Journal ArticleDOI
Benefiting from Innovation: Value Creation, Value Appropriation and the Role of Industry Architectures
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In this article, the authors consider how innovators benefit from value appropriation and creation, and they provide an integrative guide that explains how firms should manage their position along the value chain to capture returns from innovation, thus extending and qualifying Teece's original predictions and prescriptions.Abstract:
Extending Teece's landmark 1986 article, we consider how innovators benefit from value appropriation and creation. We elaborate on value appropriation, first by pointing out the importance of "industry architectures", i.e. sector-wide templates that circumscribe the division of labor; and second, by treating complementarity and factor mobility as distinctive components of cospecialization. This allows us to qualify Teece's prediction, by positing that firms can create an "architectural advantage" in terms of high levels of value appropriation without the need to engage in vertical integration. Such architectural advantage comes about when firms can enhance both complementarity and mobility in parts of the value chain where they are not active. We then elaborate on value creation by indicating how actors can benefit from investing in assets that appreciate because of innovation, which suggests that firms can benefit from encouraging imitation while investing in complementary assets. We also consider how investment in complementary assets changes the scope of the firm and thereby the development of capabilities that support future innovation. Finally, we provide an integrative guide that explains how firms should manage their position along the value chain to capture returns from innovation, thus extending and qualifying Teece's (1986) original predictions and prescriptions.read more
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Value Creation in Innovation Ecosystems: How the Structure of Technological Interdependence Affects Firm Performance in New Technology Generations
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Industry platforms and ecosystem innovation
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Ecosystem as Structure: An Actionable Construct for Strategy
TL;DR: In the past 20 years, the term "ecosystem" has become pervasive in discussions of strategy, both scholarly and applied as mentioned in this paper, and its rise has mirrored an increasing interest and concern among both researc...
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Constructing Markets and Shaping Boundaries: Entrepreneurial Power in Nascent Fields
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Posted Content
Governance in global value chains
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TL;DR: In this article, the authors employ a novel conceptual framework in their research on industrial clusters in Europe, Latin America and Asia and provide new perspectives and insights for researchers and policymakers alike.
References
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Dynamic capabilities and strategic management
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Journal ArticleDOI
The Market for “Lemons”: Quality Uncertainty and the Market Mechanism
TL;DR: In this paper, the authors present a struggling attempt to give structure to the statement: "Business in under-developed countries is difficult"; in particular, a structure is given for determining the economic costs of dishonesty.
Journal ArticleDOI
Transaction-Cost Economics: The Governance of Contractual Relations
TL;DR: For instance, the authors argues that if transaction costs are negligible, the organization of economic activity is irrelevant, since any advantages one mode of organization appears to hold over another will simply be eliminated by costless contracting.
Journal ArticleDOI
The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration
Sanford J. Grossman,Oliver Hart +1 more
TL;DR: In this paper, a theory of costly contracts is presented, which emphasizes the contractual rights can by of two types: specific rights and residual rights, and when it is costly to list all specific rights over assets, it may be optimal to let one party purchase all residual rights.
Book
Open Innovation: The New Imperative for Creating and Profiting from Technology
TL;DR: Open Innovation: The New Imperative for Creating and Profiting From Technology as discussed by the authors is a book by Henry Chesbrough, which discusses the importance of open innovation for creating and profiting from technology.