Embedded strategies, corporate partners, and markets in the digital age

The digital revolution has been pushing each of the market players---firms, governments, and workers---to redefine their relationships to one another. Nevertheless, it is fundamentally reshaping the social, organizational, and legal landscape that we know. The full effect of these emerging new forms has yet to be felt. If anything, our thinking and our framework for monitoring, controlling, and evaluating these new forms has not kept pace with the reality of technological revolution. Our institutions and our theories have not yet adopted to meet the challenge and the opportunity of a new digital-revolution-based world. Furthermore, these economic and technological transformations do not necessarily offer "economic democracy" in the broader sense.;The present paper has two independent sections, distinct yet related. The main study of Section 1 is to resolve the contradictions between economic innovation and cooperation in order to create a real market economy and "democracy." The main objective of Section 1 is to achieve a greater degree of practical progress in economic development and "economic democracy" by redesigning the institutions of economic innovation and cooperation. The heart of economic development is cooperation; that is one thing democracy and economic innovation have in common. The recurring problem is to develop an institutional structure of cooperation at each of these levels that minimizes the restraints upon innovation and experimentalism. More people, more small and medium firms, more workers and technicians should have a variety of different modes of access to the financial and technological instruments of production. The result is neither capitalism nor socialism but the market economy made more experimental, decentralized and democratic.;In fact, corporate partnering as explained in Section 2 is precisely about economic innovation and cooperation. Corporate partnering is an economic and legal innovation, making it possible for firms to form various kinds of business and legal arrangements that allow tremendous flexibility in how firms can compete, but at the same time cooperate with one another.;Section 2 analyzes strategic corporate partnering in the embedded computer market by studying in detail the embedded computer market. Section 2 argues that innovation cannot be traced to individual companies in the embedded computer market. Rather, in this market, innovation comes from the flow of ideas between companies by establishing strategic corporate partnering. Section 2 concludes that the synergistic interaction of small and big companies at every phase of research and development and production must be sustained and promoted if Silicon Valley type digital era companies are to flourish.