 About
me
› Glance
› Career Objectives
› Research Focus
› Research work
 Origins
of Radical Innovations
› Motivation
› Paper
Avimanyu (Avi) Datta
 B.Sc. Computing and Information Systems, University of
London
 M.S. Information Systems, Hawaii Pacific University
 Ph.D., Washington State University (2011)
Assistant Professor of Management: Illinois State University
(Fall 2011-Present)
 Industry Analyst: Frost & Sullivan
 Analyst, Market Sizing: Access Market International (AMI)Partners

Enjoy Painting and Sketching:
http://avimanyu.weebly.com/paintings-etc.html
 Enjoying brewing Espressos

Research
Teach
Practice
Develop and
test theories
Simplify the findings:
Class room Teaching
Synthesize the findings:
Prescriptive
Recommendations
Strategy
Capabilities
IT
Capabilities
Entrepreneurship
Information
Systems
Firm
Boundaries
Innovation
Commercialization
s
Radical
Innovations



Published in
› Journal of International Management
› Information Systems Research (ISR)
› Journal of Virtual Communities and Social network
› American Journal of Business
› Communications of AIS
› Journal of Cases on Information Technology (JCIT)
› Journal of Management and Strategy
› Technology and Investment
› International Journal of Strategic Information Technology and Applications
› International Journal of Innovation in Digital Economy (IJIDE)
› Journal of Business and Management
› Journal of Knowledge Management
Presented in:
› Strategic management Society (2011)
› AMCIS (2008, 2009, 2010)
› Academy of Management (AOM: 2010, 2012)
› Southern Management Association (2008; 2012 )
› Atlanta Competitive Advantage Conference (ACAC: 2010)
› Marketing Science Conference (2012)
› INFORMS Conference on Marketing Sc. (2012)
Under Review
› Organization Sc.
› Technovation
› R&D Management
› Journal of Business venturing
› Industrial Marketing Management
› Decision Science Journal
Combinatory effects of Exterior
Sourcing and Technology Distinctness
on Radical Innovations: A longitudinal
look at Patents in the IT Industry
Avimanyu Datta
Radical Innovations Make a firm Long-Lived .
Not all firms are capable of bringing radical
innovations
With age firms tend
to look inwards
(boundary and
industry) to source
innovations
MOTIVATION
Radical Innovations
are technologically
“different”
from a firms existing
stock of innovations
(patents)
Radicalness is often contingent upon access to
technologies whose influence/application
exceeds the territory of that technology’s
definition (technology distinctness) and sourcing
innovation outside a firm’s focal industry (exterior
sourcing)
Radical Innovations:
Innovation that are original and forms the
foundation for future innovation outcomes
Exterior Sourcing:
Degree to which an innovation is sourced
outside a firm’s focal industry.
Technology Distinctness :
Degree of distinctness between an
innovation’s definition and its
application/influence.
Novel
Unique
Impact on future
Technology
Positives: Tapping for sources of innovations outside the focal industry,
stimulate intensive experimentation with new technological combinations,
which furthers the possibility of creation of DIFFERENT Innovations (Ahuja &
Lampert, 2001; Fleming, 2001; Phelps, 2010; Audia & Goncalo, 2007; Makri et
al. 2010).
Negatives: Sourcing innovations outside focal industry result in
1. Costly, Expensive inconclusive innovations
2. High Integration Cost
3. Thus, we argue that while exterior sourcing may enable radical
innovation, it also creates confusion which negatively affects the
radicalness of innovation
Thus,
Hypothesis 1: There is a negative relationship between exterior sourcing and
radicalness.
1. Access to technologies whose application and influence exceeds the
definitional boundaries of prior technologies increases the set of possible
technology combinations as well as the potential for highly novel and
unique solutions (Fleming, 2001; Phelps, 2010)
2. Access to distinctly different technologies stimulates intensive
experimentation with new technological combinations, which should also
lead to more radical innovation outcomes (Ahuja et al., 2001b).
3. Access to more distinct technologies and experimentation with them not
only helps in creation of novel and unique solutions leading to original
innovation, but also increases the knowledge on how to productively put
these technologies into use, thereby influencing the content and speed
in developing future innovation.
Thus,
Hypothesis 2: There is a positive relationship between technological
distinctness and radicalness
Sourcing Innovations outside focal industry is expensive: when a high
number of exterior sources are employed this creates dual problems:
information overload arising from exterior sourcing and difficulty in grasping
the knowledge relating to novel applications of technologies
Getting access to distinct technology through minimal exterior links Cost
optimizing solution
Thus,
Hypothesis 3: Exterior sourcing will negatively moderate the relationship
between technology distinctness and radicalness.
Hypothesis 4: Exterior sourcing and technology distinctness will interact in
such a way that low exterior sourcing and high technology distinctness will
result in the highest level of radicalness, and high exterior sourcing and low
technology distinctness will result in the lowest level of radicalness.
Exterior
Sourcing
H1 : There is a negative relationship between
exterior sourcing and radicalness.
-
Technology
Distinctness
H3 : Exterior sourcing will negatively moderate
the relationship between technology
distinctness and radicalness.
Radicalness
+
H2 : There is a positive relationship between
technological distinctness and radicalness.
H4: Exterior sourcing and technology distinctness will interact in such a
way that low exterior sourcing and high technology distinctness will result
in the highest level of radicalness, and high exterior sourcing and low
technology distinctness will result in the lowest level of radicalness.
Get Total Patents
from 1994-2009 of all
69 firms including
their subsidiaries and
Spinouts
Filtration of
500 firms
S&P 500
Firms
500 FIRMS
69 IT Firms
Select the firms from IT
Verticals. There are
initially 82. Of which
69 had patents
69 Firms
192070 patents
2.6 million Citations
IT FIRMS
FINAL SAMPLE


Exterior Sources (EC): [B-(I+P)]/B
› Where B=all backward citations
› I = backward self citation
› P= Backward partner
When a patent application cites another patent from the firm itself,
we considered that an internal citation.

When a patent application cites members of the S&P-500 IT or
other IT firms, we considered that as a ‘partner’ citation.

To make sure that a non-S&P firm was belonged to the IT vertical
we compared it’s SIC code with corresponding codes that
collectively represents Information Technology Industry. Those SIC
codes are: 4510 (software & services), 4520 (technology hardware
& equipment), 4530 (telecommunication services)

Technology Distinctness: degree of distinctness between an
innovation’s definition and its application/influence.

From the standpoint of patents we look at its technological class
and subclasses to see to assess its definition and its field of search
to determine its application/influence.)

Technology Class: Technological classes and subclasses for a
patent define its technological domain.

Field of search: Field of search shows the application of an
invention which may or may not exceed the technological
domain restricted by its class.
technology distinctness = 1-[technology class ∩ field of search]

 Radicalness
 Log(((1+FC)*F/(1+BC)*B)/N)
 where FC=Forward citation and f=forward class match;
BC=Backward citation and b=backward class match;
N= number of years passed since the patent was
announced.
 We divided by N because older patents have more
forward citations making them artificially more Radical
than younger ones.
 We too log value to have a normal distribution
(a) Distribution
of Radical
Scores,
Controlled for
year
(b)Distributio
n after Log
Transformati
on

Statistical Test
› Using an Ordinary Least Squares Regression (OLS) Model we tested
Hypotheses 1, 2, and 3. The basic equation for this analysis was

Y i, (t’-t) = β0+ β1Ri, t-1 + β2Si, t-1+ β3Ai, t+ β4Pi, t+ β5PA i, (t ‘-t) + β6ES i, t + β7TD i, t+ β8
(ES×TD) i, t+ e,

For Hypothesis 4, the interaction between technology distinctness and
exterior sourcing will be graphically depicted by categorizing Exterior
Sourcing and Technology Distinctness as high (>0.5) or low (<0.5)
High
(ES>0.5)
Low
(E ≤ 0.5)
Technology
Distinctness
Control Variables: R&D Spending, Firm Size, Age of Firm, No of patents and
Patent Age.
External
Sources

High
(E>0.5)
Low
(E ≤ 0.5)
Hypotheses Test
Variables
Model 1
Beta (Error)
Model 2
Beta (Error)
Model 3
Beta (Error)
Model 4
Beta (Error)
R&D Spending
.102**(.003)
.110**(.000)
.104** (.000)
.103** (.000)
Revenue
.002**(.000)
.137**(.000)
-.138**(.000)
.085**(.000)
.024**(.000)
.091**(.000)
-.154**(.000)
.105**(.000)
.017**(.000)
.099**(.000)
-.158**(.000)
.112**(.000)
.018 **(.000)
.099** (.000)
-.158** (.000)
.112** (.000)
-.257**(.000)
-.260**(.000)
-.257**(.000)
.169**(.000)
.166** (.000)
Firm Age
No. of patents
Patent Age
Exterior Sources
Technology
Distinctness
-.087**(.000)
ES * TD
R2 (R2
Improvement)
.020** (N/A)
.083** (.063**)
.111** (.028**)
.112**(.001**)
Information
Criterion
(Improvement)
328,119.29
325,557.86
(2561.43)
318, 117.74
(7440.12)
306,768.32
(11349.42)
n=192,070. Standardized coefficients are reported with standard errors in parenthesis. Dummy variables
were included in analysis but not reported here.
**p<.001
Hypothesis
Model 1
Model 2
Model 3
Model 4
1
Only Control
variables (NA)
Supported
Supported
Supported
2
Only Control
variables (NA)
Supported
Supported
3
Only Control
variables (NA)
Supported
Model 4 is the best model with highest variance accounted for,
lowest in terms of Information Criterion.
Killer Combination: Sourcing the
Highest possible Distinct Technologies
with minimal Exterior Sources.
1. Deeper investigation and enhance prior research on exterior sourcing
and technology complementariness by linking it with radicalness.
2. Further research on radical innovations by including perspectives on
exterior sourcing and technology distinctness.
3. Logical understanding on the boundary conditions for which the
relationships among the constructs will hold true.
4. Selection capabilities of partners, are crucial not only to develop
radical innovation but also for long term performance
5. Future research can use radicalness as context to see how relative
absorptive capacity gets affected when technologies are distinct
and the entities involved in the network are from different industries
1. Managers are not only expected to grasp new technologies, comprehend
fresh knowledge, but also deal with information overload arising from
different industry
2. Commitment exterior sources should be made only when there are enough
incentives to get past the frictions and frustrations of dealing with information
overload, integration problems, and of comprehending technology that is
drastically different from managers’ current stock of expertise.
3. Create incentive programs for managers for identifying (a) technologies with
future potential and create radical markets, and (b) potential partners
outside the industry for getting access to such technologies.
1. Future research should try to replicate this work with different
industries like biotechnology, pharmaceuticals, automobiles,
aerospace & defense, and so forth.
2. Relevance of this study may just be restricted to industries
where patents are meaningful indicators of innovations
3. Radicalness of patents only partially captures the radicalness
of innovation. Future research should be geared towards
looking at the novelty of commercialized products and
looking at the technology architecture to judge distinctness
from the firm’s current portfolio.
Parsimonious two-variable predictor of radicalness: Exterior
sourcing and technology distinctness.
Before taking such risks of initiating product development, our
findings can help firms at two stages:
1. When the patent is announced, a look at the exterior sources
and technological distinctness combination can help in
predicting the possibility of radicalness.
2. Three to five years later the firm can actually see if the patent
met with the prediction of radicalness using our scores.
If a firm ventures outside its technology domain, and/or partners
with firms outside its industry, that will increase the chances that
any discovery will be radical. However, risks are high
is it not enough that I need distinctive technologies…I
also need to know who to get it from?
Yes. You need to know who to source it from and also
at what frequency.
And how would I know that?
I am sorry, but that is a relevant question. Relevance
does not interest us.
No wonder you are in academia.