Technology Sourcing in New Product Development Projects: When and how to use external resources?

Author Name KANI Masayo (Tezukayama University) / MOTOHASHI Kazuyuki (Faculty Fellow, RIETI)
Creation Date/NO. June 2018 18-E-042
Research Project Empirical Analysis of Innovation Ecosystems in Advancement of the Internet of Things (IoT)
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This paper provides empirical analyses to understand the management of external technology sourcing using a novel dataset of new product development (NPD) projects in Japanese firms, focusing on the difference between bilateral and unilateral contract-based alliances. External technology sourcing takes on various forms that can be divided into two categories: bilateral alliances, such as joint research and development (R&D), and unilateral alliances, such as licensing and commissioned R&D. The former style involves the cooperation process of joint R&D with a partner, whereas the latter involves the straightforward process of technology acquisition from a partner. In this paper, the determinants of the sourcing strategy for each contract type are investigated, and we find that a firm is likely to use external technology sourcing in exploratory projects, and that the type of sourcing will differ between large and small firms. Furthermore, a bilateral alliance is likely found to be used for market pull-type projects, while technology push-type ones are more often managed by unilateral alliances.