Benefiting from External Sources of Technology

Abstract

OVERVIEW: Almost all companies with significant internal R&D activities are making deliberate efforts to locate, acquire and exploit technology from external sources. Such technology sourcing activities are expected to grow and become more systematic. A wide variety of approaches are used to organize these sourcing efforts. Considerable success is reported in finding specific targeted technologies. Regardless of the organizational approach use it is essential to have clear strategic directions, long-term commitment, and people with appropriate skills and experience. The primary locus of problems is not in finding and acquiring the technology but in successfully nurturing and exploiting it after it has been acquired. Rapid globalization of markets and resulting competitive pressures have created many new challenges for managers of industrial R&D. Acquisition of useful technology from external sources to complement internal R&D activities has emerged as one such challenge. Annual R&D trends surveys conducted by the Industrial Research Institute (IRI) for the past several years have noted an increasing emphasis on external interactions, especially strategic alliances and technology licensing (I). Recognizing this rising interest in external sourcing of technology, two IRI meetings explored the subject in some depth during 1992. Specifically, a general interest session (GIS) held at the Spring 1992 meeting featured case reports, a panel discussion, and an audience survey conducted by the authors. A special interest session (SIS) was held at the Fall 1992 meeting to promote audience exchange of ideas and insights under an experienced facilitator. Taken together, the two sessions addressed several key aspects of the subject: 1. What are some of the common approaches for organizing and targeting technology search efforts? 2. Do such efforts receive greater, lower or equal priority compared to internal development? 3. Are searches conducted with specific geographic scopes? How are they targeted strategically? 4. What success have such efforts enjoyed? 5. What are the most frequently encountered problems in identifying and/or acquiring external technology? 6. For global searches and alliances, what has worked well for successful practitioners? The audience survey conducted at the general interest session focused on Questions 1 through 5. Case reports and discussions in both sessions provided useful insights on Questions 5 and 6. This article presents the key conclusions from the audience survey, the case reports and the ensuing discussions--supplemented with the authors' own experience-based observations. SURVEY OBJECTIVES AND RESULTS The primary objective of the survey was to develop an improved understanding of the significance of the subject to R&D executives and of their experience in the matter. It should be noted that the individuals who participated in the survey are senior R&D managers from numerous major American (and some non-American) corporations. They were attending the session as official representatives of their companies. The questionnaire-based survey was designed to take only 5-7 minutes to complete. While the survey was expected to produce useful information, it was recognized that statistical inferences would be inappropriate for several reasons: 1)Although more than 130 individuals participated in the survey, representing a significant cross-section of the IRI membership, the participants were self-selected by their interest in attending the session and did not, therefore, constitute a wholly unbiased population. 2) For many IRI member companies, multiple representatives were present at the session. As a result, more than one response could have been received from a given company. 3) Many questions allowed multiple answers. 4) The survey was not built of parallel elements, screened for ambiguity or tested rigorously. …