ABSTRACT
Innovation requires new combinations of productive means. Some of them are inside the firm, while others need to be obtained externally. A purely “off-the shelf” purchase of some of these external resources is not efficient, because transfer of knowledge often requires interactive learning between users and producers (von Hippel, 1976; Lundvall, 1988). Firms are not islands separated by deep waters of market transactions, but are linked together in patterns of cooperation, especially as far as the development of new products and processes is concerned (Richardson, 1972). Arrangements to cooperate on innovation facilitate exchange of knowledge and offer new opportunities for sharing complementary resources with other organisations (Sachwald, 1998), making firms more likely to come out with new combinations.
