• Recognize when outside technology is needed to accelerate your company’s innovation processes
• Obtain a global perspective to find and evaluate sources of external technology
• Get the tools to manage the acquisition process
• Structure deals and relationships to bring external technology into your company
• Manage the resulting external relationships
• Accelerate your product development cycle and stay ahead of the competition
• Practice applying course learning to a case study for a proposed deal structure
• Make external technology acquisition part of your business processes and culture

Accelerating Innovation Through External Technology

• Becoming more innovative by moving to an ‘open innovation’ business model
• Accelerating the product development cycle using limited technical resources
• Managing risks and controlling costs: getting more bang for your money through ‘synthetic vertical integration’
• External technology acquisition and technology scouting—different names for the same external development tool

Balancing External and Internal Development Efforts

• Using the WFGMSM model of technology acquisition: determining What you need; Finding it; Getting it; Managing relationships
• Developing extensive networks of relationships for technology scouting
• Developing a comprehensive technology strategy that involves acquisition, cross-supply, and co-development 

Determining Your External Technology Acquisition Goals

• Candidate criteria: seeking value, filling gaps, managing complexity, addressing competitors, reducing costs, and hedging your bets (the portfolio concept)
• Incorporating technology roadmaps
• Determining future technical requirements: technology forecasting, anticipating customer needs, and new project requirements
• Establishing priorities among technology acquisition needs
• Weighing incremental improvement versus breakthrough technologies
• Developing a portfolio of external relationships

Finding What You’re Looking for

• Looking in other companies—successful approaches
• Searching in start-up companies—a special case
• Working with university faculty and tech transfer offices
• Dealing with the individual inventor
• Going global: problems and considerations

Structuring the Deal

• Transitioning from one-on-one arrangements to alliance networks
• Moving from cost and supply chain management to more strategic integrated external networks
• Considering the open innovation model
• Keys to successful deals: matching business objectives and style, using ‘reverse flow’ to enhance the process, and swapping personnel
• Variations on the simple acquisition model: gaining revenue from unexploited internal developments (out-licensing), creating co-development relationships, and bartering and cross-licensing

Integrating External Technology Sourcing Into Your Business Processes and Managing Resulting Relationships

• Using the external technology sourcing concept to overcome traditional corporate boundaries
• Incorporating externally driven innovation into existing business processes
• Institutionalizing external sourcing: developing new products, creating new ventures, and licensing and sublicensing
• Overcoming the ‘not invented here’ factor
• Making it work: top management involvement
• The difference between conventional R&D outsourcing and technology scouting
• Risk management

Impact of Intellectual Property Law on External Technology Sourcing

• Structuring relationships with intellectual property in mind
• Understanding the role of patent and copyright in enhancing/impeding external innovation acquisition
• Protecting trade secrets
• Assessing the impact of IP law on external sourcing: international patent complications and proposed changes in U.S. intellectual property law

Case Study Workshop

As a participant, you will work through a case study illustrating many of the issues that arise in external innovation acquisition. Each group will develop term sheets for a proposed deal structure. The case outcome and process will be discussed at length in class.

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