Systemic innovation in a distributed network: the case of Danish wind turbines, 1972—2007

Abstract

What motivates firms to engage in shared innovation activities in complex technologies, where appropriation of value is interdependent on others? Transaction cost economics prescribes that innovations that are complex and systemic in nature should not be distributed among several actors. Here the firm is clearly the locus of innovation. Opposed to this, the network-based view suggests that a distributed organization may be the most efficient way to organize innovative processes under uncertain and rapidly changing conditions and that, because the locus of innovation is the collaborative network, firms are forced to join in order to stay informed. However, these two contrasting views both overlook the complexities of real-life activities. Understanding that firms' motives and propensity to collaborate are contingent on and evolve as industries evolve is the key to understanding their attitude towards sharing and co-developing knowledge.