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EJIM 14,2

An experience-based view of co-opetition in R&D networks

Francesco Schiavone and Michele Simoni
Department of Business Studies, Faculty of Economics, University Parthenope, Naples, Italy
Abstract
Purpose The purpose of this paper is to explore the relationship between prior experience of organisations and their co-opetitive behaviours in forming research networks when a R&D programme is launched in order to fund future research projects. Design/methodology/approach Drawing on both resource-based writings and social embeddedness studies, the paper posits that two types of co-opetition namely the intra-network and inter-network co-opetition should be clearly distinguished in order to understand co-opetitive behaviours of organisations. These two types of co-opetition arise as a consequence of the different levels of rms prior experience in forming successful co-opetitive networks with their competitors. Findings A reverse U-shape trade-off between the two types of co-opetition is hypothesised: the maximum level of intra-network co-opetition and the lowest of inter-network co-opetition are expected for low and highlevels of prior experience; the minimum level of intra-network co-opetition and the highest of inter-network co-opetition are expected for moderate levels of prior experience. Originality/value This paper sheds light on how co-opetitive relationships emerge in R&D networks and under which circumstances competition prevails on cooperation. Keywords Organizational innovation, Research and development, Competitive strategy Paper type Conceptual paper

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European Journal of Innovation Management Vol. 14 No. 2, 2011 pp. 136-154 q Emerald Group Publishing Limited 1460-1060 DOI 10.1108/14601061111124867

1. Introduction Co-opetition is the phenomenon by which rms in the same industry complete each other in creating markets but compete in dividing up markets (Chesbrough et al., 2006, p. 87). Within the last 15 years, it became a rising subject of investigation for industrial organisation (Esty and Geradin, 2000) and management scholars (Brandenburger and Nalebuff, 1996; Chesbrough, 2003; Luo, 2004; Dagnino and Rocco, 2009). Much efforts have been spent to nd a rationale for this rms behaviour. Relying on different theoretical perspectives, scholars have pointed out that co-opetition arises for many strategic reasons. Transaction cost theorists argue that co-opetition is a rms response to additional costs in realising exchanges created by markets imperfections (Madhok, 2000). Game theory scholars advance the idea that competitors may decide to collaborate as a means to escape the well-known prisoner dilemma (Brandenburger and Nalebuff, 1995; Loebbecke et al., 1998). A large literature stream suggests that co-opetition should be conceived as a network embeddedness phenomenon (Gnyawali and Madhavan, 2001; Gimeno, 2004). Finally, resource based view (RBV) scholars explain co-opetition as the need for rms to access resources otherwise difcult to obtain (Hamel et al., 1989; Hamel, 1991; Lavie, 2006).
Although this paper expresses the common ideas of both the authors, Francesco Schiavone wrote Sections 2, 3 and 4. Michele Simoni wrote Sections 1, 5, 6 and 7.

But while these perspectives provide a comprehensive view of the strategic reasons for co-opetition, they left co-opetition dynamics in the shadow. Namely, how co-opetitive relationships form and how organizations choose among different form of co-opetition remain still little explored. To ll in these gaps, we investigate these two research questions in the eld of R&D programmes. These programmes are policy instruments through which institutions fund (or more often co-funds), within a specic technological or scientic area, R&D projects submitted by rms and other types of organisations. Therefore, rms act in an ecology of competition that pits organizations against each other in pursuit of scarce environmental resources and opportunities. In addition, it is not uncommon that R&D programmes assign a preferential evaluation to projects presented by allied partners (e.g. consortia) pushing rms to form networks with other organizations and eventually competitors to increase their probability of success. Thus, co-opetition is quite often to occur and different types of co-opetitive relationships emerge (Arranz and Arroyabe, 2007; Breschi and Cusmano, 2004; Hernan et al., 2003; Roediger-Schluga and Barber, 2008). In this paper, we propose a theoretical model which accounts for two different types of co-opetition among rms engaged in these R&D programmes (intra-network and inter-network co-opetition) and suggests that prior experience in successful co-opetitive efforts affects the organizations decisions about the preferred form of co-opetitive relationships. This paper has a theoretical nature and is organised as follows. Section 2 reviews the literature on co-opetition and focuses on the network embeddedness and RBV that are perspectives essential to support our theoretical hypothesis. Section 3 denes the concept of prior experience and how it should be interpreted according to network embeddedness and RBV theories. Section 4 introduces R&D programmes. Sections 5 and 6 advance our main hypothesis by contextualising it in R&D programmes eld. Section 7 summarises the main conclusions of the study, points out its relevant implications, and identies limitations and further improvements. 2. Different perspectives in co-opetition studies Co-opetition emerges when two or more rms simultaneously compete and co-operate each other. This phenomenon is quite common in mature and/or high-tech industries, in which competitiveness and market positions are hard to keep or acquire just with stand-alone strategies (Lado et al., 1997). Co-opetition can emerge between rms at both dyadic and/or network levels and relate to one level (simple co-opetition) or more levels (complex co-opetition) of rms value chains at the same time (Dagnino and Padula, 2002). Scholars recognised and studied co-opetition in several industries: biotechnology (Quintana-Garcia and Benavides-Velasco, 2004), automobile (Dagnino and Padula, 2002), airlines (Gimeno, 2004), steel (Gnyawali et al., 2006), microprocessors (Chesbrough et al., 2008), aircraft manufacturing (Nishiguchi and Caspary, 2001). The main theoretical approaches in economics and management studies give different explanations about the rationale of co-opetition[1] (Lado et al., 1997). According to transaction cost economics theorists, co-opetition rationale lies into the inefciencies of market transactions, which produce transaction costs (Madhok, 2000). Firms organise their activities opting for strategies minimising transaction costs. Inter-rm collaborations (as joint-ventures or strategic partnerships) are hybrid governance mechanisms occasionally reaching this goal since they match the benets

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and limits of both market and hierarchy. For instance, co-opetition between rivals rms may facilitate the learning of tacit knowledge between partners. However, this is a risky strategy somehow since it may stimulate opportunistic behaviours of rivals, especially if the intensity of their direct competition is high. Game theory scholars suggest the foundations of co-opetition are in the well-known prisoners dilemma model (Brandenburger and Nalebuff, 1996; Loebbecke et al., 1998). They differ with transaction costs economics theorists in the interpretation of the notion of opportunism. In the game theory approach, opportunism is not solely a risk but also a potential strategic driver for rms. Co-opetition denes a game structure based on partially overlapped interests (Padula and Dagnino, 2008) between more players, each one bringing its own-added value into the market. These players are tied together by some interdependencies, which create a value net between the company and the other market organisations (complementors and substitutors) playing the game. The key principle of game theory is that every action of a rm causes a reaction of its competitors that may delete the achieved advantages. This risk should lead rms to implement win-win strategies (as co-opetition) rather than win-lose strategies since the former are more likely to maximise the acquisition of the value that partners put into the market and to reduce competition costs for every market player (Brandenburger and Nalebuff, 1995). Adopting this view, Loebbecke et al. (1998) proposed a framework, based on knowledge synergies and leveragability, in order to manage the inter-organisational knowledge transfer during co-opetition. The embeddedness perspective is another traditional approach for scholars of co-opetition (Gnyawali and Madhavan, 2001; Gimeno, 2004). The basic assumption of this approach is networks are loci of resources within which rms, competing and collaborating each other, exchange assets and information. The structural properties of a rm determinate its centrality and embeddedness within its network and orient the co-opetitive behaviours of the other network nodes. The more a rm is powerful and embedded within its network, the more its co-opetitors are likely to be interested in its collaboration, the more its competitive strategy is affected. The study of Gnyawali et al. (2006) on global steel industry conrms this showing that the position of a rm within a co-opetitive network affects its competitive activity and variety. Recent studies (bridging together embeddedness perspective and RBV) underscore that the scope of co-opetition is not limited solely to a dyadic (rm-to-rm) dimension. Co-opetitive relations may emerge also between networks of rms (Gulati, 1999; Gimeno, 2004). For instance, Gimeno (2004, p. 825) shows that in global airline industry companies engage with rivals co-specialised alliances[2] in order to implement a competitive exclusion strategy against third rivals that could benet of partners resources. This strategy encourages third rivals to establish countervailing alliances that replicate the network benets by enlisting similar (but not the same) partners. All these theoretical frameworks explicitly (as transaction cost economics and embeddedness theory) or implicitly (as game theory) point out the prole of resources and capabilities of a rm greatly affects: . the extent of its participation to the co-opetitive dynamics of its market; and . the choice of its co-opetitive approach (intra- or inter-networking). RBV stresses more than other theoretical perspectives stressing more the centrality of resources and capabilities for the competitive behaviours and strategies of rms.

This approach rose in strategic management studies over the last 25 years (Penrose, 1959; Wernerfelt, 1984; Barney, 1991; Mahoney and Pandian, 1992). According to the seminal work of Penrose (1959), a resource is a stock rm uses to implement its activities. A capability is a ow created over time through complex path-dependent processes (Penrose, 1959). In this light, Barney (1991) denes a resource as any tangible or intangible asset of an organisation that allows its owner to create and implement a strategy. Das and Teng (2000) distinguish between property-based (as patents and trademarks) and knowledge-based resources (as organisational culture). Grant (2002) considers three different categories of corporate resources: tangible (physical and nancial), human (skills/know-how, motivation, capacity for communication and collaboration), and intangible resources (technology, reputation and culture). An akin approach to RBV is the capabilities-based view (Leonard-Barton, 1998; Teece et al., 1997). This approach empathises the importance of processes, paths and dynamic capabilities that rms accumulate and regenerate over time (and without whom rms could not exploit effectively their resources) in order to achieve a competitive advantage. Few assumptions summarise the core of the resource-based thinking. First, resources and capabilities are the bases of the rm competitive advantage and economic rents within its market. Second, rms implement strategies in order to exploit their internal resources. However, rms usually need also some complementary partners resources, to which they have partial access through their inter-organisational alliances, in order to implement effectively their strategies. Third, the contribution of a resource to the rm generation of a sustainable advantage is highly dependent on the extent of its heterogeneity and mobility and on the specicities of the industry in which the rm compete. Barney and Clark (2007) argue a rm resource or capability should respect the VRIO framework in order to achieve this goal. The more a resource/capability is valuable, rare, costly to imitate and exploitable, the more it is a source of sustained competitive advantage and economic performances above normal market levels for the rm controlling it. Social complexity and causal ambiguity are conditions affecting positively resource imperfect mobility and thus are critical to strengthen or to build rms competitive advantage (Barney, 1991). Over the last years, various resource-based and capability-based works analysed the co-opetitive strategies of rms. In general, RBV scholars noted that collaboration between competitors may be a critical (but risky) way to increase their rents since this phenomenon is always, somehow, a form of competition. The main benet of co-opetition for a focal rm refers to the learning of units of competitors knowledge. Hamel (1991) in his well-known study on nine international alliances between competitors reports that the primary objective (of rms) was the internalisation of partner skills. Nevertheless, the managers fear of giving more than what they get back (due to asymmetries in learning between partners) risks to undermine the partnership success and to change the bargaining power within the competitive collaboration (Hamel et al., 1989). Similarly, Lavie (2006) notes horizontal strategic alliances may provide both appropriated relational rents and inbound spillover rents. The former are rents intentionally transmitted between partners since they relate to the resources shared within the alliance. The latter, instead, are rents stolen from partners as they come from the partner resources non-shared within the collaboration. A focal rm acquires partners skills since their inter-rm collaboration weakens some typical conditions of the imperfect mobility of resources, as social complexity or casual

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ambiguity, between rms (Lavie, 2006). The extent of the acquisition of the inbound spill-over rents depends on the focal rm specicities. The more the absorptive capacity of the focal rm is high, the more such rm is likely to extract and gain rents from its co-opetitors. Thus, rm-specic resources and capabilities are determinant for the acquisition of network resources[3] (Gulati, 1999). 3. Prior experience in co-opetition A large amount of works in organisation, entrepreneurship and management studies stresses the relevance of the experience that a rm accumulates over time in order to improve its present performances and achieve critical competitive advantages. This corporate attribute refers to existing individual units of knowledge available within the organisation (Nonaka and Nishiguchi, 2001, p. 271). RBV intrinsically gives wide relevance to rm-specic prior experience. In fact, the Penrose (1959) key assumption that each rm is a unique bundle of resources implies its past experience is a critical element in order to orient its behaviour, shape its opportunity set and sustain its competitiveness (Lockett and Thompson, 2001). In line with this view, the scholars of the dynamic capabilities-view assert prior experience can trace deeply the present and the future of an organisation since the rm current position is often shaped by the path it has travelled (Teece et al., 1997, p. 522). For instance, various studies stressed how past experience of managers is critical to the success of the internationalisation of the small rms in which they work (Westhead et al., 2001). Prior experience provides to rms several benets having a large impact on their internal and external dynamics. Within rms, experience is acknowledged to give a cultural mindset to managers through which they interpret the external environment, understand better the industry evolution, and take their decisions. Experience affects the technological search of rms and their capability of recognising new opportunities and developing new products (Baron, 2004). Experience increases the rm productivity due to learning by doing. Finally, experience shapes greatly the organisational routines (or capabilities) of a rm. The benets of experience are clear and critical for the external activities and dynamics of rms. For instance, rm prior experiences affects positively its network centrality, the key condition determining the rm likelihood to have access to network resources (Gulati, 1999). Prior experience is critical to rms to develop an absorptive capacity[4] of knowledge from their external environment and partners (Cohen and Levinthal, 1990). A large amount of studies showed prior rm experience may affect positively the management of future alliances since this corporate attribute increases the alliances capabilities of the rm (Sampson, 2005). Furthermore, the amount of rms historical multi-market contacts with present partners increases their likelihood to minimise the risk of partners non-cooperation and, thus, to maximise the performances of partnerships (Shipilov, 2009). RBV and the network embeddedness perspectives explain theoretically the benets of experience on rm internal and external dynamics. According to RBV, benets of rm past experience emerge from the increased value of rm resources and capabilities (due to experience). For instance, experience intensies the specicity and idiosyncrasy of rm knowledge. Besides, experience may notably increase the resource/capabilities heterogeneity and hamper the resources/capabilities mobility within an industry (in accordance with the VRIO paradigm). Prior experience increases the value of knowledge-based resources of rms and may be critical in order to

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maximise the economic rents deriving from their property-based resources. According to the network embeddedness perspective, benets of rm past experience emerge from the increased rm capability to acquire resources from its external networks (in other words, the Gulati (1999) network resources). Prior experience increases the rm centrality in its inter-organisational networks. Furthermore, this corporate attribute affects positively rm capacity to absorb external information and knowledge and exploit them for commercial or managerial ends. Prior experience, thus, is a notion theoretically effective in order to analyse and understand co-opetitive dynamics within an industry. This is likely to be a critical factor of co-opetitive attraction among organisations within the same industry for two reasons: (1) experience gives to rms a competitive advantage which affects positively the likelihood of success of their further activities; and (2) experience gives to rms a powerful (central) position within their inter-rm networks, due to the amount of ties, knowledge and information that experienced companies achieved over time. Therefore, an experienced rm is likely to be a partner worth of the interest for other industry companies willing to establish a fruitful strategic alliance. The presence of one (or more) experienced companies within an inter-rm network, thus, is likely to shape and orient strongly the co-opetitive patterns and behaviours of all the network nodes. 4. R&D programs: key concepts and dynamics Co-opetition and innovation are often interconnected phenomena. Rival rms co-operate in R&D for various motives, generally related to basic and applied research, innovation processes or market access and search opportunities (Hagedoorn, 1993). Reciprocal learning of partners is a common expected benet from a R&D co-operation (Teece et al., 1997). In one industry, the emergence of co-opetitive behaviours in R&D is closely related to the rms adoption of open innovation strategies[5]. For instance, in the microchip industry the intensity of market competition between small entrants (Intel and AMD) and an established larger incumbent rm (IBM) affected the patenting strategies of these rms and stimulated technology co-opetition over the last 30 years. Intel and AMD competed successfully with IBM in the market product while they were co-opetiting in the market of technology and patents (Chesbrough et al., 2008). Some scholars found interesting evidences in the study of R&D co-operative networks of rival rms (Medcof, 2000; Miotti and Sachwald, 2003). For instance, technological resources are critical to rms in order to acquire partners high-quality complementary resources (Miotti and Sachwald, 2003). There is a rich literature about the benets of rms prior experience in R&D collaborations on their future R&D partnerships. Schmiele and Sofka (2007) found that prior international experience of about 1,000 German innovative rms greatly affected their capability in engaging international R&D co-opetition. Sampson (2005) found that rms may learn how to manage R&D alliances with experience in former similar inter-rm relationships. Another recent study shown that the extent of general alliance experience of a partner affects the likelihood of success of the R&D partnerships engaged (Hoang and Rothaermel, 2005). Similarly, other studies analysed the effects of rms prior experience in international R&D networks on their

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likelihood to participate in further inter-rm R&D complex networks. Strategic efciency in choosing partners and strategic, centrality-based network capabilities of rms (developed through their prior experiences in former R&D networks) affect positively their probabilities to be members of future R&D inter-rm consortia much more than their generic experience-based partnering capabilities (Hagedoorn et al., 2006). R&D programmes funded by public institutions often provide an opportunity of collaboration among competing organisations and rms. A valid example of such programmes is the framework programme (FP) of the European Commission (EC)[6]. Since 1984, these programmes fund the R&D projects of consortia composed by a variety of organisations coming from all the countries members of European Union (and, in some cases, also of non-European Union countries). The topics of the researches founded are several and, in practice, they embrace all the European critical industries (e.g. energy, biotechnology, healthcare, transports and many others). Each project proposal submitted to a FP call generates a simple network of co-opetition (Dagnino and Padula, 2002), since it clusters more than two actors[7] at a single phase of the value chain. Some common features characterise all the FPs launched over the time. Every organisation can apply to the same call with more proposals and participate to more R&D consortia. In each consortium, one organisation plays the role of project co-ordinator and the others are its partners. The largest organisations with more technological capabilities are used to diversify their effort in more technological areas and R&D projects. Financial resources are critical to get involved within these consortia. FP co-nances just a part of the costs of the project: the network of partners working on the R&D project has to cover the remaining part of costs. Calls usually do not specify particular restrictions and/or limitations to consider in the formation of the network of partners submitting a research proposal. EC documentation aimed at supporting the research proposals preparation and submission suggests proposals evaluators take into account two main criteria: (1) the scientic and technological excellence of the research project; and (2) the quality of the consortium submitting the proposal. This second condition implies experts do not evaluate a project through a blind review process. Evaluators know which organisations compose the consortia submitting the proposal. The reputation of R&D departments and capabilities, prior experience in the co-ordination of similar project, thus, are conditions likely to inuence largely the nal decision of proposals reviewers. Each call for proposals produces both competitive and co-operative relationships between a number of organisations of various type (rms, universities, research centres, national agencies) operating in the same industry. In these calls at the same time, every organisation is both an attractor and a searcher of other partners organisations. Prior experience gives a critical co-opetitive strength to organisation Alpha coordinating a research project in order to attract other partners organisations inside its project. Indeed, an experienced organisation is a suitable project co-ordinator since its projects are likely to be evaluated more positively by EC reviewers. But the same organisation Alpha may even search other research projects proposed by other organisations (that now act as co-ordinators) and try to participate to them as partner. The extent of prior experience of projects co-ordinators is likely to affect this choice of Alpha. What is no clear, however, is if prior experience of Alpha and prior

experience of Alphas partners may affect in some way its choice of entering in more networks (inter-network co-opetition) at the same time or focusing just on one network of usual partners (intra-network co-opetition). The prior experience in R&D programmes of an organisation might be measured in many modes. For instance, useful dummy variables of the organisation experience in R&D programmes are both the submission of a R&D proposal and the achievement of nancial support in the previous programme edition (Barajas and Huergo, 2010). Non-dummy variables of this corporate experience might be the number of submitted proposals, nanced projects and R&D partners (this latter in order to measure the old networks size of the organisation) in previous programme editions. Firms can establish a dyadic or a multi-partners R&D alliance autonomously or in order to apply for public or private research funds. In the latter case, rms along with other types of organisations (e.g. universities) are likely to create an ad hoc consortium in order to submit a research project proposal to a R&D programme launched by a public or private institution (e.g. a national government or a foundation). From the point of view of the single rm, the critical problem of its R&D strategy is to chose, when a R&D programme is launched, to which R&D co-opetitive consortia, it is more valuable to participate and in which R&D co-operative networks its participation is not advisable (Hakansson and Helman, 1984). The determinants affecting the participation of an organisation to R&D programmes are various. A rst critical variable is the level of rm innovativeness. Firms most engaged in R&D networks are high-prole innovators. These organisations tend to set up partnerships with other rms with strong complementary resources and research orientation (Miotti and Sachwald, 2003). Also absorptive capacity can direct this choice. A recent study about the participation of Spanish rms to European R&D programmes points out their absorptive capacity is positively related to their export orientation and size (Busom and Fernandez-Ribas, 2008). The heterogeneity of capabilities among partners of R&D consortia nanced by public programmes affects their motivations of participation (cost-sharing or skills sharing) and their intensity of spending. Cost-sharing is the key rationale when projects are large and homogeneity of capabilities between partners is high, while the skill-sharing motive increases with capabilities heterogeneity (Sakakibara, 1998). Hernan et al. (2003) found prior experience (along with rm size) affects positively the likelihood of rms to participate to further European R&D programmes afterwards. However, prior experience is not the unique factor affecting this choice. Also the geographical distance between participants, knowledge about research theme, relational factors and network characteristics affect the R&D collaboration choices of organisations participating in European R&D programs. Geography and relational effects (predominantly a joint collaborative history) are some of the most important factors affecting the collaboration choices of these organisations (Paier and Scherngell, 2008). The position of each rm in the network affects also the probability of collaboration. Other authors argue social distance between partners is more important than geographical distance in determining their willingness in joining to a given consortium developing a proposal for an European R&D programme (Autant-Bernard et al., 2007). Therefore, the critical conditions to full in order to stimulate the participation of a company to a R&D consortium are likely to be: . a prior R&D collaboration with the consortium partners; . an adequate extent of prior experience of the other consortium members;

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a low social distance with other companies (network embeddedness is relevant); and a low geographical distance from the other organisations.

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5. Intra- and inter-network co-opetition in R&D programmes By mimicking competitive markets and by fostering collaboration, R&D programmes can be interpreted as an imperfect market driven by both competitive and collaborative dynamics (Wernerfelt, 1984). Firms and organizations can be engaged in this market with two possible roles: coordinator and research partner. Coordinators are in charge of building the researchs network, stimulating the collaboration among members, assembling the project and submitting it; in case of positive projects evaluation, they have to coordinate the following research activities. Research partners are involved in the network with their specic competences, participate to the projects development; once the project is funded they collaborate with the other partners and the coordinator in the researchs deployment. Thus, on the one side, coordinators act in the attempt to form the most competitive network to sustain their projects; on the other side, research members struggle to nd coordinators to deal with in order to take part in a potentially winning initiative. In this dynamics, two types of co-opetition problems arise. The rst is a within the network problem. A participant to a project may be asked to collaborate with one or more of its usual competitors. That is, rms and organizations have to decide whether they will accept this situation and how they will eventually cope with the simultaneous presence of competitive and collaborative relationships within the network. We term this type of co-opetition intra-network co-opetition (Figure 1(a)). The second is a between the networks problem. Given the possibility for a participant to be involved in more than one initiative (responding for instance to different bids), rms and organizations have to decide whether they will accept to partner with participants that in other projects, belong to competing network or whether they will preserve the composition of one single partnership. By choosing not to span collaborative relationships across multiple networks rms and organizations try to save the uniqueness of their partnership and to fully exploit its potential in multiple researchs initiatives; on the contrary, by choosing to be part, at the same time, of many different networks, participants try to maximise and diversify opportunities even at the

Area of co-opetition

Figure 1. The difference between intra- and inter-network co-opetition

Competitive relation Alfa firm (a) (b)

cost of diluting the advantages deriving from a specic and particularly successful network. In that, they establish co-opetitive relationships not only within the network they belong to but also among different networks since competing initiatives may benet from the sharing of the competences of common partners. The larger the number of common partners is the higher the collaborative dimension among competing networks becomes. We term this type of co-opetition inter-network co-opetition (Figure 1(b)). Figure 1(a) shows the case of intra-network co-opetition. Three networks exist that develop different R&D projects. These networks compete to get their own project approved. Alfa rm belongs to only one of these networks in which it collaborates with some competitors. Therefore, co-opetition is bounded within the single network while competition characterises inter-network relationships. Figure 1(b) shows the case of inter-network co-opetition. The starting situation is similar to the previous case but Alfa rm is now part of two different projects. As a consequence, the two projects share the resources and the competences provided by their common partner. Therefore, co-opetition spans across two networks while competitive relationships still persist with the third project. It is worth noticing that the higher the number of shared partners is the higher co-opetition among multiple networks tends to be. But what does drive the rms choices in adopting an intra- or an inter-network co-opetitive behaviour?. Even if not explicitly related to the intra- and inter-network co-opetition, some propositions of the network embeddedness perspective may provide an insight to answer this question. By suggesting that the rms position in the network structure should affect its relational choices, scholars of this stream advance the hypothesis that rms that are already central and well-embedded in their network are more interested in fully exploiting the advantages of this position and, therefore, less interested in expanding collaborations to rms of other networks. On the contrary, peripheral rms, by being less embedded in their network, try to span their relationships across multiple networks, in the attempt to eventually occupy a structural hole and get a benet from this brokerages position (Burt, 1992; Gulati, 1999; Gnyawali and Madhavan, 2001). This idea implies that in R&D programmes, coordinators that represent the central organization of each research network should be more interested in sustaining the same partnership across multiple initiatives, while research partners should be more prone to multiply opportunities by participating in many, even competing, different networks. Accordingly, coordinators should prefer an intra-network co-opetitive behaviour, research partners an inter-network co-opetitive behaviour. Other interesting insights come from the RBV scholars who suggest that the rms choice to span its relationships beyond the boundaries of an already established network depends on the complementarities of the rms assets with those of other rms. Namely, within a network of complementary partners, rms invest in assets that benet from other rms assets (i.e. relationship specic investments), co-specialising in this way their respective activities. This represents a powerful incentive for all network members to maximise the exploitation of the already established partnership avoiding to disrupt the value of the co-specialization through relationships with rms that belong to other networks. On the contrary, rms free from the co-specializations constraints may opt for an approach that multiplies opportunities even at the cost of a less effective exploitation of the already established partnership. Thus, they form

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multiple relationships with competitors of other networks. In the eld of R&D programmes, it means that two different types of initiatives have to be distinguished. Those in which rms and organizations partner to complement each other and to co-specialise their respective activities, and those in which partners try to benet from the overlap of their resources as in the case, for instance, of organizations seeking for economies of scale (Sakakibara, 1998; Miotti and Sachwald, 2003). In the rst type of network, all members should be strongly committed to the specic partnership, trying to eventually replicate it in different projects but avoiding to put it at risk through relationships that span across multiple networks. On the contrary, the second type of network should be characterised on the one side by the presence of many partners shared with other competing networks and on the other side, by organizations striving to multiply outside the network the opportunities for a successful project. 6. Prior experience and co-opetition in R&D programmes As noted in Section 3 of this paper, prior experience refers to the knowledges units that organizations are able to accumulate over time. Summarising, it plays a role on three levels. First, by shaping rms routines, prior experience enhances the rms ability to exploit its resources (Penrose, 1959; Teece et al., 1997). Second, by providing the absorptive capacity needed to deal with the business environment, it allows organizational learning (Cohen and Levinthal, 1990; Nonaka and Nishiguchi, 2001). Finally, it is a pre-requisite for rms relational activities since it acts as a road map for manager in choosing the appropriate partners and in establishing with them a proper collaborations agreement (Sampson, 2005). Thus, in a eld like R&D programmes in which rms have to set up complex projects as well as large collaborating networks, prior experience may prove precious. In particular, by reducing the causal ambiguity typical of complex projects, the experience acquired during past rms participation to R&D programmes, on the one side, affects participants ability to exploit the programme; on the other side, it signals the likelihood that each partner can give a positive contribution to the success of the initiative (Hernan et al., 2003). In that, prior experience serves as a means for coordinators to select the best partners and to promote a successful initiative; for research partners, it serves as a means to reduce errors in choosing the partnership more suitable to accomplish their R&D needs. On the contrary, a lack of prior experience exposes both coordinators and research partners to the risk of being ineffective in developing a new project, making it difcult for coordinators to recruit partners and for partners to have access to the more promising networks. In the formation of co-opetitive relationships within R&D programmes, this has multiple implications. In trying to set up the best possible network, poorly experienced coordinators lack both the required knowledge to act in an appropriate manner and a reputation strong enough to attract the best research partners. Thus, they are in erce rivalry, especially with the more experienced coordinators to develop a promising project and, what is more relevant, to build a successful partnership. As a consequence, they will accept to collaborate with a competing rm or organization, especially, if it is a research partner that may provide substantial value to project, but they will refuse to partner with coordinators of competing networks, to avoid the risk of sustaining a rival in attracting partners. Moreover, once they have found a valuable research partner they will act to reinforce the collaboration with him in the attempt to prevent the partner from being involved in other coordinators initiatives. Therefore, a poorly experienced

coordinator will focus on few selected and successful organizations to build its network and will tend to replicate the same partnership in different initiatives. We can assume this behaviour as equivalent to an intra-network co-opetitive behaviour. Also poorly experienced research partners may face problems in participating to an R&D programme. Even if they possess the required R&D competences to access the programme, they lack both the knowledge to understand the programmes dynamics and the experience to evaluate alternative proposals of participation. In addition, by being not condent in their own ability to exploit the existing opportunities, they are exposed to a strong competitive pressure stemming from the more experienced rms that have a better ability to disentangle the programmes complexity. It implies that on the one side, poorly experienced organizations will accept the risk of collaborating with their competitors only if they are condent that the project will be successful; on the other side, they will avoid to join other competing partnerships to reduce the risk of splitting their effort among many uncertain initiatives. Furthermore, once they have met a successful coordinator, they will try to prevent other competitors from accessing the same network by participating to the same partnership in the largest number of possible projects. Also this behaviour resembles our denition of intra-network co-opetition. We turn now to experienced coordinators and research partners. The former are those who have a track record of successful initiatives in developing research projects and in bringing together the required research partners. They possess both the knowledge and the reputation to attract the organizations and rms that are better equipped to sustain an initiative. It is likely that they do not need to search for partners since are participants to the programme that will seek for them. In addition, they have the ability to clearly understand the requirements that other organizations should possess to enhance the projects probability of success and the skills to select among different alternative partners. Therefore, they are essentially interested in creating their own network at the expenses of other coordinating organizations that may eventually subtract valuable partners. On the one side, they will never accept to bring their experience into another coordinators network. On the other side, they will try to force their best partners not to share their competences with other rms outside the network. In that they may push the same partnership to be replicated in a large number of possible projects. This type of behaviour can be conceived as an intra-network co-opetition. Experienced research partners are those who participated in many successful projects. On the one side, they have the knowledge to understand the R&D programmes mechanisms; on the other side, they are able to fully exploit a given opportunity. In that, their interest is to nd the best coordinator to join in a potentially winning project. Thus, once they have created a successful partnership, they have the incentive to both sustain it and avoid that other networks that comprise their competitors become stronger. That is, they eventually accept co-opetition with other rms and organizations of the same network, but do not participate in competing partnerships. Instead they are more prone to replicate the successful network in other initiatives. Also this type of behaviour can be considered as a form of intra-network co-opetition. Differently from non-experienced and strongly experienced rms and organizations, participants to an R&D programme that possess a moderate level of prior experience act according to a different logic. Both coordinators and research partners are along the path of building their capability to exploit an R&D programme. On the one side, they have enough ability to see and evaluate different opportunities;

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on the other side, they do not possess enough reputation and experience to aspire to the best of all possible projects. Therefore, coordinators strive to rapidly increase their experience in developing successful projects and in forming proper research networks; research partners strive to increase their ability of getting in the most successful partnerships. Accordingly, coordinators have the incentive to multiply opportunities to succeed, even by collaborating with several networks eventually guided by other coordinators. Research partners do not fear to share their competencies among many well-selected projects, tough this may lead them to collaborate with many different competitors. Variety and opportunities diversication are intensively sought by both types of organizations, i.e. coordinators and research partners in order, on the one side, to benet from the prior experience already accumulated, on the other side, to improve the track record of successes. That is, rms and organizations with a moderate level of prior experience are likely to be found in several competing networks where they collaborate with different competitors. This type of behaviour fully matches our idea of inter-network co-opetition. The theoretical framework that emerges is a model in which prior experience affects positively abilities and cognitive resources of R&D programmes participants, i.e. skills and know-how required to exploit R&D programmes opportunities, reputation in terms of positive contribution to a future partnership, ability in searching valuable partners and joining a winning network that, in turn, inuence their approach to co-opetition and their choice between intra- and inter-network co-opetition (Figure 2). In particular, for low level of prior experience rms and organizations that have few skills, a poor reputation and difculties in searching the right partners are likely to limit their engagement in R&D programmes and to adopt a conservative approach. Consequently, they prefer to collaborate with their competitors within a specic network of proven
Experiment R&D programmes Multiply opportunities Focus on winning partnership Co-opetitive approach

High Intra-network co-opetition Co-optition

Low Low Moderate

Inter-network co-opetition Prior experience High Exploitation ability Reputation Search capability

Figure 2. Relation between prior experience and co-opetition

reliability instead of multiply their efforts in several networks built by other competing organizations. In that, they embrace an intra-network co-opetitive approach. Increasing levels of experience in forming successful co-opetitive relationships enhance skills, reputation and relational capabilities of rms and organizations engaged in forming co-opetitive consortia. On the one side, players are able to distinguish promising from unpromising initiatives; on the other side, they are eager to further increase their track record of successful projects in order to become leading players in the co-opetition game. Based on this different approach, these players start to consider the advantages of a simultaneous participation in competing partnerships and tend to shift from an intra-network co-opetitive approach to an inter-network co-opetitive approach. High levels of prior experience reinforce skills, reputation and capabilities of rms and organizations even further making them condent in their ability to set up a successful project and to assemble a network that comprises the best competitors. Thus, players are likely to adopt an approach that focuses on forming the best possible consortium and to commit to a single partnership, seen as superior, while avoiding to be involved in other possible networks. The incentives to inter-network co-opetition lowers and, in turn, those to an intra-network co-opetition start rising again. According to this view, we suppose that a reverse U shape trade off may exist between the two types of co-opetition. 7. Conclusions In this paper, we advance the hypothesis that rms and organizations engaged in R&D programmes adopt different co-opetitive behaviours according to their prior experience. This perspective has implications for both theory and practice. From a theoretical point of view, this idea shifts the focus of the debate from the strategic issues of co-opetition to the learning mechanisms and the evolutionary paths of the competitors involved in a collaborative effort. In particular, we suggest that opportunities related to a specic contingent situation (in our case, an R&D programme) only partially account for the co-opetitive choices. The story of each player, the ability to learn how to exploit a network of competitors, the results achieved in previous attempts all affect the decisions about the appropriate behaviour to partner with other competing organizations and rms. This expanded view of co-opetition leads to several questions related to the knowledge accumulation dynamics and the path dependency of organizations evolution. How do rms learn to collaborate with their competitors and under which circumstances does this learning process prove to be more effective? Does it exist a typical evolutionary path that shapes the co-opetitive behaviours of rms and organizations or is each story contingent? Which types of skills are involved in the evaluation of an opportunity to collaborate with competitors and which are relevant to manage this type of relationship? From a managerial point of view, our idea points to some relevant issue for both policy makers involved in the management of R&D programmes, and mangers of rms and organizations that participate to these programmes. Policy makers dene rules and mechanisms to participate in R&D programmes with little attention to rms and organizations prior experience and to the consequences of this dimension on the programmes success. A programme to account for the different levels of participants prior experience should address two competing needs. On the one

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side, programmes should favour the most experienced coordinator and partners, in order to enhance the qualitative level of partnerships and improve the manageability of co-opetitive consortia. On the other side, they should facilitate the access to programmes of newcomers that by denition, are less experienced and prepared to a co-opetitive dynamics, but could bring variety and innovative R&D knowledge to other participants. The management of this tension among competing objectives should be explored by answering to many relevant questions. Which types of policy based on the prior experience/lack of experience are most effective to enhance R&D programme results? Should these policies be based on rules and incentives or on real services provided to R&D participants? How can policy makers monitor the effectiveness of such policies? The managers of rms and organizations involved in R&D programmes seldom consider co-opetition as a specic area of learning and experiencing. Instead of building specic managerial capabilities on co-opetitive projects, they tend to deal with R&D programmes as part of their R&D development and partnering strategy. This approach leads to managerial practices that are unaware of the full implications of co-opetition and to behaviours that are suboptimal in the exploitation of R&D programmes opportunities. In order to explore this topic, some further questions need to be answered. How can managers of rms and organizations fully benet from the prior experience in R&D co-opetitive initiatives? Is it possible to develop managerial practices specic for co-opetition? Do they exist organizational solutions suited to manage R&D co-opetitive networks as coordinator or as partner? This paper suffers from many limitations. First, given its theoretical nature, the work inevitably misses an empirical test of our core hypothesis. We will perform this test in future research. With the present work, we just attempted to stimulate a theoretical debate on the inner nature of co-opetitive behaviours and their relations with experience and learning. Second, our core idea has been developed in the eld of R&D programmes. Even if we consider this eld, a valid template for a more general understanding of co-opetitive behaviours, our hypothesis may be reasonable only for R&D programmes. In this case, this paper contribution should be considered just as a deepening of a specic type of co-opetition dynamics shaped by a particular institutional setting. Finally, our theoretical model represents only a very small step in the analysis of the relation between prior experience and co-opetition. Many relevant questions descend from this relation, which are relevant for scholars and practitioners, but further efforts are required to capture the evolutionary nature of the phenomenon.

Notes 1. See Quintana-Garcia and Benavides-Velasco (2004) for a brief but valuable comparative review of co-opetition under transaction cost economics, game theory and resource-based view. 2. Co-specialized alliances, which involve investments in partner-specic assets and activities and sharing of sensitive or proprietary knowledge can create value by exploiting efciencies of mutual specialization (Gimeno, 2004, p. 822). 3. Network resources are those assets that rms achieve through the inter-rm networks in which they are embedded (Gulati, 1999).

4. Absorptive capacity is the rms ability to value, assimilate, and apply new knowledge towards commercial ends. The other key condition is the intensity of effort (Cohen and Levinthal, 1990). 5. Open innovation is the use of purposive inows and outows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively (Chesbrough et al., 2006, p. 1). 6. FPs became a fruitful eld of study for academics of various subjects (e.g. Hernan et al., 2003; Breschi and Cusmano, 2004; Arranz and Arroyabe, 2007; Roediger-Schluga and Barber, 2008). In general, these studies found that over time FP created a dense inter-organisational network with an oligarchic core of highly central and connected nodes. 7. A typical EC call requires that only a network of minimum three organisations can submit a research proposal.

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