Benefits of co-operation on innovative performance: evidence from integrated circuits and biotechnology firms in the UK and Taiwan

The increase of strategic alliance and national or pan-national government collaborative programmes has highlighted the shifting management and policy focus from inducing in-house R&D to promoting a joint partnership between firms and knowledge-generating organisations in the increasingly complex and costly innovation process. Both the 'dynamic capability' school and the 'innovation network' theorists demonstrate that inter-organisational co-operation has become a crucial mechanism for 'collective innovation'. However, little attempt has been undertaken to examine the relationship between inter-organisational co-operation and innovative performance at the firm level. The innovative activities and inter-organisational co-operation of integrated circuits and biotechnology sectors across Taiwan and the UK are investigated via a postal questionnaire survey. Multiple logistic regression models are deployed. The result reveals that the types of inter-organisational co-operation enhancing a firm's innovative performance vary across sectors and countries. Despite the variation, this paper argues that a firm's networking ability to co-operate with buyer firms, supplier firms and external organisations is becoming imperative for enhancing innovation in the increasingly distributed innovation process.