The Notion of Complementarities: Organization of R&d Activity and Internationalisation Process

This paper addresses the relationship between complementarities in capabilities of firms and choice of organizational arrangements. The key focus is to generate an understanding of the incentives to invest in learning created by the choice of different ownership structures and how the nature of innovation activity affects the choice of such organizational forms. It develops a theoretical framework for the application of complementarities in the context of inter-firm collaborative arrangements. This paper presents a firm-level study of the role of complementary activities in network in organizing R&D activities of a firm and develops it into an actorresource-activity model by IMP group. This paper has two objectives. First it elaborates on the approach of complementary activities and interprets it in A-R-A framework. The interpretation of the complementarities in A-R-A framework emphasizes on the relationship between process of transformation of a firm’s capability into core competence and articulation of actors, resources and activities in an innovation system of a firm. Secondly, it aims at describing the implications of internationalisation of R&D activity of a firm on this transition process. The underlying assumption for the conceptual framework is that the organization of innovation activities is a determinant for the incentives to engage in cooperation and share knowledge, which reciprocates the potential increasing returns to knowledge creation process or problem solving for that given innovation activity.