Page - (000341) - in Knowledge and Networks

339 Knowledge Dynamics and the Evolution of Innovation Linkages The Role of Cognitive Proximity, Social Proximity, and Similarity in Competencies in the Formation of Innovative Ties The increased orientation to collaboration, especially in research and development (R&D), has led to an upsurge of studies analyzing the advantages and incentives that are encouraging the trend toward the formation of alliances (e.g., Ahuja, 2000; Gilsing, Nooteboom, Vanhaverbeke, Duysters, & van den Oord, 2008; Gulati, 1999; Hagedoorn, 2002; Hamel, 1991; Khanna, Gulati, & Nohria, 1998; Mowery et al., 1996; Powell, 1998). Essentially, most alliances are prompted by concerns about access to external resources that are too costly to be acquired internally (Kogut, Shan, & Walker, 1992). In innovation-oriented alliances the access to a partner’s technology and knowledge-related resources—be they a particular technical infra- structure or, more important, technological capabilities and complementary skills— is the primary motive for joint research, besides the sharing of risks and R&D costs (Hagedoorn, 2002). Firms, especially those in high-tech industries, are unable to generate internally all the resources they need in order to survive the rapid pace of technological change (Powell & Grodal, 2006). According to the knowledge-based view of the firm (which draws on the resource-based view of the firm originally proposed by Penrose, 1959), a firm’s knowledge base, understood as a unique resource difficult to imitate, is a key competitive advantage (Grant & Baden-Fuller, 1995). In this regard firms can be seen as bundles of competencies (Hamel, 1991, p. 83) that they have accumulated throughout their lifespan. Because environments and solutions to problems differ between firms, knowledge gathered by firms is an idiosyncratic property and quite heterogeneous among them (Cantner & Graf, 2011). Even firms operating in the same industry or market differ in what they know and what they are able to accomplish with their competencies. Although this propri- etary knowledge resource affords a basis for opportunities, its exploitation within the firm’s boundaries is limited and leads mostly to incremental, not necessarily optimal, improvements (Ahuja, 2000; March, 1991; Yang, Phelps, & Steensma, 2010). To broaden the knowledge base and explore new possibilities for recombina- tion and radical innovations, firms depend on external sources of knowledge (March, 1991; Yang et al., 2010). In looking for solutions to complex problems, successful innovators extend their search to the environment beyond their own boundaries (Freeman, 1991). The generation of knowledge and innovation thus results progres- sively from a collective learning process among various actors interacting formally or informally (Asheim & Gertler, 2005). In innovation-oriented alliances rational actors choose their potential interaction partners according to the highest expected outcome in terms of successful knowl- edge exchange and potential innovations. The efficacy of knowledge exchange between two or more actors is governed by the degree of heterogeneity between 16 Coevolution of Innovative Ties, Proximity, and Competencies