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The Saga of Research vs Innovation – V

5. Innovation Pills
According to a study of Harvard Business School one of the reasons why Silicon Valley is so successful is the number of start up companies that are acquired by bigger companies. This has a two fold effect: it brings an innovation pill inside the big company and it provides the start up with the implicit knowledge they need to succeed. 
As shown in the drawing, Research activities may generate direct biz opportunities that are leveraged through the set up of a start up. This happens both for research carried out by Universities and the one carried out within a Big Company. 
In many instances we have seen that research created in an academic environment is more likely to generate a start up than the one carried out within a big company (I keep mentioning "big" companies since small ones are seldom involved in research).
There are several reasons for this situation, that may also differ from sector to sector and from Country to Country. In my life in a Big Company (Telco) I have seen that it is way to complex to create a start up, with gazillions of lawyers getting involved and studies on the biz opportunities. Another factor is that in academia a professor may be like to run at the same time the start up and keep his academic job, whilst in a Company it is usually a either or. A third common reason is that a Big Company may potentially exploit internally the result of the research, with no need to create a start up.
Innovative companies have indeed processes in place that allow the "exploration" first and "exploitation" later of research results.
In most cases, we see that Big Companies go on a shopping spree for start up and  some are actually growing their innovation capabilities through acquisition. Cisco is a point in case (9 acquisitions in 2013…), Google is another (18 acquisitions in 2013) and Apple another (13 acquisition in 2013).

About Roberto Saracco

Roberto Saracco fell in love with technology and its implications long time ago. His background is in math and computer science. Until April 2017 he led the EIT Digital Italian Node and then was head of the Industrial Doctoral School of EIT Digital up to September 2018. Previously, up to December 2011 he was the Director of the Telecom Italia Future Centre in Venice, looking at the interplay of technology evolution, economics and society. At the turn of the century he led a World Bank-Infodev project to stimulate entrepreneurship in Latin America. He is a senior member of IEEE where he leads the Industry Advisory Board within the Future Directions Committee and co-chairs the Digital Reality Initiative. He teaches a Master course on Technology Forecasting and Market impact at the University of Trento. He has published over 100 papers in journals and magazines and 14 books.