**3.2 Collaborative innovation**

While some researchers believe that a firm's ability to innovate is Idiosyncratic [19], others argue that there is a different paradigm in terms of open innovation, that is, the firm's ability to innovate and collaborate with external parties [20, 21], while the firm possess a lot of internal innovation knowledge for innovation propensity, exploring and utilizing the external environment is significant in developing capabilities [22]. This external knowledge can only assist the firm in developing capabilities that will drive competitive advantage. This view on collaborative innovation and

**Figure 3.** *Economic sweet spot for innovation success.*

acquiring external knowledge is consistent with the view on marketing innovation, which was discussed in Section 2.5.

Why is collaborative innovation necessary? There are many responses to this question. Some responses are as follows:


These are just some examples of why firms should collaborate to foster innovation. Collaboration also enables a broader view of opportunities and not be restricted by the operational processes and thinking processes within the firm. Collaboration allows for cross-pollination of ideas.
