Organizing R&D projects: Insights from Co-opetition

Increasingly, technological innovation results from the joint creation effort of different players in the value chain, such as suppliers, customers, research centres and universities. Balancing co-operative and competitive forces in the innovation process to co-create value and to capture part of this value has become crucial to profit from innovation. In this article, we show that this tension between value creation and value capture is present in each R&D project. Drawing on the case of STMicroelectronics, we show that the balance of co-operative and competitive forces in R&D projects is made through the careful alignment of three variables: project knowledge attributes, project governance structure (internal development, co-operation or contracting), and project partner selection (firm or university). The capability to match these three elements explains the success of the innovation process of STMicroelectronics. Building on the experience of this firm, we provide some practical guidance on how managers should trade off these co-operative and competitive forces in organising their R&D projects.