Spinouts Increase Relations Between Their Creators and the Rest of the Firm

Individuals involved in spinouts are pushed to shift from an exploitation oriented culture to a collaborative oriented one. "And innovation is highly facilitated by knowledge recombination", says Stefano Breschi, Professor of Industrial Economics and co-author with Bruno Cirillo of Divide to Connect: Reorganization through R&D Unit Spinout as Linking Context of Intra-Corporate Networks. Their work focuses on research groups within companies. They call them islands, communities with highly dense internal collaborations and loose inter-unit connections.

After the spinout of either part or entire Research & Development units, the inventors tend to form ties that bridge otherwise isolated units. Why does it happen? "We can only hypothesize the reason for this outcome", Breschi says. "Our guess, supported by interviews with managers and engineers of the firms who participated in our research, is that the new ties across intra-corporate communities are generated by a change in the incentive system. In a spinout event, a new set of incentives pushes the inventor to shift from the exploitation of his own knowledge to a commercially oriented research culture, which increases his motivation to explore and search for complementary knowledge".

This argument was tested by analyzing the collaboration networks within eight large US information and communications technology corporations. The authors compared the patent data of inventors who were involved in spinout events to those who were not. The findings reveal that individuals who experience a R&D unit reorganization tend to expand their collaborative networks and create more patents co-signed with inventors belonging to different units. Spinouts boost knowledge.

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