R&D, Innovation and Networking: Strategies for Cooperative Survival

This paper examines R&D and innovation patterns of firms in a mixed industry as a possible explanation of relative scarcity of worker cooperatives in market economies. In a set of simulations of a dynamic evolving industry, cooperatives and investor-owned firms are contrasted with regard to their attitudes toward research and development in their controlling inputs, and the non-controlling inputs. We investigate the conditions under which networking according to the principle of cooperation among cooperatives helps cooperative firms maintain significant market share in the industry. It turns out that forming close networks is a good policy for cooperative survival, even when investor-owned firms have the innovation rate advantage.