Cooperative innovation: a value chain approach

Purpose – The purpose of this paper is to briefly review earlier contributions to partner/cooperative innovation with the aim of evaluating the application of the concept to the increasingly popular virtual/value chain business model. Design/methodology/approach – A number of example cases of partner/cooperative innovation are examined and, although these are limited in number, it would appear that a classification of types of partner/cooperative innovation is possible. Findings – Partner/cooperative innovation combines elements of process and product innovation management within a “network structure” to create a product‐service response that neither partner could create using its own resources. They extend in both directions of the supply chain (upstream and down stream) and include supplier relationship management such as that demonstrated between Dell and its myriad of suppliers, and examples of customer relationship management such as the relationship that Caterpillar has built with its distributor/service network. Research limitations/implications – The findings need further validation through empirical data analysis in appropriate industrial settings. Practical implications – The paper includes a model that facilitates the evaluation of the “total efficacy” of partner/cooperative innovation alternatives. As such, the paper offers a viewpoint to be considered by management. Originality/value – The paper describes partnership/cooperative innovation that combines elements of process innovation management and product innovation management within a network structure. Neither partner can independently create this network using its own resources to meet customer/market determined expectations for product and/or service performance at an economic (viable) cost. Third party involvement is typical.