0.2 21st century economic development  (Page 7/13)

Collaboration

“If you think you have all the answers internally, you are wrong.” The Power of Many, 2006

Earlier chapters and sections have presented the complexities and challenges of innovation in increasingly rapid moving markets and technology sectors. Linkages with firms within clusters have been shown to be a key attribute in sustaining economic development, demonstrating the role and impact of collaboration within a cluster.

Collaboration is defined as a structured, recursive process where two or more people work together toward a common goal; typically an intellectual endeavour that is creative in nature by sharing knowledge, learning and building consensus ” (www.encyclopediabrittanica.com 2007). Collaboration does not require leadership and can sometimes bring better results through decentralization and egalitarianism (Leydesdorff and Wagner 2005) In particular, teams that work collaboratively can obtain greater resources, recognition and reward when facing competition for finite resources (Mithas et al. 2009). Collaboration is not just valuable among peer groups, but among all members of an organization (Rosenberg 2006, Gannon-Cook 2008).

Over the past decades, there has been exceptional growth in enterprise partnering and dependence on different forms of external collaboration (Hergert and Morris 1988, Mowery 1988, Hagedoorn 1990, Badaracco 1991, Hagedoorn and Schakenraad 1992, Gulati 1995). Historically, firms organized research and development (R&D) internally and relied on outside contract research only for relatively simple functions or products (Mowery 1983, Nelson 1990). Today, companies in a wide range of industries are executing nearly every step in the production process, from discovery to distribution, through some form of external collaboration. These various types of collaborative alliances take on many forms, ranging from R&D partnerships to equity joint ventures to collaborative manufacturing to complex co-marketing arrangements. The most common rationales offered for this upsurge in collaboration involve some combination of risk sharing, obtaining access to new markets and technologies, speeding products to market, and pooling complementary skills (Kogut 1989, Kleinknecht and Reijnen 1992, Hagedoorn 1993, Mowery and Teece 1993, Eisenhardt and Schoonhoven 1996, Park et al. 2004).

[link] shows the cycle of innovation. The key features being:

• “Death Valley” A major chasm that must be navigated in the early stage of any innovation process.
• “Bowling Alley” where early adopters support the highest rate of growth for product adoption.
• “Main Street” where product market penetration is driven by commercial strategies.
• “Elastic/Plateau” where the innovation achieves steady state before it commences a decline due to market or technological changes.

[link] shows a development of Schumpeter’s thinking, the diagram describes the hypothesis that in order to create a sustainable cluster in a region there are three key requirements. Firstly, the active sector must itself be one that is emerging and has growth potential. The sector’s location on the development cycle of the mouse is shown on the green portion of [link] . Secondly the region must have product innovation capacity in the chosen sector. This is illustrated by the orange portion of [link] . There has to be sufficient innovation capacity in the defined in the sector in the region in order for that innovation capacity to be itself sustainable. The third essential requirement, shown in purple on [link] is the need for a critical mass of knowledge enterprise in the sector in the region. Each of these requirements has to navigate its own ‘dead mouse’ obstacle course in order to arrive at the relatively calm waters at the plateau of the mouse. Each has to navigate death valley an this requires commitment from all stakeholders who need to work collaboratively to achieve a common goal but above all there needs to leadership and vision. If this can be achieved then a sustainable cluster may be created. The blue portion of the figure illustrates the goal of moving a cluster across “Death Valley” and onto the plateau. This is challenging, takes time, partnership, vision, commitment and perspiration but the rewards and the impact can be substantial. It could be argued that a region like Wales has little alternative in the current global knowledge economy landscape. It has the great advantage of being a small, coherent region but the disadvantage of being at times a collection of fiefdoms that prefer to compete rather than collaborate. Leadership, from wherever it comes is critical.