Acquisition of resources for commercializing emerging technologies: comparing large firms with startups

Abstract

Radical innovation programs designed for commercializing emerging technologies are compared to emerging technology startup firms in terms of the research work, risk, uncertainty and acquisition of resources and capabilities. Current literature shows that companies with potentially disruptive technologies are focusing initially on simple applications in industries with short product development cycles. A continuing question is how initial resources and resource acquisition strategies associated with disruptive technology commercialization are translated to positions of sustainable competitive advantage. Drawing on the resource-based view of the firm, transaction costs theory and the dynamic organization capability perspective; we characterize the chief resources being used by large firms and startups. We further analyze the ways in which these resources are acquired and categorize them under four distinct groups: internal and external resources, internal and external collaboration. The study shows how the risk, uncertainty, and flexibility associated with each of these resource groups affects the product development cycles. A comparative analysis is then undertaken to understand the role of the "acquisition of resources" process in commercialization of emerging technologies. The paper compares small and large firms in three "hot" areas of emerging technologies, biotechnology, photonics and nanotechnology. Drawing on this examination and a review of the literature we offer a schematic of how large and small firms differ in their approaches to commercialization of emerging technologies. Based on several propositions derived from our investigation, we provide conjectures about what large and startup firms can learn from each other regarding commercializing emerging technologies.