Do networks really foster innovation?

Abstract

Warns that although technology and innovation are often the key drivers in the formation of business partnerships and networks, reflecting the parallel relationship between the institutional set and the technological set, the formation of tightly knit networks of relationships often entails drawbacks and hazards like increasing complexity, loss of autonomy and information asymmetry, all of which can hamper innovation and technological change. Explores how networks simultaneously promote and block innovation in the partner companies involved. Attempts to define the concept of the network and its multiple variations. Analyses different attributes of networks as they relate to innovation: flexibility, speed and networks as learning systems. Concludes with suggested ways to extract the maximum innovative potential from interfirm networking.