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Abstract

In order to innovate, firms progressively combine complementary abilities through forming networks. Such innovation networks represent temporary assemblages of partners that, in collaboration, pursue new product developments. Existing theories suggest that successful participation in such networks depends on firms’ having certain firm-level dynamic capabilities (i.e., skill in sensing the network and its environment, learning about the network, and coordinating and integrating individual resources across the network). In this paper, we argue that firms also have to develop particular networking capabilities (i.e., they have to understand who they are partnering with, what each partner can contribute, and how exactly each partner can cooperate with others across the network). We show that inter-organizational information systems (IS) are vital for facilitating the development of these networking capabilities. IS are also vital in developing unique constellations of resources (i.e., physical, human, and organizational resources) that we term IS-embedded network resources. These resources are manifested in the IS and are unique to the innovation network because they go beyond resources at the firm level. Using three innovation networks as case studies, we provide empiric evidence on how IS support networking capabilities to arrive at unique resource constellations embedded in IS and how the set of IS-embedded network resources is a determining factor for competitive advantage in innovation networks.

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