163

Leading companies and networks

of strategic alliances
in information technologies *
John Hagedoorn and Jos Schakenraad
MERIT, Faculty of Economics, ZJniLbersity
of Limburg, 6200 MD Maastricht, Netherlands

Final version received May 1991

Strategic alliances, joint ventures and a wide array of industrial patterns and networks of inter-firm
cooperative R&D pacts have received considerable attention agreements in a relatively large field of technol-
in recent years. In this paper an attempt is made to under-
ogy, i.e. information technologies. Our present
stand not only some recent trends in inter-firm cooperation in
information technologies but also to reveal the role played by analysis covers over 1,700 strategic technology
a large group of companies. The research is based on a large alliances in information technology with its sub-
databank with information on thousands of alliances and their fields computers, industrial automation, micro-
participating companies. Applying a number of statistical electronics, software and telecommunications ‘.
techniques it is possible to identify the major players within
We have chosen information technology for this
information technology and its sub-fields. The analysis en-
ables us to recognize the major international networks of particular paper not only because it is a major
inter-firm alliances, the changes over time and different posi- field of technology in general, but also because a
tions taken by world leading companies in several industrial very large share of strategic technology alliances
and technological settings. are related to information technology. In our
data nearly 42 percent of all worldwide strategic
1. Introduction technology partnerships are found in information
technology which make this by far the largest
In recent years strategic technology partner- field of the alliances and also the sector where
ships and inter-firm alliances in general have companies seems to have the longest experience
raised an increasing interest, both in the popular with this phenomenon [7].
business press as well as in more academically Our analysis will be limited to those agree-
inclined journals. In this paper we will attempt to ments made by firms in which the transfer of
contribute to the understanding of this phe- technology or the creation of new technology
nomenon with analysis of some historical trends, through R&D or other innovative efforts are
central to the agreement, thereby omitting a wide
* This paper is one of a series of papers in a research project
on “Inter-company Cooperation and Technological Devel-
range of exclusively marketing, production or sales
opments” at MERIT. This research focuses on the empiri- agreements. In essence we restrict our analysis to
cal analysis of changes in industry structures and global strategic technology partnerships such as joint
trends in different modes of inter-firm agreements in a ventures for which joint R&D or technology
large number of fields of technology. It also addresses
sharing is a major objective, research corpora-
theoretical questions in this field of research as well as
methodological issues concerning applied network and mul-
tions, joint R&D pacts, and minority holdings
tivariate analysis of strategies and industry structures. Em- coupled with research contracts [5]. We only ana-
pirical analysis is based upon the CATI database which lyze alliances made by companies on a “private”
contains information on several thousands of worldwide
cooperative agreements and the companies involved. ’ Our research is partly based on our CAT1 databank which,
We are grateful to two anonymous referees for helpful at present, contains information on nearly 10,000 worldwide
comments on an earlier draft. cooperative agreements, of which over 4,000 strategic tech-
nology alliances, in a large number of technologies and
Research Policy 21 (1992) 163-190 several thousands of participating companies (see also Ap-
North-Holland pendix II.

0048.7333/92/$05.00 0 1992 - Elsevier Science Publishers B.V. All rights reserved

164 _I. Hagedoorn and .I. Schakenraad / Leading companies and networks in IT

basis, so we do not include agreements made in 2. General trends in strategic technology al-
the context of (inter)national shared-cost pro- liances during the 1980s
grammes such as ESPRIT and EUREKA. This
enables us to achieve some understanding of pat- A considerable number of studies suggests that
terns of “pure” inter-firm technology sharing, i.e. the past decades of industrial development are,
strategic partnering for which the incentive is amongst other things, characterized by a substan-
found within firms and not (partly) induced by tial growth in the actual number of inter-firm
government programmes or international institu- strategic alliances, see for instance [2,3,6-10,121.
tions. A further restriction is that we only study In the literature this increase is frequently ex-
“strategic” alliances, defined as those inter-firm plained by the present rapid changes in techno-
agreements that can reasonably be assumed to logical development, the necessity of pre-empting
effect the long-term product market positioning strikes, sharing of costs, monitoring of relevant
,of at least one partner. The effect of this particu- technological developments and many other mo-
lar constriction is that all agreements which we tives that play a role in particular cases. Given
expect to have mainly cost-economizing conse- the relevance of these developments and their
quences are excluded from the following analy- impact on modern capitalist development and
ses. 2 some of our own previous research experience
The emphasis in this article will be on empiri- and findings by others we expect strategic tech-
cal analysis and the testing of some hypotheses nology partnerships to be with us for a long
related to historical patterns of strategic technol- period. However, we also expect the increase of
ogy partnering, the evolution of inter-firm net- strategic partnering that began during the 1970s
works and the role played by leading companies to gradually wear off [7]. In other words, we
in the sub-fields of information technology men- envision not so much a constant or exponential
tioned above. In short, the core of this contribu- growth rate of new strategic technology alliances
tion is built on the identification of basic trends but a gradual flattening of the growth rate during
in strategic technology alliances in information the later years of the 1980s. As companies have
technologies, the main “actors” and their net- increasingly been involved in strategic alliances
works, as well as market structural aspects of we can assume them to experience that these
these alliances. In order to reconstruct such net- strategic alliances do not provide a panacea for
works of strategic alliances we will apply a multi- all their problems; alliances have to be carefully
dimensional scaling technique and cluster analy- managed and firms run all sorts of risks with their
ses. We will also present a structural analysis of partners in these alliances. As the phenomenon
network density and test the stability in groups of of strategic technology partnering has become a
“leading” partnering firms. As we are interested familiar aspect of strategic behaviour of a grow-
in the possible changes that took place over time ing number of companies they will become some-
we will look at both the first and the second half what more conscious of the implicit danger in
of the 1980s. Apart from this historical specifica- alliances which will be translated in a gradual
tion we apply a “sectoral” differentiation into flattening and even a decline in the growth pat-
sub-fields of information technology in order to tern of these agreements. This pattern should be
achieve a less aggregated understanding of net- very apparent in information technologies be-
works and their main “actors”. Although our cause this field of technology is found to have a
graphical presentation is somewhat space-con- relatively long tradition and extensive experience
suming it enables us, contrary to most forms of with strategic technology alliances [6,7].
statistical abstraction, to identify concrete net- As shown in fig. 1 the pattern of all newly
works and the major companies involved. established strategic technology alliances found
in our databank demonstrates that the first years
of the 1980s are characterized by a somewhat
constant increase of new agreements, followed by
’ See Hagedoorn and Schakenraad [7] for details about the
a sharp rise during the mid-1980s which is con-
analysis of both cost-economizing agreements and strategic
partnerships and a description of the distribution of the tinued by a somewhat slower rate of increase
most strategic modes of cooperation. during the final years of the 1980s. The increase
 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT 165

600

O[
I I I I 11 I I
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989

-- information techn. + Total

Fig. 1. Growth of numbers of newly established strategic technology alliances in general and in information technologies, 1980-89;
source: MERIT-CATI.

of strategic technology partnerships in informa- can take the analysis one step further and distin-
tion technologies shows a somewhat different guish some differences in patterns of growth of
pattern with a clear growth of new agreements in new alliances. In telecommunications there is a
the first half of the 198Os, a stable number of new gradual increase in the number of new technol-
alliances in the following years and another in- ogy alliances, although this pattern has clear an-
crease during the final years of the decade again. nual ups and downs. In computers we see a
In other words, this pattern, in particular the one relatively constant number of new alliances with
in information technology, does not appear to two periods of accelerated growth, one during the
provide any verification of our hypothesis of a mid-1980s and one at the end of the period. In
flattening of the growth rate in strategic technol- microelectronics there is a clear and rapid growth
ogy partnering. in new alliances until 1984 followed by a period
However, if we look at the pattern in different of an almost constant number of new agreements.
sub-fields of information technology (fig. 2), we Strategic technology alliances in industrial au-

100

80 -

60

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989

- computer + Ind.autom. -*- mlcroelectronlcs

+ software + telecom -& other IT

Fig. 2. Growth of newly established strategic technology alliances in information technologies, 1980-89; source: MERIT-CATI.
166 J. Hapdown and J. Schakenraad / Leading companies and networks in IT

tomation increased during the first half of the strategic partnering is an activity in which in
1980s after which the number of new agreements particular “second division” companies are en-
gradually decreased again. A clear pattern of gaged. Following Casson [ll strategic partnering
growth with a steep rise of new strategic technol- could be seen in the light of oligopolistic rivalry
ogy alliances is visible for the field of software in which companies meet in a number of markets,
where partnering appears to have “boomed” since in some of which collaboration is a viable option.
1983. In particular leading companies, i.e. market lead-
So, with the exeption of software this general ers, would be able to set up networks of strategic
trend indicates that strategic alliances in informa- partnering in which they act as nodal companies.
tion technology have come into a more or less Others, for instance Porter, take a different point
stable situation. An explanation for the growth in of view when describing these strategic alliances
technology partnerships in software has to be in terms of weakness and not strength of partici-
found in the crucial role that software plays in pating firms. So, from this perspective strategic
linking different sub-fields of information tech- alliances “ . . appear to be most common among
nologies and the complementarity between hard- second-tier competitors.. ” 114, p. 671. We, how-
ware manufacturers and software producers. Re- ever, take a somewhat intermediary position. We
cent developments in information technologies expect leading companies, which are often of a
stress the possibilities of building complex net- diversified nature, to create flexible networks that
works of once relatively separated sub-fields such enable them to capitalize on economies scope
as telecom and computers and industrial automa- generated by changing networks for a number of
tion and computers. As these systems become their businesses. Market leaders have, almost by
potentially more interlinked, software with its definition, the discretion to choose their partners
intermediary function becomes vital to further from a relatively large group of companies and, if
development. Specialized software developing they are diversified, they can also spread their
firms have particular capabilities that turn them alliances over a number of their activities and not
into attractive but also compulsory partners in just their core business. This flexibility implies
strategic technology alliances. Hence, strategic that we do not expect a strict correlation between
technology alliances between software developers the relative market position of companies in dis-
and a wide variety of companies from different tinct businesses and their position in networks of
fields of information technology blossom in a strategic technology alliances. However, we also
period when the general increase of strategic do not expect strategic technology partnering to
technology alliances in this broad field of technol- be a game of “second-tier competitors”, if this
ogy has become relatively stable. term implies competitors that are at the loosing
end of (interhrational competition. It is obvious
that there are examples of combinations of such
3. The general structure of networks of strategic
companies, but in general there seems little indi-
technology partnering in information technolo-
cation to expect strategic technology partnering
gies
to be dominated by “losers”. A more subtle inter-
So far contributions from economics and pretation would suggest that leading companies
strategic management suggest a number of inter- forge alliances with different partners in order to
pretations regarding the structure of inter-firm create spill overs from a variety of joint projects
networks. In very general terms it can be claimed and R&LD ‘activities. If market leaders do not
that these networks are applied by large compa- necessarily concentrate their strategic partner-
nies in their strategies for further international- ships in their core activity, their overall presence
ization, diversification and complementing their in alliances for all their interests is still expected
existing technological competence (see Hage- to stand out among the general population of
doorn [S] for a survey of the literature). From a companies engaging in strategic technology part-
theoretical position there are at least two con- nering.
fronting lines of thought, one supporting the no- In this section as well as in the next the con-
tion that market leaders take nodal positions in crete analysis of networks of strategic partnering
inter-firm networks, the other maintains that can provide some first understanding of the posi-
 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT 167

tion taken by the most prominently cooperating chip and computer manufacturers, the second
companies in a number of industrial and techno- contains some European firms, and the third one
logical settings. The analysis of the general struc- is a Japanese cluster. ’ On the left-hand side of
ture of networks of strategic technology partner- dimension one in fig. 3a we notice a concentra-
ing in this section is of a fairly descriptive nature. tion of US companies such as RCA, NCR, Allied,
However, the analysis does enable us to do more Hewlett-Packard, Harris, DEC, Schlumberger
than just give some measurement of increased (including Fairchild), United Technologies
cooperation or other rather abstract indicators of (Mostek), Honeywell, CDC, Advanced Micro De-
inter-firm technology partnering as it actually fa- vices and General Electric. On the right-hand
cilitates the identification of both major “actors” side, in the first quadrant, we see a concentration
in several sub-fields of information technology of a number of Japanese companies such as Mit-
and some possible clusters of companies, as well subishi, NTT, Hitachi, Oki Electric, Toshiba and
as the changes that have taken place during the Fujitsu. European companies also have a high
1980s. proximity.
In the previous section we have seen that To improve our interpretation of MDS pic-
strategic technology partnering has increased dur- tures, it is useful to draw lines between com-
ing the 1980s. Despite a relative slow down in the panies. 4 From fig. 3a we learn that during the
growth of new partnerships in recent years about first half of the 1980s there was a number of
60% of all agreements made during the 1980s companies with rather strong interrelationships.
have been established during its second half. If For example: the networks around CDC, Sperry,
some companies play a central role in strategic Intel, Motorola, Siemens, NEC, Fujitsu and
alliances and consequently strategic technology Philips. All these firms rank among the top ten of
partnerships are unevenly distributed towards most cooperating companies in information tech-
“nodal” companies, we can expect the linkages of nologies in that period (see also table 3).
these firms to have escalated during the second If we take a look at the situation in informa-
half of the 1980s which should show up in the tion technologies during the second half of the
analysis of intensified inter-firm partnerships in 1980s (fig. 3b),- we notice that there is still a
the following paragraphs. concentration of intra-Japanese strategic partner-
In order to reconstruct networks of strategic ing with an almost identical group of companies
alliances we have applied both multidimensional as during the previous period. From the bottom
scaling and cluster analyses. A non-metric multi- upwards to the centre we find US firms. On the
dimensional scaling (MDS) technique will be ap- right-hand side of dimension one we see a con-
plied to give an overview of the network structure centration of intra-European cooperation in par-
(see Appendix II>. We already introduced an ticular by companies such as GEC, CGE, Daim-
MDS technique for the analysis of inter-firm al- ler-Benz (especially through its acquisition of
liances in previous work, see Hagedoorn and AEG), Bosch, IRI (represented by many of its
Schakenraad [6,7], and also Kruskal and Wish units such as STET, CSELT, DEA, Consultel),
[ill, and Wilkinson [15]. Cluster analysis will be Plessey, Nokia, Ericsson. This notion of rather
applied to detect groupings of collaborating firms strong geographical concentration is supported by
(see Appendix II). A very common way of pre- the results of cluster analysis. In the centre of
senting the results of clustering is by means of a
so-called dendrogram. We, however, will put a ’ For an explanation of company codes in this paper we refer
summary of the results of the cluster analysis in to Appendix III.
’ We have drawn lines between every pair of companies of
table 1 and discuss them together with the MDS
which the proximity exceeds some threshold value. Fat solid
solutions. lines indicate very strong cooperation (7 cooperative agree-
For information technologies in general the ments or more), normal lines stand for strong cooperation
intensity and structure of technology cooperation (5 or 6 agreements), while dashed lines represent moderate
in two periods is pictured in fig. 3a and 3b. cooperation (3 or 4 agreements). The position of companies
which are not connected to other companies through lines is
Cluster analysis applied to the 45 most cooperat-
by no means truly peripheral. Only their agreements are
ing firms shown in fig. 3a results in three distinct spread over a number of companies without having more
clusters. The first cluster consists of American than two agreements with one of the other companies.
16X J. Hagedoom and J. Schakenraad / Leading companies and networks in IT

both dimensions we find the companies that have we notice that most of the largest US and Euro-
most international strategic partnerships with a pean companies, led by Siemens, have moved
number of companies. Here we find a number of towards the centre, which indicates their pivotal
the world leading companies in information tech- role in worldwide partnering.
nologies such as IBM, Unisys, Siemens, AT&T, During the second half of the 1980s a number
Thomson, Bull, Philips, STC, GE, Toshiba, Intel, of US companies have “disappeared”. Some com-
HP and DEC. Compared to the previous period panies merged, such as Sperry and Burroughs,

Table 1
Results of cluster analysis for information technologies in 1980-84 and 1985-89

19X0-84 lY8S-89
Information Three clusters: Basically the same
technologies -Europe. US, Japan pattern as in 1980-84
(figs. 3a, 3b)

Computers Five clusters: Seven clusters:

(figs. 4a. 4b) -TRW, AMP, etc. group including Sperry, -Honeywell, Bull, NEC, Hitachi
Toshiba, Mitsubishi, IBM -Fujitsu and STC
-Cluster around CDC Smaller groups with -Olivetti cluster (with Stratus, etc.)
Japanese firms in the centre: -CDC group (with Elbit, Gray)
-Fujitsu -Philips, IRI, GEC, Nixdorf
-NEC -AT&T, Unisys, Toshiba, Mitsubishi
-Matsushita, Oki, Kanematsu -Cogent, Sequent, Ncube, Float PS

Industrial Several small groups: Relative large groups:

automation -GM. Westinghouse etc. -Rockwell cluster (with DEC, Koreans, Olivetti, Fiat,
(figs. Sa, Sb) -Dainichi Kiko etc. Honeywell)
-Siemens, Fanuc etc. -GM group (with Fanuc, Fujitsu, Tandem)
-Bosch and Shoun -Shoun, Toyota, Nippon Autom.
-Olivetti and Allen-Bradley etc.
-IBM group
-Cincinnati Milacron cluster
-Yaskawa, CGE, Toshiba

Micro- Two main clusters: Three main clusters:

electronics -Intel, Fujitsu, Matra-Harris, NEC, Siemens, -a combination of the Intel/Motorola groups from the
(figs. 6a, 6bI AMD. IBM previous period plus Toshiba
-Motorola. Thomson, Philips, Matsushita, -a cluster with AT&T (and SUN, Samsung, Lucky,
Schlumberger, Hitachi, CTNE. Olivetti)
-The HP, RCA, Kodak. TI, GE, IBM, GE, etc. consortium

Software Some rather separate groups: Four main clusters:

(figs. 7a, 7b) -US consortium with Sperry, NCR, DEC, etc. -a US aerospace group (with Boeing, Northrop, etc.)
-European firms (Philips. Siemens, STC, Bull) -the US groups with Unisys, DEC, NCR, etc. (same group
-Microsoft, IBM, Olivetti as in previous period)
-Hitachi, Telex etc. -a Japanese cluster
-Digital Research, Exxon. Gould, NEC -US/Europe group with several subgroups:
-Volmac, CAP-Gemini, Sema
-Microsoft, IBM, Olivetti
-AT&T, SUN
-Philips, BSO, Nixdorf, BULL, STC

Telecom Some largely national groups: More international groups:

(figs. Xa, 8bI -Japanese firms (plus IRI, Rolm, Mitel. IBM,) -1R1, AT&T, Toshiba, Olivetti
GTE) -Siemens, IBM, Philips, FIAT, Bosch, CGE, Daimler, ITT
-German/Scandinavian cluster plus ITT -Racal, Matra, Ericsson, GEC, Plessey
-AT&T plus Philips and Olivetti -NT, DEC, BT, STC
-UK firms (Racal, Plessey, GEC, British Telecom) -Some Baby Bells
-DEC, XEROX, Intel -Japanese firms and Bellcore, GTE and C&W.
 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT 169

-2 -1 0 1 a
DIIENSICN 1
- 7 ofmore ollioncrs European Firm

- Sar6ollionca
Japanese Firm
-------- 30r4dlioncr

US Firm

Other

Fig. 3a. The structure of strategic partnering in information technologies, 1980-84.

170 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT

DIIENSICN 2

0 i _-

0
l?CA

-2 -1 1

- 7 or more ollionces Europeon Firm

- 5 or 6 alliances
-.-----. 3or4ollionces Japanese Firm

US Firm

Othrr

Fig. 3b. The structure of strategic partnering in information technologies, 1985-89.

 J. Hagedoorn and .I. Schakenraad / Leading companies and networks in IT 171

others divested (parts of) their activities in infor- Centronics Data Computer. Other key positions
mation technologies, such as ITT’s divestment of are held by two Japanese firms, NEC and Fujitsu.
its telecom division to Alcatel (CGE), and United The latter had tied up with STC (in the field of
Technologies’ selling of Mostek to Thomson. mainframes), Amdahl (plug compatible main-
From fig. 3b we learn that a number of very frames), Computer Consoles and Signal-daughter
strong tie-ups are apparent, such as: Siemens Ampex (peripheral equipment and tapes). NEC is
with IBM, Intel, Philips, CGE, DEC; Philips with a dominant partner in arrangements with
Siemens and Thomson; AT&T with Sun Mi- Siemens, BASF (and with the Siemens-BASF joint
crosystems; Fujitsu with STC, Hitachi and NEC, venture Comparex), National Advanced Systems
Mitsubishi and Mitsui, and, in particular before (NAS), Honeywell, STC, and Olivetti (all on the
Honeywell divested its I.T. business, a very strong field of mainframes). NEC also established. tech-
link between that company and Bull of France. nical links with 3M (on information storage), IBM,
So for information technologies at large we see Burroughs and Honeywell (for mainframes).
that firms have formed many linkages with a wide Turning to the second half of the 1980s (fig.
variety of partners, which nevertheless generate 4b) we notice that companies such as Fujitsu,
separate clusters dominated by either Japanese, NEC, Unisys (the Sperry-Burroughs merger), and
European or US companies. It is also evident CDC still take central positions during the sec-
that many leading US and European information ond half of the 1980s. Others, such as Olivetti,
technology firms take a nodal position in these Bull and Siemens, have improved their network
networks for which the linkages have increased positions slightly. Philips collaborates with Nix-
during the past decade. dorf, IRI and GEC on unconventional computer
structures. The world’s largest computer manu-
3. I. Networks of strategic alliances in computers facturer and market leader IBM has moved
somewhat to the periphery. Newcomers at the
In fig. 4a and 4b we present the MDS solu- top of the network are Apple, Cray, the cluster
tions for computer technology in both periods. 5 with Ncube, Cogent, Floating Point Systems and
Interpreting fig. 4a and looking at the results of Sequent (brought together through their mem-
the cluster analysis in table 1, we first discover a bership of a parallel computing consortium), and
dense cluster of American firms at the foot of the Sun Microsystems which rapidly created its own
right-hand side. During the early 1980s all of network.
these companies were member of the “Optical
Circuitry” research corporation, which started 3.2. Networks of strategic alliances in industrial
some research on super fast optical computers. automation
Of all the participants in this research corpora-
tion only IBM and Sperry had substantial links Strategic partnering in industrial automation
with other firms and already held central posi- during the early 1980s (fig. 5a) can hardly be
tions. The strategic position of Control Data Corp. described in terms of a dense network. Instead,
(CDC) is also evident; this firm had close ties few medium-sized clusters and many couples
with Philips (CD memory systems), Honeywell characterize the picture. The first and largest
(disk systems), Sperry, STC and NCR (for com- cluster is built around Fanuc and Siemens and its
puter peripherals), with Elbit from Israel, Hitachi tentacles reach Philips, KUKA, IRI and even
and Hewlett-Packard (several links in the area of Apollo and Shoun. The second cluster which has
minicomputers). It also made strategic invest- no ties with the first one, comprises GM, West-
ments in promising start-ups such as Trilogy and inghouse, Schaudt, etc. Dainichi Kiko, Aritmos of
Sweden, DAF, Hoogovens and Sykes from the
’ Due to the smaller numbers of alliances between firms at third cluster. The picture contains some couples
the level of sub-fields we adapted our legend. For all of the of rather intense collaborating firms such as Bosch
following MDS plots a very fat solid line indicates that we
and Shoun, Allen-Bradley and Olivetti, and the
registered 4 or more strategic alliances between a couple of
firms. A fat line stands for 3 alliances; a normal line
Swiss duo Georg Fischer-ADC. Many isolated
represent 2 alliances and a dashed line indicates one inter- firms have no links with any of the firms pictured,
firm agreement. but they do belong to the group of most cooperat-
172 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT

ing firms; their less cooperating partners, how- Turning to the next period (fig. 5b), the first
ever, are not incorporated in the MDS proce- thing to mention is that several links between
dure. already existing, separate networks have been

DINENSICN 2
I , I

-2 -1 0 1 3
DINENSICZJ i
- 4 ofmow ollionces
- 3 ollioncrr
- 2 ollioncrr
__ _ _. _. _ I ollioncr

Fig. 4a. The structure of strategic partnering in computers, 1980-84.

 J. Hagedoom and J. Schakenraad / Leading companies and networks in IT 173

0
I

0IBM
._
,

i
\ (----&
\
.
. . k_J ------ ; , NMD

F31,
’ _
--

El ls3T.D

m
’
,’

;--
,’ I

/
’
,
I
I

-.
‘_ /

L--l
IRI '

-1
-2 -1 0 1 2
DIMENSICN 1
_ 4 or more ollionces
- 3 alliances
- 2 alliances
__ _ . __ . I alliance
Fig. 4b. The structure of strategic partnering in computers, 1985-89.

forged, although some floating teams still exist. In these lines. The Korean companies Kia and Dae-
particular Rockwell (which has taken over Allen- woo together with Rockwell formed a CNC man-
Bradly), GM and IBM have been active along ufacturing joint venture in South Korea. GM
174 .I. Hagedoorn and J. Schakenraad / Leading companies and networks in IT

strengthened its network position by creating a 3.4. Networks of strategic alliances in software
joint venture with Fanuc, called GMF, which
itself is also active in the field of strategic part- Strategic partnering in software demonstrates
nering. IBM follows a cooperative strategy in some rather separate groups in the period from
industrial automation, as well. It has links with 1980 till 1985 (see fig. 7a). The first group is the
IRI, ABB, Tandem, Cincinnati Milacron, etc. Im- MCC consortium from the USA with 13 of its
portant newcomers are DEC, Tandem, and the members lying on the right-hand side of the pic-
recently established R&D joint venture of ture. Philips, Siemens, STC and Bull are repre-
KUKA, Chrysler, Litton, Du Pont and Cincinnati sentatives of a European cluster. We also have to
Milacron. mention the positions of Microsoft and Digital
Research, two influential software firms.
3.3. Networks of strategic alliances in microelec- During the second half of the 1980s the net-
tronics work density has increased dramatically as one
can learn from fig. 7b. The MCC consortium is
Cluster analysis for microelectronics in the first still operating, it can be found in the first quad-
half of the 1980s (see fig. 6a and table 1) basically rant, but another large joint venture has been
reveals two large clusters. One cluster is headed created; the Software Productivity Consortium
by Intel and includes large integrated chip manu- which develops tools for writing complex com-
facturers such as Fujitsu, Matra-Harris, NEC, puter software. Its members originate from the
Siemens, AMD and IBM, the other one is being automotive, aeronautics and defense industry
dominated by Motorola and has Thomson, (Ford, Lockheed, Harris). Siemens joined indi-
Philips, Matsushita, Schlumberger (Fairchild) and rectly through its acquisition of Bendix. Mit-
Hitachi among its most important members. The subishi, Hitachi, NEC and Fujitsu are brought
emergence of two clusters, one around Motorola together by the TRON project which is aimed at
and another around Intel can be explained as a developing a new computer operating system.
result of both cooperation and fierce competition Boeing, Harris and Siemens occupy key positions
in microelectronics during the first half of the by having access to different major groups. The
1980s when second-sourcing arrangements for remaining part of the picture consists of a US-
RAM chips and micro-processors were the most Europe cluster with several subgroups such as
common way of partnering. Intel and Motorola Volmac, CAP-Gemini, Sema; Microsoft, IBM and
produced highly competitive processors, Intel Olivetti; AT&T and SUN Microsystems; Philips,
supplied its 8084, 8086 and 80286 series, Mo- BSO, Nixdorf, Bull and STC.
torola its 68000 family. These products were sub-
ject to many second-sourcing agreements which 3.5. Networks of strategic alliances in telecommuni-
ultimately led to the clustering described above. cations
During the second half of the 1980s the Intel and
Motorola clusters have converged somewhat, al- In the telecommunications network for 1980
though still no important ties between both firms up to 1985 some largely national groups can be
are registered, see fig. 6b. Toshiba got a strong discovered (see fig. Xa). On the left-hand side, we
foothold to the Intel-Motorola cluster by team- find Japan’s NTT accompanied by some of its
ing up with Siemens and Motorola. A large num- traditional suppliers Oki, Hitachi, Fujitsu and
ber of research links between dominant firms NEC. On the opposite side a German-Scandina-
were forged during this period. New networks vian cluster is located with MBB, ANT, AEG,
were being formed with AT&T, Sun Microsys- Siemens, Bosch, Nokia, Ericsson, and the, at that
tems, Samsung, Lucky Goldstar, CTNE and time, European telecom unit of ITT, Standard
Olivetti in active roles. On the right-hand side of Elektrik Lorenz. The UK quartet Plessey, Racal,
fig. 6b we see many members of the Semiconduc- GEC and British Telecom lies at the foot of the
tor Research Corp., established in 1986 to sup- picture and can be expanded with STC. In con-
port basic semiconductor research in the US; trast to these nationally oriented clusters are the
among the major members of this consortium are clearly international positions of the US firms
Harris, RCA, DEC, and CDC. AT&T, GTE, IBM and Motorola.
 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT 175

Although we found that during the second half corn, and telematics as popular items for collabo-
of the 1980s some shift has taken place from ration, this has not really changed the structure
public digital exchanges to PABX, mobile tele- of strategic networks with national and regional

I I I

\ 7
\
RENAIJL

-2 -1 0 1 2
DIMENSION 1

_ 4 or more alliances
- 3 alliances
- 2 alliances
___ _____ I alliance
Fig. 5a. The structure of strategic partnering in industrial automation, 1980-84.
176 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT

D~IfWICCl 2

-2 -1 @ 1 2
DIPiE!‘lSIoN 1

I 4 or more alliances
- 3 alliances
2 alliances
___ ___._ I alliance

Fig. 5b. The structure of strategic partnering in industrial automation, 1985-89.

groups and a few truly international cooperating Daimler, CGE) and US clusters (the Baby Bells).
firms (see fig. 8b). One can quickly recognize AT&T, IBM, GTE and Motorola still keep truly
Japanese (NEC, Fujitsu>, European (Bosch, international, “triadic” links, but some Japanese
 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT 177

firms and Siemens, Cable & Wireless, and Bell- tions of Daimler (after absorbing AEG and MBB),
core are trying to succeed in this way as well. CGE (after taken over ITT’s European telecom
Finally, we have to mention the strategic posi- businesses), and Ericsson. The so-called Baby

DllGXSICN 2
I ! I I

-2 -1 0

- 4 or more alliances
- 3 alliancrr
- 2 alliances
-- - _ .--- I alliance

Fig. 6a. The structure of strategic partnering in microelectronics, 1980-84.

178 J. Hagedoorn and J. Schakenruad / Leuding companies and networks in IT

DIMRJSICN 2

-2 -1 0 1 2
DIMENSIC+J 1

m 4 or more alliances
- 3 alliances
2 al lionces
_- - . . .. I ollionce
Fig. 6b. The structure of strategic partnering in microelectronics, 1985-89.

Bells (Nynex, Bell South, Pacific Telesis etc.> and internationally oriented, which is reflected in their
their R&D joint venture Bell Communications growing number of international alliances.
Research (Bellcore) have gradually become more
 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT 179

DI!SNSION 2

-2 -1 0 2
DIHENSICXJ
1
_ 4 of morr alliances
- 3 oilimm
- 2 alliances
__ _ __*__ I alliance

Fig. 7a. The structure of strategic partnering in software, 1980-84.

180 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT

-- _ _--

-2 -1 0 1 :!
DIUENSION ?

_ 4 or more alliances
- 3 alliances
2 al liancts
_ _ _ _ __. _ I alliance

Fig. 7b. The structure of strategic partnering in software, 1980-89.

 J. Hagedoom and J. Schakenraad / Leading companies and networks in IT 1X1

DlNENSICN 2

I I I 1
-2 -1 0 1 2
DIMEZISICN 1

,_ 4 or more ollionces
_ 3 ollionces
- 2 0 I lionces
___ .__-- I ollionce

Fig. 8a. The structure of strategic partnering in telecommunications, 1980-84.

182
 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT 183

4. A semi-aggregated analysis of networks in in- explain. In other words, we expect a relatively

formation technologies stable group of intensively cooperating companies
which, however, does not exclude entry or changes
Expanding the analysis from the previous sec- in the rank order.
tions we can formulate the hypothesis that an This hypotheses is supported by the findings of
intensification of strategic technology partnering rank correlations presented in table 2. If we look
during the past decade should show up in an at the presence of companies amongst the group
increased network density for both information of leading cooperating companies during both
technology at large and its main sub-fields. To periods of the 1980s we find that for information
uncover some aspects of structural centrality of a technologies in general 33 out of 45 firms, that is
network we computed a network density index. 73 percent remain on the list of most cooperative
This density index is defined as the ratio of the companies. For sub-fields we recorded the lowest
actual number of links between companies (k) to percentage of “stayers” in industrial automation
the possible number of links 1/2n(n - 1) where (42%) and the highest for telecommunications
n denotes the number of points in the network. (64%). The correlation between the ranks of the
The network density in information technologies “stayers” in both periods, however, failed to reach
(see table 2) changed considerably from 23 per- any level of significance in general informa-
cent in the first half of the 1980s to 40 percent in tion technologies. Although the proportion of
the second half. This means that in the years “stayers” was very high (nearly three-quarter)
since 1985 40 percent of all theoretically possible there were considerable shifts in their rankings.
links between the 45 most cooperating firms are In sub-fields of information technologies, where
also empirically observed. In other words, one the number of potentially relevant firms can be
can speak of a very intensive, dense network in expected to be smaller, we found significant rank
information technologies. Of course, this high correlations, with the exception of software. This
density is partly explained by the rather broad means that in computers, industrial automation,
scope of the combined fields of information tech- microelectronics, and telecommunications some
nologies. Therefore, it is interesting to focus on firms indeed do leave and others enter the group
networks in the sub-fields of information techolo- of most collaborative companies, but the rankings
gies. It appears that these sub-fields all show of the remaining companies did not change signif-
increased density except for computer technology icantly.
where network density declined to 8 percent. For In addition to this we still have to analyze
microelectronics and software we see the highest strategic technology partnering in terms of a pos-
density growth, resulting in a 23 percent and 28 sible domination by market leaders. In table 3
percent density during the second half of the one can find the lists of companies having most
1980s. strategic links. If we keep in mind the most
The next step in our analysis is to examine the cooperating firms in information technologies in
stability in the group of most cooperating firms. both periods and check how regularly they ap-
In case strategic technology partnering would be pear on lists for sub-fields, it becomes clear that
part of some sort of static oligopolistic structure seven firms are among the top of cooperating
the group of most cooperating companies would firms for at least three different fields of technol-
resemble a relatively closed system with little or ogy. These “leading” companies are Siemens (in-
no entry and a more or less stable rank order if dustrial automation, chips, software, telecom),
one would compare these cooperating companies IBM (industrial automation, chips, telecom),
at different time intervals. Based on our concep- Philips (computers, chips, software, telecom), Fu-
tualization of networks of strategic technology jitsu and NEC (computers, chips, telecom),
alliances as moderately flexible market institu- Olivetti (computers, software, telecom), and fi-
tions, we can expect inter-firm networks that are nally, AT&T (chips, software, telecom).
partly open to new entrants but still with some It is obvious that all these companies are very
moderate domination by companies that make well known, large and also market leaders in very
the core of these networks, otherwise the in- general terms, although not always for the fields
crease of network density would be difficult to in which they stand out as major strategic tech-
184 J. Hagedoom and J. Schakenraad / Leading companies and networks in IT

Table 2
A comparison of some network aspects for 1980-84 and 1985-89 in information technologies

Network density Rank correlation

1980-84 and 1985-89
1980-84 1985-89 N (% of 45) i-
Information technologies 23% 40% 33 73% 0.17
Computers 10% 8% 23 51% 0.52 *
Industrial automation 4% 8% 19 42% 0.56 *
Microelectronics 11% 23% 25 56% 0.73 *
Software 12% ‘28% 22 49% 0.27
Telecommunications 9% 17% 29 64% 0.48 *

* significant at 0.05 level.

Table 3
A comparison of the top ten firms with the most strategic links in information technologies in 1980-84 and 1985-89 (numbers in
brackets)

Information technologies Computers

1980-84 19X5-89 1980-84 1985-89
1. Motorola (53) Siemens (134) I. Sperry (27) Olivetti (22)
2. Siemens (51) Philips (127) 2. IBM (19) CDC (19)
3. IBM (48) Olivetti (110) 3. CDC (18) Unisys (17)
4. Sperry (47) IBM (108) 4. Olivetti (17) Bull (14)
5. Fujitsu (46) HP (96) 5. Fujitsu (15) Philips (13)
6. Olivetti (42) DEC (95) 6. NEC (12) Fujitsu (12)
7. CDC (411 AT&T (90) 7. Burroughs (11) NEC (12)
8. Intel (41) Thomson (83) 8. Toshiba (101 SUN-Micr. (Ill
9. Philips (40) Fujitsu (78) 9. Du Pont (IO) DEC (10)
10. NEC (39) Motorola (68) 10. 3M (10) Hitachi (10)
Industrial automation Microelectronics

1980-84 1985-89 1980-84 1985-89

I. GM (8) GM (20) 1. INTEL (34) Thomson (51)
2. Mitsubishi (8) IBM (20) 2. Motorola (23) INTEL (46)
3. Dainichi (6) ABB (13) 3. Philips (20) AMD (42)
4. Siemens (6) Dainichi (11) 4. Thomson (19) Motorola (40)
5. Westingh. (6) Tandem (Ill 5. Toshiba (18) Philips (39)
6. ACME-C. (5) FANUC (10) 6. Siemens (17) TI (37)
7. Asea (5) Rockwell (10) 7. Fujitsu (16) Siemens (36)
8. Daimler (5) Siemens (IO) 8. NEC (16) IBM (30)
9. FANUC (5) Westingh. (IO) 9. EXXON (15) Toshiba (27)
10. IBM (4) C.Milacron (9) 10. AMD (14) AT&T (26)
Software Telecommunications

1980-84 1985-89 1980-84 1985-89

1. CDC (18) HP (47) I. Siemens (17) Siemens (45)

2. NCR (16) DEC (45) 2. AT&T (15) CGE (32)
3. Honeywell (14) Siemens 3. ITT (14) Sumitomo
4. Motorola (14) Bull (34) 4. Fujitsu (10) Mitsubishi cm
5. HP (13) AT&T (33) 5. IBM (IO) Fujitsu (27)
6. Sperry (13) Philips (32) 6. Plessey (10) AT&T (26)
7. Allied (12) SUN-MI< :r. (31) 7. Hitachi (9) Philips (26)
8. AMD (121 NCR (29) 8. ANT (8) IBM (24)
9. DEC (12) Volmac (29) 9. NEC (8) NEC (23)
10. Harris (12) Olivetti (28) 10. Olivetti (8) Ericsson (20)

Source: MERIT-CAT1 databank.

 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT 185

nology collaborators. For a more precise determi- for the second half of the 1980s. In general the
nation of the relation between strategic technol- conclusion has to be that there is no clear corre-
ogy partnering and the market position of compa- lation between both rankings, it is obvious that
nies additional analysis is compulsory. Following the leading companies are well represented
the brief discussion at the beginning of section 2, among the most collaborating companies, without
we can expect that neither the leading firms in quantitatively dominating the general network of
terms of market position will completely domi- strategic technology alliances.
nate the list of leading cooperators, nor do we
anticipate that “second tier” competitors play a
decisive role in strategic technology partnering. 5. Some conclusions
At the present level of analysis we can only
attempt to find some very indirect indicators to Our analysis of strategic technology alliances
test such a hypothesis, an attempt which is demonstrates that this phenomenon has become
severely hampered by the lack of systematic sta- an important issue in company behaviour during
tistical data. It is obvious from table 3 that all the the 1980s although its growth appears to have
main partnering companies belong to the group levelled off again during more recent years. The
of leading companies in each sub-field. In order growth in the number of strategic alliances in
to take the analysis one step further we have information technologies parallels an increasing
constructed three lists of indicative top-ten sales intensity and complexity of inter-firm technology
for computers, microelectronics and telecommu- cooperation in which particular companies ap-
nications. 6 For these three fields of information pear to take a more active role than others. It has
technologies one can see that about half of the become clear that network-density of inter-firm
leading companies in strategic partnering are also collaboration has increased in nearly all fields of
found in the lists of leading companies according information technology and reached a relatively
to market share. In computers six out of ten of high level. Many of the leading cooperating com-
the most cooperating companies in the second panies in most -sub-fields prevailed throughout
half of the 1980s also belong to the top ten of the decade. This indicates a certain stability in
suppliers, although it is clear that there is no the international pattern of strategic alliances,
statistical relation between both rankings. In although the exact order of the leading coopera-
computers IBM has disappeared from the list of tors might have changed considerably for some
most cooperating companies during the second fields, and companies have also entered and left
half of the 1980s and therefore this market leader this group of leading cooperating firms. In other
plays only a moderate role in partnering in its words, the network of strategic technology part-
core-business, whereas its position in fields such nering that we investigated support the notion
as telecommunications, industrials automation that the pattern that emerges is one of an only
and microelectronics is quite remarkable. In mi- relatively stable character.
croelectronics 50 percent of the leading suppliers Our study also suggests that most of the lead-
are also part of the list of most cooperating ing, diversified companies play a prominent role
companies but we have to acknowledge that the in strategic partnering in information technolo-
leading firms, according to market share, are not gies. This does not suggest that market leaders
represented or play only a moderate role in the are concentrating their alliances in their core
list of major partnering companies. In telecom- activities or that they dominate strategic technol-
munications there is a coverage of six out of ten ogy partnering across the board. A major conclu-
sion from our research so far is that many market
6 The ten leading manufacturers of computers, microelectron- leaders do play a substantial role in strategic
ics and telecommunications, ranked in order of sales during technology partnering, but not for all leading
the second half of the 1980s. Computers: IBM, DEC, Unisys, firms is their partnering necessarily close to their
Fujitsu, NCR, NEC, CDC, HP, Siemens, Hitachi. Micro- core activity. However, we also found little evi-
electronics: NEC, Toshiba, Hitachi, Motorola, TI, Intel,
dence that supports the notion that “second-tier
Fujitsu, Mitsubishi, Matsushita, Philips. Telecommunica-
tions: ATT, CGE, Siemens, LME, NT, NEC, Fujitsu, Telit, competitors” control the scene of strategic al-
GTE, Plessey. liances. In general one can state that, based on
the analysis of the structure of inter-firm strategic terest for “outdated” topics such as solar and
technology partnering in distinct fields of infor- wind energy seems to fade away.
mation technology, it appears that the pattern of - The fact that we read mainly articles written in
strategic alliances only partly mirrors the existing English probably causes some bias and distor-
market structural hierarchy. tion, too.
- Another problem is that information about the
dissolution of agreements is not systematically
Appendix I - The cooperative agreements and
published. This is in particular true for licens-
technology indicators (CATI) information system
ing and customer-supplier relationships. On
The CATI databank is a relational database the other hand, research contracts and joint
which contains separate data files that can be product developments have often disclosed
linked to each other and provide (des)aggregate time schedules. Equity joint venture and disso-
and combined information from several files. So lutions of investments are published rather sys-
far information on nearly 10,000 cooperative tematically in specialized journals.
agreements involving some 3,500 different parent - One final problem is that the number of cus-
companies has been collected. In this appendix tomer-supplier relations and licensing a-
we will elaborate on sources of information and greements is subject to a fierce underestima-
limitations of databank. tion due to the fact that these more casual
Systematic collection of inter-firm alliances agreements are little reported publicly, even in
started in 1987. If available, many sources from the professional literature.
earlier years were consulted enabling us to take a
retrospective view. In order to collect inter-firm All together, these handicaps in the first place
alliances we consulted various sources, of which lead to a skewed distribution in the modes of
the most important are newspaper and journal cooperation, followed by some geographic - i.e.
articles, books dealing with the subject, and in Anglo-Saxon - bias. Next, we have to reckon with
particular specialized journals which report on a possible underestimation of certain technologi-
business events. Company annual reports, the cal fields not belonging and finally, there is some
Financial Times Industrial Companies Yearbooks overrepresentation of large firms.
and Dun & Bradstreet’s Who Owns Whom pro- Despite these shortcomings, which are largely
vide information about dissolved equity ventures unsolvable even in a situation of extensive and
and investments, as well as ventures that we did large-scale data collection, we think we have been
not register when surveying alliances. able to produce a clear picture of the joint efforts
This method of information gathering which of many companies. This enables us to perform
we might call “literature-based alliance counting” empirical research which goes beyond case stud-
has its drawbacks and limitations: ies or general statements. Some of the weakness
of the database can easily be evaded by focusing
- In general we have only come to know those on the more reliable parts, such as strategic al-
arrangements that are made public by the liances (see Appendix III).
companies themselves. The databank contains information on each
_ Newspaper and journals reports are likely to agreement and some information on companies
be incomplete, especially when they go back in participating in these agreements. The first entity
history and/or regard firms from countries is the inter-firm cooperative agreement. We de-
outside the scope of the journal. Furthermore, fine cooperative agreements as common interests
in earlier years some journals simply did not between independent (industrial) partners which
exist whereas existing periodicals might grasp are not connected through (majority) ownership.
the collaboration subject less thoroughly. In the CAT1 database only those inter-firm
_ A low profile of small firms without well- agreements are being collected, that contain some
established names is likely to have their collab- arrangements for transferring technology or joint
orative links excluded. research. Joint research pacts, second-sourcing
_ Some journals emphasize fashionable items, and licensing agreements are clear-cut examples.
such as superconductivity or HDTV, while in- We also collect information on joint ventures in
 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT 187

which new technology is received from at least Fortune’s International500, and the third group
one of the partners, or joint ventures having some was retrieved from the US Department of Com-
R&D programme. Mere production or market- merce’s patent tapes.
ing joint ventures are excluded. In other words,
our analysis is primarily related to technology
cooperation. We are discussing those forms of Appendix II - A short note on MDS and cluster
cooperation and agreements for which a com- analysis
bined innovative activity or an exchange of tech-
nology is at least part of the agreement. Conse- The core of the MDS technique can be ex-
quently, partnerships are omitted that regulate plained as follows. MDS is a data reduction pro-
no more than the sharing of production facilities, cedure comparable to principal component analy-
the setting of standards, collusive behaviour in sis and other factor analytical methods. One of
price-setting and raising entry barriers - although the main advantages of MDS is that usually, but
all of these may be side effects of inter-firm not necessarily, MDS can fit an appropriate model
cooperation as we define it. in fewer dimensions than can factor analytical
We regard as a relevant input of information methods. This increases the possibility of easy
for each alliance: the number of companies in- interpretable two-dimensional pictures. MDS of-
volved; names of companies (or important sub- fers scaling of similarity data into points lying in
sidiaries); year of establishment, time-horizon, an X-dimensional space. The purpose of this
duration and year of dissolution; capital invest- method is to provide coordinates for these points
ments and involvement of banks and research in such a way that distances between pairs of
institutes or universities; field(s) of technology; points fit as closely as possible to the observed
modes of cooperation; and some comment or similarities. In order to facilitate interpretation
available information about progress. Depending the solution is given in two dimensions, provided
on the very form of cooperation we collect infor- that the fit of the model is acceptable. A stress
mation on the operational context; the name of value indicates the goodness-of-fit of the configu-
the agreement or project; equity sharing; the di- ration. For all MDS solutions presented in this
rection of capital or technology flows; the degree paper the stress values, as given in table AII.1,
of participation in case of minority holdings; some range from acceptable to very good.
information about motives underlying the al- The total number of strategic partnerships be-
liance; the character of cooperation, such as basic tween two companies is taken as a measure of
research, applied research, or product develop- similarity between those two companies. A large
ment possibly associated with production and/or similarity, as found in a similarity matrix, indi-
marketing arrangements. In some cases we also cates intensive cooperation. ’
indicate who has benefitted most. Unfortunately our MDS software can only an-
The second major entity is the individual sub- alyze similarity matrices to a maximum of 45
sidiary or parent company involved in one (reg-
istered) alliance at least. In the first place we
assess the company’s cooperative strategy by Table AH.1
Stress values of MDS solutions
adding its alliances and computing its network
centrality. Second, we ascertain its nationality, its 1980-84 1985-89
possible (majority) owner in case this is an indus- Information
trial firm, too. Changes in (majority> ownership in technologies 0.12 0.13
the 1980s were also registered. Next, we deter- computers 0.05 0.06
industrial
mine the main branch in which it is operating and
automation 0.01 0.03
classify its number of employees. In addition, for microelectr. 0.06 0.09
three separate subsets of firms time-series for software 0.02 0.08
employment, turnover, net income, R&D expen- telecom 0.05 0.07
ditures and numbers of assigned US patents have
been stored. The first subset is based on the
Business Week R&D scoreboard, the second on ’ These similarity matrices are not reproduced in this paper.
rows, which means that for each field of technol- Appendix III - List of companies
ogy the analysis is restricted to a maximum of 45
Label Company ts fXt name cwltry
companies with the largest numbers of strategic
3M Minnesota Mining & Mfg. Co. (3MI USA
partnerships. MDS solutions are presented for A-B Allen-Bradley Co. USA
two periods, the years from 1980 to 1984, and A-C Allis-Chalmers Corp. USA
from 1985 to 1989. For the first period (1980-84) ARB ABB Asea Brown Boveri A.G. SW1
we have taken those alliances established in that ACME-C Acme Cleveland USA
ADC Ateliers des Charmilles SW1
particular period plus those alliances made be-
ADR Applied Data Research (ADRl us.4
fore 1980 that were not already discontinued in AEG AEG FRG
19811.For the second period, the years since 1985, Al-SIG Allied-Signal Inc. USA
we follow the same procedure; we have taken all ALLIED Allied Corp. USA
alliances forged in that period and added those ALPS Alps Electric Co. JPN
AMD Advanced Micro Devices Inc. USA
alliances from the earlier period which were not
AMDAHL Amdahl Corp. USA
already discontinued in 1985. During each period AMERIT Ameritech USA
alliances of subsidiaries and divisions are as- AMINF American Information USA
signed to the parent company. Also within each AMP AMP Inc. USA
period, the still existing alliances of companies AMSTRD Amstrad Plc. UK
AMTELC American Telecom USA
taken over by others or partnerships made by
ANT ANT Nachrichtentechnik FRG
merging companies will be assigned to the acquir- APOLLO Apollo Computer USA
ing company or the new corporation. APPLE Apple Computer Inc. USA
The same similarity data were used for a clus- ARITM Aritmos SWE
ter analysis. The objective of cluster analysis in ARTINT Artificial Intelligence USA
ASEA Asea A.B. SWE
this study is simply to group firms on the basis of
ASM ASM lnt. NET
numbers of alliances between them. The result is AT&T Am. Telephone Pr Telegraph Co.
a series of clusters comprised of intensely cooper- (AT&T) USA
ating companies. The particular technique em- AUTO-T Auto-Trol Technologies USA
ployed here is known as hierarchical cluster anal- AIJTODP Automatic Data Processing USA
B&W Burkhard & Weber FRG
ysis [4,15]. Clusters are formed by grouping firms
B-ATL Bell Atlantic USA
into a small but highly cohesive clusters. These B-CORE Bellcore USA
groups are subject to a subsequent clustering B-SOUT Bell South Corp. USA
procedure until each firm is a member of a single BA British Aerospace UK
cluster. The basic characteristic of hierarchical BASF Basf A.G. FRG
BBN Bolt Beranek & Newman USA
clustering is that once a firm is a member of a
BMW Bayerische Motor Werke A.G. FRG
cluster, it remains part of that cluster. As the BOEING Boeing Aerospace Co. USA
term suggests, each cluster is embedded within a BOSCH Bosch FRG
larger cluster. In one extreme case the “network” BSO BSO NET
can be seen as comprised of 45 clusters which all BT British Telecom UK
BTH BT Industries SWE
contain only one firm, while in another extreme
BULL Bull Groupe S.A. FRA
case the network can be seen as one cluster BURROU Burroughs USA
having all 45 firms in it. It is obvious that we are C&T Chips & Technologies USA
interested in some intermediate level of cluster- C&W Cable & Wireless Plc. UK
ing. Before applying cluster analysis a number of C.ITOH CItoh JPN
CANON Canon Inc. JPN
additional decisions were made. First, to what
CAPGEM Cap Gemini Sogeti FRA
extent firms are alike is measured by Euclidean CDC Control Data Corp. iCDCt USA
distance. Second, as a criterion for combining CENTRN Centronics Data Computer USA
clusters we chose the “average linkage” method. CGE Cie G&t&ale d’ElectridtC (CGEJ FRA
This method combines clusters in such a way that CHRYSL Chrysler Motor Corp. USA
CIPHER Cipher Data Products Inc. USA
the average distance between all firms in the USA
CM Cincinnati Milacron Inc.
resulting cluster is as small as possible. In other CMG Computer Management Group (CMGI USA
words: the average number of alliances between COGENT Cogent Research USA
all firms should be as high as possible. COLUM Columbia Data Products USA
 J. Hagedoorn and J. Schukenraud / Leading companies and networks in IT 189

COMPAS Computer Associates Int. Inc. USA KANEMA Kanematsu Semiconductor JPN
COMPC Computer Consoles Inc. (CCI) USA KIA Kia Machine Tool SK
COMPTG Computer Task Group USA KIHEUN Kiheung Machinery Works SK
COMPUS Computer Service Holland NET KODAK Eastman Kodak Co. USA
CONTEL Continental Telecom USA KOR-EL Korea Electronics SK
CONVEX Convex Computer USA KUKA Kuka FRG
CONVIC Convick SWE LEP LEP FRA
CONVRG Convergent Technologies Inc. USA LITTON Litton Industries Inc. USA
CORONA Corona Data Systems USA LOCKHD Lockheed USA
CR&TR Cross & Trecker USA LOTUS Lotus Development Corp. USA
CRAY Cray Research USA LSILOG LSI Logic USA
CTNE Compaiiia Telefonica Naqional de E. SPA LUCKY Lucky Group Ltd. SK
cv Computer Vision Corp. USA MARTIN Martin-Marietta Corp. USA
CYPRES Cypress Semiconductor USA MATRA MATRA S.A. FRA
DAEWOO Daewoo SK MATRAH Matra-Harris Semiconducteurs FRA
DAF DAF Trucks N.V. NET MATSUS Matsushita Elect. Industrial Co.Ltd. JPN
DAIICH Dai-ichi JPN MBB Messerschmitt-Bolkow-Blohm (MBB) FRG
DAIMLR Daimler-Benz A.G. FRG MCD-D McDonnell Douglas Corp. USA
DAIN-K Dainichi Kiko JPN MEMTEL Memorex Telex USA
DATA-L Datalogen A.B. (Data Logic) SWE MENTOR Mentor Graphics USA
DEC Digital Equipment Corp. (DEC) USA MI Machine Intelligence USA
DIGR Digital Research Inc. USA MICR-V Micro-V USA
DONGY Dong Yang Electric Discharge M.Co. SK MICSFT Microsoft Corp. USA
DOOSAN Doosan Mfg. Co. Ltd SK MILLIC Millicom USA
DUPONT Du Pont de Nemours USA MIPS Mips Computer Systems USA
ELBIT Elbit Computers ISR MITEL Mite1 CAN
ENCORE Encore Computer USA MITSUB Mitsubishi Corp. JPN
ERICSS Ericsson A.B. SWE MITSUI Mitsui & Co. JPN
EXXON Exxon Corp. USA MOSTEK Mostek USA
FANUC Fanuc Ltd. JPN MOTOR0 Motorola Inc. USA
FERRAN Ferranti UK MULTIH Multihouse NET
FIAT Fiat SpA. ITA NAS National Advanced Systems (NAS) USA
FLOAT Floating Point Systems USA NATSEM National Semiconductor Corp. USA
FORD Ford Motor Co. USA NCR National Cash Register Corp. (NCR) USA
FUJI-E Fuji Electric JPN NCUBE Ncube USA
FUJITS Fujitsu Ltd. JPN NEC Nippon Electric Corp.(NEC) JPN
G-FIS Georg Fischer SW1 NIP-AU Nippon Automation JPN
GE General Electric Co.(GE) USA NIXDRF Nixdorf FRG
GEC GEC UK NOKIA Nokia Oy. FIN
GENDYN General Dynamics Corp. USA NORTHR Northrop USA
GENINS General Instrument USA NT Northern Telecom Can
GM General Motors USA NTT Nippon Telegraph & Telephone (NTT) JPN
GMF GMF Robotics USA NYNEX Nynex Enterprises USA
GOULD Gould Inc. USA OK1 Oki Electric Industry Co. JPN
GRUMMN Grumman USA OLIVET Olivetti ITA
GTE General Telephone & Electric (GTE) USA PANAT Panatec R&D Corp. USA
H-P Hewlett-Packard Co. USA PERF Perfect Data Corp. USA
HAMAI Hamai JPN PERKIN Perkin-Elmer USA
HARRIS Harris USA PHILIPS Philips, Gloeilampenfabriek N.V. NET
HITACH Hitachi Ltd. JPN PLESSE Plessey Co. UK
HONEYW Honeywell Corp. USA QUOTRN Quotron Systems USA
HOOGOV Hoogovens N.V. NET RACAL Racal UK
IBM Int. Business Machines Corp.(IBM) USA RCA RCA (Radio Co. of America) USA
INMOS Inmos UK RENAUL Renault FRA
INTEL Intel Corp. USA RICOH Ricoh JPN
INTERQ Intertechnique FRA ROCKWL Rockwell Int. Corp. USA
IPL IPL Systems USA ROLM Rolm USA
IRI IRI ITA S-GOBN Saint-Gobain S.A. FRA
ITT Int. Tel.& Telegraph Corp.(ITT) USA SAMSNG Samsung Co.Ltd. SK
190 J. Hagedoorn and J. Schakenraad / Leading companies and networks in IT

SANYO Sanyo Electric Co.Ltd. JPN References

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