Friday, August 18, 2006

Technology Scouting Topology

Research - Technology Management, a publication of IRI published an article in June 2006 in which the authors propose a new topology for thinking about the types of Technology Scouting conducted in Open Innovation. I thought the topology was very helpful because of all the debate regarding what constitutes Open Innovation and versus traditional out-sourcing, M&A, alliances, Business Development, Corporate VC, and sourcing. Here is their proposed topology.

External Technology Sourcing Topology

  • Level 1 - Cost and Supply Chain Management
  • Level 2 - Strategic Partnering
  • Level 3 - Extended External Networks
  • Level N - Integrated External Innovation

In Level 1, companies “focus on modifying existing products or processes to meet current market needs.” To me, this means Level 1 is for the Incremental Innovation Christensen talks about. It either adds a new bell/whistle to the product or helps lower the cost which can allow a company to lower their price.

In Level 2, the “focus…varies but includes specific market needs, development skills and market access.”

In Level 3, what the company needs is “determined by specific areas of business activity, such as identifying therapeutic candidates, new catalysts or other materials.”

In Level N, “the business drivers…include strategic issues that necessitate multiple sources of innovation, a fast pace of innovation as well as a leadership vision that sets expectations around truly discontinuous innovations.”


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