Managing inter-firm interdependencies in R&D investment: Insights from the semiconductor industry

Key conclusions• Investment in R&D often takes the form of long-term interdependent patterns ofspending by networks of specialized firms.• Such specialization allows each firm to focus on its core skills, but risks significantcapital misallocation unless interdependencies between investment programs arecoordinated effectively.• Centered on the semiconductor industry, our research shows how firms may shareinformation to coordinate R&D investments without divulging their individual tradesecrets or acting in violation of anti-trust legislation.• If accountants are to estimate accurately the value of R&D investments in“ecosystems” of innovation, an understanding of such information sharingarrangements is crucial.