I'm Aija Leiponen, I'm a professor in the Dyson School of Applied Economics and Management, and particularly I'm interested in cooperation as part of firms' innovation strategies, and I've looked at that sort of broad question in a number of different spaces and contexts.
I've looked at markets for knowledge, where firms buy inputs for their innovation from various kinds of service providers. I study technology markets, where firms buy and sell patented inventions or even data. And for the past 15 years--it's been a long while now--I've looked at sort of systemic technologies like telecommunication systems, where firms are connected to lots of other parties in order to commercialize their services or products. So, firms have to agree with other firms, including their toughest rivals, and it's a really interesting microcosm of strategic behavior and competition and innovation, because firms are so dependent on each other for their success at the same time as they compete, and some of the firms fail.
I recently published an article in the Strategic Management Journal on conflict and cooperation, where we are focusing on these kinds of standard-setting activities in telecommunication industry, particularly in the wireless telecommunications.
So we looked at these firms that are participating in wireless telecommunication standard development, and where they collaborate with their peers to create the standard but they also occasionally sue each other for patent infringement.
So lots of firms have patents on their inventions and technologies and they let other firms use those technologies through patent licensing, but sometimes they have very very fierce disputes about what are the terms of licensing, so you have this kind of long-standing cooperative activity but it's interspersed with really really bitter conflict about how to then kind of distribute and share the revenue and profits from these technologies.
So we approached this setting assuming that these kinds of conflicts would really unravel and hamper cooperation between the parties, but it turns out that once Firm A sues Firm B, they actually start cooperating even more. Part of the puzzle is explained by complementarities between the firms: they're technologically dissimilar, and there's a lot of opportunities for them to learn from each other and license those technologies-- then cooperation is actually accelerated by conflict.
I work in digital industries where there's a lot of information and communication technologies being used, which are really rapidly changing. They've been changing for 50 years and they just continue to change, and recently I've been trying to understand what is happening with blockchain. So this is a technology that's underpinning cryptocurrencies like Bitcoin, but the underlying technology could be used in a wide variety of situations where parties are contracting and exchanging transacting with each other.
And so blockchain allows us to think through very very fundamental questions about economic exchange from a new perspective, because it changes some of the institutional features of the situation and then makes people and organizations behave differently.
And the other exciting and I think really important area to study is the role of data in the economy. We've been thinking about big data for a long time now, but data has just become a really fundamental factor of production and innovation in the economy, so now we have to rethink our understanding of information as a sort of a underpinning feature and factor in society and in the economy.
So, most of my work is really very very applied in that I do my work in order to provide answers for managers or policymakers on all these kinds of technological issues in the economy. For example, one managerial insight was that managers should be kind of prepared for conflict already before it happens by creating a network of collaborative partners from the get-go. Firms that are not dependent--highly dependent--on any single partner, but have a wide and diverse network-- pre-existing network of collaborative partners tend to be better off because they don't have to then just accept the terms of the conflict.
Another one that I'm really interested in is related to the data project that I'm working on-- what is the role of data in the economy-- and particularly how it relates to firms' privacy practices. And what we find is that it seems that producing privacy is really costly, but consumers are actually not willing to pay much for privacy. And so that just suggests to us that we have to resolve these issues through policy, in order to protect consumers from the harms that breaches and insecurity with respect to data are causing right now.
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Professor Aija Leiponen discusses her research on conflict and cooperation as part of firms' innovation strategies.