Academic journal article Research-Technology Management

Innovation through Spinning in and Out

Academic journal article Research-Technology Management

Innovation through Spinning in and Out

Article excerpt

EIRMA Working Group 60, 2003; Available to IRI and EIRMA members from EIRMA (European Industrial Research Management Association), 34, rue de Bassano, F-75008, Paris; www.eirma.asso.fr

This report by an EIRMA Working Group examines corporate venturing as an effective means of technology acquisition (spinning in) and technology divestment (spinning out). Formed in 2001, the Group was charged with: establishing the drivers for, and benefits of, these approaches as strategic tools for deriving greater value from R&D; identifying current good practices; and understanding the barriers to progress. Concluding in January 2003 that corporations should no longer ask if they should enter into venture investments but rather how to do so in order to support sustainable growth, the Group made the following recommendations:

* Venturing has pervasive benefits: There are opportunities in nearly all sectors to capitalize on new technologies, by bringing these into the company and by divesting them to prove their value in the marketplace.

* Benefits from spinning in: Mature businesses have perhaps the most to gain. Benefits come from rejuvenation and greater agility through access to new skills, know-how and competences. These boost innovation, speed time-to-market, and help gain market share and consolidate markets. A more flexible approach to new opportunities, sustainability and longer-term size and value can be achieved by acquiring previously-missing technologies and entrepreneurial talent.

* Spinning out: This is a very effective way for companies in emerging industry sectors to leverage new technologies and let them prove their value. Investment can be partnered and shareholder value created while a dedicated home for an innovation is created. …

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