A value network development model and implications for innovation and production network management

In managing their value network, firms have to balance current and future value concerns and own and network partners' concerns. Firms generate immediate value through manufacturing and selling the current generation of products together with other firms in their production network. Firms generate future value by developing a new product generation with other firms and research institutes in their innovation network. Product innovation and production often take place simultaneously and recurrently. We take the discernible production and innovation activities to occur in co-evolving layers of the same network. We formulate a biplex value network development model that lays out the temporal pattern of production and innovation activities in the value network. We introduce terminology to pinpoint temporal interactions between the innovation and production activities. We study several exemplary complications in the cross-table of inter- and intragenerational interactions versus interactions within and across network layers.