Coopetition Regimes and State-Led Creation of New High Technology Industries

Abstract

Over the last decade, a new business strategy has become widespread - coopetition. Unlike the binary notions of pure competition versus true collaboration, coopetition recognizes that firms need to simultaneously collaborate and compete. However, in spite of the fact that coopetition has been shown to be highly contextual, there has been little research on how particular institutional environments affect the evolution of specific coopetition regimes. This paper addresses this gap by focusing on the role of public policy in the creation of coopetition regimes, that is, particular consultations of coopeatitive institutional paradigms, which are more or less conducive to particular industrial clusters in new high-technology industries. This approach sheds light on the role these regimes play in the successful evolution of certain industries. The paper shows that with the increasing fragmentation of production and the specialization around specific stages of production, different economies need to develop different coopetition regimes that create and maintain very different competitive advantages, skills, and management capabilities. By analyzing the hardware IT industry, the biggest and most global of the high-technology industries, this paper illustrates the particular role of public policy in the development of very different strategies by offering a general theoretical model and elucidating it using Israel and Taiwan.