Thematic Thinking and Individual Performance in Research and Development

Individuals differ in their preference for processing information on the basis of taxonomic, feature‐based similarity, or thematic, relation‐based similarity. These differences, which have been investigated in a recently emerging research stream in cognitive psychology, affect innovative behavior and thus constitute an important antecedent of individual performance in research and development (R&D) that has been overlooked so far in the literature on innovation management. To fill this research gap, survey and test data from the employees of a multinational information technology services firm are used to examine the relationship between thematic thinking and R&D professionals' individual performance. A moderated mediation model is applied to investigate the proposed relationships of thematic thinking and individual‐level performance indicators. Results show a positive relationship between thematic thinking and innovativeness, as well as individual job performance. While the results do not support the postulated moderation of the innovativeness–job performance relationship by employees' political skill, they show that the relationship between thematic thinking and job performance is fully mediated by R&D professionals' innovativeness. The present study is thus the first to reveal a positive relationship between thematic thinking and innovative performance.     

Government sponsored programmes for international technological exchanges and applied collective research

The author sets out to critically reassess the conventional wisdom that, in the high-tech semiconductor market at least, R&D and innovation demands inter-firm collaboration and significant government intervention and funding. The hinge of his critique is that arguments for extensive collective work are dominated by technology and underestimate the need of individual firms to put the effect on their competitiveness first when new technology is on the agenda for development. Government sponsored collective agreements may in fact result in loss of competitiveness if they encourage technology inappropriate for market needs. In fact, R&D is not the only important contributor to innovation; licensing-in an existing technology new to the firm may be an equally effective means of achieving competitiveness.
The author concludes that the value of technical agreements to a firm will differ from industry to industry and from nation to nation, but, whatever the situation, in making the decision whether or not to participate it must be expected a firm will give priority to maintaining its competitiveness.     

License to Be More Innovative

A patent holder may choose to give up its current leading position through patent licensing in order to increase its incentive to innovate further and thus avoid falling behind its rivals in future R&D races. We show that because of this “catching-up” effect, licensing may occur even when it reduces current industry profits. The overall effect of licensing is to slow down the pace of innovation, as it reduces the licensee's incentive to conduct R&D.     

When do strategic alliances inhibit innovation by firms? Evidence from patent pools in the global optical disc industry

Research and development (R&D) consortia are specialized strategic alliances that shape the direction and scope of firm innovation activities. Little research exists on the performance consequences of participating in R&D consortia. We study the effect of patent pools, a unique form of R&D consortia, on firm performance in innovation. While prior research on alliances generally implies that patent pools enhance firm innovation, our study finds the opposite. Analyzing data on systemic innovation in the global optical disc industry, we find that patent pool formation substantially and significantly decreases both the quantity and quality of patents subsequently generated by licensors and licensees relative to the patenting activity of nonparticipants. Our empirical findings suggest that patent pools actually inhibit, rather than enhance, systemic innovation by participating firms. Copyright © 2011 John Wiley & Sons, Ltd.     

Make,buy, organize: The interplay between research,external knowledge,and firm structure

We bridge current streams of innovation research to explore the interplay between R&D, external knowledge, and organizational structure—three elements of a firm's innovation strategy, which we argue should logically be studied together. Using within‐firm patent assignment patterns, we develop a novel measure of structure for a large sample of American firms. We find that centralized firms invest more in research, and patent more per R&D dollar, than decentralized firms. Both types access technology via mergers and acquisitions, but their acquisitions differ in terms of frequency, size, and integration. Consistent with our framework, their sources of value creation differ: while centralized firms derive more value from internal R&D, decentralized firms rely more on external knowledge. We discuss how these findings should stimulate more integrative work on theories of innovation. Copyright © 2013 John Wiley & Sons, Ltd.     

PROJECT CHOICE AND RISK IN R&D*

We introduce stochastic R&D in the Hotelling model and show that if the technical risk is sufficiently high, all firms focus on the most valuable market segment. We then endogenize technical risk by allowing firms to choose between a safe and a risky R&D technology. Firms either both target the most attractive market with at least one firm using the risky technology or they choose different niche projects and both apply the safe technology. R&D spillovers lead to more differentiated R&D projects and patent protection to less. Project coordination within an RJV implies more differentiation, and may be welfare‐improving.     

Integrating the R&D and Patent Functions: Implications for New Product Performance

This paper examines the impact of cross‐functional integration between the research and development (R&D) and the patent functions on new product development (NPD) performance. The attitudinal (collaboration) and the behavioral (contributions of the patent function to NPD) dimension of cross‐functional integration between the R&D and the patent functions are distinguished. It is also investigated if the level of innovativeness moderates the relationship between the attitudinal and the behavioral dimension of cross‐functional integration between the R&D and the patent department and NPD performance. The four hypotheses are tested based on a multi‐informant sample of 101 NPD projects which are nested within 72 technology‐based firms or strategic business units from multiple industries in Germany. The results show that the attitudinal and the behavioral dimensions of cross‐functional integration between the R&D and the patent functions have a significant and positive impact on NPD performance. This lends empirical support for the notion expressed in the literature that certain managerial capabilities are important for understanding the effect of patenting on appropriability outcomes such as value creation and performance. The level of cross‐functional integration between the patent and the R&D functions appears to be one of these critical patent management capabilities that affect the returns from investments into patents. There is support for the hypothesis that the context matters for the effect of cross‐functional integration between the R&D and the patent functions on NPD performance. In line with the initial hypothesis, the level of innovativeness positively moderates the impact of the behavioral dimension of cross‐functional integration between the R&D and the patent department on NPD performance. In contrast to the initial hypothesis, the findings reveal no moderating effect of the level of innovativeness on the link between the attitudinal dimension of cross‐functional integration between the R&D and the patent department and NPD performance. This implies that joint objectives and an open and trustful working relationship between the R&D and the patent functions are not sufficient for achieving higher NPD performance if firms aim to develop very innovative products. In the case of highly innovative products, the actual behavior, that is, the specific contributions of the patent department to the NPD project, matters. Overall, these findings have important implications for improving performance by means of effectively integrating the patent and the R&D functions during NPD.     

Optimal use of patents and trade secrets for complex innovations

This paper studies how an inventor protects a “complex” innovation that involves multiple complementary components. Each component can be protected through either patent or secrecy protection, so that the entire innovation may be protected through a patent-secret combination. Potential entrants might acquire these components either through costly imitation or licensing. I find that, first, secrecy is optimal when the patent length is relatively short; otherwise, a patent-secret combination is optimal; second, the inventor is over-rewarded compared to an inventor with an innovation that is equivalent except that it involves only a single-component so that the entire innovation can be protected through either patent or secrecy protection; and, third, a policy that precludes the use of a patent-secret combination enhances allocative efficiency ex-post but may stifle R&D incentives ex-ante.     

Patent Hold‐Up and Antitrust: How A Well‐Intentioned Rule Could Retard Innovation

Licensing technology essential to a standard can present a hold‐up problem. After designing new products incorporating a standard, a manufacturer could be confronted by an innovator asserting patent rights to essential technology. This hold‐up problem can be solved with a damages remedy provided by antitrust or some other body of law, but a damages remedy can reduce the innovator's licensing revenue and thereby retard innovation. The availability of an ex post damages remedy also alters the licensing terms in ex ante bargaining with the result that fewer socially beneficial R&D projects are undertaken.     

Outbound open innovation and its effect on firm performance: examining environmental influences

Firms may open up their innovation processes on two dimensions. While inbound open innovation refers to the acquisition of external technology in open exploration processes, outbound open innovation describes the outward transfer of technology in open exploitation processes. Prior open innovation research has focused on the inbound dimension, whereas the outbound dimension has been relatively neglected. Therefore, this article addresses the relationship between outbound open R&D strategies and firm performance. We use data from 136 industrial firms to test four hypotheses on the moderating effects of environmental factors in the relationship between open innovation strategies and firm performance. The results show that the degree of technological turbulence, the transaction rate in technology markets, and the competitive intensity in technology markets strengthen the positive effects of outbound open innovation on firm performance. By contrast, the degree of patent protection does not facilitate successful open innovation. The results are crucially important to managers because they show under what environmental conditions open innovation strategies enhance performance.     

Offshoring and firm innovation: The moderating role of top management team attributes

This study attempts to increase the understanding of how offshoring influences the introduction of new products and services. Focusing on the offshoring of those business functions that provide direct knowledge inputs for innovation (i.e., production, R&D, and engineering), we propose that offshoring has an inverted U‐shaped influence on firm innovativeness. Additionally, we provide an upper echelon contingency perspective by considering the moderating role of two top management team (TMT) attributes (i.e., informational diversity and shared vision). Using a cross‐industry sample with lagged data, we find that offshoring has an inverted U‐shaped influence on firm innovativeness and that this relationship is steeper in firms with high TMT informational diversity and in firms with low TMT shared vision. Copyright © 2012 John Wiley & Sons, Ltd.     

Inward technology licensing and firm performance: a longitudinal study

Inward technology licensing (ITL) is often viewed as an important strategy adopted by firms to achieve innovation. However, relatively limited research has focused on evaluating the contribution of ITL to firm performance. The gap is all the more surprising since the benefits of external technology acquisition on innovation output have been emphasized in a lot of the literature. This study therefore sets out to investigate the extent to which the investment of ITL by firms affects their performance. In view of the relative abundance of data on variables for a longitudinal investigation, this analysis concentrates on the electronics-manufacturing industry. The longitudinal sample allows this examination to control the more extraneous effects and to provide more convincing evidence for examining the relationship of ITL and firm performance. A total of 341 Taiwanese electronics-manufacturing firms balanced over the period from 1998 to 2002 is taken as the analytical sample. The basic statistics indicate that acquiring technology externally shows an increasing tendency within the firms. The analyses, from the least square dummy variable method, reveal that ITL per se does not provide a significant contribution to firm performance; however, the positive impact of ITL on their performance increases with the level of the firms' internal research and development (R&D) efforts. Both the checks for robustness and the split-sample analyses validate the results. The findings not only highlight the importance of internal R&D efforts but also suggest that firms had better use ITL as a complement rather than a substitute of internal R&D for their competence.     

Identifying technology trends for R&D planning using TRIZ and text mining

The current pace of technological development has forced many companies to invest significant capital and resources in research and development (R&D) activities. A systematic and efficient method of identifying technology trends and their evolutionary potentials can help companies guide their R&D planning and wisely allocate their R&D resources. This study proposes a framework combining the evolutionary trends developed by the Theory of Inventive Problem Solving, or Teoriya Reshniya Izobretatelskikh Zadatch (TRIZ) in Russian, with the visualization technique of text mining to systematically identify technology trends from patent documents. As technological information in patent documents is stored almost entirely in text format, the text mining method allows R&D personnel to efficiently identify technology trends and effectively conduct R&D planning. Utilizing text mining method on patents of magnetic random access memory (MRAM) systems and the underlying principles of TRIZ evolutionary trends, this study shows that MRAM includes 10 important technology trends. These trends have almost reached the evolutionary limit phase defined by TRIZ, which means that MRAM is fast becoming a mature technology. Therefore, for businesses that intend to acquire MRAM technology they do not possess, a wise R&D plan may be licensing the technology, buying the technology from others, or participating in a joint venture rather than using in‐house R&D.     

How entrepreneurial orientation can leverage innovation project portfolio management

Innovation project portfolio management (IPPM) is a key task in R&D management because this decision‐making process determines which R&D projects should be undertaken and how R&D resources are allocated. Previous research has developed a good understanding of the role of IPPM in R&D strategy implementation and of successful IPPM practices. But the fundamental orientations that drive the strategy formation and implementation process have never been investigated in the context of IPPM, and it is unclear whether successful practices are equally valid for different strategic orientations. This study, therefore, investigates the moderating impact of a firm’s entrepreneurial orientation on the relationship between strategic portfolio management practices and portfolio success. An empirical analysis of 257 firms shows that both innovativeness and risk taking as entrepreneurial orientation’s dimensions positively moderate the relationship between managerial practices and performance. Specifically, we find that firms high in innovativeness profit more from stakeholder engagement compared to firms low in innovativeness. Firms high in risk‐taking profit more from a clearly formulated strategy. With increasing innovativeness and risk‐taking propensity, firms also profit more from business case monitoring and agility in portfolio steering. The results suggest that a firm’s entrepreneurial orientation can leverage the effect of IPPM practices. Vice versa, a lacking entrepreneurial orientation can render these practices ineffective. Strategic orientation and IPPM practices should, therefore, be aligned with each other to enable firms to better implement their strategy and generate competitive advantage.     

Declared essential patents and average total R&D expenditures per patent family

The sharp increase in SEP declarations and declaring firms emphasizes the necessity for understanding firms’ innovation investment behavior in standardization. This paper empirically investigates whether declared standard-essential patents (SEPs) and the declaring firm’s business model (operationalized as a firm’s location in the value chain) are associated with a firm’s innovation investment behavior. To this end, we measure firms’ innovation investment behavior through average total research and development (R&D) expenditures per filed patent family for publicly listed firms from 1999 to 2018. Our sample mainly includes major SEP family declarants. We rely on a binary business model taxonomy differentiating upstream and downstream firms. Within that setting, total R&D expenditures rise with increasing fragmentation of declared SEP families, suggesting that firms adjust their R&D investments to declaration developments in standard-setting organizations (SSOs). We also show that upstream firms have significantly lower total R&D expenditures than downstream firms, which could indicate structural differences in their intellectual property (IP) and R&D management processes. Our results can help SSOs and regulators better understand firms’ innovation investment behavior.     

Innovating standards through informal consortia: The case of wireless telecommunications

We empirically examine the effects of industry consortia on the coordination of innovation strategies of the members. Our analyses utilize membership data from 32 consortia in wireless telecommunication technology subfields from 2000 to 2005 and prior art citations in standard-essential patents. We find that connections among firms in informal and technically-oriented consortia significantly increase the likelihood that firms cite each other's patents in subsequent patents essential for the UMTS wireless telecommunication standard. Inventions that are likely to become part of the UMTS system tend to build on inventions by firm peers who were members of the same consortia, controlling for patent or firm fixed effects, technology class, and other characteristics. Consortia may enhance productivity of invention and increase the incentives to invest in R&D by internalizing potential externalities. They may also enhance efficiency of standardization by facilitating the interaction of committee and market processes. Consortia thus structure and constrain the process of innovating standardized technologies. This is problematic if consortia are not truly accessible for all the relevant parties. Policymakers thus need to balance these effects. For managers, the results show that participation in a variety of technical consortia enables influencing peers' innovation strategies related to compatibility standards.     

Firms' open innovation policies,laboratories' external collaborations,and laboratories' R&D performance

The value of the open innovation approach is now widely recognized, and the practice has been extensively researched, but still very little is known about the relative impact of firm‐level and laboratory‐level open innovation policies and practices on R&D performance. This study attempts to measure that impact by analyzing a sample of 203 laboratories of Japanese firms located in Japan. It examines simultaneously the effects of firm‐level open innovation policy and laboratory‐level external collaborations on laboratory R&D performance. The study aims to go beyond a general understanding of the importance of open innovation; it shows how an open innovation policy can have a positive and significant effect on collaborations between a laboratory and local universities or business organizations. The results also show how an open innovation policy can contribute to the laboratory's R&D performance by facilitating external collaborations by the laboratories. It demonstrates how these factors affect R&D performance in different ways, depending on the type of R&D tasks. Our findings suggest several theoretical and practical implications in the field of R&D management.     

R&D and the patent premium

We analyze the effect of patenting on R&D with a model linking a firm's R&D effort with its decision to patent, recognizing that R&D and patenting affect one another and are both driven by many of the same factors. Using survey data for the U.S. manufacturing sector, we estimate the increment to the value of an innovation realized by patenting it, and then analyze the effect on R&D of changing that premium. Although patent protection is found to provide a positive premium on average in only a few industries, our results also imply that the premium varies across industries and with firm size. Patent protection also stimulates R&D across all manufacturing industries, albeit with the magnitude of that effect varying substantially.     

Determinants of Technical Success in Product Development When Innovative Radicalness Is Considered

Mushin Lee and Dohyeong Na present their analysis of data obtained from Korean project leaders in order to investigate the relationships between various factors and technical project success. When the radicalness of technical innovativeness is employed as a contingency variable, the result shows that existence of a champion is critical if the innovativeness is radical. Top management's support, R&D, production, and financial capabilities, and information acquisition during the development stage are related to the success, but there is no indication that the radicalness heavily affects the relationships. Information acquisition during the idea generation stage is not important for both radical and incremental improvement projects.     

Types of R&D Collaborations and Process Innovation: The Benefit of Collaborating Upstream in the Knowledge Chain

This paper explains how research and development (R&D) collaborations impact process innovation; given the differences in innovation mechanisms, prior insights from studies of product innovation do not necessarily apply to process innovation. Extending the knowledge‐based view of the firm, this paper classifies four types of R&D collaborations—with universities, suppliers, competitors, and customers—in terms of two knowledge dimensions: position in the knowledge chain and contextual knowledge distance. Position in the knowledge chain is the position of the R&D collaboration partner in the knowledge chain of the industry—the input–output sequence of activities that result in the transformation of raw materials into products that are used by end customers. Based on this knowledge chain, this paper considers universities and suppliers as upstream R&D collaborators, and competitors and customers as downstream R&D collaborators. Contextual knowledge distance is the difference in industry‐related contexts of operation of the R&D collaboration partners and the firm. Based on this, this paper views R&D collaborators that are suppliers and competitors as having low contextual knowledge distance to the firm, and R&D collaborators that are customers and universities as having high contextual knowledge distance to the firm. Using this classification, this paper proposes a ranking of R&D collaborations in terms of their impact on process innovation: R&D collaborations with suppliers have the highest impact, followed by R&D collaborations with universities, then R&D collaborations with competitors, and finally R&D collaborations with customers. These arguments are tested on a four‐year panel of 781 manufacturing firms. The results of the analyses indicate that R&D collaborations with suppliers and universities appear to have a positive impact on process innovation, R&D collaborations with customers appear to have no impact, and R&D collaborations with competitors appear to have a negative impact. As a consequence, the main driver of the impact of R&D collaborations on process innovation appears to be position in the knowledge chain rather than contextual knowledge distance. These novel ideas and findings contribute to the literature on process innovation. Even though process innovation tends to be internal and tacit to the firm, it can still benefit from external R&D collaborations; this paper is the first to analyze this relationship and provide a theoretical framework for understanding why this would be the case. This study also has important managerial implications. It suggests that managers need to be careful in choosing the partners for their firms' R&D collaborations. Engaging in R&D collaborations with universities and suppliers appears to be helpful for process innovation, whereas conducting R&D collaborations with competitors may potentially harm process innovation.