Technological Innovation by Miriam Delgado Verde Gregorio Martín de Castro

Author:Miriam Delgado Verde Gregorio Martín de Castro [Gregorio Martín de Castro, Miriam Delgado Verde, Pedro López Sáez and José Emilio Navas López]
Language: eng
Format: epub
Publisher: Palgrave Macmillan
Published: 2009-12-31T16:00:00+00:00

The role of relational capital in technological innovation

Finally, the present arguments investigate how different types of inter-organizational relationships contribute to the creation of new knowledge, and hence to improve a firm’s technological innovation results.

Nowadays, many innovative firms spend very little on R&D, and yet they achieve successful innovations because of the knowledge and experience from a wide range of external sources (Laursen and Salter, 2006). Thus many studies suggest that knowledge from beyond the organizational boundaries of a firm is useful for innovation (Bossink, 2002; Chang, 2003; Phene et al., 2006). More specifically, the latter work shows that external sources of knowledge are vital for a better product and process innovation. In addition, the authors state that the creation of radical innovations is a common function of external knowledge, and firms are able to access it.

We can expect that the interaction with different types of environmental agents, such as customers, suppliers, allies and so on, influence a firm’s innovative performance. Knudsen (2007) summarized the motives by which firms engage in inter-firm collaborations: (i) the need for renewing the knowledge base through external learning; and (ii) the process of developing new or improved products is long and risky, hence the use of an external agent may save time and money for the firm.

The process of external learning extends over a long period of time. For this reason firms are motivated to establish permanent relationships with these external agents, as co-operative agreements. Furthermore, the accumulation of firm’s relational experience within inter-organizational relationships is an important factor leading to the achievement of learning success.

As Huergo (2006) highlighted, the success in the commercialization of innovations involves complementary assets, not only intra-firms, but also inter-firm or relational ones. These complementarities would come from relationships with customers, suppliers, public and/or private research institutions, or even competitors in the product market.

Knudsen (2007) postulated that relationships with universities and research institutes, suppliers and competitors have a positive effect on innovative performance. But relationships with customers may have the opposite result. This may occur if the firm is too focused on the specific needs of a single group of customers, and therefore collaborations with customer in product development projects will have a negative effect on overall innovative performance.

The value held by the relationships that the firm maintains with the different agents in its competitive environment (mainly customers, allies, suppliers, plus other firms and institutions), or simply relational capital, constitutes a good source of information and knowledge-gathering for the firm. In this sense, the traditional view of innovation through sequential linear models of push-and-pull technology has evolved into a concept that sees innovation as a multi-actor process requiring high levels of interaction at both the inter- and intra-firm level (Adamides and Karacapilidis, 2006). This notion is closely related to relational capital. Following this vein, in recent years, one of the concepts that has been applied most frequently to determine the innovative capability of the firm is that of ‘absorptive capability’ (Cohen and Levinthal, 1990). These authors define this notion as