IMPLICATIONS OF STRATEGIC ALLIANCES FOR SMALL R-AND-D-INTENSIVE FIRMS

In this paper I explore the effects of international strategic alliances on the competitive position of small Canadian firms. Canadian policymakers advocate strategic alliances as mechanisms for domestic firms to participate internationally. However, little is known about the implications of these partnerships for small R&D-intensive firms. The role of government in promoting alliances is first considered. Anticipated outcomes of partnerships, along with the actual implications of alliance relationships, are considered in some depth. A series of case studies made it possible to identify factors that affect the benefits, costs, and risks associated with international strategic alliances. Safeguarding technology is a primary consideration because technical capability is at the heart of each firm's competitive advantage. The paper concludes with an overview of the important factors affecting the competitive position of small firms involved in strategic alliances. It is possible to identify issues warranting closer consideration both from corporate executives and from policymakers interested in international involvement through strategic partnerships.