Technological capability building through networking strategies within high-tech industries

Learning through networks has been a research topic for several years now. Technological learning is more and more based on a combination of internal and external learning and firms need to develop both technological and social capital for that purpose. This paper analyses the relationship between both types of capital and their impact on the technological performance of companies in high-tech industries. We claim and find strong empirical evidence that technological capital and social capital mutually reinforce each other¿s effect on the rate of innovation for companies with small patent and alliance portfolios. However, when companies have a strong patent portfolio and an extensive network of alliances then both types of capital become substitutes. We also found that there are two possible equilibriums: the first one emphasizes the development of strong internal technological capabilities supported by a small alliance portfolio. The second is the mirror image of the first one: these firms focus mainly on technology acquisition through alliance partners supported by a minimum of internal technological capabilities. Both strategies can co-exist in an industry. Finally, we find empirical evidence that companies who explore novel and pioneering technologies have a higher rate of innovation in subsequent years.