Partner Alliances and Networks

In Chapter 8, a serious discussion is presented in terms of entrepreneurships partnering with others. This is the critical second phase in bottom-up globalization, the first phase being the formation of the entrepreneurship. It is this second phase that really displays increasing power and effectiveness of bottom-up globalization. In order to create a powerful second phase the partnering activity must be some version of strategic alliance. Unlike regular partnerships, strategic alliances are major vehicles primarily in the diffusion of technological knowledge that can more readily contribute to the partnerships’ success (Lee 2007). Resource-based theory suggests that the decision to choose strategic alliance partners is primarily based on mutual benefit, i.e., mutual potential to provide additional R & D value, manufacturing, and marketing (Lee 2007). Although market access is generally considered to be a major motivation for licensors to form strategic alliances, in some more high-tech industries such as biotech, risk reduction through commercialization may be a more important reason for developing a strategic alliance. Research has shown that entrepreneurships that are more extensively technology-based and product-based are more likely to form strategic alliances. These alliances are being formed at a higher rate than those that are based on less extensive knowledge. Thus knowledge as a foundation is more of a stimulant in the creation of alliances. This process is particularly observed among new firms in the computer and telecommunication industries (Kelley, Rice and Peters 2001).