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10.1177/0092070303255470ARTICLEJOURNALOFTHEACADEMYOFMARKETINGSCIENCEWINTER2004Royetal./INNOVATIONGENERATIONInnovationGenerationinSupplyChainRelationships:AConceptualModelandResearchPropositionsSubrotoRoyUniversityofNewHavenK.SivakumarLehighUniversityIanF.WilkinsonUniversityofNewSouthWales,AustraliaInnovationgenerationhasincreasinglybeenrecognizedasanoutcomeofinteractionbetweenafirmandvariousoutsideentities.Accordingtothisview,supplierinvolve-mentandalliancesareroutestoinnovationgeneration.Despitethisrealization,thereisadearthofresearch,bothconceptualandempirical,focusingoninnovationgenera-tioninbuyer-sellerrelationshipsinsupplychains.Inanattempttofillthisvoid,thisarticledevelopsaconceptualmodelofinnovationgenerationinbuyer-sellerrelation-shipsinupstreamsupplychains.Theauthorsproposethatinnovationgenerationinsupplychainrelationships,bothincrementalandradical,isaconsequenceofinteractionsbetweenbuyersandsellers.Theyalsodelineatefactorsin-ternalandexternaltotherelationshipthatmoderatethelinkbetweeninteractionandinnovationgeneration.Finally,theauthorsdiscussmanagerialimplicationsoftheirresearchandofferguidelinesforfutureempiricalresearch.Keywords:supplychain;innovation;newproductdevel-opment;buyer-sellerinteraction;knowledge-based;business-to-businessHowareinnovationsgeneratedinorganizations,andwhogeneratestheseinnovations?Forseveraldecades,researchersandmanagershaveaskedandattemptedtoanswertheseimportantquestions.Recently,anumberofscholarshavechallengedtheconventionalnotionthatinnovationsinsupplychaincontextsoriginatefromthebuyeralone(Hakansson1987;vonHippel1987,1988).Inacomplextechnologicalera,innovationgenerationisincreasinglyviewedasamultidisciplinaryactivityspan-ningamultiplicityoforganizations,circumstances,andsettings(Hakansson1987;Leonard-Barton1995;NonakaandTakeuchi1995;vonHippel1994;WindandMahajan1997).Flowingfromthisconceptualizationisthegrowingrecognitionthatinnovationresultsfrominteractionswithinbuyer-sellerrelations(DodgsonandRothwell1994;Millson,Raj,andWilemon1996;RobertsonandGatignon1998;SivadasandDwyer2000).Scholarsagreethatasubstantialpartoftheinnovationprocessoccursbetweenbuyersandsellersinthesupplychain(Hakansson1987;Lundvall1985a,1985b).Accordingly,alargebodyofstrategy-levelresearchonbuyer-sellerinteractionandtechnicaldevelopmenthasemerged(Athaide,Meyers,andWilemon1996;Hakansson1987).Withtheadventofinformationtechnology(IT)inbusi-nessprocesses,theenterprisehasbeenlinkedinternallythroughenterpriseresourceplanningsystems,externallyJournaloftheAcademyofMarketingScience.Volume32,No.1,pages61-79.DOI:10.1177/0092070303255470Copyright©2004byAcademyofMarketingScience.tothecustomerthroughcustomerrelationshipmanage-mentsystems,andsuppliershavebeenintegratedback-wardswithsupplychainmanagementsystems.Aca-demicsandpractitionershaveshowngreatinterestinimprovedsupplychainperformanceandhavecalledformoreresearchinthearea(Day1994;Srivastava,Shervani,andFahey1999).Forexample,Day(1994)noted,“Sup-pliersmustalsobepreparedtoparticipateinthecus-tomer’sdevelopmentprocesses,evenbeforetheproductspecificationsareestablished”(p.45).Upstreamsectionsofthesupplychaininvolvemanu-facturingactivitiesthatoccurbeforetheproductmovestothedistributionchannel.Extantresearchoninnovationsinsupplychainsrelationshipshasprimarilybeenconductedintheautoindustry(e.g.,ClarkandFujimoto1990,1991);thefocusofsuchresearchhasbeenonoperationsandtotalqualitymanagementratherthanmarketing.Inaddition,theorybuildinginsupplychainshaslaggedbehindadvancesinITandbusiness-to-businesselectronicinte-gration(Hammer2001;MentzerandKahn1995).Forinstance,Sheth(1996)notedthatstudiesoforganizationalbuyingbehaviorhavefocusedtoomuchonempiricismandtoolittleontheory.Indeed,anumberofinfluentialinnovationstudies,despiteofferinginterestingdata-basedinsights,havebeencriticizedforbeingatheoretical(BrownandEisenhardt1995;TaylorandLowe1997).Althoughanumberofresearchershaveinvestigatedfac-torsinfluencinginnovationgeneration(Chandrashekaran,Mehta,Chandrashekaran,andGrewal1999;Cooper1998;Cooper,Edgett,andKleinschmidt1998;Griffin1997),acomprehensiveconceptualexaminationofupstreamsupplychainrelationshipfactorsininnovationgenerationhasnotbeenattempted.Toreducetheseimportantgapsintheliterature,thisarticledevelopsaconceptualmodelofinnovationgenera-tioninbuyer-sellerrelationshipsinupstreamsupplychains.Wearguethatbuyer-sellerinteractionsinupstreammanufacturingsectionsofthesupplychaingeneratebothincrementalandradicalinnovations.Fromanacademicperspective,thisnewframeworkwouldfacilitateabetterunderstandingoftheinnovationprocess,sheddingtheo-reticallightonissuessuchaswhyinteractionsbetweenbuyersandsellersfacilitateinnovation,howbuyer-sellerrelationsbecomeimportantsitesofinnovation,andwhattypesofinnovationsarefosteredundergivencircum-stances.Managerially,theframeworkwouldoffersomeguidepoststofacilitatebettermanagementofinnovationgenerationinsupplychainrelationships.Inadditiontotheincreasingimportancegiventosupplychainissuesinthepopularpress(e.g.,BusinessWeek,InformationWeek,andsoon)andacadem