The Collaboration of Innovation Intermediaries and Manufacturing Firms in the Markets for Technology

Many manufacturing firms have opened up their product innovation processes and actively transfer knowledge with external partners in the markets for technology. However, the markets for technological knowledge have remained inefficient in comparison with the markets for most products. To reduce some of the market inefficiencies, manufacturing firms may collaborate with innovation intermediaries, which are defined as organizations that act as agents or brokers in the innovation process between two or more parties. These innovation intermediaries comprise different service providers ranging from consulting companies to Internet marketplaces for technology. In light of an increasing importance of intermediary services in the context of open innovation, this paper specifically focuses on the collaboration of manufacturing firms and innovation intermediaries, which may be critical for the success of intermediary services. Based on new interview data from 30 innovation intermediaries and 30 European manufacturing firms, this paper examines the question of how innovation intermediaries and manufacturing firms collaborate concerning the following issues, which emerged as the key themes from the interviews: potential of intermediation, roles of intermediaries, types of intermediation, drivers of intermediation, complementarity of intermediation, compensation of intermediation, and the importance of repeated collaborations. The findings indicate how manufacturing firms may reduce their transaction costs in technology markets by collaborating with intermediaries. However, intermediary services can only be regarded as a complement rather than a substitute of manufacturing firms' internal activities of managing technology transfer. Thus, manufacturing firms need sufficient internal capabilities for managing technology transfer, such as absorptive capacity and desorptive capacity.     

The Effects of Market Network Heterogeneity on Innovation Diffusion: An Agent‐Based Modeling Approach

Innovations usually have an initial impact on very few people. The period of learning or early evaluation precedes the diffusion of the technology into the wider addressed population. More than a transfer, this is best characterized as communication of benefits, costs, and compatibility with earlier technologies and a relative assessment of the new state of the art. Innovation development by an organization or individual creates not just a device (i.e., process or tacit knowledge) but concomitantly a capacity on the part of other organizations or persons to use, adopt, replicate, enhance, or modify the technology, skills, or knowledge for their own purposes. How innovations actually diffuse is to understand the communication of progress, and this framing helps one to design innovations and also design the marketing and testing programs to ready innovations for market and launch them efficiently. Diffusion theory's main focus is on the flow of information within a social system, such as via mass media and word‐of‐mouth communications. This theory presents often in the form of mathematical models of innovation and imitation. Distinct from classical diffusion models, however, consumers are not all identical in how they connect to others within a market or how they respond to information. We examine the effects of various network structures and relational heterogeneity on innovation diffusion within market networks. Specifically, network topology (the structure of how individuals in the market are connected) and the strength of communication links between innovator and follower market segments (a form of relational heterogeneity) are studied. Several research questions concerning network heterogeneity are addressed with an agent‐based modeling approach. The present study's findings are based on simulation results that show important effects of network structure on the diffusion process. The ability to speed diffusion varies significantly according to within‐ and cross‐segment communications within a heterogeneous network structure. The implications of the present approach for new product diffusion are discussed, and future research directions are suggested that may add useful insights into the complex social networks inherent to diffusion. A simple summary is that discovery of significant prime communicator nodes in a network allows innovation development practices to be better calibrated to realistically multiple market segments.     

Barriers to Matching New Technologies and Market Opportunities in Established Firms

In industries that produce high‐technology products or are reliant on technology for administrative or manufacturing processes, it is essential appropriately to link technologies to markets in order to increase shareholder value and to build future cash flows. Research and development (R&D) allocations in such industries are greatly dependent on forecasts of the R&D project's estimated potential contribution to future cash flows, which is related to the project's ability to satisfy current or future customer needs. The resource allocation decisions are difficult, however, since both markets and technology are likely to be highly uncertain. Although the innovation literature ably has addressed specific relationships between certain factors and new product development outcomes, less attention has been given to obstacles faced in linking technology to markets. Grounded in a literature‐based discussion of technology and market opportunity, the authors develop a conceptual framework for identifying and understanding the barriers facing managers in the process of matching technologies to market opportunities. Technology and market barriers include technology‐market linkage, technology availability, technology and market capabilities of competitors, and business model feasibility. Strategy and structure barriers include competition for limited resources, technology capabilities, technology portfolio goals, current market strategies, and competition for control of market charters. Social and cultural barriers include interpretive and communication barriers between functional units and language and cultural barriers within the technology workforce. The article concludes with implications for researchers and managers. The conceptual framework presented here can encourage the development of a stream of research in the area of technology strategy and planning processes, allowing researchers to improve our understanding of the process of technology innovation. Managers can use the framework as a guide for addressing a wide range of issues related to the process of matching technologies to market opportunities. For example, rather than relying strictly on cash flow projections for estimating the value of a new technology, managers also should consider how the technology could create new market opportunities or could reshape existing ones.     

How to manage innovation processes in extensive networks: A longitudinal study

In this paper, we examine the managing of the full innovation process, from visioning to commercialization, in extensive networks. By drawing on the IMP, strategic network, and innovation network literatures, we develop a comprehensive picture of the management activities when ‘mobilizing’, ‘orchestrating’, and ‘involving’ actors in working towards the innovation aim in such network settings. Through using two longitudinal case studies – the one pursuing radical and the other incremental innovation - we provide an empirically refined understanding of seven key management activities (motivating, resourcing, goal setting/refining, consolidating, coordinating, controlling, and leveraging), which are needed throughout the innovation process to turn the diversity of an innovation network into an opportunity rather than an obstacle. We demonstrate how actor diversity and the type of innovation (radical or incremental) shape the management activities, and map a dynamic actor composition that evolves alongside the innovation process. The longitudinal data highlights the consequences of the presence or lack of management activities, and the interlinkages between activities throughout the process. Our findings also provide insights for practitioners on how to cope with the increasing tendency to involve diverse stakeholders in innovation by pinpointing the critical management activities that can be employed.     

Supporting the technology-push of a discontinuous innovation in practice

The hydraulic power generation business is usually faced with continuous innovation, meaning that progress is rather made in small than in large steps. Nevertheless, there are currently some examples of discontinuous innovation, the Powerformer -technology being one of them. The implying difficulties for successful innovation are internal communication and linking the technology to the most suitable markets. In order to proficiently push the Powerformer -technology onto the markets, an appropriate procedure is identified and implemented to practice.
First, a SWOT-analysis is used for assessing the competitive product concept of this discontinuous innovation. This contributed the specific calls for action. Second, the identified procedure for leveraging this technology-push aggregates the technology choice tool, roadmapping and a process for technology commercialization. As a result, specified market segments, a market penetration schedule as well as development and design aims were defined. This paper intends to give a practice example on how the mentioned methodologies were applied for the technology-push of a discontinuous innovation.     

A process model of the maturation of a new dynamic capability

The literature on dynamic capabilities highlights their importance for gaining competitive advantage. However, existing research fails to explain how a new capability matures into a source of such an advantage. This study addresses this question using a process approach. It examines how this maturation process occurs and develops within a firm to a point where a new dynamic capability becomes institutionalized in an organization. Taking the case of a dynamic synchronization capability, one that enables a firm to coordinate dual innovation strategies, and that matures through the integration of operational sourcing capabilities, our study highlights the role of socio (group interactions) and cognitive (perceptions and interpretations) elements via an interactive learning in this process. The case shows that this process is multi-stage, unfolding across different organizational levels and encounters a series of conflicts that act as triggers for capability maturation. This paper contributes to the literature by focusing on the maturation of a capability rather than the emergence of a new capability, which has dominated prior research.     

The state of the art in the study of technology transfer—a brief survey

Abstract Technology transfer involvesthe movement of new concepts, processes or products from one area of science or engineering technology to another. The nature of the literature dealing with technology transfer is described. Discursive or 'wisdom' literature predominates indicating a great concern with the problem by industry and government. There are some case studies that provide insights into various aspects of the process, but there are very few empirically based field studies. Apart from research on the diffusion of innovation and studies in other allied areas, little theory building with accompanying field tests of propositions has been done. It is now appropriate to begin such studies to obtain information that will provide a more sound basis for government policy and industry investment in R&D.     

Innovation upgrading of local small and medium-sized enterprises and regional innovation policy: An empirical study

The aim of this paper is to clarify factors that promote innovation upgrading of regional SMEs and to analyze why and how policy programs implemented by local government affect their upgrading. This study is based on a firm-level questionnaire survey conducted in 2014 that targeted 1324 SMEs in Hyogo Prefecture, Japan. Innovation upgrading was classified into four stages depending on the novelty of the technology used and products; the novelty is classified according to whether they were existing or new. Measures of upgrading include the ratio of research and development (R&D) investment to sales, open innovation, sources of ideas, problem solving ability, human resource development (HRD), and business development strategies. An ordered probit model was employed. Six policy programs of Hyogo Prefectural Government were analyzed. The Manufacturing Academy was seen to be significant, and how this policy program affects upgrading through factors inside SMEs was examined by introducing cross-terms of policy programs and measures. Estimation results demonstrated that this policy program enhanced upgrading through HRD in SMEs, and it is considered that this was due to the policy programs meeting the necessity that SMEs have to develop the skills and abilities of their engineers and workers.     

Antecedents of Innovation Strategies in New Technology‐based Firms: Interactions between the Environment and Founder Team Composition

This research contributes to the ongoing stream of research on the integration of technical and business knowledge for successful innovation, but does so with a unique focus—that of new firm founder teams. This is in contrast to much of the existing literature, which focuses on organizational units in large firms. As part of their strategy for success, new technology‐based firms need to find an optimal balance between exploration and exploitation in their innovation activities. However, the resource constraints they typically face make it difficult for them to pursue both at the same time, which means that at any given point in time they are likely to opt for either exploration or exploitation rather than both. The purpose of this research is to investigate what influences new technology‐based firms to select one innovation strategy over another. Data collected in 145 new technology‐based firms are used to test hypotheses about how environmental conditions and founder team composition interact in their contributions to choice of innovation strategy. Based on hierarchical regression analysis of the data, the research findings suggest that teams consisting of individuals who have dissimilar backgrounds are more likely to adapt their innovation strategy to the characteristics of the environment than teams of individuals with similar backgrounds. Conversely, teams consisting of individuals with similar backgrounds are more likely to continue to follow their preferred strategy. However, as competitive intensity or environmental dynamism increases, such teams are likely to deviate from their preferred strategy.     

Developing Sustainable New Products in the Textile and Upholstered Furniture Industries: Role of External Integrative Capabilities

Environmental sustainability has become one of the key issues for strategy, marketing, and innovation. In particular, significant attention is being paid by companies, customers, media, and regulators to development and consumption of green products. It is argued that through the efficient use of resources, low carbon impacts, and risks to the environment, green products can be essential to help society toward the environmental sustainability targets. The number of green product introductions is rapidly increasing, as demonstrated by the growing number of companies obtaining eco‐labels or third party certifications for their environmentally friendly products. Hundreds of companies representing most of the industries, such as Intel, SC Johnson, Clorox, Wal‐Mart, and Hewlett–Packard, have recently introduced new green products, underlining the need to develop products that create both economic and environmental values for the firm and customers. A review of the literature shows that academic research on green product development has grown in interest. However, to date, only a few empirical studies have addressed the challenge of integrating environmental issues into new product development (NPD). Previous empirical works have mainly focused on a set of activities for the green product development process at the project level. After years of paying no or marginal attention to environmental sustainability issues, most of the companies now generally realize that it would require knowledge and competencies to develop green products on a regular basis. These knowledge and competencies can be varied, such as R&D, environmental know‐how, clean technology/manufacturing process, building knowledge on measuring environmental performance of products, etc., that may be developed internally or can be integrated through external networks. Adopting a resource‐based view of the firm, this article aims at (1) investigating the role of capabilities useful for companies to integrate knowledge and competencies from outside of the firm on green product development in terms of both manufacturing process and product design and (2) understanding whether green product development opens new product, market, and technology opportunities, as well as leads to better financial performance of NPD programs. To this end, a survey was conducted in two Italian manufacturing industries in which environmental issues are becoming increasingly important, namely textiles and upholstered furniture. A questionnaire was sent to 700 firms, and 102 useable questionnaires were returned. Results show that (1) companies engage in developing external integrative capabilities through the creation of collaborative networks with actors along the supply chain, the acquisition of technical know‐how, and the creation of external knowledge links with actors outside the supply chain; (2) external knowledge links play a key role in the integration of environmental sustainability issues into the manufacturing process, whereas capabilities such as the acquisition of technical know‐how and the creation of collaborative networks prove to be more important for integrating environmental issues into product design; and (3) the integration of environmental sustainability issues into NPD programs in terms of product design leads to the creation of new opportunities for firms, such as opening new markets, technologies, and product arenas, though not necessarily leading to improved financial performance of the NPD programs.     

Indicators of technical intensity and international competitiveness: a case for supplementing quantitative data with qualitative studies in research*

The author provides evidence, derived from his own published research, to justify his claim that all the commonly used indicators of technical intensity of innovation suffer from severe limitations. The paper consists of a critique, as indicators of innovativeness, of increase of value-to-weight ratios of finished products, R&D expenditure, the number of QSEs employed, patent and licensing activity and the rate and direction of the flow of technology. He shows that technical change can increase value added-to-weight of a product but that differences in the ratio do not necessarily reflect different technical performance; that in-house formal R&D is not the only way in which technical change is brought about in a firm; that one must know not only how many QSEs are employed by a firm but also how they are distributed over the firm's operations; that patent and licensing information need very skilled interpretation to produce valid conclusions and that outward flow of technology, though perhaps a necessary criterion of innovativeness is not a sufficient one. The paper concludes with some suggestions for an alternative approach, the key to which is to combine quantitative data derived from the above indicators with qualitative in-depth studies of how innovation actually occurs in the economic sector under study.     

Adaptation and Organizational Connectedness in Corporate Radical Innovation Programs*

This research examines how established companies organize programs for fostering technology‐based radical innovation. It addresses conflicts revealed in the innovation literature concerning the appropriate design of the strategic, structural, and process components of these programs. In developing innovation strategies, managers must balance the desire for strategic clarity with the need to allow for creativity and exploration. They must structure programs that ensure innovations benefit from the organization's resources while minimizing the numerous constraints that can impede these unconventional activities. Additionally, though they may favor management processes that provide accountability and effective resource allocation, managers must also ensure these do not restrict the flexibility required for successful innovation. The study is a longitudinal, comparative case analysis of interviews with managers involved in innovation programs in 12 industry‐leading multinational corporations. Site visits at each company were followed by biannual interviews with key managers in each company. A total of 81 follow‐up interviews were conducted over a three‐year period. These interviews were aimed at identifying the changes and progress in the programs over time and internal and external impacts on the organization's innovation activity. The analysis reveals (1) distinct but evolving objectives that maintain a logical strategic connection, (2) adaptive structures that shift and transform but preserve relationships with the broader organization, and (3) flexible processes that are understandable beyond the innovation program and are modifiable, both for the context and in response to learning over time. This suggests that programs introducing high uncertainty and risk into mature corporate environments are highly flexible systems that maintain organizational connectedness as they evolve. For academics, this implies a need to understand the evolution of innovation programs as an adaptive learning process that, regardless of form and purpose, preserves its connection to the traditional organization. For practitioners, it highlights the importance of considering the process, strategic, and structural connections to the broader organization when designing innovation programs and suggests the need for feedback mechanisms to help adapt these elements over time.     

Leveraging External Sources of Innovation: A Review of Research on Open Innovation

This paper reviews research on open innovation that considers how and why firms commercialize external sources of innovations. It examines both the “outside‐in” and “coupled” modes of open innovation. From an analysis of prior research on how firms leverage external sources of innovation, it suggests a four‐phase model in which a linear process—(1) obtaining, (2) integrating, and (3) commercializing external innovations—is combined with (4) interaction between the firm and its collaborators. This model is used to classify papers taken from the top 25 innovation journals, complemented by highly cited work beyond those journals. A review of 291 open innovation‐related publications from these sources shows that the majority of these articles indeed address elements of this inbound open innovation process model. Specifically, it finds that researchers have front‐loaded their examination of the leveraging process, with an emphasis on obtaining innovations from external sources. However, there is a relative dearth of research related to integrating and commercializing these innovations. Research on obtaining innovations includes searching, enabling, filtering, and acquiring—each category with its own specific set of mechanisms and conditions. Integrating innovations has been mostly studied from an absorptive capacity perspective, with less attention given to the impact of competencies and culture (including “not invented here”). Commercializing innovations puts the most emphasis on how external innovations create value rather than how firms capture value from those innovations. Finally, the interaction phase considers both feedback for the linear process and reciprocal innovation processes such as cocreation, network collaboration, and community innovation. This review and synthesis suggests several gaps in prior research. One is a tendency to ignore the importance of business models, despite their central role in distinguishing open innovation from earlier research on interorganizational collaboration in innovation. Another gap is a tendency in open innovation to use “innovation” in a way inconsistent with earlier definitions in innovation management. The paper concludes with recommendations for future research that include examining the end‐to‐end innovation commercialization process, and studying the moderators and limits of leveraging external sources of innovation.     

The paradox of tie strength in customer relationships for innovation: a longitudinal case study in the sports industry

Current literature argues that firms should have strong ties to customers to benefit from increased customer retention and loyalty. Strong ties, however, have also shown to prevent innovation, suggesting that firms should also develop weak ties to other customer groups. This paper focuses on the potential for strong ties to facilitate, rather than prohibit, innovation. It is based in a 7‐year longitudinal research project with Adidas, a global sporting goods company. From the case, we find that the paradox of tie strength results from an overly simplified view of the nature of company–customer relationships. Contrary to the established literature, we find that strong ties in the Adidas case supported significant innovation. In fact, the involvement resulted in the development of a new product with a radically different product architecture and led to one of the most successful product launches in the company's history. To explain these findings, we introduce the nature of customer participation in a firm's value creation processes as a new dimension of the constitution of firm–customer ties and discuss how such a kind of relationship can develop.     

Why and How Combining Strong and Weak Ties within a Single Interorganizational R&D Collaboration Outperforms Other Collaboration Structures

The purpose of this paper is to demonstrate why and how an ambidextrous interorganizational R&D collaboration outperforms other collaboration structures in the creation of innovation. This research effort contributes to a growing stream of research in social network theory suggesting that the contradictory theories of the strength of weak ties and weak network structures on the one hand and the theory of strong ties and closed network structures on the other have a mutually reinforcing effect on innovation outcomes if combined rather than considered separately. An in‐depth exploratory single case study approach within an innovatively organized national R&D collaboration allowed giving further evidence for such a superior innovation performance and for this research to contribute to theory by demonstrating why and how such a combination may lead to higher innovation output and how this effect can be actively reinforced. It is suggested that the combination of strong and weak ties should occur at the individual rather than at the project or firm level. The authors distinguish between the additive effects of the respective innovation benefits of strong and weak ties, a positive interaction effect in the portfolio of dyadic ties of an individual and a second multilevel interaction effect of weak ties embedded in the ambidextrous network structure. Referring to previous empirical findings, intellectual property regulation and structural interdependency between network members showed a higher impact than trust with regard to leveraging weak ties and are important sources for achieving the multilevel interaction effect. Managerial implications of this research are that a large network will outperform several smaller, independent networks given that the right structure and processes are in place. Direct implications for the architecture of an ambidextrous R&D collaboration are discussed, and a framework for a new form of technology R&D collaboration called “semi‐open organization” is presented, which places itself between the extremes of traditional R&D in closed organizations and completely “open innovation” approaches.     

Open innovation ecosystem organizing from a process view: a longitudinal study in the making of an innovation hub

This paper uses process theory as a theoretical lens to analyze AstraZeneca's enactment of an open innovation initiative with the purpose of strengthening the firm's surrounding innovation ecosystem. Based on empirical data collected over 7 years, we develop a process model of open innovation enactment and explain how the initiative gradually transformed while maintaining its guiding principles, which were set from the start. In applying a process perspective, we highlight open innovation initiatives as dynamic and evolutionary – but not deterministic – developments. As such, we provide a comprehensive and more nuanced understanding of not only what open innovation is but also how it becomes. This study also contributes to the innovation ecosystem literature by theorizing how firms orchestrate innovation ecosystems through open innovation initiatives over time.     

Technology transactions: networks over markets

There is a widespread belief in the business community that firms can rely on the market for buying and selling technological opportunities. The argument is: with so much technology development going on in the world, ‘there must be somebody somewhere who has the technology we need.’ According to this belief, acquiring new technology just boils down to finding the supplier, possibly with the help of a specialized intermediary. Several large firms have indeed developed ambitious mechanisms for acquiring the needed technological know-how as they proceed to make and market a new product. We contend that this concept of the technology transfer process is erroneous, as it conflicts with actual practice. The very high transaction costs entailed leave considerable room for opportunistic behavior and are more likely to occur when the parties do not know each other. An effective way to reduce transaction costs, therefore, is to limit technology transfers to the firm's partners, i.e. organizations with which the firm has already interacted in the past. Our research provides evidence that successful technology transfers typically take place between suppliers and buyers who had business relationships before considering a technology agreement. In addition, we report findings that companies using intermediaries (technological opportunities catalogues, databases, fairs, etc.) have been disappointed in their attempts to find new technologies from unknown sources. Because of the high risk of opportunistic behavior, it is practically impossible to assess the value of a technology without knowing who sells it. Similarly, the technology transfer capabilities of a company are difficult to appraise without prior knowledge through business interaction. To a certain extent, it may be better to buy any technology from a partner that one knows well than to buy a supposedly good technology from a firm with which one has had no experience. To put it bluntly: the identity of the partner may actually matter more than the technology being traded! Consequently, the relevant framework for technology transfer is built on a ‘network concept’ rather than the ‘market concept’. Firms wishing to acquire new technology should turn first to their network of trusted business partners, looking for available technological opportunities instead of trying to buy technology from unrelated organizations.     

Problem-solving in technology education as an approach to education for sustainable development

This paper explores the issue of how students might learn about sustainability in technology––education classrooms and the relevance of problem-solving in that learning. One of the emerging issues in technology education research is the nature of problem-solving specified in curriculum documents and the kinds of learning activities undertaken by students in technology education classrooms. In parallel with our developing understanding of the characteristics of good technology education programs is the inclusion in recent curriculum documents of the concept of sustainability or sustainable development. However, as yet there is little information about how technology students think about sustainability and how they might best learn about it. This is of particular interest because in technology education, sustainability is often described in curriculum documents as an issue that is intended to be integrated within design projects and activities, rather than being the topic of a classroom lesson as might happen in a subject such as environmental studies. This paper explores current understanding of the issue generally and within technology education. It concludes that the design, problem-solving approach that is common to technology education classrooms provides many affordances to students engaging meaningfully with ideas of sustainability and of developing strong understandings of its scope and significance.     

The Transformation of the Innovation Process: How Digital Tools are Changing Work,Collaboration, and Organizations in New Product Development*

Over the past several decades, digitization has invaded all areas of human activity, including innovation. The result of digitization of existing tools for design and collaboration, and the introduction of entirely new digital tools, is a far more substantive change of innovation than previous generations of tools enabled. It affects not only the quality of the output and speed of its generation, but it affects the innovation work itself, changes work content, collaboration patterns, decision authority, organizational set‐ups, governance structures, firm boundaries, and ultimately entire ecosystems. In this paper, the digitization of New Product Development (NPD), a subset of innovation, is studied to pursue two research questions: (1) How has the digital tool landscape in NPD changed over the past 15 years, and (2) how have these changes affected how firms innovate? This research uses a longitudinal multi‐method, qualitative approach to deep dive into actual use cases of digital design tools such as computer‐aided design CAD and new tools such as collaborative information technology (CIT). The changes in these tools and observations into how these tools are transforming the very nature of how things are designed is the research focus of this study. These tools have become increasingly more sophisticated while being easier to use and are integrated earlier in the design process. As a result, digital tools have a far broader reaching impact than previous generation of tools. Not only do they affect output and process efficiency, but they also increase depth and breadth of the work of individual innovators, they lead to rearrangement of the entire innovation processes, enable new configurations of people, teams, and firms, and rewrite the rules on how knowledge management acts as a critical competitive capability. The progression of digitization is laying the groundwork for changes to what firms are and do and points to different ways of organizing, specializing, and training for NPD professionals.