Governance and co-ordination of distributed innovation processes: patterns of R&D co-operation in the upstream petroleum industry

Increasingly the firm meets limits to its reach over the breadth of technologies and capabilities that are needed to innovate. Empirical study has shown that innovation processes are distributed across a variety of actors. The distribution of innovation processes across actors calls for specific forms of governance which extend across the boundaries of the firm, such as loosely coupled innovative networks. Technological and market drivers determine the location of agents within such networks, reflecting their needs and capabilities to co-ordinate systemic knowledge and power dependencies. The paper discusses the theoretical perspectives on the technological and market dimensions involved in the co-ordination of distributed innovative activities, proposing an interpretative framework for the investigation of R&D collaborations. Exploring these topics through the lens of the upstream petroleum industry, we investigate the relationship between competitive domains, technological profiles and positioning of actors within R&D networks, arguing that technological and market power contribute differently to the evolution of co-ordinating (nexus) functions over time.