Chapter 5: Overcoming Innovation Barriers: Alliance Portfolio Characteristics and Technological Innovations

We first identify the key innovation barriers and review the literature at the intersection of alliance portfolios and innovation. Subsequently, we advance a conceptual model showing how the two key factors of alliance portfolios—structural and content—-jointly impact a firm’s ability to innovate. In advancing the conceptual model of how the effects of alliance portfolio content factors (resource richness and diversity) on firm innovativeness are moderated by alliance portfolio structural factors (strength of ties and partner interconnectedness), we explicate the underlying alliance portfolio mechanisms that help the firm overcome key innovation barriers in generating innovations on a sustained basis. Our theorization of how and why the structural attributes moderate the effects of the content attributes suggest that the firm needs to strategically design and change its alliance portfolio configuration to maximize innovation benefits occurring from the portfolio. Our study contributes to both innovation and alliance network literatures and is likely to stimulate future research on the role of alliance portfolio factors in firm innovation. We also discuss the policy and managerial implications and key limitations of this study.