The dynamic chain of innovation: bounded capabilities and complementarity in agribusiness

Abstract

PurposeThe paper presents a framework – the Dynamic Chain of Innovation – to analyze the dynamics of innovation in agribusiness.Design/methodology/approachThe authors adopt a theoretical review in developing the theoretical framework.FindingsThe boundedness of economic agents will not simply be complemented by acquiring any missing asset or resource on the market. In a more complex way, complementarity occurs through collaborative relationships, aimed at developing specific solutions, joint development, special orders, interaction with research institutions, among others.Research limitations/implicationsGiven the theoretical nature of the study, it requires further development with empirical data that support the propositions made as future studies.Originality/valueThe dynamic chain of innovation framework starts from the very existence of incomplete economic agents. However, the authors sustain that the incompleteness is the result of bounded innovation capabilities in individual agents. Innovation, rather than emerging from simple market relations, ought to happen from relations established among bounded capabilities of incomplete agents along the chain or within the micro-links as a puzzle. The dynamics of innovation is thus based both on the boundedness and the complementarity of firms.