technological frontier, and knew that an open innovation stance would be necessary.
According to Peter Savagian, Director at General Motors, “competition between the companies
was less important than the challenge of getting a new product to market quickly”33 and for Prof.
Burkhard Göschel, Board Member at Bayerische Motoren Werke AG (BMW), “the creation of a
shared technology platform for hybrid drives would allow for the alliance partners to more
quickly integrate the best technologies on the market and would therefore exploit and strengthen
the innovative potential of all participating companies”34. Forecaster and industry analyst Phil
Gott of Global Insight, called the hybrid alliance an “excellent strategy that lets three rivals’ pool
resources and tailor the system to their own vehicles”35.
By late 2007, GM’s two-mode hybrid vehicles had been launched. Automobile Magazine
lauded it as ‘Technology of the Year’. GM launched the two mode hybrid on its Chevy Tahoe,
Yukon and Cadillac Escalade models earning much praise for its systems and for achieving fuel
economy of about 25%. Chrysler followed a year later by bringing along two full-size SUV
hybrids the Dodge Durango and Aspen with similar hybrid systems. BMW was the last to join
the fray with its 2010 BMW ActiveHybrid X6. All three partners, GM, DaimlerChrysler and
BMW, eventually launched at least one product using the two mode technology.
While extensive sharing of components and production facilities and the collaborative
relationship with suppliers would enable all alliance partners to achieve significant economies of
14
scale and associated cost benefits, the actual resources contributed by each partner to the alliance
were highly uneven. Nearly eighty percent of the inventors in the patent pool, including every
one of the top ten (by number of patents), worked for General Motors, and 97% of them were
based in Michigan or neighboring states (Ohio and Indiana). BMW and DaimlerChrysler, on the
other hand, provided material resources but little human capital to the endeavor. While it was
touted as an ‘alliance of equals’, the allies’ contributions were complementary rather than
agglomerative.
The nearly 500 engineers working in the Global Hybrid Development Center in Troy,
Michigan did not try to reverse engineer Toyota’s hybrid technology. They worked to develop
their own modular system along with the individual components - electric motors, high-
performance electronics, wiring, safety systems, energy management, and hybrid system control
units. The overall system integration and project management were also within the Center’s
responsibilities. Over the period it was in force, the Global Hybrid Alliance was granted 115
patents by the USPTO. On analyzing the knowledge base by referring to the backward citations
for these 115 patents granted to the Cooperation (Figure 7), a significant percentage was sourced
from General Motors’ own patent database (22%). The second highest set of backward citations
were sourced from within the patents developed by the Global Hybrid Alliance’s own database
(13%). The amount of knowledge sourced from close competitors was rather small. Ford (7%),
Toyota (6%), Honda (3%) and Nissan (3%) were the external (to the Alliance) knowledge
sources utilized in developing the two-mode hybrid technology.
The Global Hybrid Alliance was ultimately dissolved in 2011. DaimlerChrysler indicated
that one of the reasons it was pulling out was the excessive investment relative to expected
vehicle production volume. Daimler was to focus on modular hybrid building blocks with
15
scalable lithium-ion batteries, based on technology developed in a separate collaboration with
BMW for the S-class and 7-Series sedans. No new products have emerged from the knowledge
created within the coalition. It appears that GM directly exercised the catch-up real option to
develop the Chevrolet Volt plug-in hybrid, whereas Daimler and BMW learned from the
experience that an alternative technological path was preferable. Hence we observe divergence
not only in terms of the partners’ contributions (BMW and Daimler only contributed money, GM
contributed knowledge), but also in terms of their options calculus – some coalition partners
directly used the knowledge generated within the alliance, while others did not. Sales data
through 2012 seems to show that the Global Hybrid Alliance did not dramatically alter the shape
of the hybrid sector of the auto industry.
The hybrid engine technology space offers a particularly appropriate context in which to
test our theory. During periods of technological transition, numerous competing technologies are
being developed and the future industry standard is not yet clear. Horizontal open innovation
coalitions are a viable way for laggard companies to share efforts in new technology
development, when the cost of conducting the development in-house is prohibitively high and
the ability to source the technology in the market is severely limited due to the high rivalry
typical of oligopolistic industries. This form of open innovation is operationalized through what
we have termed “catch-up real options”. These allow laggards with heterogeneous resources and
capabilities to collaborate within the coalition and to exit along a range of different trajectories.
These range from directly commercializing the knowledge created within the coalition to
learning that other technology paths are better suited to their capabilities. Finally, such “close but
adversarial” collaboration inevitably incorporates a fear of opportunism that places restrictions
16
on the process of knowledge sharing. Hence, it is more focused on limiting the size of
technology gap between the laggards and the leaders rather than on catching up per se.
Discussion
Open innovation among rival firms is an under-researched topic. It has emerged in a
number of knowledge-intensive oligopolistic industries ranging from pharmaceuticals to
automobiles, and the data indicate that such horizontal R&D alliances are growing in both
number and scale36. We argue that one of key reasons underlying this surge is the increasing
pace of technological advance and the concomitant shortening of technology life cycles. This
implies that technological discontinuities with the associated uncertainties regarding future
industry trajectory become more common.
In each potential new technology, the firms in the industry become divided into leaders
and laggards. The latter are forced into horizontal open innovation coalitions by (a) the scale of
investments required; and (b) the impossibility of ignoring potentially promising technologies.
This form of horizontal open innovation coalitions enable laggards to pursue what we call a
“catch-up real option” strategy to cover all potential future technologies. This particular form of
real option has unique characteristics. All the laggard firms have a common interest in the focal
technology, but they bring different resources – and therefore different incentives – to the
coalition. Some bring cash, while others bring knowledge.
The “close but adversarial” nature of these open innovation coalitions makes assessing
outcomes problematic – some members may exercise the option by directly commercializing the
knowledge produced, while others may use it more indirectly. In other words, those that do not
exercise the option directly have also likely gained from the coalition in terms of the complex
17
outcomes of this particular form of real option. However, given the diverse objectives of the
coalition members, the stated goal of technology catch-up is often never achieved.
18
Appendix
19
20
21
22
23
Figure 6: Global Hybrid Alliance: Distribution of Inventor-Firms and Inventor-Locations
0%
20%
40%
60%
80%
GM BMW DaimlerChrysler Unidentified
I N V E N T O R L O C AT I O N S :
M I C H I G A N : 8 7 % O H I O : 3 %
C A L I F O R N I A : 4 % I N D I A N A : 6 %
24
Figure 7: Global Hybrid Alliance: Knowledge Sources
46%
3%3% 6%7%
13%
22%
General Motors GHC Alliance Ford Motor Company ToyotaHonda Nissan Others
25
Notes
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3 D.R. Gnyawali and B.R. Park. "Co-opetition between giants: Collaboration with competitors for technological innovation." Research Policy 40/5 (2011): 650-663.
4 T. Khanna, R. Gulati, and N. Nohria. "The dynamics of learning alliances: Competition, cooperation, and relative scope." Strategic Management Journal 19/3 (1998): 193-210.
5 D.J. Teece, "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy." Research Policy 15/6 (1986): 285-305.
6 G.A. Moore, Crossing the chasm: Marketing and selling high-tech Goods to mainstream customers (New York: Harper Business 1991).
7 K.B. Clark and T. Fujimoto. Product development performance: Strategy, organization, and management in the world auto industry. (Boston: Harvard Business Press 1991).
8 S. Ili, A. Albers, and S. Miller. "Open innovation in the automotive industry", R&D Management 40/3 (2010): 246-255.
9 J. Schumpeter, Capitalism, socialism and democracy (2nd edn) (New York: Harper and Row 1942).
10 K. Arrow, “Economic welfare and the allocation of resources for invention” In The Rate and Direction of Inventive Activity: Economic and Social Factors. (Princeton: NBER and Princeton University Press, 1962, 609 – 625).
11 H.W. Chesbrough, Open innovation: The new imperative for creating and profiting from technology. (Boston: Harvard Business Press 2006).
12 J. West and M. Bogers. "Leveraging external sources of innovation: a review of research on open innovation." Journal of Product Innovation Management 31/4 (2014): 814-831.
13 L. Dahlander and D.M. Gann. "How open is innovation?." Research Policy 39/6 (2010): 699-709.
14 J.H. Dyer and H. Singh. "The relational view: Cooperative strategy and sources of interorganizational competitive advantage." Academy of Management Review 23/4 (1998): 660-679.
26
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17 R. Mudambi, T.J. Hannigan, and W. Kline. "Advancing science on the knife's edge: integration and specialization in management Ph. D. programs", Academy of Management Perspectives 26/3 (2012): 83-105.
18 R.R. Nelson and S.G. Winter. An evolutionary theory of economic change. (Boston: Harvard University Press 1982).
19 J. West and M. Bogers. "Leveraging external sources of innovation: a review of research on open innovation." Journal of Product Innovation Management 31/4 (2014): 814-831.
20 H.W. Chesbrough, Open innovation: The new imperative for creating and profiting from technology. (Boston: Harvard Business Press 2006).
21 U. Andersson, P.J. Buckley, and H. Dellestrand. "In the Right Place at the Right Time!: The Influence of Knowledge Governance Tools on Knowledge Transfer and Utilization in MNEs." Global Strategy Journal 5/1 (2015): 27-47.
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