Such is the pace of innovation that companies increasingly have to combine with other companies or research centres on research and development projects. However, managing these inter-organisational relationships requires skilful selection of external agents and careful timing. For example, opening up a company's innovation process can expose the company to the risk of opportunistic behaviour from its external partners.
Balancing “co-opetition” – co-operation and competition – in the innovation process has therefore become crucial. This article describes the tension that is inherent between value creation and value capture in R&D projects. Through a case study of co-operative projects conducted by STMicroelectronics, Europe's largest microelectronics company, the authors demonstrate how a balance can be achieved between co-operative and competitive forces by the careful alignment of three variables. These are: project knowledge attributes, project governance structure and project partner selection.
While the key argument of the paper is related to the management of co-opetitve forces on R&D projects that lead to innovation, it also provides insights into how companies can manage knowledge cogeneration to their competitive advantage.

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