Critical Factors in Inter-firm Research Collaboration
(Theme 3: The Evaluation of Collaboration and Networking in European S&T;)

Keith Dickson
Helen Lawton Smith
Anne-Marie Coles


The principal aim of this project was to identify critical factors affecting the conduct of inter-firm collaborative R&D; projects, to develop more informed criteria for assessing the success and failure of such projects. It was also intended to consider changes in project control and the allocation of benefits arising over time. Other factors to be considered were issues involved in collaborating with overseas firms, and the effects of management and organisational learning on collaborative practice.

During the course of the research it has become clear that such a black and white view of project success and failure did not take into account the fact that firms learn from experience. We have, therefore, shifted the focus of the research and analysis towards the latter objectives, and have concentrated on evaluating the process of learning and adaption that develops within a firm as, over time, it develops experience of managing collaboration.

Main Results

This project was designed to review the fate of a sample of UK-based firms which had initially been identified as R&D; collaborators between 1989/91. During that time 27 pairs of collaborating firms were interviewed to ascertain their motives towards and assessments of inter-firm R&D; projects in which they were involved. During this project, return visits to many of the firms have been made in order to obtain a longer term view of the role of collaboration in R&D.; Furthermore, the project sought to determine whether past experience of UK collaboration encourages firms to search for European or other overseas partners.

Collaboration is one of the sources of external information available to the firm. It differs from activities such as informal knowledge trading in the level of commitment required of both technology and personnel. It also involves two or more firms reaching an agreement to share proprietary information for mutual benefit. A successful outcome, therefore, will depend not only on the technical potential for innovation but also on interpersonal factors such as level of communication, respect, understanding and trust that can develop between the partners. One of the major lines of enquiry in this project was, therefore, to investigate how firms develop a competence in collaboration over the longer term.

Although several firms had either ceased trading or merged with another firm, and some had stopped collaborating altogether, seven of the original pairs of firms were still collaborating with each other. In total, this project undertook in-depth, semi-structured interviews with 25 firms, 20 of which had long-term experience of R&D; collaboration. Many of the firms have experience of collaborating with an overseas firm either through informal contacts or as part of a European funded consortium.

In each of the cases where firms are still collaborating, they appeared to have gone through a distinct learning processes between the time of the first interview and the second, although each firm had followed its own unique path of development. When first interviewed, many of the firms had only just become involved in collaboration and were unsure of their future involvement in collaborative ventures. By the second visit they had matured into firms using collaboration as part of an explicit R&D; strategy. Although the learning experience appeared intangible, it had affected their assessment of the risks associated with collaboration and their perception of the positive role of collaboration in innovation. The motivation to continue innovating in this way was a necessary factor in a firm taking a long term view of collaboration, and persisting with it even through difficulties and failure.

Analysis of the results of this project emphasizes that firms which had a long term experience of collaboration have been involved in the process of 'learning by doing' which has led to 'learning by absorption'. The firms had developed a competence particularly in three areas, selecting successful projects and partners and managing collaboration. Over time they have developed tacit knowledge and understanding about the management and control of inter-firm projects. The existence of this knowledge within the firm increases the chances of a beneficial outcome from any new project, in terms of ability to direct the project towards clear goal, and to limit the potential loss should it fail.

Firms which develop confidence in managing collaboration are in a position to utilise it as a component of their innovation strategy. They may become strategic collaborators, active participants in a number of ongoing collaborations, utilising collaboration as one of the possible options available for innovation. Such firms will be aware of the importance of maintaining a good reputation as a fair partner and will accept the necessity of sharing benefits of innovation with another firm. They will also tolerate a certain level of project failure and be aware of potential problem areas that can arise in the management of inter-organisational teams.

This work gives support to theoretical ideas in the organisational learning literature and also links with studies in innovation which consider the concept of 'technological competence' of a firm. In the analysis of how a firm gains in experience of collaboration, the early, uncertain attempts to collaborate with another firm, which led to a high level of failure, can be seen as an 'exploration' stage, where high level learning is taking place. As a result of experience some firms could be said to have become competent in collaboration, and new ventures of this sort involve them in routine learning. In an extension of the organisational learning literature, we would argue that the outcome of a firm developing a technological competence, enables it to move on to novel areas of exploration and learning.

Implications for Policy and Practice

The clear message from the firms interviewed in the course of this research is that European funds are not a substitute for national support, especially for small, high-tech firms searching for aid to develop their technological potential. Both the SMART and LINK awards were well regarded by the firms which had benefitted from them, with the proviso that submitting a proposal was too costly in terms of the relatively small chance a proposal will be funded. For small firms with specialist equipment that are offering a service to other local firms, European funding is not a viable option, so national schemes are their main means of achieving aid for developing their technology.

This discussion gives rise to a number of issues that have a bearing on national policy. The policy recommendations raised by this research are:

  1. Support for UK schemes which help to fund UK innovation is high amongst our sample firms but the application costs to the firm should be reduced.
  2. Firms considering collaboration for the first time could be encouraged by a scheme which enabled them to draw on the experiences of firms which have experience of both the benefits and weaknesses of collaboration. Firms would have a more realistic opportunity to evaluate the possible positive and negative effects of collaboration and be encouraged to assess the potential of a proposed project against its own internal strategy for development. Such a scheme would also aid analysis, with hindsight, of the progress of a collaboration.
  3. Promotion of awareness amongst UK firms of the potential advantages of developing partnerships with overseas firms could help international linkages. Policies designed to aid firms find suitable partners would be beneficial. For example, brokers in certain sectors noted for their fragmentation, eg. electronics, could have a useful part to play.
  4. Longer term support for firms which already have experience of collaboration should be consider as a mechanism to enable them to develop fully into strategic collaborators. This could enhance the innovation opportunities of many UK firms.
  5. The innovative potential of UK scientific entrepreneurs needs to be encouraged due to the fact that such small firm owners are likely to be working at the leading edge of technological developments, where R&D; collaboration is often a possibility. In particular, a greater awareness of the importance of business and commercial skills

The project concludes that inter-firm R&D; collaboration should be viewed as a long term phenomena and any policies designed to encourage and support collaboration should incorporate this finding.

Publications Arising from the Project

(Authorship is by all three researchers unless otherwise noted)

Refereed Articles and Book Chapters:

  • 'Learning from Experience: Lessons in Managing Inter-Firm R&D; Collaboration', in Bennet & Steward (Eds), Technological innovation and Global Challenges, IAMOT/Aston University, Birmingham, 1995.

  • "How Informal Can You Be? Trust and Reciprocity within Co-operative and Collaborative Relationships", International Journal of Technology Management, vol 11(1/2): 129-139, 1996. (Dickson K)

  • 'Adapting to New Realities: Learning by Doing in Interfirm Collaboration', in Piccaluga and Butler (Eds), Knowledge, Technology and Innovative Organisations, Guerni e associati, Italy, 1996.

  • 'Learning Issues in Successful, Long-term, Inter-firm R&D; Collaboration', Journal of Strategic Change vol 5, 1996.

  • 'Staying the Course: Strategic Collaboration for Small High Tech Firms', Small Business and Enterprise Development, vol 4 no.1, 1996.

Conference Papers:

  • 'Adaptive Behaviour and Co-operation in Competitive Situations', Small Business and Enterprise Development Conference, Leeds University, England, April, 1995.

  • 'Adapting to New Realities: Learning by Doing in Inter-Firm R&D; Collaboration', R&D; Management Conference, Pisa, Italy, September, 1995.

  • 'Scientific Curiosity as Business: Towards an Analysis of the Scientific Entrepreneur', 18th National Small Firms Conference, University of Paisley, Glasgow, Scotland, Nov, 1995.

  • 'National Systems of Innovation and Learning through Collaboration', Annual conference of the Association of American Geographers, Charlotte, N. Carolina, USA, April 1996.

  • 'Science in the Marketplace: The Role of the Scientific Entrepreneur', for presentation at 4th Annual High Technology Small Firms Conference, University of Twente, Netherlands, Sept, 1996.


  • 'Successful, Inter-firm R&D; Collaboration: A Report on the Learning Issues', Department of Management Studies Working Paper No 38, Brunel University, December, 1995.

  • 'Critical Factors in Inter-firm Research Collaboration', Final Report to ESRC, Sept. 1995.

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