STRATEGIC ENTREPRENEURSHIP, COLLABORATIVE INNOVATION, AND WEALTH CREATION

Strategic entrepreneurship refers to fi rms ’ pursuit of superior performance via simultaneous opportunity-seeking and advantage-seeking activities. Both small and large fi rms face impedi-ments while pursuing strategic entrepreneurship. While small fi rms ’ opportunity-seeking skills may be strong, their limited knowledge stocks and lack of market power inhibit their ability to enact the competitive advantages necessary to appropriate value from opportunities the fi rms choose to pursue. In contrast, large fi rms are skilled at establishing competitive advantages, but their heavy emphasis on the effi ciency of their existing businesses often undermines their ability to continuously explore for additional opportunities. Building on a variety of theories, including network, learning, resource-based, and real options, we suggest that collaborative innovation can enable both types of fi rms to overcome their respective challenges. Collab-orative innovation is the pursuit of innovations across fi rm boundaries through the sharing of ideas, knowledge, expertise, and opportunities. For small fi rms, we contend that pursuing entrepreneurship collaboratively allows them to preserve their creativity and fl exibility while mitigating the inherent liabilities of smallness. We argue that collaborative innovation permits large fi rms to exploit their advantage-creating skills while concurrently exploring for oppor-tunities outside their current domain. Thus, small and large fi rms that learn how to integrate strategic entrepreneurship and collaborative innovation are well positioned to create wealth. Copyright © 2008 Strategic Management Society