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Profiting from Enabling Technologies?

Author

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  • Alfonso Gambardella

    (Department of Management and Technology and Invernizzi Center for Research on Innovation, Organization, Strategy and Entrepreneurship (ICRIOS), Università Bocconi, 20136 Milan, Italy; and Centre for Economic Policy Research, London EC1V 0DX, United Kingdom;)

  • Sohvi Heaton

    (College of Business Administration, Loyola Marymount University, Los Angeles, California 90045;)

  • Elena Novelli

    (Cass Business School, City, University of London, London EC1Y 8TZ, United Kingdom;)

  • David J. Teece

    (Haas School of Business, Institute for Business Innovation, University of California, Berkeley, Berkeley, California 94720)

Abstract

How to profit from innovation has been an important question for both innovation scholars and practitioners over the years. It is certainly a relevant question for all types of technological innovation, including emerging ones. David J. Teece’s profiting from innovation (PFI) framework [Teece DJ (1986) Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Res. Policy 15(6):285–305.] sets forth a theory of the relevant contingencies. However, Teece’s framework focuses on technologies with applications in specific domains. We focus on the question of how to profit from enabling technologies : technologies that are applicable across multiple domains. We argue that capturing value in such circumstances is fundamentally different from profiting from less-enabling technologies and raises new issues with respect to the relevant business models and public policies. This paper’s contribution is threefold. It formally revises and extends the original PFI framework to include the case of enabling technologies, it provides empirical evidence to support the distinction between profiting from enabling and profiting from narrower “discrete” technologies, and it generates perspectives on the appropriate business models for these technologies and discusses related public policy implications, in light of the fact that the share of the benefits the innovator can capture is likely to be even smaller for enabling than for discrete technologies.

Suggested Citation

  • Alfonso Gambardella & Sohvi Heaton & Elena Novelli & David J. Teece, 2021. "Profiting from Enabling Technologies?," Strategy Science, INFORMS, vol. 6(1), pages 75-90, March.
  • Handle: RePEc:inm:orstsc:v:6:y:2021:i:1:p:75-90
    DOI: 10.1287/stsc.2020.0119
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    Cited by:

    1. Rahul Kapoor & David J. Teece, 2021. "Three Faces of Technology’s Value Creation: Emerging, Enabling, Embedding," Strategy Science, INFORMS, vol. 6(1), pages 1-4, March.
    2. Henkel, Joachim, 2022. "Licensing standard-essential patents in the IoT – A value chain perspective on the markets for technology," Research Policy, Elsevier, vol. 51(10).
    3. Kristina McElheran & J. Frank Li & Erik Brynjolfsson & Zachary Kroff & Emin Dinlersoz & Lucia Foster & Nikolas Zolas, 2024. "AI adoption in America: Who, what, and where," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 33(2), pages 375-415, March.
    4. Gambardella, Alfonso, 2023. "Private and social functions of patents: Innovation, markets, and new firms," Research Policy, Elsevier, vol. 52(7).
    5. Goldfarb, Avi & Taska, Bledi & Teodoridis, Florenta, 2023. "Could machine learning be a general purpose technology? A comparison of emerging technologies using data from online job postings," Research Policy, Elsevier, vol. 52(1).
    6. Ding, Jeffrey, 2022. "Techno-industrial Policy for New Infrastructure: China’s Approach to Promoting Artificial Intelligence as a General Purpose Technology," Institute on Global Conflict and Cooperation, Working Paper Series qt1sb844ws, Institute on Global Conflict and Cooperation, University of California.
    7. Hurmelinna-Laukkanen, Pia & Yang, Jialei, 2022. "Distinguishing between appropriability and appropriation: A systematic review and a renewed conceptual framing," Research Policy, Elsevier, vol. 51(1).
    8. Milan Miric & Hakan Ozalp & Erdem Dogukan Yilmaz, 2023. "Trade‐offs to using standardized tools: Innovation enablers or creativity constraints?," Strategic Management Journal, Wiley Blackwell, vol. 44(4), pages 909-942, April.
    9. Yoruk, Esin & Radosevic, Slavo & Fischer, Bruno, 2023. "Technological profiles, upgrading and the dynamics of growth: Country-level patterns and trajectories across distinct stages of development," Research Policy, Elsevier, vol. 52(8).
    10. Tom Broekel & Torben Klarl, 2024. "The long-term evolution of technological complexity and its relationship with economic growth," Papers in Evolutionary Economic Geography (PEEG) 2427, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2024.
    11. Haessler, Philipp & Giones, Ferran & Brem, Alexander, 2023. "The who and how of commercializing emerging technologies: A technology-focused review," Technovation, Elsevier, vol. 121(C).
    12. Nylund, Petra A. & Ferràs-Hernández, Xavier & Pareras, Luis & Brem, Alexander, 2022. "The emergence of entrepreneurial ecosystems based on enabling technologies: Evidence from synthetic biology," Journal of Business Research, Elsevier, vol. 149(C), pages 728-735.
    13. Peters, Bettina & Marks, Hannes & Trunschke, Markus & Grimpe, Christoph & Sofka, Wolfgang & Czarnitzki, Dirk, 2023. "Schwerpunktstudie Technologiemärkte," Studien zum deutschen Innovationssystem 9-2023, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    14. Pundziene, Asta & Gerulaitiene, Neringa & Bez, Sea Matilda & Georgescu, Irène & Mathieu, Christopher & Carrabina-Bordoll, Jordi & Rialp-Criado, Josep & Nieminen, Hannu & Varri, Alpo & Boethius, Susann, 2023. "Value capture and embeddedness in social-purpose-driven ecosystems. A multiple-case study of European digital healthcare platforms," Technovation, Elsevier, vol. 124(C).
    15. Waßenhoven, Anna & Rennings, Michael & Laibach, Natalie & Bröring, Stefanie, 2023. "What constitutes a “Key Enabling Technology” for transition processes: Insights from the bioeconomy's technological landscape," Technological Forecasting and Social Change, Elsevier, vol. 197(C).
    16. Soltanzadeh, Javad & Sahebjamnia, Navid & Khosroshahi, Elnaz Mesma & Bouguerra, Abderaouf, 2024. "Commercializing Covid-19 diagnostic technologies: A review of challenges, success factors, and insights from the profiting from innovation framework," Technovation, Elsevier, vol. 130(C).
    17. Mendonça, Sandro & Damásio, Bruno & Charlita de Freitas, Luciano & Oliveira, Luís & Cichy, Marcin & Nicita, António, 2022. "The rise of 5G technologies and systems: A quantitative analysis of knowledge production," Telecommunications Policy, Elsevier, vol. 46(4).
    18. Bojovic, Neva, 2022. "Strategic framing of enabling technologies: Insights from firms digitizing smell and taste," Research Policy, Elsevier, vol. 51(3).
    19. Conti, Raffaele & Novelli, Elena, 2022. "Not all technologies are created equal for stakeholders: Constituency statutes, firm stakeholder orientation and investments in technology generality," Research Policy, Elsevier, vol. 51(3).
    20. Wen, Wen & Forman, Chris & Jarvenpaa, Sirkka L, 2022. "The effects of technology standards on complementor innovations: Evidence from the IETF," Research Policy, Elsevier, vol. 51(6).
    21. Nylund, Petra A. & Brem, Alexander & Agarwal, Nivedita, 2022. "Enabling technologies mitigating climate change: The role of dominant designs in environmental innovation ecosystems," Technovation, Elsevier, vol. 117(C).

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