8. Knowledge and Innovation in the New Industrial Organization

The objective of this work is to study “The New Industrial Organization” (Hernández 1997) and its implications for knowledge, cooperative relations and business innovation. This objective implies understanding the close and meaningful connection between Economics, Business Organization and Strategic Management. In doing so, we point out that two intangible factors, knowledge and cooperative relations between the agents of the firm are the basis of business profitability, through their impact on innovation. Innovation exists to convert knowledge into products and services that will attract the customers. Competitiveness emerges here, when those goods and services are unique and generate value for the customers, who are willing not only to acquire them, but also to pay the set price, and ultimate being an agent of the firm. The challenge consists in offering, today as ever, products and services that are yet to be found on the market, so that the firm will not be marginalized and abandoned by the customers, now a an agent of the firm´s network. Knowledge, together with the innovative capabilities of people, opens up an enormous space for the firm, which leads to continuous progress full of opportunities and future.