Understanding cross border innovation activities: The linkages between innovation modes, product architecture and firm boundaries

The mirroring hypothesis highlights the correspondence of design characteristics across different architectural levels and in this paper, we consider how mirroring may impact the distribution of national and international innovation activities of firms. We identify incremental and modular innovations (as product architecture reinforcing innovations) along with architectural and radical innovations (as innovations that overturn the existing product architecture) to consider how and when innovation activities may adopt an international dimension. Our study of the bicycle industry highlights that international collaboration is most likely to occur in respect of incremental and modular innovation on the basis of the embedded coordination that modular designs offer. However, even in these circumstances, international collaboration was limited, on the basis that cross-national collaboration created higher levels of complexity and uncertainty; thereby being an attractive option only when the capabilities of the international partner far exceeded what was available either internally, or within national boundaries.