Page 263 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

248 Appendix B

graphic research, and customer activity cycle mapping. But to
make such deep investigations worthwhile, companies have
had to revisit what they do with the insights generated, i.e., how
to move these insights into development and generate sub-
stantial new business opportunities without relying solely on
the technology-focused centralized lab structures of the past.
Part of the answer was R&D partnerships. Michael Porter’s
research in the 1980s revealed the importance of innovation
networks, particularly geographical clusters of specialized
companies and institutions that collectively generated better-
than-average productivity gains. In industries that were
deemed to be nationally strategic, such as semiconductors and
aerospace, the U.S. government facilitated and subsidized the
pooling of R&D in formal R&D consortia that previously
would have faced antitrust barriers. Soon after the turn of the
century, the economic growth of countries such as China, India,
and Brazil encouraged companies to open local R&D facilities
to serve these markets and interact more directly with other
local companies in the industry ecosystem. New forms of inter-
national R&D partnerships emerged, fostered by advances in
and diffusion of information and communication technologies.
Corporate venture capital offered another potential solution.
When large corporations scaled back or abandoned their labo-
ratories, burgeoning private venture capital partially filled the
gap. Venture capital financing for new business development
soared in the 1990s, not infrequently for ventures conceived by
stymied employees who were leaving large corporations. Par-
tially in an effort to recapture some of the benefits of their
entrepreneurial employees, large corporations began setting
up their own venture funds. Rather than exclusively attempt-
ing to generate technologies in captive laboratories, some com-
panies sought to access technologies that had been developed
externally, often before they reached the market. In profitable