Dewey
D28
414
2
ALFRED
P.
WORKING PAPER
SLOAN SCHOOL OF MANAGEMENT
The Current Transformation of Technology Strategy:
The Attempt to Create Multiple Avenues for
Innovation Within the Large Corporation
John Friar
and
Mel Horwitch
December 20, 1984
1618-84
MASSACHUSETTS
INSTITUTE OF TECHNOLOGY
50 MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02139
The Current Transformation of Technology Strategy:
The Attempt to Create Multiple Avenues for
Innovation Within the Large Corporation
John Friar
and
Mel Horwitch
December 20, 1984
1618-84
FEB 2 2
1985
RECEfVEO
J
The Current Trans format ion of Technology Strategy:
The Attempt to Create Multiple Avenues for Innovation
Within the Large Corporation
by
John Friar
and
Mel Horwitch
Massachusetts Institute of Technology
Sloan School
of.
Management
50 Memorial Drive
Cambridge, MA
02139
U.S.A.
Revision of December 19, 1984
Paper
presented at The Fourth Annual
Society, October 13,
Conference
of
1984, Philadelphia, Pennsylvania.
the
Strategic Management
Introduction
I.
This paper deals with a major change in the nature of postwar, privatesector technology strategy in the United States.
The transition began in the
As seen in Figure
mid-1970s and is reaching a peak of intensity today.
—
competitive strategy
transformation has three essential components:
the
the key
structure
tradeoff between continued competition and new forms of cooperation;
—
1,
the blending of small, high-technology firm entrepreneurship with large-
corporate
scale
R&D
and
development;
technology
—
domain
and
the
explicit
choice between internal technology development and external technology develop-
ment
These
acquisition.
or
competitive
elements,
structure,
strategy,
and
domain, make up the major building blocks of modern technology strategy.
The significant change in technology strategy patterns will be documented
and analyzed at two levels:
changing
patterns
very
three
in
personal computers,
industries:
We will examine the relevant
industry and firm.
different
kinds
technologjr-intensive
of
manufacturing technology,
and
biotechnology.
Then we will contrast technology strategy in a number of firms.
Before
discussing
specifically
this
transition,
term
the
strategy" itself requires some further elaboration and explanation.
"technology
Technology
strategy can meaningfully be distinguished from other overlapping technology-
related aspects of business activity.
been
has
practices,
portrayed
largely
including
as
strategy.
depth as part of R&D management
it
has
been
subject
a
separate
Technology has
and
innovation traditionally
Technological
the
process
been
of
from
other
studied
in
technological
been reviewed as a determinant of organization
seen
as
being
a
critical
international product life cycle.
factor
in
influencing
structure;
the
management
considerable
innovation;
and
evolution
it
has
of
the
Modem technological innovation, further-
-2-.
more,
now recognized as
is
growing understanding
evolution
Great
durations.
"user
and
needs."
people,
information
feedback
emphasis
now
promoting
effectively
placed
research
Important
"market
of
role
the
highlight
to
innovation.
2
technological
overall
obviously
innovation
a
and
role
of
manag^iis,
in
Moreover,
form
time
pull"
key
the
activites as R&D management, new product development, process
even
lengthy
technology-familiar
or
accelerating
and
on
continues
entrepreneurs,
champions,
as
is
is
complicated patterns
potentially
and
loops,
our
of
innovation
technological
that
varied participants,
made up of diverse parts,
process,
of
realization
the
is
important aspect
One
complex activity.
a
such
wiiila
improvement,
part
or
technology
of
strategy, they do not usually encompass such key aspects of corporate strategy
as
management
top
high-level
involvement,
planning,
strategic
and
resource
allocation.
technology and
Both
be
viewed as
ability
the
ambiguous
strategy are
to
create
activity.
"Strategy"
is
Definitions
of
involves
the
Its
probably
result
This capacity is both a formal and
even
an
but
strategy abound,
interplay
of
three
radical
be
can
can
reproducable way for generating new or
a
improved products, processes, or services.
informal
"Technology"
concepts.
more
ambiguous
there
is
sets
incremental
or
term
that
present
dimensions:
of
nature.
technology.
than
general agreement
in
and
strategy
future,
internal and external, and explicit and implicit managerial practices.
For
much
of
the
postwar
period
the
in
United
States,
technology
corporate strategy were distinctly separate fields and areas of activity.
key
ingredients
vigorous
for
functioning
technological
of
different
vitality
kinds
of
in
industry
technological
appeared
to
innovation
and
.
The
be
the
and
the
active interplay of two distinctly separate forms of private-sector technological
innovative
innovation.
3
activity
Corporate
—
strategy
small-company
as
and
large-scale-corporation
described above was
usually not
part
of
-3-
"
a
small
firm's
management
repertoire.
Instead,
strategy,
if
related
it
to
technology anywhere, belonged to the realm of the large-scale corporation and,
-^'
hence,
its
R&D activities.
But even in this case,
technology usually was not.
-'^""considered in truly strategic terms.
Increasingly, however,
variable
J
-.Ji:
*^<
own
This
right.
elevation
recent
technology
of
affecting the various diverse elements of modern strategy.
the postwar period,
-of
''"
its
to
a
strategic level means that technology-related concerns are now permeating and
f
•
in
technology is becoming recognized as a strategic
private-sector
during the 1970s,
technological
-corporate innovation
—
Moreover,
later in
the boundary between the two major forms
innovative
activity
— small
firm
and
large
began to fade and an active blending of strategy with
technology started to emerge.
This blurring of the traditional separation of
small-firm and large-firm technology development was at least concurrent with
and
probably
variable.
*-'i;0 J 0:
partly
caused
by
the
elevation
of
technology
to
a
strategic
-4-
The Current Transition of Modern Technology Strategy:
II.
An Industry-Level
Perspective
Personal Computers
The
personal
entrepreneurially
computer
1970s,
the
the
true
one
of
clearest
the
technology-intensive
launched
macro level the current
of
industry,
for
this
of
illustrates
industry,
transition of technology strategy.
spark
examples
In
an
on
a
last half
the
from an entrepreneurial
industry came
small-firm environment that was made up of hobbyists, publicists and proaoters,
technological
champions,
of the major initial
firms
and Processor Technology,
IMSAI,
sustainable
these
start-up
computer
personal
early
essential business skills.
three
personal computer industry.
MITS,
seen
As
the
in
1,
failed in the marketplace and did not create
Although
businesses.
in
Table
all
entrepreneurs.
and
they
firms
very
were
different
different
in
ways
kinds
often
of
lacked
firms,
certain
Their fates were also frequently too dependent on
some counter-productive personal traits of the founding entrepreneurs.
But there was an important
"second wave" in the early personal computer
industry, beginning with the appearance
Apple,
Radio
and
two,
large,
established
Shack-Tandy and Commodore
in
firms
1977-1978 of one totally new firm,
that
International.
All
three
personal computer industry at about the same time.
three were
successful.
innovative
and
champions
effective,
product
at
Apple reflected
adaptable
the
top,
informal,
design,
technology
a
and
best
service
and
support,
entered
firms
small-firm behavior:
design,
entrepreneurial
industries.
drive,
skilled
and
a
an
technology
rerar.rkably
Radio Shack-Tandy had a good
and
a
superb
marketing
Commodore International had good marketing and
production through vertical integration.
the
For different reasons all
of
product
and spirited organization.
excellent
distribution system.
strong
the
from other
entered
and
low-cost
During this "second wave," small and
-5-
-A.
vital
interplay between them as people
with this
But
breaking
traditional
the
down
personal
in
flowed
There was co-existence but separateness.
firm/large
small
indicated
As
computers.
dichotomy
firm
development in the industry occured with the entrance of IBM.
'^'
captured a huge market share,
a
percent
survey of
sample
had
primary
as
appears
Table
in
'•^ '-^
<""-1984,
and
firm to another,
from one
technology and relevant managerial knowledge
transfer of
the
flow,
and technique took place.
"
But there was a
large personal computer firms remained more or less distinct.
The firm quickly
In June,
particularly in the business market.
thirty-seven Fortune
companies
hardware
computer
personal
500
dramatic
a
1,
be
to
IBM
found
that
or
PC/XT,
PC,
95
PC-compatible machines.
Much of IBM's market success in personal computers lies in the novel way
The firm went
IBM structured itself to enter the personal computer industry.
outside Its mainstream R&D processes to establish an Independent Business Unit
(IBU)
to develop
The IBU worked separately from the rest
personal computers.
of IBM and created a totally different kind of product and product strategy.
-'
The IBM PC would use off-the-shelf components and an outside operating system,
MS-DOS.
Also,
its
operating system architecture would be open so that
parties could develop software.
^-r.:
own sales
in August,
'
instead of solely selling
:.
Its
"
Moreover,
IBM would
force,
1983,
through
sell
retail
IBM boosted its equity position in Intel,
processor
supplier,
financial
investment,
its
also
and America's
to
about
13.7
IBM appeared
technological
IBM had both created
a
percent.
to
base
be
by
Rather
taking
than
outlets.
a
through
Finally,
its key PC micro-
just
strategic
strengthing
8
third
making
action
key U.S.
a
good
.9
to
protect
innovator.
small-firm-like organization within its overall large-
corporation structure and had established a number of novel external linkages.
More generally, as indicated in Figure 2,
the personal computer industry
witnessed an increasing number of key strategic linkages that spanned types of
-6-
innovation,
technological
percent
Olivetti
of
countries,
quickly
Olivetti
and
organizations.
and
IBM-compatible machine for AT&T to sell,
established
Silicon
Valley.
building
highly
Olivetti.
10
Meanwhile,
successful
Sanyo,
also,
computers
building
was
U.S.
firm,
sell
to
the
machine
in
the
computer
firm,
in
was
Kyocer^i,
and
NEC,
Mitsui
Mitsui.
highly successful quasi-small-firm
a
U.S.
making its flat LCD display for its new,
firm
small
a
for
an
AT&T also
1984.
Radio-Shack-Tandy,
for
lap
a
then entered a joint venture with Kaypro,
ceramics
25
produced
and
Technologies,
Japanese
the
lap
designed
beginning in July,
Convergent
with
venture
joint
a
AT&T had bought
12
Finally,
Sharp
now has
Apple
Apple will
trim lie computer.
also
market Canon's new laser printer in the United States while Canon will market
Apple's Macintosh computer in Japan.
Both
the Macintosh for the Japanese market.
firms are working on softv.are
for
13
The Manufacturing Technology Industry
The same pattern of an evolving set of complex technology strategies
manifested
now
in
the
technology
manufacturing
industry,
industry
an
is
that
possesses little postwar small-firm entrepreneurial experience.
The U.S. machine tool industry played an important and venerable role in
U.S.
technological
nineteenth
century,
developing
and
development
machine
transferring
the mid-twentieth
by
the
business
and
tool
industry
technology
century,
the U.S.
to
During
history.
served
much
machine
as
tool
vital
the
of American
much
of
the
link
for
industry.
sector was
14
clearly
But
in
a
mature phase and had lost much of the technological vitality and importance as
a
salient industry that had characterized it in an earlier era.
This
not
very
strategy.
industry,
glamorous
during much of
or
Defined as
exciting
the
from
postwar period until about
the
point
"power-driven machines,
not
of
view
hand held,
of
1980,
was
technology
that
are
used
-7-
to cut,
ii.
•
^
have
precent
U.S.
the
of
been
traditionally
employment
small,
lines, as indicated in Table 2.
•
'
~'''
'^•-
comprising about 0.12 percent of the GNP and
small sector of the U.S. economy,
'=.-0.10
-^-'
form or shape metal," the machine tool industry itself is a relatively
in
closely
1982.
held
machine
Most U.S.
companies
with
firms
tool
product
narrow
The industry is not highly concentrated, with
the four largest firms in 1977 accounting for 22 percent of industry shipments.
Both sales and,
and
development
"'-" productivity
are
relatively
all
investment
capital
expenses,
Research
employment are highly cyclical.
lesser extent,
to a
low.
1982,
In
constant
in
growth
and
dollars,
R&D
and
outlays,
expenses declined to about the same level that they were in 1975.
The global
market share of the U.S. machine tool industry decreased
percent
As can be seen in Table 3,
1968 to 20 percent or less in the 19708.
of
both growth
and
productivity,
the
from 25
U.S.
machine
1973-81 period fell way behind U.S. manufacturing as a whole and,
of
productivity,
period,
behind
durable
until perhaps very recently,
During
manufacturing.
goods
the U.S. machine
tool
terms
in
during
industry
tool
in
the
in the case
postwar
the
industry generally
exhibited a short-term outlook, concerned mostly with annual financial goals.
The U.S. machine tool sector, therefore, seemed to resemble the proto-
typical
"smokestack"
or
"sunset"
industry.
Under
the
impact
of
effective
global competition and the apparent failure to exploit or keep up with various
new technologies
and
complete
and
U.S.
machine
have
lost
significant market
absence
of
possible exception of
significant
the
robotics
software,
such as new materials,
the
automation,
profitable
in manufacturing,
tool
firms
small-firm
field.
have
progressively
become
Moreover,
share.
innovation
CAD/CAM,
there
activity,
Even in robotics,
was
with
less
the
the
however, much
of the technological leadership during the 1970s shifted to Japanese companies.
In addition,
the
relatively
large
U.S.
firms
also
did
significant technological R&D activity or leadership.
not
generally exhibit
In machine tools
during
-8-
the 1970s,
there was very little of
distinctly
small-firm and
"second
wave"
machine
tool
of
personal
and
stagnated
industry
interplay between
creative and vital
innovation
large-firm
early
the
the
computer
vigorous
manifested
was
that
Instead,
industry.
global
competitors
the
in
U.S.
the
took
quick
advantage of this situation.
But
such
today.
a
the
If
gloomy picture
of machine
definition
machine
of
needs
tools
tools
is
revision
substantial
broadened
encompass
to
manufacturing process technology as a whole rather than just metal-bending or
metal-cutting,
then
restructuring.
The
development
full-scale
ultimately
industry
the
of
is
software,
automation
factory
experiencing
clearly
now
CAD/CAM,
robots,
major
systems,
and
what
had
changing
dramatically
is
a
been seemingly a stagnant, sunset industry into a technologically vigorous one
that possesses
some of
the
technology strategy manifested in
new patterns of
more stereotypical modern technology-intensive industries.
3,
the industry
groups,"
and
is
is
As
in Figure
seen
becoming more complex in terms of proliferating "strategic
attracting
wide array of new entrants,
a
ranging
from new
small-firm-type ventures to established large manufacturing firms like General
Electric, Westinghouse, and IBM.
"'^"'
^
18
The current pattern of technology strategy in the manufacturing process
technology industry is also one of an increasing blurring of the distinctions
between
the
various
types
of
and
innovation
technological
of
establishing
linkages between types of innovation and firms.
These trends can be seen by focusing on one
whole
manufacturing
American effort
to
a
few
to
players,
process
technology
develop robotics until
and
lacked
the
industry,
about
support
large industrial concerns and the government.
recently, practically all
strategic group within the
of
robotics.
1980
crucial
was
19
The
fragmented,
stakeholders,
As seen in Figure 4,
whole
limited
such
as
until very
robotics activity in the U.S. was concentrated in a
-9-
with
few companies,
Unimation
firms,
two
and
Cincinnati
Milacron,
together
Like
accounting for a greater than 50-percent U.S. market share through 1982.
machine tools, robotics in the U.S. was
R&D
priority
Milacron
Cincinnati
for
except
item
until
and
involvement
The
1980s.
the
largely
was
firms,
small
few
a
industrial R&D backwater and,
the
in
manufacturing
large
of
low
a
enterprises and corporations with strong capabilities in the key technologies
and often huge captive markets was practically non-existent until the 1980s.
^
...
,..
.
rate
.
By
1980,
however,
of
U.S.
robotic
situation
the
sales
was
accelerating
important new entrants had appeared.
were
primarily new
not
established
enterprises
Large
skills.
start-up
and
ventures.
strong
firms
are
and,
Instead,
fully
as
significant,
as
seen
in Table 4,
represented
they
and/or
represented.
that at some point in the early 1980s,
,
industry began to increase
suddenly
large
technological
We
technology-based industry on the verge of a probable takeoff.
...,.,
growth
The
just
manufacturing
now
change.
to
The new entrants,
with
small
beginning
was
now
Figure
find
5
a
shows
the rate of growth of the U.S. robotics
significantly.
In addition,
seen in Figure 6,
as
whole, rich array of linkages is being established through licensing
a
agreements,
joint ventures,
international in character.
mergers
and
acquisitions,
and
many of which are
A new complex set of technology-strategy patterns
now exists in the U.S. robotics industry, perhaps just in time.
J.,
f
,
The Biotechnology Industry
r..-,-
.^
<
..^,
The
.
industry
a full
biotechnology
20
.
It
industry
is
is young and global.
still
another
of
type
Almost from the start, it has possessed
set of complex strategic relationships.
All forms of modern technology
strategy are represented in this sector, as seen in Figure
small firms,
linkages
such as Genentech,
with
several
large
technology-based
Biogen,
7.
The major U.S.
and Cetus, have equity and/or research
corporations
throughout
the
world.
A number
of
-10-
major large corporations,
degree
DuPont,
in
such as Eli Lilly,
addition
to
sizeable
linked in diverse ways with other firms.
ships
are
global
in
nature,
as
U.S. -Japanese strategic connections.
seen
Monsanto,
internal
R&D
and even
activity,
to
are
a
limited
actively
In fact, these intertwining relationin
Figure
8,
which
illustrates
-11-
III.
The
Current
Transition
Modern
of
Technology
A
Strategy;
Firm-Level
Perspective
The companies selected for our firm-level analysis of modern technology
strategy were
from those U.S. -based
Fortune
500
companies
spent
had
that
at
least $80 million on R&D in 1982, as listed by Business Week (March 21, 1984).
It was assumed that companies which had spent this much money on R&D had large
R&D organizations extant, with
research projects.
capabilities
the
Furthermore,
to
initiate a complex set of
firms would also be able to locate and
these
acquire technical capabilities that were not presently in-house.
The
selection criterion
for
the
companies
to
be
studied was purposely
biased toward companies that are considered a priori to want
of
of
keep as much
to
their technology development under direct control because they are capable
doing
We
so.
wanted
test,
to
then,
even
against
and are going to continue to use,
companies were using,
technology strategy approaches and
a
this
a
bias,
whether
greater variety of
greater proportion of external techniques
for technology development than they had in the past.
Roberts
acquisition
defined
(Table
entrepreneurial
development.
5).
21
Technologies
subsidiaries
The
methods
several
remaining
are
for
developed
results
the
techniques
technology
are
of
in
the
development
considered
to
or
in
techniques
of
R&D
internal
be
and
lab
the
external
methods of technology acquisition.
Ninety-seven companies met our R&D expenditure criterion and are listed
in Table 6.
Sixteen companies were selected to give
of the direction of our study results.
twenty-four
industry groupings
(
a
preliminary indication
The ninety-seven companies fell within
Business
Week's
classifications),
subset of sixteen fell within seven industry groupings (Table 7),
while
the
-12-
Data were gathered by three methods:
1)
Comparative analysis of Wall Street Journal index citations.
2)
Analysis of Annual Reports and 10-K's
3)
Phone interviews based on a common questionnaire
Street Journal
Wall
The
citations
Index
for
the
sixteen
studied
firms
for the years 1978 and 1983 were scanned for any mention of a company's use of
one
techniques
the
of
acquisition
technology
of
or
The
development.
years
were chosen by taking the most recent year and the year five years previous to
it.
The results of the Index search are listed in Tables 8a and 8b.
has been both
an increase
in
the
There
general variety of use of approaches and a
significant increase in the use of external sources as a group (3 1/3 times as
There
much).
method
individual
also
has
been
external
of
of
each
Companies
that
have
same
time,
more
chosen for study may not have juSt
been
significant
a
technology
increase
the
in
acquisition.
strong in-house research capabilities have been using,
the
at
use
of and a greater variety of external sources.
To
test whether
annual
anomalies,
the
two
reports
and
years
phone
interviews
used
as
a
recall
aid
for
the
of
the
techniques.
respondents.
corroborate
to
or
were asked questions about methods
Indepth
information was
This
interviews
phone
were
In the phone interviews, respon-
completed for ten of the sixteen companies.
dents
used
The annual reports were scanned for any
refute the direction of the findings.
mention of a company's use of one
were
of
technology-strategy planning and
about trends over the last five to seven years and for the next five to seven
years
in
the
use
of
technology development
techniques.
The
interviews often
required two or three respondents from each company and took about an hour to
complete.
(The
questionnaire
included as an appendix).
on
which
the
phone
interviews
were
based
is
-13-
RespondenCs were asked to allocate the significance of the use of each
development
technology
One hundred
corporation by using proportional measures.
represented
percent
A negative
direction indicator in Tables 9a and 9b.
the
the
The change in the proportion over the time
the entire set of such activities.
period was used as
within
activity
acquisition
technology
or
sign, as in the use of the central R&D lab for example, does not mean that the
activity decreased on an absolute
necessarily
decreased
,--
Rather,
cut.
compared
central
the
of
development
technology
other
funding
R&D
example,
importance
relative
the
the
to
For
scale.
was
not
R&D
lab
acquisition
or
activities.
-'
interview results corroborate
The
z-.in
that
external
the
importance
over
sources
technology
of
few years
last
the
the Wall
search
relative
in
central
the
of
Index
grew
development
expense
the
at
Street Journal
R&D
lab.
There was also a shift in relative importance internally from the central R&D
lab
^^
internal
to
development.
mid-1980s,
managers
u.,,
ventures
For
press
period
the
releases,
signified
all
or
an
entrepreneurial
to
from
lasted
that
reports,
annual
increase
in
the
subsidiaries
late
the
variety
through
1970s
planners
corporate
and
for
activities
of
R&D
the
and
R&D
used
for
^technology development and an increase in the relative importance of external
sources to internal ones.
•;,
..
In
interviews,
the
continue in the future.
„. recent
the
.;<.
expansion
respondents
..
these
trends
were
likely
We found different results (Tables 10a and 10b).
of
both
external-oriented
types
of
innovation efforts,
paint
strategy methods.
more
whether
asked
also
to
The
and current period of experimentation, which has been characterized by
generally of
^.
we
relative
a
near-term
future
The central R&D
significance
and
it
lab
approaches
of
is
may
may be
more
and
Many
stabilizing.
consolidation
at
its
of
our
technology
in
not generally predicted
stabilize
variety
greater
a
to
present
lose any
level
of
-14-
Many
importance.
of
other
the
activities,
moreover,
may
relative
lose
The broad range of external activities may be used somewhat
priority.
although three activities may continue to grow in relative importance.
activities are
formation of joint ventures,
the
less,
These
and acquisition of
licensing,
firms for technology acquisitions and development.
In
the
interviews,
organizational
planning.
hierarchy
were
respondents
of
Technology-strategy
also
planning
the
defined
was
as
location
in
the
technology-strategy
performing
people
those
asked
consisting
of
three
activities:
1.
Determining what new markets or distribution channels a company can
enter with its present technical capabilities
2.
Determining the allocation of R&D funding for present major product
lines
3.
Determining what new technologies to develop or acquire.
4.
Determining the methods of technology acquisition or development.
All
the
respondents
who
would
discuss
technology strategy planning said that
their
their
firms
firms'
are
methodologies
explicitly performing
this planning activity somewhere within the organization (Table 11).
the ten firms had people at corporate headquarters performing the
seven
firms
had
people
Technology-strategy
on
planning
general management task.
two
or
appears
more
to
be
levels
a
for
performing
multi-level
and
Eight of
function and
the
function.
increasingly
-15-
Conclusion
IV .
level,
industry
the
discussions
from our
can been seen
As
and
level,
form
technology
Moreover,
involvement
headquarters
of
seems
strategy
appears
to
be
Several corporations appear to have
developing into a true strategic factor.
some
conceptual
the
at
technology
level,
firm
the
analyses
and
to
in
technology-strategy
be
an
planning.
diverse
and
approaches
for
increasingly
multi-level activity.
Theoretically,
developing
or
there
acquiring
existed
always
has
These
technology.
number
a
approaches
of
can
segmented
be
Within each
development internally or acquisition and development externally.
.segment,
moreover,
centrally
of development
For internal development a firm can use its own R&D staff
that are available.
located
exists some diversity in the methods
there
and
within
A
divisions.
the
firm
can
firm
can
venture,
license
or acquire
technology
pay
or
part or all
for
Externally,
of another
firm
form
development,
its
establish
also
internal ventures or entrepreneurial units to develop technology.
a
by
for monitoring
or
a
joint
accessing
technology.
Even though these approaches have always existed,
have
just
recently started
approaches.
techniques,
to
experiment
other than using their own R&D staffs,
the use of a number of approaches,
our
the
the
last
industries.
a
variety of
these
of
at
least
three
five
for
years.
technology development
Along with
increasing
firms have been more active relatively
external approaches of development.
analysis
seriously with
that firms
Our data show that firms have increased their relative use of all
by three and one-half times over the
in
it appears
These
very different
trends
kinds
of
are
corroborated by
technology-intensive
-16-
There is
a
general trend in technology strategy toward more cooperation
among competitors
licensing,
technology development,
for
ventures,
joint
approaches may indicate
less
as
companies
competitive
purely
a
competition may shift
away
acquisitions
and
that
where
tool.
from
technology
and
technology.
technology per
technology
As
toward
of
the methods
use
share
to
using
are
firms
and
less
se
more
becomes
other
Such
areas,
common,
as
such
marketing and manufacturing.
A factor running counter to such an argument, however, is the prediction
that
use
the
external
of
sources
as
group
a
level
may
Intense
off.
experimentation of diverse technology strategy methods that stress cooperation
may be unstable in the long run because of the lack of direct and full control
and because of the ultimate attraction of a fully competitive option for many
predict
less
one would
If technology is to be used as a competitive weapon,
corporations.
growth of cooperation among
decreased
growth
According
to
rate
in
the
argument,
this
use
several
of
therefore,
methods
and
with
use
the
may soon peak and some consolidation may
internal-oriented
firms
take
external-oriented
and
a
approaches.
external-oriented methods
of
place with a
external-oriented
directly under corporate management's control.
technology
sharing
in
renewed
efforts
are
that
on
focus
more
The data tends to support this
contention.
Technology,
in summary,
technology-intensive
large
growth
industries.
technology-based
the
in
use
companies
of
more
extensive
cooperation
within
purely competitive
the
the
tool.
use
Technology
in
a
But
strategy
strategic
five
years.
last
of
external-oriented
the
and
use
is
multilevel manner.
the
industry
concern in all
become a strategic
external-oriented
acquistion has occurred over
the
has
the
of
less
practiced
A
period
practices
We
for
by
of
technology
the
can
be
most
rapid
technology
have hypothesized
methods,
of
types
greater
used
that
the
as
a
external-oriented approaches may be
-17-
reaching an unstable state.
practices may be
t
limit
intense
As
strategic
indicated
diversity
in
as
Figure
large
9,
firms
the
there
internal-oriented
appears
begin
to
to
:.'6r
.
be
attempt
reassert greater proprietary control over their technological resources.
.'ir;
I
to
likely.
Some consolidation back to
a
to
-18-
Table
1
Market Share (By Dollar Sales) of the U.S.
Personal Computer Industry
Company
HITS
1976
1978
1980
1982
-19-
Table
2
Size of U.S. Machine Tool Establishments
-20-
Table
3
Growth of Output and Productivity:
Aanual Average Percent Change
1959-1973
1973-1931
4.6
2.3
Manufacturing
4.8
2.5
Durable Goods Manufacturing
2.3
0.1
Machine Tool Industry
2.3
0.1
Manufacturing
3.0
1.7
Durable Goods Manufacturing
2.8
1.7
Machine Tool Industry
1.0
-0.7
Growth of Output
Growth of Output Per Hour
of all Employees
Source:
Bureau of Labor Statistics, U.S. Department of Labor.
-21-
Table 4
Market Share:
U
-22-
Table
5
Technology Development and Acquisition Approaches
Internal
Developed
Originally
the
Central
Lab
R&D
1.
Technologies
Division
2.
Venturing,
Developed
Using
Internal
Technologies
Units,
etc.
Business
Independent
Subsidiaries,
preneurial
3.
Technologies Developed
4.
Acquisitions
of
External
Technology-Acquisition Purposes
5.
As A Licensee for
Another Firm's Technology
6.
Joint Ventures to
Develop Technology
7.
Equity Participation
Technology
8.
Other Approaches for Technology Development or Acquisition
in
or
Entre-
External
Source:
Through External Contracted Research
in
Another
Firms
Firm
to
for
Acquire
Primarily
Monitor
or
Adapted from Edward B. Roberts, "New Ventures for Corporate Growth,"
Harvard Business Review, July-August, 1980.
w--
-23-
Table
6
Companies That Spent More than |80 Million on R&D in 1982
Abbott
Allied
Allis-Chalmers
Aluminum Company of America
Amdahl
American Cyanamid
American Home Products
American Motors
AMP
Atlantic Richfield
ATT
Baxter Travenol
Boeing
Bristol-Meyers
Burroughs
Caterpillar
Celanese
Chrysler
Control Data
Coming Glass
Data General
Dart & Kraft
DEC
Deere
Dow
DuPont
Eastman Kodak
Eaton
Emerson
Exxon
FMC
Ford Motor
GE
General Dynamics
General Foods
General Motors
Goodyear
Gould
GTE
Gulf
Halliburton
Harris
Hewlett-Packard
Honej^ell
IBM
Ingersoll-Rand
Intel
International Harvester
ITT
Source:
Business Week, March 21, 1984
J&J
Lilly
Litton
Lockheed
Martin Marietta
McDonnell-Douglas
Merck
Mobil
Monsanto
Motorola
National Semiconductor
NCR
Northrop
Pfizer
P&G
Phillips Petroleum
Polaroid
PPG
Raytheon
RCA
Rev Ion
Rockwell
Rohm & Haas
Schering-Plough
Schlumberger
Searle
Shell
Signal
SmithKline
Socal
Sperry
Squibb
Standard Oil (Ind.)
Syntex
Tektronix
Texaco
Textron
3m
TI
TRW
Union Carbide
United Technologies
Upjohn
U.S. Steel
Wang
Warner-Lambert
Westinghouse
Xerox
-24-
Table
7
Listing of Industry Groups Represented by Companiea
That Spent More Than $80 Million on R&D in 1982
Aerospace
Automotive:
cars, trucks
Automotive:
parts, equipment
Chemicals
Conglomerates
Drugs
Electrical
Electronics
Food & Beverage
Fuel
Information Processing:
Information Processing:
Computers
Office Equipment
Instruments
Leisure Time Industries
Machinery:
farm & construction
Machinery:
machine tools, idustrial, mining
Metals
Mining
&
Miscellaneous Manufacturing
Oil Service & Supply
Personal
&
Home Care Products
Semiconductors
Steel
Telecommunications
Tire & Rubber
Industries from which companies were studied
Source:
Business Week, March 21, 1984
in further detail.
-25-
Table 8a
Technology Development Activity of Selected 16 Firms
1978 and 1983
(# of Publicly Reported Major Instances of Technology Strategy Activities)
1978
Approach
1.
R&D Lab
2.
Internal Venturing
3.
Contracted Research
4.
Acquisition of Firms
5.
-
1983
1
4
1
7
10
18
Licensee
5
9
6.
Joint Venture
1
16
7.
Equity Participation
8.
Other
8
_5
14
21
72
(Market Another's Product)
Totals
Source:
Wall Street Journal Index, 1978
&
1983.
:
-26-
Table 8b
Technology-Planning Activity of Selected Firms
1978 and 1983
(# of Publicly Reported Major Instances of Technology Strategy Activities)
12345678
1978
Approach:
12
1983
3
4
5
6
7
6
2
6
18
12
2
1
8
Company
A
1
B
1
C
1
3
1
1
11
D
E
11
11
F
3
1
G
14
1
2
4
3
5
2
1
H
1
I
I
J
1
1
11
3
1
K
1
L
M
Total
Source:
N
1
P
1111
1
10
5
1
4
Wall Street Journal Index, 1978 & 1983
2
8
1
18
1
9
15
7
14
-27-
Table 9a
Directional Change in Relative Significance for the
Eight Approaches for Ten Companies
1978-1984
Increase
Approach
1.
R&D Lab
2.
Internal Venturing
3.
Contracted Research
4.
Acquisition of Firms
5.
Licensee
6.
Joint Venture
7.
Equity Participation
8.
Other
(Market Another's Product)
Source:
Personal Interviews
Decrease
-28-
Table 9b
Directional Change in Relative Significance for the
Eight Approaches for Ten Companies
1978-1984
^Company
Approach
B
C
E
1.
R&D Lab
2.
Internal Venturing
3.
Contracted Research
4.
Acquisition of Firms
+
+
+
+
5.
Licensee
+
00
+
+
6.
Joint Venture
+
+
+
7.
Equity Participation
+
00
+
8.
Other
+
+
+
+
+
(Market Another's
Product)
Source:
G
H
0000
I
J
+
1+000+00000
I
i
F
Personal Interviews
+ increase in relative significance
no change in relative significance
- decrease in relative significance
+
+
000
000
+
+
+
0000
00000
6
-29-
Table 10a
Directional Change in Relative Significance for the
Eight Approaches for Ten Companies
1984-1990
Approach
1.
R&D Lab
2.
Internal Venturing
3.
Contracted Research
4.
Acquisition of Firms
I.
5.
Licensee
6.
Joint Venture
7.
Equity Participation
8.
Other
(Market Another's Product)
Source:
+
Personal Interviews
increase in relative significance
no change in relative significance
-
decrease in relative significance
-30-
Table 10b
Directional Change in Relative Significance for the
Eight Approaches for Ten Companies
1984-1990
'
.
-31-
Table 11
Location of Technology-Planning Activity
Company
Location
HQ
Separate Technical
Planning
Lab
Other
F*
G
H
-32-
Figure
1
Elements of Modern Technology Strategy
COOPERATION
f
COMPETITIVE
STRATEGY
COMPETITION
LARGE
/
DEVELOPMENT
/
/
INTERNAL
/
DOMAIN
y
EXTERNAL
SMALL
ENTREP. FIRM
INNOVATION
-^
f-
CORP. R&D
& TECH.
STRUCTURE
Figure
2
A Selected List of Linkages In the Personal Computer
Industry, 1983-1984
Europe or
Convergent
Japan
U.S. - Mode II
U.S. - Mode I
Olivetti
f
(
^
(Italy)
Technology
Sanyo
^
Mitsui
Kyocera
Radio Shack/
Tandy
^
Sources:
Various issues of InfoWorld in 1983-1984.
Sharp
.
-34-
Figure
3
Strategic Groups in the Manufacturing Technology IndusCry
HIGH
Automated Factories
Integrated Manuracturing
Systems and Cells
Degree of
Sophistication of
Customer
Support
Required
From
Supplier
Robot Systems
}
Robots]
Specialized Niche
Stand-Alone
Machine Tools
LOW
Primarily
Mechanical
Technology
Source:
Integrated Mechanical
Information
Technology
National Research Council, The U.S. Machine Tool Industry and
the
Defense Industrial Base (Washington, D.C.
National
Academy Press, 1983)
:
-35-
-36-
F igure
5
ESTIMATZS OF U.S. R030T POPULATION 1970-1981
5500
5000
4500
4000
3500
3000
2500
2000
1500
1000
500
^
\
i
\
1973
1974
\
1970
1971
1972
h-H
1975
# of
Point
A
B
Robots
200
Date
1970 (April)
Source
1976
\
1977
\
1978
\-
1979
1980
1981
-37-
Figure
6
Interfinn Linkages in the U.S. Robotics Industry 1983
LICENSING AGREEMENTS
If'::
Licenses
Licensor
Kawasaki Heavy Ind. (Japan)
RN Eurobotics (Belgium)
Can-Eng. Mfg. (Canada)
Murata Machinery (Japan)
Unimation
Arab
Binks (U.K.)
Cyclomatic Ind.
Didde Graphics Co.
DeVilbiss
Nordson
Admiral Equip. Co.
Bendix
Thermwood
Automat ix
General Electric
Interred
Hitachi (Japan)
Graco
United Technologies
RCA
I.B.M.
General Electric
Nolaug (Norway)
Nimak (W. Germany)
Oainichi Kiko (Japan)
Sankyo Seiki (Japan)
DEA (Italy)
Volkswagen (W. Germany)
Ollivetti (Italy)
Hisubishi Electric (Japan)
Komatsu (Japan)
Jobs Robots (Italy)
II
ti
Westinghouse
II
II
II
II
Trail fa (Norway)
Taskawa (Japan)
Lloyd Tool and Mfg.
JOINT VENTURES
J.V.
Unimation
GMF Robotics, Inc.
Cybotech
Int'l. Machine Intell.
Int'l. Machine Intell.
Graco Robotics
MERGERS AND ACQUISITIONS
Subsidiary
Unimation
PAR Systems
U.S. Robots
Copperweld Robotics
(formerly Auto-Place)
.SOURCE:
Parents
Condac, Pullman Corp.
General Motors, Fanuc
Renault, Randsburg
Industries
Machine Intelligence,
Yaskawa
Graco Inc., Edon Finishing
Parent
Westinghouse
GCA
Square D. Corp.
Copperweld Corp.
David Schatz, The Strategic Evolution of the Robotics Industry
Unpublished Thesis, Alfred P. Sloan School of Management, May, 1983,
,
p.
119.
-38-
d
C
•
=1
>
41
Q
^~
-a
»)—<»(
a u
3
c
<0
-o
3
V)
3
V)
e
>5
a
_^ >^
u
o w
o > u
_. _0 o
00
ea
a
<u
x:
c
a
u
a
«
hi
4->
(TJ
4-1
3
u
3
en
H
h4
1T3
a
t:
c
n
>
•ft
4-1
(0
4J
c
en
0)
a
«
z
h.
-39-
Figure 8
Relationships Between U.S. and Japanese Dlochemical Companies
-nybritech
Mics-ibishi Chemical
Tak£(^a Chemical Ind,
•Genentech-^
Tor ay Ind.
Hof f man-LaRoche
Daiichl Pharmaceutical
International
Minerals &
Chemicals
Shicnogi Pharmaceutical
Monsanto
Lilly
International
Minerals &
Chemicals
onsanto
Dow Chemical
Bristol-Myers
>3-.saka
Hayashibara
Biochemical Lab.
Pharmaceutical
Searle
1
LaiTqe Japanese'
Company
Small Firm (U.S
and Japan
3
[
Larqe U.S.
Company
-40-
Flgure
9
Direction of Modem Technology Strategy
LIMITS
EXTERNAL
(COOPERATION)
INTERNAL
(COMPETITION)
[
LARGE
CORPORATE RSD
& TECH. DEVELOPMENT
SMALL
ENTREPRENEURIAL FIKM
INNOVATION
-41-
Endnotes
1.
Donald G. Marquis,
For the process of technological innovation, see:
1969, #7; Success
"The Anatomy of Successful Innovations," Innovation
Report on Project Sappho (London:
and Failure in Industrial Innovation:
Centre for the Study of Industrial Innovation, n.d.); R. Rothwell, et.al.,
Vol. 3
"SAPPHO Updated:
Project SAPPHO Phase II," Research Policy
(1974); James Utterback, "The Process of Technological Innovation Within
For
March, 1971, pp. 75-88.
the Firm," Academy of Management Journal
Woodward,
J.
see:
technology-organization structure discussion,
the
Oxford University
Industrial Organization: Theory and Practice (London:
"Operations
Pugh and D. Pheysey,
Hickson,
D.
S.
D.
Press,
1965);
Reappraisal,"
Empirical
An
Structure:
Organizational
and
Technology
Vol. 14 (1969), pp. 378-396; G. G.
Administrative Science Quarterly
Theoretical
As
Structure
Organization
"Technology
and
Stanfield,
Vol.
21
(1976),
pp.
Categories," Administrative Science Quarterly
489-493.
For the role of technology in the international product life
The Product Life
Louis T. Wells, Jr., "International Trade:
cycle, see:
The
Product
Life Cycle and
Cycle Approach," in Louis T. Wells, Jr. (ed.).
International Trade (Boston: Division of Research, 1972), p. 3-33.
,
.
,
,
,
2.
For necessary interactions with the market and with the user, see:
Donald G. Marquis, "The Anatomy of Successful Innovations," Innovation
Report on
Success and Failure in Industrial Innovation:
1969, #7;
Centre for the Study of Industrial Innovation,
Project Sappho (London:
Project SAPPHO Phase II,"
n.d.); R. Rothwell, et.al., "SAPPHO Updated:
Research Policy Vol. 3 (1974); Eric Von Hippel, "The Dominant Role of
Users in the Scientific Instrument Innovation Process," Research Policy
champions,
for
need
the
about
discussions
Vol.
For
5
(1976).
A. Schon,
managers,
Donald
entrepreneurs, and technology-familiar
see:
Review
Business
Harvard
New
Inventions,"
"Champions
for
Radical
N.Y.:
(New York,
Technology and Change
March-April,
Schon,
1963;
"Entrepreneurship and Technology,"
Delacorte, 1967); Edward B. Roberts
Research Management July, 1968; Edward B. Roberts, "Generating Effective
Corporate Innovation," Technology Review October-November, 1977; Robert
Hayes and William Abernathy,
Managing Our Way to Economic Decline,"
Harvard Business Review July-August, 1980.
,
,
;•
,
,
,
,
,
,
3.
For typical strategic planning views emphasizing present-past portfolios,
Boston Consulting Group, Perspectives on Experience (Boston, MA:
see:
The Boston Consulting Group, 1967); R. V. Buzzell, B. T. Gale, and R. G.
M. Sultan, "Market Share-Key to Profitability," Harvard Business Review
Uses and
January-February, 1975; P. Haspeslagh, "Portfolio Planning:
the
For
1982.
January-February,
Limits," Harvard Business Review
very
different
use
literature,
that
external-oriented
strategy
approaches, see:
Michael Porter, Competitive Strategy (New York, N.Y.
A
Management:
Strategic
Free
Press,
Edward
Freeman,
R.
1980);
on
For an emphasis
Pitman, 1984).
Stakeholder Approach (Marshfield, MA:
the need for strategy to be supported by internal structures, systems and
Structure
and
Strategy
Jr.,
Alfred D.
processes,
see:
Chandler,
(Cambridge, MA:
MIT Press,
1962)
and Jay Galbraith and Daniel A.
The Role of Structure and Process
Nathanson, Strategy Implementation:
For implicit strategy, see:
(St. Paul, MN:
West Publishing, 1978) .
Harvard U.
(Cambridge, MA:
Chester Barnard, The Functions of Executive
Press, paperback edition, 1968); Kenneth R. Andrews, The Concept of
,
,
:
,
-42-
Richard D. Irwin, 1980); Thomas Peters
Corporate Strategy (Homewood, IL:
Harper and
and Robert Waterman, In Search of Excellence (New York, N.Y.:
A Stakeholder
Row, Inc. 1982); R. Edward Freeman, Strategic Management:
Logical Incrementalism
Approach J. Brian Quinn, Strategies for Change:
and C. K. Prahalad,
Horwitch
1980).
Mel
Irwin,
Richard
D.
(Homewood, IL:
Sloan Management
Ideal
Modes,"
Three
"Managing Technological Innovation
Review Winter, 1976.
;
—
,
4.
Robert Hayes and William
For the rise of technology strategy, see:
Harvard Business
Decline,"
Economic
Abernathy, "Managing Our Way to
Review
July-August, 1980; Alan M. Kantrow, "The Strategy-Technology
Christopher
July-August, 1980;
Connection," Harvard Business Review
MIT
Freeman, The Economics of Industrial Innovation (Cambridge, MA:
Press, 1982), Chapter 8; Boris Petrov, "The Advent of the Technology
Portfolio," Journal of Business Strategy Fall, 1982.
.
,
,
5.
Mel Horwitch, "The
For a comprehensive discussion of this blending, see:
Dual Paradigm for Postwar Private-Sector Technology Strategy in the U.S.
and the Current Transformation," paper presented at the Mitsubishi Bank
Foundation Conference on Business Strategy and Technical Innovations,
July 13-15, 1984, Ito City, Japan.
6.
Information on the early history of the U.S. personal computer industry
Paul Freiberger and Michael Swaine,
comes from the following sources:
Osborne/McGraw Hill, 1984); Gary N.
Fire in the Valley (Berkeley, CA:
MIT,
Farner, A Competitive Analysis of the Personal Computer Industry
Alfred P. Sloan School of Management, unpublished Master's Thesis, May
20, 1982; Deborah F. Schreiber, The Strategic Evolution of the Personal
Computer Industry MIT, Alfred P. Sloan School of Management, unpublished
Master's Thesis, May, 1983.
,
,
7.
"Microcomputer Use Doubles in Past Year in Leading Organizations,"
Research and Planning, Inc. press release, circa June, 1984.
8.
October 3,
and the Winner is IBM," Business Week
Shuford, "IBM's
76-95; Lawrence J. Curran and Richard S.
Estridge," Byte November, 1983, pp. 88-97; Vrian Camenker, "The Making
of the IBM PC," Byte November, 1983, pp. 254-256.
Computers
"Personal
1983,
,
pp.
,
.
9.
January
Intel Link Up to Fend Off Japan," Business Week
1983, pp. 96-97; Wall Street Journal August 17, 1983, p. 10.
"IBM and
,
10,
,
10.
June 27, 1984,
"AT&T Introduces Personal Computer," New York Times
"AT&T's Long-Awaited Micro," InfoWorld July 16, 1984, pp. 46-47.
.
D5;
11.
"A Real Computer On Your Lap?," InfoWorld
12.
"Kaypro Lap-Size Portable
1984, p.
p.
,
to
Run
IBM PC
,
April 2.
1984,
p.
13.
Programs," InfoWorld
.
March 26,
14.
13.
InfoWorld
14.
For the key role of the machine tool industry in U.S. business history,
Machine Tool
the
in
"Technological Change
see:
Nathan Rosenberg,
Industry, 1840-1910," Journal of Economic History Vol. XXIII:4. December
,
May 14. 1984.
.
1963.
-43-
15.
i. :
y.
.-,-
comprehensive industry analysis of the traditional U.S. machine
industry, see:
National Research Council, The U.S. Machine Tool
Industry and the Defense Industrial Base (Washington, D.C.:
National
Press,
Academy
1983), Chapter 2.
For
a
tool
rE
16.
Mel Horwitch and Kiyonori Sakikabara, The Changing
Relationship in Technology-Related Industries:
A
Comparision of the United States and Japan
MIT Sloan School Working
Paper, #1533-84, January 5, 1984.
For robotics, see:
Strategy-Technology
,
17.
For a general discussion of strategic groups, see:
Michael E. Porter,
Competitive Strategy (New York, N.Y.: The Free Press, 1980), Chapter 7.
18.
For the restructring and broadening of the machine tool industry, see:
National Research Council, The U.S. Machine Tool Industry and the Defense
Industrial Base Chapter 2.
,
-i'.
19.
See:
Mel Horwitch and Kiyonori Sakikabara, The Changing TechnologyStrategy Relationship .
20.
For a comprehensive discussion of the biotechnology industry, see:
Mel
Horwitch
The
Changing
and
Kiyonori
Sakikabara,
Strategy-Technology
Relationship in Technology-Related Industries;
A Comparision of the
United States and Japan
.
21.
^i^:)^-^
Of
Edward
Review
Roberts, "New Ventures for Corporate Growth," Harvard Business
July-August, 1980.
B.
,
s
-44-
Appendix
Technology Strategy Survey
This survey is part of
of
technology
compete
major study on the evolution and current state
technology
and
technology-intensive
in
participation.
feel
strategy
a
free
to
planning
industries.
We
in
large
very
corporations
much
would
like
We have also tried very hard to keep this survey brief.
make
additional
comments,
elaborate
on
points,
and
that
your
Please
include
supplementary material that you think might relate to your answers or to the
subject of the overall study.
not obviously available
you release them.
in
Of course, all company-specific answers that are
the public domain will be kept confidential unless
We will also share our
findings with you.
much for your help.
John Friar
Mel Horwitch
MIT, Alfred P. Sloan School of Management
50 Memorial Drive, E52-556
02139
Cambridge, MA
617-253-6672
Tel:
Name
Position
Company
Division,
Subsidiary, etc.
Address
Telephone
Today'
Date
(
)
Thank you very
-45-
II-l.
Could you please try to estimate how much of your company's overall
business
(in
terms
of
percentage
technology-planning relevant
sales)
of
(i.e.,
in
technology-strategy
is
opinion,
your
uses
or
could
use technology strategy technology planning).
..^..II-2a-l.
is
^,^
of percentage
now covered
by
your
sales,
of
how much of your current business
technology-strategy
technology-planning
or
process?
rp" -
II-2a-2.
•-'
In terms
Also, if it exists at all, where is explicit and/or formal technology
i.
strategy or technology planning practiced in your corporation?
Corporate Headquarters
The Group (i.e. Multi-Division) Level or Equivalent
s":
The Divison Level or Equivalent
The Business or Strategic Business Unit (SBU)
Level or Equivalent
At the Central R&D Laboratory or Equivalent
At a Totally Separate Technology-Planning Unit or
Equivalent (Please explain briefly if possible).
Elsewhere (Please explain briefly if possible).
II-2a-3.
Also,
if
it
is
practical
at
all,
we
are
interested
at
in
least
understanding in a general way how technology strategy or technology
planning
is
practiced
in
your
However,
corporation.
answering an involved set of questions,
describe
process?
II-2a-4.
your
technology-strategy
or
that are used or
technology-planning
Thank you.
inter-departmental units that have
Does your firm have integrative,
significant
so,
of
could you possibly include
some of the "raw" forms or other formal documents
that
instead
technology-strategy
or
technology-planning
what is this unit(s) called, who heads
possible), and when was it formed.
it
(position
roles."
&
name
If
if
-46-
III.
We
also
are
development
continue
to
approaches
very
interested
technology
and
evolve.
for
We
technology
in
how
your
acquisitions
have
listed
development
columns:
the
the early 1990s.
late
We would
19708;
the
like you
have
below
and
for
technology
evolved
various
and
will
methods
technology
and
acquisition
Beside each method there are
that are used by modern corporations.
three
methods
mid-19808
to
(the
present);
and
give us your best estimate
for the entire range of technology-development and technology-
acquisition
activities
the three periods.
practiced
at
your
corporation
for
each
of
Assuming that 100 percent represents the entire
set of such activities, please estimate and allocate the approximate
significance of each activity at your corporation using percentages
for each period.
-47-
Late
1970s
vy-'
1.
Technologies Developed
Originally in the Central
R&D Lab.
2.
Technologies Developed
Using Internal Venturing,
Entrepreneurial
Subsidiaries, Independent
Business Units, etc.
3.
Technologies Developed
Through External
Contracted Research
4.
External Acquisitions
of Firms for Primarily
Technology-Acquisition
Purposes
5.
As a Licensee for
Another Firm's Technology
6.
Joint Ventures to
Develop Technology
7.
Equity Participation in
Another Firm to Acquire
or Monitor Technology
8.
Other Approaches for
Technology Development or
Acquisition (Please
Explain Briefly)
e,
Total
Mid-19803
Early
(the present)
1990s
Z
X
100%
100%
100%
.
-48-
For your most recent fiscal year, could you please list the specific
IV-a.
technologies
joint
that
ventures,
have
been
equity
commercially
positions
introduced,
established,
units
or
specific
the
and/or
outside firms involved under each of the categories below.
IV-b.
1.
Technologies Developed Originally in the Central R&D Lab.
2.
Technologies Developed Using Internal Venturing, Entrepreneurial
Subsidiaries, Independent Business Units, etc.
3.
Technologies Developed Through External Contracted Research.
4.
External
Acquisitions
of
Technology-Acquisition Purposes.
5.
As a Licensee for Another Firm's Technology.
6.
Joint Ventures to Develop Technology.
7.
Equity Participation
Technology.
8.
Other Approaches for Technology
(Please Explain Briefly).
in
Firm
to
U.S.
Firms
.
S
Primarily
for
Acquire
Development
Specifically for your current joint ventures,
your partners in the following matrix?
Small Firms
(under $50 million sales)
Non-U
Firms
Another
Firms
or
or
Monitor
Acquisition
could you please
Large Firms
(over $50 million in sales)
list
-49-
Specifically for your current equity participation positions,
IV-c.
you please list the firms
in which you have equity
interests in the
following matrix?
Small Firms
(under $50 million sales)
Large Firms
(over $50 mill ion in sales)
U.S.
Firms
Non-U. S.
Firms
V.
General data on your firm that is related to technology.
a.
In what industries do you compete?
b.
R&D spending as a percentage of total sales'
c.
R&D manpower as
d.
Annual number of patents issuedl
a
percentage of total manpower?
could
fiJ
3790 ui5
3
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SIE 633
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0120
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Lib-26-67