Innovative capabilities of a firm and the use of technical alliances

Relationships between types of innovative capabilities of firms, the amount and nature of technical alliance usage, and the extent and types of problems associated with those alliances are explored with firms in the semiconductor industry. Results show that, although firms need radical and/or incremental product and process innovation capabilities to compete successfully, they are likely to have core capabilities which are either product focused or process focused. Firms can reconcile radical and incremental R&D cultures, but find it more difficult to bridge the product-versus-process divide. Firms with strong capabilities are found to engage in more technical alliances. This is particularly true of firms with radical innovation capabilities. The study also finds that firms engage in technical alliances more often to supplement rather than complement their capabilities. Firms experience more problems in acquiring product innovation capabilities through alliances meant for new technology development than they do in acquiring process innovation capabilities