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Innovation Management. Kevin O’Brien. Open Innovation & Technology Transfer. Learning Objectives. Recognise the importance of technology transfer to innovation management Be able to summarise the technology/knowledge transfer process
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Innovation Management Kevin O’Brien Open Innovation & Technology Transfer
Learning Objectives • Recognise the importance of technology transfer to innovation management • Be able to summarise the technology/knowledge transfer process • Explain why a ‘receptive’ environment is necessary for technology transfer • Understand the role of tacit knowledge in technology transfer • Identify barriers to technology transfer
Introducing technology transfer • Much written about the subject; became extremely popular in the late 1980's. • Governments believed it could solve problems of national budget deficits! • Collaboration on technology development encouraged. • Large companies established Technology Transfer units. • Universities also established Industrial Liaison units and Technology Transfer units. • The panacea for industry's problems did not materialise.
Transfer to industry and private enterprise Existing R&D projects and developed technology Economics of technology transfer The attraction of technology transfer was that companies and industry could benefit from technology that had already been paid for. it has already been paid for!
Definition of technology transfer ‘Technology Transfer is the application of technology to a new use or user. It is the process by which technology developed for one purpose is employed either in a different application or by a new user. The activity principally involves the increased utilisation of the existing science/technology base in new areas of application as opposed to its expansion by means of further research and development’ (Langrish et al., 1982).
Student Firm University DTI Knowledge Transfer Partnership What to do? Diversify? What to make? What new products services to offer? Iracroft Ltd £10,000,000 company Its main customer is JCB 80% of its business is JCB
Science Parks • A Science Park is a business support and technology transfer initiative that: • Supports the development of links to strengthen technology transfer to help the growth of business enterprise • Promotes initiatives of value to the Science Park tenants • Facilitates the interchange of concepts, ideas and experiences • Provides a forum for developing collaborative initiatives • First established in 1970 (Cambridge) • Now approximately 100 parks across the UK (Source: UK Science Park Association)
Technology Brokering at IDEO Solutions to client’s Design problems Original combinations of existing knowledge Existing technologies (40 industries)
Open Innovation • Co-operative R&D projects reached a new peak in the 1990s • New emphasis on opening firm boundaries to outside innovation • Inbound open innovation • Leverage discoveries of others • Don’t rely exclusively on own R&D • Outbound open innovation • Look for external organisations better suited to commercialise a given technology (Chesbrough, 2003)
Open Innovation The closed innovation model The open innovation model Boundary of the firm Boundary of the firm New Market Current Market The Market Research Projects Research Projects Development Research Development Research (Chesbrough, 2003)
Open Innovation • Philips’ High-technology campus in Eindhoven • open innovation ‘ecosystem’ • 40 companies & institutes • 50 nationalities, 7,000-8,000 people • € 500 million investment by Philips
Data Information Projects & activities of the organisation Intangibility Knowledge Know-how Action Relevance to the firm Tangibility of Knowledge (Adapted from Cooley, 1987)
Accessibility Mobility Receptivity Limitations of Models • They fail to understand the recipient organisation's needs • Technology viewed in terms of technical attributes • Underestimate the extent of interaction required • Assume an ability on the part of organisations to communicate their problem in the form of a technical requirement Need greater emphasis here Too much emphasis here
Absorptive Capacity • The ability to evaluate and utilise outside knowledge is largely a function of the level of prior related knowledge • Prior knowledge includes basic skills, shared language, knowledge of recent scientific or technological developments in the field • Prior related knowledge confers the ability to recognise the value of new information, assimilate it, and apply it to commercial ends • These abilities collectively constitute ‘absorptive capacity’ (Cohen & Levinthal, 1990)
Receptivity Accessibility Mobility Receptivity Awareness Association Assimilation Application (Trott & Cordey-Hayes, 1996)
Receptivity (Trott & Cordey-Hayes, 1996)
Acquisition of technology from outside Level of learning Continual flow of tacit and explicit knowledge Individual Skills Continual flow of tacit and explicit knowledge Group Routines Continual flow of tacit and explicit knowledge Organisation Embedded in the organisation as capabilities Organisational Learning
References Chesbrough, H.W. (2003) The era of open innovation, MIT Sloan Management Review, 44(3), 35-41. Chesbrough, H.W. (2003) Open Innovation – The New Imperative for Creating and Profiting from Technology, Boston: HBSP. Cohen, W.M. & Levinthal, D.A. (1990) Absorptive capacity: a new perspective on learning and innovation, Administrative Science Quarterly, 35, 128-152. Cooley, M. (1987) Architect or bee? The Human Price of Technology, London: Hogarth Press. Langrish, J., Evans, W.G. & Jerans, F.R. (1982) Wealth from Knowledge, London: Macmillan. Trott, P. & Cordey-Hayes, M. (1996) Developing a ‘receptive’ environment for inward technology transfer: a case study of the chemical industry, R&D Management, 26(1), 83-92.
