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Unique technological combinations drive knowledge transfer in inter-firm alliances

Alliances are at the core of firms’ innovation strategies. They allow firms to strengthen their innovation activities by providing access to technological knowledge developed by other firms. For this reason, alliances are particularly common in high-tech industries where the market position of firms is very dependent on their ability to introduce new and improved products and services. Often, however, alliances fail to meet expectations and do not lead to valuable outputs. It is therefore important to understand what distinguishes successful from less successful alliances.

New research from the House of Innovation provides insights into the factors that drive the transfer of knowledge in inter-firm alliances. Prior research has solely looked at the type and quantity of technologies a firm can combine to create new innovations and has ignored the fact that not all firms have the same capability to combine these technologies to create new innovations. In the fuel cell industry, for instance, the fact that a firm has expertise in the domains of hydrogen storage and automotive vehicles does not necessarily imply that it is able to combine these technologies to create hydrogen storage tanks that can function inside a car. Examining alliances in the fuel cell industry, this research project, developed in collaboration with researchers from WHU and the University of Groningen, focuses on the capability of alliance partners to combine technologies in unique ways to address this research gap.

This research shows that when alliances partners have the capability to combine technologies in ways that no other firm in the industry can do, this increases knowledge transfer opportunities within an alliance. After all, when such partners are involved in an alliance, greater learning opportunities are present in it. At the same time, however, these learning opportunities might not always be translated into new innovations: partnering with firms whose combinatory capabilities are excessively unique can lead to lower knowledge transfer rates because of the complexity involved with understanding such a partner.

These findings are important since they indicate that firms should apply more nuanced criteria when evaluating the learning potential of alliance partners. Moreover, they demonstrate that firms that are capable of creating unique combinations between technologies can benefit from this in two ways: (1) they are able to more effectively absorb knowledge from their partners and (2) they are better able to protect their internal resources from other firms. This information is important for alliance managers that seek to maximize the amount of knowledge they can access from their partners, while ensuring that their own knowledge pool remains sufficiently protected.

Researchers:

Holmer Kok
Stockholm School of Economics, Sweden

Dries Faems
WHU-Otto Beisheim School of Management, Germany

Pedro de Faria
University of Groningen, The Netherlands

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