Open Innovation & Technology Transfer

Innovation Management

Kevin O’Brien

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.

Economics of technology transfer

Existing R&D projects and developed technology Transfer to industry and

private enterprise

it has already been paid for!

The attraction of technology transfer was that companies and industry could benefit from technology that had already been paid for.

‘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).

Definition of technology transfer

DTI Knowledge Transfer Partnership

University FirmStudent

Iracroft Ltd£10,000,000 companyIts main customer is JCB80% of its business is JCB

What to do?Diversify?What to make?What new products services to offer?

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 toclient’sDesign

problems

Existing technologies(40 industries)

Original combinations of existing knowledge

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

ResearchProjects

Research Development

The Market

Boundary of the firm

The closed innovation model

Research Development

Current Market

ResearchProjects

Boundary of the firm

The open innovation model

NewMarket

(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

Tangibility of Knowledge

Relevance to the firm

Inta

ngib

ility

Projects & activities of the organisation

KnowledgeKnow-how Action

Information

Data

(Adapted from Cooley, 1987)

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

Accessibility Mobility Receptivity

Too much emphasis here

Need greater 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

AssimilationAwareness Association Application

(Trott & Cordey-Hayes, 1996)

Receptivity

Activity Process

Awareness Processes by which an organisation scans for and discovers what information on technology is available

Association Processes by which an organisation recognises the value of this technology (ideas) for the organisation

Assimilation Processes by which the organisation communicates these ideas within the organisation and creates genuine business opportunities

Application Processes by which the organisation applies this technology for competitive advantage

(Trott & Cordey-Hayes, 1996)

Organisational LearningAcquisition of technology

from outside

Skills

Routines

Embedded in the organisation as capabilities

Level of learning

Individual

Group

Organisation

Continual flow of tacit and explicit

knowledge

Continual flow of tacit and explicit

knowledge

Continual flow of tacit and explicit

knowledge

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.