GovernanceLAB

In search of the ideal form: collaborating to innovate

February 10, 2016

Innovation is important and is becoming even more so. Markets are growing, margins are becoming smaller and, therefore, standing still means an almost certain decline. This makes innovation, at both the product and the organizational level, a necessity and no longer a luxury. This becomes a matter of survival.

But how do you innovate as a small company with limited resources? Or is innovation easier for a small company to foster than for a large enterprise? Ferry Koster is associate professor of Innovative Cooperation at TIAS. On January 15, he delivered his inaugural address in which he discussed his research into collaboration and innovation. As part of his research, he had analyzed datasets of companies from 32 European countries.

Two schools of thought

Koster: "There are indeed two schools of thought. One says that large companies are in a better position to innovate because of their strength, while the other argues that large enterprises are less flexible and less future-oriented and that SME companies have the advantage. My analysis shows that this rather depends on the type of innovation you are looking at. Large enterprises innovate more easily at the product level and can launch products faster, while small companies are better at making changes to their organizational structure."

Collaboration in the SME sector

Koster's analysis is a precursor to a more extensive research he will be conducting at TIAS GovernanceLAB and ICOON Knowledge Center. This research will focus on smaller companies, particularly businesses in the SME sector. Collaboration and (acquiring) knowledge will play a central part in it. Both are subject to change in terms of form and content. Despite the accessibility of resources on the Internet, reliable, specialist knowledge is becoming less and less available.

Elusive knowledge

Koster: "Knowledge plays an increasingly crucial role in the knowledge economy while becoming at the same time an increasingly elusive commodity. The knowledge required for innovation cannot be found in manuals or procedures. Instead, it is stored in individuals or in the way people interact with each other. Knowledge has become a matter of trust. Others have to tell you which information is reliable."

In order to acquire the required knowledge SMBs can purchase the knowledge on the market. However, they enter more and more often into formal or informal partnerships. In the first case, collaboration is formalized; an informal partnership works on the principle that both parties can get an (as of yet uncertain) advantage.

Trust

It almost speaks for itself that in any kind of collaboration trust, or a lack thereof, plays a role. However, we do not yet see this, or other informal aspects, reflected in current collaboration models. Koster is about to change that. "Classical plans only offer a choice between the market and collaboration with formal agreements. If there is no trust, agreements are made to get the process going. In the plan that I am suggesting, trust and other informal aspects are an inherent part."

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