This book develops and illustrates a comprehensive, multi-level framework for the evaluation of industrial R&D activities and the measurement of their performances. The framework encompasses a set of hierarchical, interrelated levels at which R&D evaluation and performance measurement could be undertaken. This enlightening book focuses on the single industrial firm to study performance measurement of R&D functions, projects and individual researchers or engineers. It also addresses the R&D evaluation from the point of view of financial markets, with a focus on the relationships between R&D investments and the value of the traded firm.
(Rak 1)
Technological knowledge has become a source of sustained competitive advantage for many firms operating in high-technology industries (Granstrand 1999). A key issue in the strategic management of technology is how to convert technological knowledge into economic value. This can be done internally, by incorporating technologies into new products and services that are then sold in the market, or externally, by selling technological knowledge itself, disembodied from physical artifacts, through one of several contractual forms, such as licensing agreements, joint ventures, and patent sales (Lichtenthaler 2005). Exploiting technology internally has long been the approach adopted by the most innovative enterprises (Chandler 1990). In the last decade, as a result of the diffusion of the Chesbrough's (2003) open-innovation paradigm and rising pressure to maximize returns from RD the value of global technology transactions has grown from the $35 to $50 billion range in the late 1990s to an estimated $100 billion in recent years (Arora and Gambardella 2010). However, extracting revenues from the sale of technology remains a challenge for most firms. The gap between the few pioneering companies that earn millions of dollars in royalties (e.g., IBM and Qualcomm) and the majority, which fail to achieve any significant benefits (Lichtenthaler 2005), is huge. The peculiarities of technological knowledge as an object of commerce present challenges throughout the process of technology sale; companies that are successful in realizing revenues from technology sales have developed a set of managerial solutions to address these challenges. We sought to understand the particular challenges presented by technology sale transactions and to analyze and identify the management practices of firms that do successfully sell their technological knowledge. To accomplish that, we studied 75 technology transactions undertaken by 30 high-technology firms in healthcare, ICT, and other industrial sectors. Peculiarities of Technological Knowledge Technology is knowledge of how to do things to accomplish human goals (Simon 1973). Technological knowledge that is novel and useful can be legally protected through intellectual property rights (IPRs) and, in particular, patents. Although unpatented technologies may also be subject to external commercialization, patents, of course, make technology sale easier to pursue. Technology and technological knowledge have a number of attributes that make its sale more complex than the commercialization of physical goods. First, technology is intangible it cannot be seen, touched, or physically measured. Second, it is highly idiosyncratic--its value cannot be stated in the abstract, but is peculiar to specific contexts. For instance, CAT scanner technology was much more profitable in the hands of General Electric than it had been when owned by EMI (Teece 1986). Although EMI invented CAT technology in the 1970s, General Electric was able to leverage its complementary assets as an established player in the electromedical industry to profit from the commercialization of the technology. It was the downstream assets controlled by General Electric, rather than the characteristics of the technology itself, that ultimately determined how much economic value the CAT scanner generated. Third, technology involves considerable uncertainty because it is subject to technical and market failure and its future cash-generation potential is unknown. For instance, in the pharmaceutical industry, on average only one drug is launched on the market for every 10,000 molecules that are screened. Despite achieving much technical success, Xerox failed to capture much of the value from its PARC technologies because it could not figure out which applications would be most valuable (Chesbrough 2003). …
The ‘life science’ revolution related to the development of biotechnology affects many different markets. In the pharmaceutical business new drugs are continuously developed, tested, and submitted to governmental institutions for the required approval. In the agricultural business the so-called ‘green revolution’ is well under way with many new products designed in order to appeal to farmers or to consumers. The increasing pace of introduction of new biotech products—particularly drugs and agrochemical (Ag) foods—leads firms to look for collaborations in the different phases of the introduction process. Basing on an empirical study conducted on a sample of 27 organisations involved in the process of introduction of biotech products, the paper aims at comparing and contrasting the nature and the processes involved in inter-institutional collaborations occurring at various stages of new product development and commercialisation of new biotech products (particularly drugs and Ag foods).
The relevance and incidence of strategic alliances in business practice significantly increased since the past decade thus renewing the interest of management scholars on the topic. In a globalised economy, where technological innovation and industry dynamics are becoming faster and faster, strategic alliances of a firm are expected to change in number and nature (exploration vs. exploitation) not only in relation to the strategic intent of the firm but also as an outcome of the co-evolution of the environment in which it operates. The paper investigates, through an in depth case study of Hp, the evolution of strategic alliances in the ICT industry during the period 1998-2007 and relates it, in a co-evolutionary perspective, to the major industry dynamics (product/market modularity and digital convergence). The paper provides an example of and supports the application of the co- evolutionary perspective in the fast moving ICT industry. Finally, it identifies and initially discusses an evolutionary virtuous cycle for strategic alliances.
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