Public-private innovation strategic alliances for SMEs: an emerging model

A recent theme in strategic alliances is the formation and the management of alliance portfolios as an effective way to provide diversity of resources and inputs. Despite the obvious advantages, alliance portfolios can be very resource intensive. To address this issue, large corporations have allied with public sector organizations to form alliance portfolios to support innovation, combining a private interest agenda with a public policy agenda. In exchange of the public sector resources, the large corporation undertakes the responsibility to support innovation in small and medium-sized enterprises (SMEs), while at the same time they pursue their own open innovation strategies. Three configuration patterns are identified among the Innovation Strategic Alliances (ISAs): (i) the public-driven “hierarchical” structure, (ii) the private-driven “hierarchical” structure, and (iii) the ecology-shaped network structure. The strong practices and the inhibitors of each configuration are also discussed. As for the management of the ISAs, the analysis identifies a range of practices from the concentrated decision making power in one player to a decision making power distributed to several players. The configuration patterns and the management approaches are combined to generate three strategic models for ISAs: (a) the ISAs with a strictly controlled portfolio, (b) the ISAs with a web of alliances where a pivotal partner weaves a number of alliances and projects, and (c) the dynamic constellation of alliances model, where different organizations get the space to develop their own alliances.