Networked Innovation

Nowadays, firms realize more and more the benefits of networked innovation. “Collaboration” is on the top of the agenda. Co-create value with partners, could be suppliers and even competitors, is a crucial and strategic element to maintain competitive advantage (Gulati et al., 2000; Iansiti and Levien, 2005; Sawhney et al., 2005). All type of companies, SME’s or/and MNC’s, are concerned by this topic of current interest because all of them want to acquire complementary resources and increase their technological knowledge.

“An innovation […] should not be seen as the product of only one actor but as the result of an interplay between two or more actors; in other words as a product of a ‘network’ of actors” (Håkansson, 1987, p 3)

The concept of networked innovation is well-explained by Akio Morita, cofounder of the Japanese society Sony. He explains that losing money is not a problem but losing time is a critical issue for a company. So, according to him:

“The best way to gain time is to communicate a lot and establish as many personal relationships as possible”.

Networking is the key to succeed. Akio Morita said:

“The more people you know, the better it is” (Harryson, 2006).

Muller and Pénin (2006) view innovation as the outcome of a group of activities involving interaction and knowledge exchange between people and organizations. In a similar way, Cowan et al. (2007) stake out that it’s the recombination of knowledge held by the partners that result in innovation. These two authors underline the importance that firms’ knowledge complements each other. According to Gulati (1999), social networks are seen as valuable channels of information. The network theory, based on establishing relationships and ties with others, largely influence firms’ behaviors and performances in their implications for their alliances.

“An innovation network can be defined as a reasonably stable set of partners that collaborate in order to improve their research” (Muller and Pénin, 2006, p87).

“In a networked world, more money can be made in managing interactions than performing actions” (Mohanbir Sawhney and Deval Parikh, 2001, p82)

References:

Cowan, R., Jonard, N. and Zimmermann, J-B. (2007) ‘Bilateral Collaboration and the Emergence of Innovation Networks’, Management Science, vol. 53, no. 7, pp. 1051-1067.

Gulati, R. (1999). ‘Network location and learning: the influence of network resources and firm capabilities on alliance formation’. Strategic Management Journal, 20, 397- 420.

Gulati, R., Norhia, N., & Zahere, A. (2000). Strategic Networks. Strategic Management Journal, 21, 203-215

Harryson, S. (2002). “Why know-who trumps know-how”, Strategy and Business Magazine, issue 27, second quarter 2002, pp 1-6.

Håkansson, H. (Ed.) 1987. Industrial Technological Development: A Network Approach. Beckenham: Croom Helm Ltd.

Iansiti, M., & Levien, R. (2004). Strategy as Ecology. Harvard Business Review, March, 1-10

Muller, P. and Pénin, J. (2006) ‘Why do firms disclose knowledge and how does it matter?’, Journal of Evolutionary Economics, vol. 16, no. 1-2, pp. 85-108.

Sawhney M. and Parikh D. (2001), “Where value lives in a networked world”, Harvard Business Review, pp 79-86, January 2001

Sawhney M., Verona G. and Prandelli E. (2005), “Collaborating to create: the internet as a platform for customer engagement in product innovation”, Journal of interactive marketing, vol. 19, n°4, pp 4-17, autumn 2005