The trick is to figure out when and where in the value chain companies can collaborate. Take Apple’s strategy for the iPod. The company would have bled if it singularly took digital music to shoes, microwaves and cars. “Apple spends far less on R&D than competitors like Microsoft, Sony and Nokia,” says Michael Schrage, author of Shared Minds: The New Technologies for Collaboration, who researches innovation at the MIT Sloan School in the US. In 2006, Apple’s R&D expenses stood at 4% of its revenues, compared to 15.8% for Nokia. Seven years after its birth, the iPod continues to be successful by virtue of it being an application that morphs with disparate products. It is now compatible with Nike shoes, Siemens hearing aids and the BMW 3 Series Sedan.
Even as the iPod morphs from utility to utility, its purpose is the same: to provide digital sound. But for it to be relevant and in sync with the products of each company, there is a need for Apple and the other entity concerned to collaborate to increase their respective sales. Says Schrage: “More organizations are doing collaborative research today because they have no choice. They don’t have the internal expertise, let alone the resources, to explore and exploit intersections between disciplines.”
Most current successes in collaborative research tend to stem from the Internet. Think Google Maps, which can be installed in a car, desktop and mobile phone. At the back end, Google has tied up with a satellite-imagery company for high-resolution imagery. The trick is in what researchers call ‘interoperability’. It is in first figuring out how a product can be relevant to a different domain and in line with its common standards.
The value of collaboration lies in an organization’s ability to use digital media to test and refine a new product or service concept virtually, and then scale that to a regional, national or even global level. It is an approach that Google again demonstrated with the beta-version launch of its Web browser Chrome last year, wherein it asked users worldwide to make iterations to what was made available.
User-generated research, as a cost-effective tool, has also been leveraged to some extent by the collaboration-averse pharmaceutical sector. Clinical trials and testing have inadvertently bordered on user-led development. Further, pharma companies have been known to collaborate with smaller players on molecule research. It saves them the cost and risk of developing and marketing new molecules, while the royalty stays with the company that developed them. There’s power in partnerships.

Source: Outlook Business