Markets for Technology and Their Implications for Corporate Strategy

39 Pages Posted: 21 Feb 2000

See all articles by Ashish Arora

Ashish Arora

Duke University - Fuqua School of Business; National Bureau of Economics Research; Duke Innovation & Entrepreneurship Initiative

Andrea Fosfuri

Universidad Carlos III de Madrid - Department of Business Administration

Alfonso Gambardella

Bocconi University - Department of Management and Technology

Date Written: January 2000

Abstract

Although market transactions for technologies, ideas, knowledge or information are limited by several well known imperfections, there is increasing evidence that, during the last two decades or so, such market transactions have become more common than in the past. These markets bring about new challenges to the firms. This paper examines some implications of markets for technology for the firms' corporate and technology strategies. Markets for technology change the traditional mindset in which the only available option for a company wishing to introduce an innovation is to develop the technology in-house, or for a company developing the technology to own the downstream assets needed to manufacture and commercialize the goods. This affects the role of companies both as technology users (they can now "buy" technologies) and as technology suppliers (they can now "sell" technologies). The implications for management include more proactive management of intellectual property, greater attention to external monitoring of technologies, and organizational changes to support technology licensing, joint-ventures and acquisition of external technology. For entrepreneurial startups, markets for technology make a focused business model more attractive. At the industry level, markets for technology may lower barriers to entry and increase competition, with obvious implications for the firms' broader strategy as well.

JEL Classification: L22, O31

Suggested Citation

Arora, Ashish and Fosfuri, Andrea and Gambardella, Alfonso, Markets for Technology and Their Implications for Corporate Strategy (January 2000). Available at SSRN: https://ssrn.com/abstract=204848 or http://dx.doi.org/10.2139/ssrn.204848

Ashish Arora

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

National Bureau of Economics Research

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Duke Innovation & Entrepreneurship Initiative ( email )

215 Morris St., Suite 300
Durham, NC 27701
United States

Andrea Fosfuri (Contact Author)

Universidad Carlos III de Madrid - Department of Business Administration ( email )

Calle Madrid 126
Getafe, Madrid, Madrid 28903
Spain

Alfonso Gambardella

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

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