I was browsing the internet for articles on Co-Opetition and came across a very interesting research. The research shows that Industry Technology Alliances have grown at an exponential rate in US especially after 1990. However, the number of industry alliances in Japan and Europe have steadily decreased starting from the late 1980's.
(This article can be found at: Industry Technology Alliances)
I started thinking if this could explain the growth of US and the dominance of US technology firms (like Microsoft, Google, IBM etc.) across the world since the early 1990's.
To draw some sort of inference I compared the GDP of US, Europe and Japan as a percentage of world GDP since 1980 (A graph showing the relative positions can be found at: Relative GDP's of US, Japan and Europe as a percentage of World GDP).
I found that the GDP of Japan as a percentage of world GDP has fallen since early 1990's. We observe the same trend for Europe. In Europe, the number of Alliances have steadily declined since mid-1980's and this coincides with decline in Europe's GDP as a percentage of world GDP. However, the US GDP as a percentage of world GDP has remained fairly constant. This coupled with the fact that the GDP of Asian countries was growing at a very fast pace suggests that US GDP also grew at a significant rate to maintain its share of world GDP at a constant percentage.
Could it be the US firms have been more successful as compared to Japanese and European firms (which has consequently led to higher growth in US GDP) due to their strategy of forming more alliances? Does this probably hint towards the fact that forming alliances helps the firms and consequently GDP grow?
Of course bereo drawing any inference there are many other things that we need to consider. First and foremost I think we should look at the GNP and not the GDP to see how the three regions performed relative to each other (this is because the GNP will account for income earned by US firms abroad and will also adjust for the earnings of foreign firms in US). Even a better measure would be to collect data regarding only technology firms in US, Europe and Japan as the alliance data is only for technology alliances. Lastly the alliance data should be refined to include only alliances between competitors for us to make any definitive conclusions regarding Co-Opetition.
In spite of the above mentioned points i felt that it was interesting to link the number of alliances to the growth of the economy (relative to the world economy). Maybe some researcher could take into account the factors mentioned above along with many other such considerations to show a definitive link between Co-Opetition and growth of an economy. This will truly help us understand the value of Co-Opetition not only for an individual firm, but for the economy as a whole. What do you guys think?
Regards,
Shrikant Dave
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an interesting topic for discussion. What do others think?
ReplyDeleteI would tend to think that the other reasons given in the article may be more important to explain this convergence in GDP (note, they are adjusted to purchasing power parity). For example, Europe and Japan have work forces that are much more stable through job protection and just more of a culture of staying with a particular company for a longer time.
ReplyDeleteInnovation certainly suffers from this, and as we discussed in another class, there may be more volatility in the US job market but in the long run this tends to lead to higher growth rate for the economy as a whole.
A very interesting idea though, and it can certainly be a contributing factor that more alliances lead to higher GDP/