Peer innovation as an open innovation strategy for balancing competition and collaboration among technology start-ups in an innovation ecosystem

Abstract

Start-ups, as small, new companies, suffer from liabilities of size and lack of experience when entering market competition. Research has suggested that relationships with other organisations might be a solution to balance such liabilities. While several studies underline the importance of relationships between start-ups and large organisations within an Innovation ecosystem, few still analyse the relevance of coopetitive relationships among start-ups. Coopetitive relationships describe “hybrid activity” of simultaneous cooperation and competition among firms while focusing on value creation within an innovation ecosystem. Moving from a case study review, we analyse how start-ups manage the balance between cooperation and competition among peers when belonging to an innovation ecosystem. We call this peer innovation. Our findings propose a framework for evidence about innovative start-ups' primary motivations, managerial mechanisms, and peer innovation strategy practices. Implications for theory define a novel paradigm that start-ups establish to cooperate and compete at the same time while being part of an incubator.