Collaborative Innovation. Things that motivate companies to Essay

Collaborative Innovation. Things that motivate companies to collaborate in innovation - Essay Example Technology increases the productivity and profitability of a firm in which it is used. Usually, firms collaborate to innovate in the running of their businesses (Gloor, 2006, p72). When two or more firms choose to work together to develop a technology, they identify the things they have in common. Various factors that are perceived to be beneficial to partnering firms cause them to come together and innovate together. Some of the factors that cause firms to collaborate in innovation include reducing the cost of development of the technology, reducing the potential risks that are involved in technological development or entering the market, to achieve the economies of scale, which reduce the cost of production, promoting shared learning between the firms involved, and reducing the time taken to produce and market new products (Tidd, Bessant and Pavitt, 2005, p25-78). The results of the collaborative invention vary significantly according to different companies, and these factors may b e beyond or within the abilities of the partnering firms. Some factors that influence the results of a collaborative interaction between firms include: the competitiveness of the partners, the transparency issues, receptivity of ideas, the rate of learning and bargaining power of partners, the intention of the firms when they accepted to enter into collaboration, and sustainability of the deal (Hamel, 1991, p.83-101). These factors determine whether or not the collaboration will continue in order to develop technologies together; if the factors are favourable to the collaborating firms, they continue to develop technologies together. Different companies collaborate in innovation according to different interaction policies. These interactions are determined by conditions that are set by those partners, when joining together as well as those that are related to sustainability. In order to understand the issues that are related to the collaborative innovation, there is need to explore the factors that influence firms to come together as well as those that influence the sustainability of collaborative innovation interactions. Things that motivate companies to collaborate in innovation In events where firms collaborate to innovate, they need to put into consideration all the issues that can arise from it. When firms focus narrowly at the reduction of cost, it may work not for their benefit because although collaboration may reduce the cost of production and enhance economies of scale, it is also possible that the company will need to establish a strategy of developing the collaborative relationship. For instance, if firms consider the factor of cost reduction in a collaborative innovation deal, they can evaluate other costs apart from the basic raw materials for the company. A good collaborative innovation deal needs to consider the amount of money that will be required to facilitate collaborative capabilities. For instance, different firms will need to develop peo ple within their firm that will sustain the technology that they develop. This means that they should not develop a technology that they will lose within a short time (MacCormack, Forbath, Brooks & Kalaher, 2007, p17-102). Firms may be driven to form a collaborative interaction in innovation by their need to increase the income share; this is by maximisation of all the opportunities they have in their production. Every chance a firm has to reduce the risk of making losses and increase profitability becomes a motivation for the company to involve other companies to innovate (Da Vinci, n.d, p1). When firms come into collaboration, they intend to develop fast to gain their competitive advantages.