Non-equity Joints among Small and Medium Enterprises and Innovation Management: An Empirical Analysis Based on Simulation

Abstract

In this work a simulation model is described and implemented, with the purpose of analyzing the non-equity collaborations among small and medium enterprises (SMEs) and the effects of innovation management strategies on enterprise networks. Non-equity links are usually stable, but not strong. In this context the strong links are joint-ventures and participation exchanges, while non-equity collaboration (as a consortium) are stable, but leaving each enterprise as an autonomous entity. In particular, the governance of SMEs remains independent, but in the long term we observe a co-evolution of strategies among the enterprises which take part in the collaborative network. An enterprise can decide to exploit innovative processes it owns, thus potentially gaining competitive advantage, but risking, in turn, that other players could reach the same technological levels. Or it could decide to share it, in exchange for other competencies or money. These strategies could be the basis for a network formation and/or impact the topology of an existing network. The model presented in the paper aims at exploring how a process innovation and the strategies to manage it can facilitate network formation, affect its topology, induce new players to enter the market and spread onto the network by being shared or developed by new players.