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Finding #6: Alliances are one of the ideal mechanisms
           for creating innovation streams between differing
           specialized fields, industries, and companies.

    If finding #4 (Innovations are happening trans-field) and #5 (Breakthroughs require differentials in thinking) are both true, then it may certainly be true that some structures are better suited for innovation.

    We looked at a variety of trans-field structures, such as collaborative networks (e.g. Linux), confederations (software development), mergers, acquisitions, and strategic alliances.

    While each structure had its pros and cons, the preponderance of evidence, both academic and imperical, indicates that, if best practices are employed, Strategic Alliances were the perferred method of engaging in joint or collaborative innovation.

    • Implications:
      • Companies that are truly committed to Innovation will seek to form alliances with outside entities that have a very different perspective, skill set, area of specialization, and culture.
      • Innovation is not just a value-added augmentation to alliances; it’s the root source of an alliance’s ability to regenerate over time
      • If an alliance is to prosper and thrive in the long run, a continuous commitment to innovation is essential to enable it to adapt to the unceasing waves of value migration.
    • Evidence:
        • We found numerous sources of joint innovation, ranging from chemical (e.g. Dow), pharmaceutical (e.g. Lilly), high tech companies (e.g. IBM), and consumer products companies (P&G) that had great success flowing innovations from their strategic alliances.
        • Perhaps the most compelling evidence came from our colleagues in the Netherlands: Guert Dysters & Ard-Pieter de Man, in conjunction with the University of Einhoven, as shown below.


Alliances have a Major Positive Impact on Innovation & Competitive Advantage

Impact of Alliances on Innovation

Impact of Mergers & Acquisitions on Innovation

Source: 2002 Ministry of Economic Affairs in the Netherlands –University of Einhoven Study -- Extensive literature review on the available empirical studies regarding the effect of strategic alliances and mergers and acquisitions on innovative performance

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