Pooled R&D is a trend, which has been broadly observed by OI authors. Pooling resources like knowledge, infrastructure and human capital into a mutual R&D project with other entities can be the product of various strategic plans. Shan and Visudtibhan (1990)[1] argue, for example, that the decision to engage in cooperative relationships is a function of organizational characteristics, competitive position and choice of strategy. Lorange et al (1992)[2] report that firms form cooperative relationships when they are followers than leaders, in other words – when they strive to catch-up with a dominator on the market. Carney (1987)[3], on the other hand, proposes that in turbulent environments, characterized with disruptive new technologies, which can threaten the resource base of firms, firms are more willing to cooperate in order to minimize risk, share costs, realize economies of scale, converge technologies, etc.

Two visible open-source examples for pooled R&D are the Linux operating system and the Mozilla software community, well-known for its Firefox web browser.

The Mozilla open-source project first saw daylight in 1998 when Netscape decided to donate the source code of one of its crown-jewel products - the most dominant of internet browsers at the time in terms of usage share (90%), called Netscape, thus creating the Mozilla Organization to coordinate future development of its product. After creating Mozilla Netscape terminated all internal development of the donated product in July 2003, abdicating from future support and delegating this task to the open-source community. Various Unix system vendors at the time, such as IBM HP and Sun lacked a supported browser, as Internet Explorer was being bundled with Microsoft Windows and was starting to dominate the market. In this way, each of them decided to allocate software engineers to contribute with work on the Mozilla project in order to further develop its progress and to assure new releases are compatible with their respective systems.

The situation with Linux collaborative R&D centres on OSDL – a non-profit organization, founded in 2000 with the goal “to be the recognized centre-of-gravity for the Linux industry”. OSDL members included computer and telecommunication hardware and software vendors, producers of microprocessors, Linux distributors, support organizations and a large society of developers of complimentary products. Later on in 2007 OSDL merged into the Linux Foundation, the main agenda of which was to promote, protect and advance Linux and its collaborative development.

Maximizing Returns of Internal Innovation

For most firms the main incentive to participate in such pooled R&D is to maximize the returns of their internally developed products. Participators in Mozilla, for example, contributed to the development of the shared browser technology in order to customize the open-source project so higher integration with their own products is achieved. This led to the easier incorporation of the jointly-developed browser with their own integrated systems.

Most of OSDL members, on the other hand, were striving to establish a common platform (the Linux operating systems) for their own individual products. From this angle the OSDL resembled a conventional R&D consortium in which participants contribute in building a common joint-product without fears that this will undermine their competitive market position or disrupt their main line of business.

Role of External Innovation

An analysis on the two examples of Mozilla and Linux shows that in cases of pooled R&D external innovation is used subsidiary to core internal company assets. Stakeholders in pooled R&D act on a quid pro quo basis –investments in the external innovation development process are only justified if the end-product of the joint effort might be of potential value in relation to the main bundle of assets, the company already owns (or does not own – in the case of Netscape distributing the unsustainable for the company financial and creativity weight of supporting its web browser). As a conclusion, the main characteristic of external innovation in pooled R&D is that the back-ground and foreground knowledge contributions are available to all.

Motivating Participation

The motivation of participants remains an unsolved challenge in open-source pooled R&D. Many consortia motivate members to join and participate on an ongoing basis by limiting the direct access to the consortium’s work exclusively to member-participants. Open source licenses, however, do not permit such exclusivity, allowing non-members to benefit on the same basis as members.

Motivation could be achieved when the pooled R&D becomes a reputable ongoing institution with established legitimacy and continuity, which will attract a larger number of young and skilled researchers, willing to contribute. Another key issue is the hybrid character of the developer community, comprising both corporate developers on firm payroll and voluntary contributors, attracted by non-monetary goals. Disproportions in this homogenous community may sometimes cause shift in the open-source project agenda, closer to the interests of the corporate contributors. This may lead to an idea from the substantial portion of voluntary developers that the project they participate in is no longer driven by the goals, which attracted them to the community in the first place. Thus, they will be forced to abandon it, leaving the corporations to either support the project themselves or let it collapse in time.

Related Risks

As noted above, the lack of control over knowledge spillovers and the hybrid characteristics of the community remain one of the main challenges related to pooled R&D.

Once key technology is released in the pool of the open-source community neither it, nor its derivatives and advancements, can be later appropriated or controlled via ownership.

On the other hand, since researchers in the alliance often originate from different (or no) organizational structures, they lack team work habits with each other and often share disparate ideals. Thus, coordinating mutual efforts and aligning shared interests remains a challenging task for the members of the pooled R&D. If this conflict is not addressed correctly, this could pose a risk of a “freeze” or even disembodiment of the whole pooled R&D.

[1] Shan, W. and Visudtibhan, K. (1990). Cooperative strategic in commercializing an emerging technology, European Journal of Operational Research, 47, p. 172-181.

[2] Lorange, P., & Roos, J. (1992). Strategic alliances: Formation, implementation, and evolution. Cambridge, Mass., USA: Blackwell Business.

[3] Carney, M. G. (1987). The strategy and structure of collective action. Organization Studies