Organizing for Innovation: R&D Projects, Activities and Partners

Abstract

We explore how R&D project characteristics condition the governance of an R&D project and its individual activities. Prior literature has sought to explain the factors - both at the industry and at the firm level - that influence the way in which firms partner for innovation. In this paper, by analyzing detailed data from a subsidiary of STMicroelectronics, we identify the main drivers of partner selection for innovation. Partnering or contracting with universities for innovation is common practice for developing new - original - knowledge (as opposed to applying existing knowledge to a problem). But firms are more reluctant to partner, especially with other firms, when that knowledge directly enhances their competitiveness. However, conditional on cooperation, partners are more likely to act individually when the project is strategically important. Contracting for innovation to universities or research centers, as opposed to partnering, is usual in more experimental projects in which highly original knowledge is developed, and typically early on in the project.

Keywords: innovation strategy, technological innovation, R&D projects organization, partner selection