Alliance Portfolio Diversity: The moderating role of R&D human capital

Research has demonstrated the value of external linkages to augment in-house R&D; however very little is known about ‘how’ managers can operationally leverage the potential benefits of open collaborative modes of innovation to create an innovative edge. Responding to calls for research on how to manage business ecosystems, this paper examines the value of diversity in cooperation networks on innovation performance. Additionally, the moderating effect of R&D human capital on the alliance portfolio diversity-innovation performance relationship is explored. Results support the curvilinear relationship reported in studies; however, the effect of alliance diversity is more accentuated in high-tech industries, particularly in the case of radical innovation given the technological complexity, market uncertainty and divergent set of skills required to innovate in high-tech sectors. Further, we find evidence that the value of alliance diversity on innovation performance is contingent upon firms’ R&D human capital. These findings strongly suggest the need to adopt an alliance portfolio approach within the context of innovation strategies.