Discussion Papers

John Hagedoorn

Changing Patterns of Inter-Firm Strategic Technology Alliances in Information Technologies and Telecommunications
Nr. 72 / November 1991

Summary

This paper presents a brief analysis of a number of aspects of strategic technology alliances in information technologies and in telecommunications in particular. It appears that this phenomenon has achieved growing attention both as a subject of corporate behaviour and as an object of study in both academic studies and business publications.

The paper first focuses on the trends in strategic technology partnering finding a general growth of new alliances made during the eighties. The main issue in the paper, however, is the analysis of networks of partnering companies that one can find in information technologies at large and telecommunications in particular. Applying both cluster analysis and multi-dimensional scaling techniques one can search for patterns in networks of companies and the changes that took place during the past decade. Given the growth of these alliances one can expect that the network density of cooperating companies has also increased, applying a simple measure for this density one can test whether such a development has taken place.

Another subject briefly introduced is the question whether patterns of networks of firms with strategic technology alliances reproduce existing market hierarchies or whether the market structure is only partly reflected in networks of strategic technolgy alliances which will demand a more subtle interpretation of this phenomenon.

Given the increase of strategic technology partnering both in terms of actual numbers and density of networks, it is an interesting question: why firms enter into these agreements. It appears that both market access and technology-related arguments are major drivers for these partnerships, whereas expected major motives such as the high costs of innovation and the lack of financial resources paly only a small role in the motivation for firms to engage in these partnerships.

Finally, the paper takes a brief look at the international distribution of technology alliances noticing that this is still a game of the Triad: USA, Japan and Europe with little left for the majority of non-Triad countries.

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