‘Who does what’ and ‘who gets what’

The issue of who benefits from innovation is a complex one. The answer is notalways the innovator. It may be other firms that are needed to get an innovationto market (complementary assets), or even those who produce imitations andadapted versions of the original innovation.For the innovator the usual advice is to try to protect the innovation as tightlyas possible, usually through intellectual property rights and, if this is not possible,consider taking on other parts of the innovation value chain. Don’t just create theinnovation, but design, market and sell it, for example. Our research, however,shows that innovators have more options than this, new strategies that they canemploy to ensure that they capture the most value possible from their innovation.Instead of innovators being narrowly focused on the nature of their relationships withcomplementary assets, and who gets what out of those relationships, they must lookat the broader picture of the economic network they operate in and their influenceon that network: In other words, they may be able to shape their sector’s architecture,allowing them to benefit without needing to integrate throughout the productionprocess – ruling without assets, like Microsoft or Intel.To do so, firms should consider their relationships with other innovation partnersin terms of complementarity –how good the fit is, in terms of how much value itcreates – and factor mobility – how interchangeable is the other specialised firm– as this partly determines the innovators share of the innovation value pie.[...]