Innovation in knowledge-intensive industries: The double-edged sword of coopetition

This study researches an important topic for knowledge-intensive SMEs that operate in clusters. Results from a sample of 830 SMEs as well as from qualitative validation interviews indicate that coopetition, the simultaneous pursuit of cooperation and competition, has a varying impact on innovations of SMEs. Three moderators influence coopetition's innovation performance: (1) sharing knowledge with the partner, (2) learning from the partner (inlearning), and (3) technological uncertainty. Overall, the study finds that coopetition can trigger radical innovation, but at the same time can harm the extremely novel revolutionary innovation. The damaging effect on revolutionary innovation is even stronger when SMEs share knowledge with their partners. However, a positive effect of coopetition on revolutionary innovation is achievable if SMEs do integrate their partners' knowledge through inlearning. Coopetition is also advantageous under greater technological uncertainty. A latent profile analysis in this study disentangles unobserved heterogeneity and displays seven different profiles of SMEs.