TAKING THE FIRST STEP — WHAT DETERMINES GERMAN LASER SOURCE MANUFACTURERS ENTRY INTO INNOVATION NETWORKS?

Muhamed Kudic,Andreas Pyka,Jutta Guenther

doi:10.1142/s1363919615500504

Abstract

Early access to technological knowledge embodied in an industry's innovation network can prove an important competitive advantage for firms. Surprisingly, not much is known about the determinants of their initial entry into such networks. We analyze the propensity of firms for entering the industry's innovation network and their timing in doing so. More precisely, we seek to shed some light on the factors affecting the length of the time-span between a firm's founding and its first cooperation event. We apply a unique longitudinal event history dataset based on the full population of German laser source manufacturers. Innovation network data stem from official databases providing detailed information on the organizations involved, the subject of joint research and development (R&D) efforts, as well as the start and end times of all publicly funded R&D projects between 1990 and 2010. Estimation results from an event history estimation model indicate that micro firms enter the network later than small or large firms. An in-depth analysis of the size effects for medium-sized firms provides some unexpected but highly interesting findings. The choice of cooperation type makes no significant difference to a firm's timing in entering the network. Finally, the analysis of geographical determinants shows that cluster membership can, but does not necessarily affect the timing of a firm's decision to cooperate.

Highlights

Since technologies are becoming more and more complex, the focus of innovation resides within the firm, and outside, at the interface between firms, universities, research laboratories and so on
In this paper we study a spatial sectoral innovation network based on a specific type of cooperative relationship: Formal, knowledge-related, publicly-funded research and development (R&D) projects that aim explicitly at increasing the innovativeness of the firms and organisations involved
We argue that newcomer firms — which are part of the spatial-sectoral innovation system but not yet of the innovation network — that are able to enter the industry’s innovation network earlier than their competitors gain a strategic advantage

Summary

Introduction

Since technologies are becoming more and more complex, the focus of innovation resides within the firm, and outside, at the interface between firms, universities, research laboratories and so on. The motives behind entering R&D collaborations are manifold and range from cost savings and risk reduction (Hagedoorn, 1993, 2002; Sivadas and Dwyer, 2000), to knowledge access and interorganisational learning issues (Rothaermel, 2001; Grant and Baden-Fuller, 2004; Kale et al, 2000), to savings in time (Mowery et al, 1996) These and many related issues have become the focus of debate in innovation management (Moeller and Svahn, 2009, 2006; Tidd et al, 2005). Previous research has provided us with important insights, we argue that one important part of the puzzle is missing This is an understanding of the very nature and underlying logic of firms’ network entry processes and the emergence and evolution of innovation networks at higher aggregation levels. We present the results of our empirical study and draw conclusions

Theoretical Considerations

Introducing the German laser industry

Data and methods

Findings

Contextual level