The emergence of radical technologies presents a significant challenge to incumbent firms. We study firms' management of radical technological change by separating their actions into upstream research (the "R" of R&D) and downstream development (the "D" of R&D). We introduce two contingencies to explain when incumbents' research investments in radical technologies translate into product development and when these upstream investments may get voided by organizational inertia downstream. First, radical technologies can differ in how they conform to incumbents' existing business models, impacting the extent to which the movement of research outputs toward development will be subject to inertial pressures. Second, incumbents can invest in a radical technology through a variety of modes (internal research, external research contracts, alliances, acquisitions). These modes represent unique combinations of who does research and who is involved in the decision for subsequent development, and, hence, differ in the extent to which they are shielded from inertial pressures. This difference helps explain why incumbents, despite responding to radical technologies, may still be unable to adapt, as well as what types of investments will be more effective in helping firms navigate technological change. Evidence from pharmaceutical incumbents' pursuit of monoclonal antibodies and gene therapy offers strong support for our arguments. 1 We use the terms "technological regime" and "technologies" interchangeably to refer to specific knowledge bases and/or procedures as solutions to relevant problems within a given context (Anderson & Tushman, 1990; Dosi, 1982; Nelson & Winter, 1982). Note that while "technology" may sometimes be confounded with a physical artifact (e.g., steamship, cell phone), "technological regime" provides greater generalizability and is more consistent with our empirical context (e.g., Nicholls

The market for knowledge has grown dramatically over the past decades. Extant work underscores the factors shaping market efficacy: (a) the cost of searching for innovative knowledge; (b) asymmetric-information between inventors and investors; and (c)

Although the relationship between competition and firm innovation has long been of scholarly interest, prior research has predominantly considered changes in internal research and development (R&D) as a strategic response to competitors’ actions. In this study, we focus on one of the most important and commonly observed contractual mechanisms used to acquire external technologies: technology licensing. Surprisingly, licensing has been mostly overlooked by prior studies examining the effect of competition on firms’ allocation of R&D. We take into account the unique properties of licensing and systematically link them to the demands arising from the competitive pressure caused by rivals’ launches of new products. Furthermore, we discuss how licensing-in decisions ultimately shape a firm’s subsequent innovation in areas where they are threatened by competitors and how such innovation depends on the cumulative R&D investments inside the organization into which licensed knowledge is added. We test our theoretical model through a longitudinal design that tracks the licensing-in and innovation outcomes of firms in the global biopharmaceutical industry. Accounting for the endogenous selection of firms into licensing, our findings illustrate that licensing-in is motivated by competitive pressures. We also find that licensing-in increases a firm’s capacity to innovate in areas where competitors have exerted pressure, particularly in the presence of cumulative R&D investments. In so doing, the paper anchors technology licensing as a key organizational action that helps increase our understanding of the important relationship between competition and innovation.

As much as prior research has shed light on the boundary‐spanning processes of global organizations and their (positive) impact on an MNC's performance, whether, when and how past performance ultimately shapes an MNC's boundary‐spanning activities remains an open question in management research. To tackle these questions, we examine the behaviour of technology scouts in global organizations who span organizational and national boundaries to tap into novel knowledge and span internal boundaries to present this knowledge to constituents inside the MNC. Drawing on the behavioural theory of the firm, we propose that the intensity of organizational boundary spanning, the likelihood of spanning national boundaries and the way technology scouts span internal boundaries to engage with members inside the organization are sensitive to how the MNC has performed relative to its aspirations. We support our theoretical expositions with insights gained from interviewing senior industry professionals with direct experience in technology scouting in MNCs.

Emerging technologies, while offering enormous potential for economic growth, carry a high degree of uncertainty regarding whether and when that potential may be realized. How can firms evaluate the uncertainty surrounding an emerging technology? To address this question, we offer a structured approach that unbundles the uncertainty surrounding emerging technologies, incorporating both supply- and demand-side factors. These include the focal technology itself, the potential market applications, the users adopting the technology, the ecosystem of activities that support the technology’s value creation, and the business model with which the technology is being commercialized. We further consider that the uncertainty surrounding each of these sources may not be resolved in a vacuum, but, rather, that it may interact with other sources of uncertainty in a pooled, sequential, or reciprocal way. Such a structured approach of evaluating uncertainty can help firms and managers in terms of the cognitive processes and the managerial practices and provide microfoundations for dynamic managerial capabilities. We illustrate the applicability of the framework for two emerging technologies—gene therapy and autonomous vehicles—and how the framework can be integrated with prominent managerial practices for managing uncertainty.