ABSTRACT
This chapter examines inter-firm collaborations in high-tech industries, which have arisen because complex technologies are often too cumbersome, inter-connected with other technologies. Rather than to rely primarily on its own internal resources to develop, a high-tech firm willing to embrace collaborations with other unaffiliated firms is following the open innovation (OI) paradigm in contrast to the traditional vertically integrated (VI) closed innovation model. A company following the OI model emphasizes research and production via collaboration and networks, and commercializes internal as well as external ideas by utilizing outside as well as in-house pathways to the market. The more complex forms of inter-firm technology collaboration increases participating firms access to each other's technologies and related technical information and expertise. They bring together complementary assets and skills, and permit work to be done that is too expensive for one company to fund. Thus, structuring inter-firm collaborations to preserve the incentives of both parties to continue their cooperation presents significant challenges.
