Governance Modes for Systemic Innovation. Service Development in Mobile Telecommunications

Abstract

This paper focuses on governance modes for systemic innovation projects. The central question is: to what extent does the newness of a system and its components affect the most appropriate governance mode for component development projects? Component development projects can be performed by either the system developer, the component developer or by some combination of these parties in a collaborative governance mode. This paper presents a model to determine the most appropriate governance mode for component development depending on the newness of the system and the component. We include in our model considerations of both appropriation and integration of knowledge. We tested the model on thirty new service development projects for mobile telecommunications systems. The study shows support for the claim that misfit between the modeled and the actual governance modes negatively affects the performance of component innovation projects.

Keywords: governance modes, system innovation, component innovation, performance of innovation projects

JEL Classification: M, M10, L2, L29