Interfirm Network Structure and Innovation Creation: a Simulation Study

Interfirm network can provide enhanced access to competitive resources and capabilities in an innovation ecosystem. This study uses a simulation approach to explore the impact of interfirm network structures on the creation of innovations. Based on the network structure theory, this study tests different network structures and knowledge exchange rules and their impact on the process of innovation creation. The simulation results show that a random network structure is more effective in promoting innovation creation and a mixture knowledge trade rule (a combination of barter rule and gift rule) is better for the focus firms for innovation creation in innovation ecosystems. Implications for building innovation efficient ecosystems are then discussed for better innovation management in the era of the knowledge economy.