How networks of innovative sustainability technology producers deal with the dilemma of collaboration versus competition

To increase chances of market success of their innovative sustainability technologies, firms can strategically build-up an innovation system or business ecosystem around their innovative technology. Transition literature... [ view full abstract ]

To increase chances of market success of their innovative sustainability technologies, firms can strategically build-up an innovation system or business ecosystem around their innovative technology. Transition literature refers to this process as ‘collective system-building’. Firms collaborate in networks, which can include public and private actors, to optimize their technology, create a new market and trigger socio-economic changes. When engaging in collective system-building, firms face a profound dilemma that may hamper collaboration: should they invest their limited resources into collaboratively building up the innovation system, or should they invest them into competing against their rivals for market share? Firms have to carefully weigh the advantages and disadvantages of collaboration versus competition when engaging in collective system-building. We examined how firms who collaborate on developing and implementing a new technology deal with the dilemma of competition versus collaboration in system-building. The transition literature has not addressed this dilemma yet. To fill this gap in the transition literature, we use insights from the coopetition literature. The coopetition literature addresses the issue of simultaneously competing and collaborating with a partner. To make coopetition strategies more effective, it is important to manage coopetition processes at both the firm-level and the network-level. So far, little research exists on coopetition management at the network-level. In this paper, we examine how actors in networks deal with the benefits and risks of coopetition, and how they manage these. Our empirical case is the Dutch smart grids sector. We conducted a multiple-case study on the six important system-building networks in this sector. Semi-structured interviews have been conducted with key actors of these networks. We found that system-building actors use coping strategies to minimize the risks inherent in coopetition. But moreover, they already prevent risks from the start, by setting up mechanisms that reduce risks and increase benefits. They try to reduce the dilemma of competition versus collaboration upfront.

Key words: sustainability technologies; innovation systems; coopetition strategy; collaboration; system-building