When it comes to innovation and new business development, there is a need to not only maximize internal resources and capabilities but also to complement these internal resources. Research has shown that firms have become increasingly reliant on external knowledge and collaboration with other firms to enhance or complement their internal innovation activities for increased innovation, and on scientific knowledge, which is increasingly important. Small firms have difficulty, however, in entering collaborative relations because they lack legitimacy. This chapter analyses the interfirm or interorganizational collaborations in both Japan and in the UK, particularly in terms of how the entrepreneurs collaborate, who the usual participants of such collaborations are, and the reasons for forming these collaborations. The chapter also looks into private-public collaborations, especially those with universities, and policy promotion in both countries. It likewise identifies the differences between the collaborations made by high performers with those made by non-high performers.
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