Most managers no longer ask whether they should collaborate for innovation. The real question is with whom. In our recent study “Coopetitive portfolio configurations for product innovation: A crisp-set Qualitative Comparative Analysis”, published in Technovation, we examined how firms can best combine collaborations with competitors (coopetition), customers, suppliers, and universities to enhance product innovation success, showing that different configurations of partners impact innovation success differently.
As products become more complex and innovation cycles accelerate, companies increasingly rely on networks of external partners to access knowledge, technologies, and new market insights. Suppliers help improve production processes, universities provide cutting-edge research, customers reveal unmet needs, and, increasingly, firms even collaborate with direct competitors.
But there is a catch.
The success of these collaborations does not depend solely on the quality of individual partnerships. It also depends on how those partnerships fit together. In other words, innovation is not just about choosing the right partners, but about building the right portfolio of partners.
Innovation is not just about choosing the right partners, but about building the right portfolio of partners.
Why collaborating with competitors is both attractive and risky
At first glance, collaborating with competitors sounds like a terrible idea. After all, why would you share knowledge with companies that are trying to outperform you?
Yet firms do it all the time.
Competitors often possess highly relevant technological expertise, face similar industry challenges, and understand market developments extremely well. Working together can reduce R&D costs, spread risks, and accelerate innovation efforts. At the same time, however, competitors are also uniquely positioned to learn from you, imitate your ideas, or benefit from unintended knowledge spillovers.
This tension helps explain why previous research has struggled to provide a clear answer to a simple question: does collaborating with competitors improve innovation? Sometimes the answer seems to be yes. Sometimes it appears to be no.
Our findings suggest that both answers may be correct.
Whether coopetition leads to successful innovation depends largely on the other partners surrounding that competitor relationship.
One clear message: never forget the customer
If there is one finding that managers should remember from this research, it is this:
Customers were present in every successful coopetitive portfolio configuration.
Across all pathways leading to product innovation, customer collaboration emerged as a crucial ingredient. Firms collaborating with competitors were far more likely to introduce new products when customers were also actively involved.
Why does this combination work so well?
Competitors and customers contribute very different types of knowledge. Competitors provide insights into technologies, products, and industry developments. Customers contribute information about actual needs, frustrations, and emerging market demands. Together, they create a powerful blend of technological insight and market insight.
Think of it this way: competitors can help you build a better product, but customers help ensure you are building the right product.
Competitors can help you build a better product, but customers help ensure you are building the right product.
For managers, this finding is particularly important because customer involvement is often treated as a later-stage activity. Feedback sessions, beta testing, or customer surveys frequently occur after key technological decisions have already been made. Our results suggest that customer collaboration deserves a much more central position in innovation partnerships.
Universities are not always the innovation superpower we assume
Another finding may surprise many practitioners.
Universities are widely viewed as ideal innovation partners. They offer access to scientific expertise, cutting-edge research, and novel ideas. As a result, many firms assume that adding university collaborations will automatically strengthen their innovation efforts.
Our findings suggest that reality is more nuanced.
In coopetitive portfolios, collaborating with universities was not always associated with successful product innovation. In fact, when firms collaborated with competitors, customers, and universities, but lacked supplier involvement, innovation outcomes were less favorable.
This does not mean university collaborations are ineffective. Rather, it highlights a challenge many managers will recognize.
University knowledge is often highly novel and exploratory. It can be intellectually exciting but difficult to translate into products that customers can buy next year. In addition, universities generally operate under a logic of knowledge sharing and dissemination, while firms in coopetitive settings often need to be especially careful about protecting valuable information from competitors.
As a result, the combination of universities and competitors can create additional complexity, coordination challenges, and concerns about knowledge leakage.
The combination of universities and competitors can create additional complexity, coordination challenges, and concerns about knowledge leakage.
The hidden value of suppliers
Fortunately, the story does not end there.
One of the most interesting findings from the study is that the apparent downside of university collaboration disappears when suppliers are also involved.
This suggests that suppliers play a role that goes far beyond providing components, materials, or manufacturing expertise.
Suppliers play a role that goes far beyond providing components, materials, or manufacturing expertise.
Suppliers appear to act as translators. They help bridge the gap between academic knowledge and commercial application. Because they are closely involved in product development and production processes, they can often transform complex scientific insights into practical solutions that firms can actually implement.
In many ways, suppliers serve as the missing link between universities and the market.
For managers, this insight has direct implications. When building innovation partnerships, it may not be enough to simply connect with leading universities. Organizations should also ask themselves who will help translate that knowledge into something tangible.
Without that translation function, even brilliant ideas may never make it into successful products.
There is no universal recipe for innovation
One of the most common questions executives ask is: What is the ideal innovation ecosystem?
Our findings suggest there is no single answer.
The effectiveness of different partner configurations depends heavily on the context in which firms operate.
For small and medium-sized enterprises (SMEs), simpler portfolios proved most effective. SMEs benefited from focused collaboration portfolios centered on competitors, customers, and occasionally suppliers. This makes intuitive sense. Managing multiple partnerships requires coordination, governance, and managerial attention, all resources that SMEs often have in limited supply.
Large firms, however, told a different story. For them, the most successful configuration was a fully diversified portfolio involving competitors, customers, suppliers, and universities simultaneously. Larger organizations are generally better equipped to manage complexity and are therefore more capable of capturing the benefits that diverse knowledge sources can provide.
Industry conditions matter as well.
In relatively stable industries, firms benefited from broad, diversified portfolios. In highly dynamic industries, however, more focused configurations performed better. When technologies and customer preferences change rapidly, speed and agility become essential. Under those conditions, firms appear to gain more from strong customer involvement and close supplier relationships than from managing a highly complex network of partners.
The big lesson for managers
Perhaps the most important takeaway from this research is that innovation partnerships should not be managed one relationship at a time.
Too often, managers evaluate potential collaborations in isolation. Should we work with a university? Should we partner with a supplier? Should we collaborate with a competitor?
The better question is: how do these partners fit together?
Our study shows that the value of a partner depends on the broader configuration in which it operates. Customers make competitor collaborations more effective. Suppliers make university collaborations more effective. Diverse portfolios can be powerful, but only when firms have the capabilities to manage them.
In short, successful innovation is not simply about finding great partners. It is about creating the right combination of partners.
Successful innovation is not simply about finding great partners. It is about creating the right combination of partners.
And in an era where collaboration has become a necessity rather than a choice, that distinction may make all the difference.
