Technology Scouting is the systematic process of identifying, evaluating, and acquiring external technologies, innovations, and intellectual property (IP) assets that have the potential to enhance an organization’s products, services, or processes. It involves monitoring market trends, conducting research, and building networks to identify emerging technologies and startups that align with the organization’s strategic objectives and innovation goals.
By leveraging external sources of innovation, technology scouting enables organizations to stay competitive, drive growth, and accelerate product development in rapidly evolving industries.
External Innovation: Technology scouting focuses on sourcing innovation externally from startups, research institutions, and other organizations. It recognizes that valuable technologies and ideas may exist outside the organization’s boundaries and seeks to leverage external expertise and resources to drive innovation.
Strategic Alignment: Technology scouting efforts are strategically aligned with the organization’s business objectives and innovation priorities. They focus on identifying technologies that address specific challenges, enhance existing capabilities, or open up new opportunities for growth and differentiation.
Cross-Functional Collaboration: Technology scouting involves cross-functional collaboration between various departments and stakeholders within the organization, including R&D, business development, and strategic planning. It requires close coordination and communication to ensure that scouting efforts are aligned with the organization’s overall strategy and objectives.
Methodologies and Approaches
Implementing Technology Scouting involves various methodologies and approaches to technology assessment, due diligence, and partnership development.
Technology Assessment
Technology scouting teams assess potential technologies based on criteria such as market potential, technical feasibility, and strategic fit with the organization’s goals. They conduct thorough evaluations, including technology reviews, market analysis, and competitive benchmarking, to identify technologies with the highest potential for impact and value.
Due Diligence
Technology scouting teams conduct due diligence on potential technology partners, including startups, research institutions, and technology vendors. They assess factors such as intellectual property rights, technical capabilities, and financial stability to ensure that partnerships align with the organization’s strategic objectives and risk tolerance.
Partnership Development
Technology scouting teams build relationships with external technology partners through networking, outreach, and collaboration. They engage with startups, research institutions, and other organizations to explore partnership opportunities, negotiate agreements, and facilitate technology transfer or licensing arrangements.
Benefits of Technology Scouting
Technology Scouting offers several benefits for organizations seeking to drive innovation, stay competitive, and achieve strategic objectives.
Access to Innovation: Technology scouting enables organizations to access a wide range of external technologies, ideas, and expertise that may not be available internally. By tapping into external sources of innovation, organizations can identify new opportunities, explore emerging trends, and stay ahead of the competition.
Accelerated Product Development: Technology scouting allows organizations to accelerate product development by leveraging external technologies and expertise. By partnering with startups or licensing technologies, organizations can reduce time-to-market, mitigate development risks, and enhance the competitiveness of their products and services.
Diversification of Innovation: Technology scouting helps organizations diversify their innovation portfolios by sourcing ideas and technologies from a variety of sources. By exploring a diverse range of technologies and partners, organizations can reduce dependence on internal R&D efforts and increase resilience to market disruptions.
Strategic Partnerships: Technology scouting fosters strategic partnerships and collaborations with external technology partners. By building relationships with startups, research institutions, and technology vendors, organizations can access complementary expertise, share risks and resources, and create value through joint innovation initiatives.
Challenges in Implementing Technology Scouting
Despite its benefits, implementing Technology Scouting can pose several challenges and considerations for organizations.
Resource Constraints: Technology scouting requires dedicated resources, including personnel, time, and budget. Organizations may face challenges in allocating sufficient resources to scouting activities, especially in competitive or resource-constrained environments.
Integration with Internal Processes: Technology scouting efforts must be integrated with the organization’s internal processes and decision-making structures. Achieving alignment and coordination between scouting teams and internal stakeholders can be challenging, particularly in large or complex organizations.
Risk Management: Technology scouting involves inherent risks, including uncertainty about the viability of external technologies and the reliability of technology partners. Organizations must conduct thorough due diligence and risk assessments to mitigate potential risks and ensure alignment with strategic objectives.
Strategies for Implementing Technology Scouting
To address challenges and maximize the effectiveness of Technology Scouting, organizations can employ various strategies and best practices.
Strategic Alignment: Ensure that technology scouting efforts are aligned with the organization’s strategic objectives and innovation priorities. Develop clear criteria and guidelines for evaluating potential technologies and partners to ensure alignment with strategic goals.
Cross-Functional Collaboration: Foster cross-functional collaboration and communication between technology scouting teams and internal stakeholders. Involve R&D, business development, and strategic planning teams in scouting activities to ensure alignment with business objectives and integration with internal processes.
Continuous Learning: Foster a culture of continuous learning and adaptation within technology scouting teams. Encourage experimentation, exploration, and knowledge sharing to stay abreast of emerging technologies and trends and identify new opportunities for innovation.
Partnership Development: Invest in building relationships with external technology partners through networking, outreach, and collaboration. Actively engage with startups, research institutions, and technology vendors to explore partnership opportunities and facilitate technology transfer or licensing arrangements.
Real-World Examples
Technology Scouting has been successfully implemented by organizations across industries and sectors to drive innovation, stay competitive, and achieve strategic objectives.
General Electric (GE): GE Ventures, the corporate venture capital arm of General Electric, focuses on technology scouting and investment in startups across various sectors, including healthcare, energy, and industrial automation. By leveraging external innovation, GE Ventures aims to accelerate innovation, drive growth, and create value for GE’s businesses and customers.
Procter & Gamble (P&G): P&G Ventures, the corporate venture capital arm of Procter & Gamble, scouts for external technologies and startups that have the potential to disrupt the consumer goods industry. By partnering with startups and entrepreneurs, P&G Ventures aims to drive innovation in areas such as personal care, home care, and healthcare, and create new opportunities for growth and differentiation.
Siemens: Siemens Technology Accelerator (STA) is the technology scouting and corporate venturing unit of Siemens AG, a global technology company. STA scouts for promising technologies and startups in areas such as industrial automation, digitalization, and renewable energy. By investing in and collaborating with external partners, Siemens aims to drive innovation, accelerate product development, and strengthen its position in key markets.
Conclusion
Technology Scouting is a strategic approach to driving innovation, staying competitive, and achieving strategic objectives by leveraging external sources of technology and expertise. By systematically identifying, evaluating, and acquiring external technologies and partnerships, organizations can access new opportunities, accelerate product development, and create value for customers and stakeholders. Despite challenges such as resource constraints and risk management, Technology Scouting offers significant benefits for organizations seeking to stay ahead of industry trends and drive sustainable growth in today’s dynamic business environment. As organizations continue to pursue innovation and differentiation, Technology Scouting will remain a critical tool for identifying and harnessing external sources of innovation and driving long-term success.
Related Frameworks
Description
When to Apply
Open Innovation
– A collaborative approach to innovation that involves sharing ideas, resources, and expertise across organizational boundaries to accelerate innovation and drive value creation. Open Innovation leverages external networks and ecosystems to access diverse perspectives and capabilities.
– When seeking to tap into external knowledge and resources for innovation. – Embracing Open Innovation principles to collaborate with partners, customers, and stakeholders, co-create solutions, and access new technologies and markets, accelerating the pace of innovation and enabling Technology Scouting by leveraging collective intelligence and expertise.
Corporate Venture Capital (CVC)
– Involves corporate investment in external startups or ventures to access new technologies, markets, and business models, and drive innovation. Corporate Venture Capital (CVC) enables corporations to gain strategic insights, foster entrepreneurial talent, and explore new growth opportunities.
– When seeking to accelerate innovation and explore new markets. – Establishing Corporate Venture Capital (CVC) initiatives to invest in external startups, access emerging technologies, and explore new business models, leveraging external innovation ecosystems and entrepreneurial talent to drive disruptive innovation and growth, consistent with Technology Scouting objectives.
Strategic Partnerships
– Collaborative relationships between corporations and external entities, such as startups, universities, or research institutions, to access complementary capabilities, technologies, or markets. Strategic Partnerships enable corporations to enhance innovation, accelerate growth, and drive competitive advantage.
– When seeking to leverage external expertise and resources for innovation. – Establishing strategic partnerships with startups, academic institutions, or industry collaborators to access emerging technologies, co-develop solutions, and explore new market opportunities, enhancing Technology Scouting efforts and fostering a culture of innovation and collaboration.
Technology Radar
– A tool or methodology used to monitor and evaluate emerging technologies, trends, and market developments systematically. Technology Radar helps organizations identify disruptive innovations and assess their potential impact on business strategies and operations.
– When tracking emerging technologies and trends in specific industries. – Implementing Technology Radar frameworks to scan for emerging technologies, evaluate their readiness and relevance to business objectives, and prioritize areas for further exploration and investment, guiding Technology Scouting efforts and strategic decision-making.
Open Source Intelligence (OSINT)
– Involves gathering and analyzing publicly available information from open sources, such as websites, social media, and online databases, to gain insights into market trends, competitor activities, and emerging technologies. Open Source Intelligence (OSINT) provides valuable intelligence for Technology Scouting and competitive analysis.
– When conducting research and analysis on emerging technologies and market trends. – Leveraging Open Source Intelligence (OSINT) tools and techniques to collect and analyze publicly available data on emerging technologies, competitors, and market dynamics, informing Technology Scouting strategies, identifying innovation opportunities, and supporting strategic decision-making processes.
Horizon Scanning
– A systematic process of identifying and analyzing emerging trends, risks, and opportunities that may impact an organization’s future strategy and operations. Horizon Scanning helps organizations anticipate and prepare for potential disruptions and changes in the business environment.
– When forecasting future trends and developments in technology and markets. – Conducting Horizon Scanning exercises to identify emerging technologies, market shifts, and disruptive trends, assessing their potential impact on business strategies and operations, and proactively shaping Technology Scouting initiatives and innovation agendas to capitalize on emerging opportunities and mitigate risks.
Innovation Clusters
– Geographic concentrations of interconnected companies, universities, research institutions, and support organizations that collaborate and share resources to drive innovation and economic growth in specific industries or regions. Innovation Clusters provide fertile ground for Technology Scouting and collaborative innovation.
– When seeking to access innovation ecosystems and networks. – Engaging with Innovation Clusters or technology hubs to connect with startups, research institutions, and industry partners, access emerging technologies, and explore collaborative opportunities, enhancing Technology Scouting efforts and fostering a culture of innovation and collaboration.
Technology Foresight
– A strategic planning process that involves systematically exploring and envisioning future technological developments, trends, and scenarios to inform long-term innovation strategies and investment decisions. Technology Foresight helps organizations anticipate and prepare for disruptive changes in technology and markets.
– When developing long-term innovation strategies and investment plans. – Conducting Technology Foresight exercises to anticipate future technological developments, assess their potential impact on industries and markets, and identify opportunities for strategic innovation and investment, guiding Technology Scouting initiatives and supporting corporate growth objectives.
Competitive Intelligence
– Involves gathering and analyzing information on competitors’ strategies, products, and capabilities to understand their strengths, weaknesses, and market positioning. Competitive Intelligence helps organizations anticipate competitive threats and identify opportunities for differentiation.
– When conducting analysis on competitors and market dynamics. – Leveraging Competitive Intelligence techniques to gather insights into competitors’ technology portfolios, R&D activities, and market strategies, identifying gaps and opportunities for innovation and differentiation, supporting Technology Scouting efforts and strategic decision-making processes.
Emerging Technology Forums and Conferences
– Events and gatherings focused on showcasing and discussing emerging technologies, trends, and innovations in specific industries or domains. Emerging Technology Forums and Conferences provide opportunities for networking, learning, and collaboration.
– When seeking exposure to emerging technologies and innovations. – Participating in Emerging Technology Forums and Conferences to stay informed about the latest developments, trends, and opportunities in specific industries or technology domains, networking with experts and thought leaders, and exploring potential partnerships or collaborations to drive Technology Scouting efforts and foster innovation within the organization.
Convergent thinking occurs when the solution to a problem can be found by applying established rules and logical reasoning. Whereas divergent thinking is an unstructured problem-solving method where participants are encouraged to develop many innovative ideas or solutions to a given problem. Where convergent thinking might work for larger, mature organizations where divergent thinking is more suited for startups and innovative companies.
The concept of cognitive biases was introduced and popularized by the work of Amos Tversky and Daniel Kahneman in 1972. Biases are seen as systematic errors and flaws that make humans deviate from the standards of rationality, thus making us inept at making good decisions under uncertainty.
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and eventuality. It also discourages the tendency for individuals to default to the most obvious choice.
Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving, can at times, create a big impact.
Bounded rationality is a concept attributed to Herbert Simon, an economist and political scientist interested in decision-making and how we make decisions in the real world. In fact, he believed that rather than optimizing (which was the mainstream view in the past decades) humans follow what he called satisficing.
The Dunning-Kruger effect describes a cognitive bias where people with low ability in a task overestimate their ability to perform that task well. Consumers or businesses that do not possess the requisite knowledge make bad decisions. What’s more, knowledge gaps prevent the person or business from seeing their mistakes.
Occam’s Razor states that one should not increase (beyond reason) the number of entities required to explain anything. All things being equal, the simplest solution is often the best one. The principle is attributed to 14th-century English theologian William of Ockham.
The Lindy Effect is a theory about the ageing of non-perishable things, like technology or ideas. Popularized by author Nicholas Nassim Taleb, the Lindy Effect states that non-perishable things like technology age – linearly – in reverse. Therefore, the older an idea or a technology, the same will be its life expectancy.
Antifragility was first coined as a term by author, and options trader Nassim Nicholas Taleb. Antifragility is a characteristic of systems that thrive as a result of stressors, volatility, and randomness. Therefore, Antifragile is the opposite of fragile. Where a fragile thing breaks up to volatility; a robust thing resists volatility. An antifragile thing gets stronger from volatility (provided the level of stressors and randomness doesn’t pass a certain threshold).
Ergodicity is one of the most important concepts in statistics. Ergodicity is a mathematical concept suggesting that a point of a moving system will eventually visit all parts of the space the system moves in. On the opposite side, non-ergodic means that a system doesn’t visit all the possible parts, as there are absorbing barriers
Systems thinking is a holistic means of investigating the factors and interactions that could contribute to a potential outcome. It is about thinking non-linearly, and understanding the second-order consequences of actions and input into the system.
Vertical thinking, on the other hand, is a problem-solving approach that favors a selective, analytical, structured, and sequential mindset. The focus of vertical thinking is to arrive at a reasoned, defined solution.
Metaphorical thinking describes a mental process in which comparisons are made between qualities of objects usually considered to be separate classifications. Metaphorical thinking is a mental process connecting two different universes of meaning and is the result of the mind looking for similarities.
Maslow’s Hammer, otherwise known as the law of the instrument or the Einstellung effect, is a cognitive bias causing an over-reliance on a familiar tool. This can be expressed as the tendency to overuse a known tool (perhaps a hammer) to solve issues that might require a different tool. This problem is persistent in the business world where perhaps known tools or frameworks might be used in the wrong context (like business plans used as planning tools instead of only investors’ pitches).
The Peter Principle was first described by Canadian sociologist Lawrence J. Peter in his 1969 book The Peter Principle. The Peter Principle states that people are continually promoted within an organization until they reach their level of incompetence.
The straw man fallacy describes an argument that misrepresents an opponent’s stance to make rebuttal more convenient. The straw man fallacy is a type of informal logical fallacy, defined as a flaw in the structure of an argument that renders it invalid.
The Google effect is a tendency for individuals to forget information that is readily available through search engines. During the Google effect – sometimes called digital amnesia – individuals have an excessive reliance on digital information as a form of memory recall.
The Streisand Effect is a paradoxical phenomenon where the act of suppressing information to reduce visibility causes it to become more visible. In 2003, Streisand attempted to suppress aerial photographs of her Californian home by suing photographer Kenneth Adelman for an invasion of privacy. Adelman, who Streisand assumed was paparazzi, was instead taking photographs to document and study coastal erosion. In her quest for more privacy, Streisand’s efforts had the opposite effect.
Single-attribute choices – such as choosing the apartment with the lowest rent – are relatively simple. However, most of the decisions consumers make are based on multiple attributes which complicate the decision-making process. The compromise effect states that a consumer is more likely to choose the middle option of a set of products over more extreme options.
In business, the butterfly effect describes the phenomenon where the simplest actions yield the largest rewards. The butterfly effect was coined by meteorologist Edward Lorenz in 1960 and as a result, it is most often associated with weather in pop culture. Lorenz noted that the small action of a butterfly fluttering its wings had the potential to cause progressively larger actions resulting in a typhoon.
The IKEA effect is a cognitive bias that describes consumers’ tendency to value something more if they have made it themselves. That is why brands often use the IKEA effect to have customizations for final products, as they help the consumer relate to it more and therefore appending to it more value.
The overview effect is a cognitive shift reported by some astronauts when they look back at the Earth from space. The shift occurs because of the impressive visual spectacle of the Earth and tends to be characterized by a state of awe and increased self-transcendence.
The house money effect was first described by researchers Richard Thaler and Eric Johnson in a 1990 study entitled Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice. The house money effect is a cognitive bias where investors take higher risks on reinvested capital than they would on an initial investment.
As highlighted by German psychologist Gerd Gigerenzer in the paper “Heuristic Decision Making,” the term heuristic is of Greek origin, meaning “serving to find out or discover.” More precisely, a heuristic is a fast and accurate way to make decisions in the real world, which is driven by uncertainty.
The recognition heuristic is a psychological model of judgment and decision making. It is part of a suite of simple and economical heuristics proposed by psychologists Daniel Goldstein and Gerd Gigerenzer. The recognition heuristic argues that inferences are made about an object based on whether it is recognized or not.
The representativeness heuristic was first described by psychologists Daniel Kahneman and Amos Tversky. The representativeness heuristic judges the probability of an event according to the degree to which that event resembles a broader class. When queried, most will choose the first option because the description of John matches the stereotype we may hold for an archaeologist.
The take-the-best heuristic is a decision-making shortcut that helps an individual choose between several alternatives. The take-the-best (TTB) heuristic decides between two or more alternatives based on a single good attribute, otherwise known as a cue. In the process, less desirable attributes are ignored.
The bundling bias is a cognitive bias in e-commerce where a consumer tends not to use all of the products bought as a group, or bundle. Bundling occurs when individual products or services are sold together as a bundle. Common examples are tickets and experiences. The bundling bias dictates that consumers are less likely to use each item in the bundle. This means that the value of the bundle and indeed the value of each item in the bundle is decreased.
The Barnum Effect is a cognitive bias where individuals believe that generic information – which applies to most people – is specifically tailored for themselves.
The anchoring effect describes the human tendency to rely on an initial piece of information (the “anchor”) to make subsequent judgments or decisions. Price anchoring, then, is the process of establishing a price point that customers can reference when making a buying decision.
The decoy effect is a psychological phenomenon where inferior – or decoy – options influence consumer preferences. Businesses use the decoy effect to nudge potential customers toward the desired target product. The decoy effect is staged by placing a competitor product and a decoy product, which is primarily used to nudge the customer toward the target product.
Commitment bias describes the tendency of an individual to remain committed to past behaviors – even if they result in undesirable outcomes. The bias is particularly pronounced when such behaviors are performed publicly. Commitment bias is also known as escalation of commitment.
First-principles thinking – sometimes called reasoning from first principles – is used to reverse-engineer complex problems and encourage creativity. It involves breaking down problems into basic elements and reassembling them from the ground up. Elon Musk is among the strongest proponents of this way of thinking.
The ladder of inference is a conscious or subconscious thinking process where an individual moves from a fact to a decision or action. The ladder of inference was created by academic Chris Argyris to illustrate how people form and then use mental models to make decisions.
Goodhart’s Law is named after British monetary policy theorist and economist Charles Goodhart. Speaking at a conference in Sydney in 1975, Goodhart said that “any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” Goodhart’s Law states that when a measure becomes a target, it ceases to be a good measure.
The Six Thinking Hats model was created by psychologist Edward de Bono in 1986, who noted that personality type was a key driver of how people approached problem-solving. For example, optimists view situations differently from pessimists. Analytical individuals may generate ideas that a more emotional person would not, and vice versa.
The Mandela effect is a phenomenon where a large group of people remembers an event differently from how it occurred. The Mandela effect was first described in relation to Fiona Broome, who believed that former South African President Nelson Mandela died in prison during the 1980s. While Mandela was released from prison in 1990 and died 23 years later, Broome remembered news coverage of his death in prison and even a speech from his widow. Of course, neither event occurred in reality. But Broome was later to discover that she was not the only one with the same recollection of events.
The bandwagon effect tells us that the more a belief or idea has been adopted by more people within a group, the more the individual adoption of that idea might increase within the same group. This is the psychological effect that leads to herd mentality. What in marketing can be associated with social proof.
Moore’s law states that the number of transistors on a microchip doubles approximately every two years. This observation was made by Intel co-founder Gordon Moore in 1965 and it become a guiding principle for the semiconductor industry and has had far-reaching implications for technology as a whole.
Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.
Value migration was first described by author Adrian Slywotzky in his 1996 book Value Migration – How to Think Several Moves Ahead of the Competition. Value migration is the transferal of value-creating forces from outdated business models to something better able to satisfy consumer demands.
The bye-now effect describes the tendency for consumers to think of the word “buy” when they read the word “bye”. In a study that tracked diners at a name-your-own-price restaurant, each diner was asked to read one of two phrases before ordering their meal. The first phrase, “so long”, resulted in diners paying an average of $32 per meal. But when diners recited the phrase “bye bye” before ordering, the average price per meal rose to $45.
Groupthink occurs when well-intentioned individuals make non-optimal or irrational decisions based on a belief that dissent is impossible or on a motivation to conform. Groupthink occurs when members of a group reach a consensus without critical reasoning or evaluation of the alternatives and their consequences.
A stereotype is a fixed and over-generalized belief about a particular group or class of people. These beliefs are based on the false assumption that certain characteristics are common to every individual residing in that group. Many stereotypes have a long and sometimes controversial history and are a direct consequence of various political, social, or economic events. Stereotyping is the process of making assumptions about a person or group of people based on various attributes, including gender, race, religion, or physical traits.
Murphy’s Law states that if anything can go wrong, it will go wrong. Murphy’s Law was named after aerospace engineer Edward A. Murphy. During his time working at Edwards Air Force Base in 1949, Murphy cursed a technician who had improperly wired an electrical component and said, “If there is any way to do it wrong, he’ll find it.”
The law of unintended consequences was first mentioned by British philosopher John Locke when writing to parliament about the unintended effects of interest rate rises. However, it was popularized in 1936 by American sociologist Robert K. Merton who looked at unexpected, unanticipated, and unintended consequences and their impact on society.
Fundamental attribution error is a bias people display when judging the behavior of others. The tendency is to over-emphasize personal characteristics and under-emphasize environmental and situational factors.
Outcome bias describes a tendency to evaluate a decision based on its outcome and not on the process by which the decision was reached. In other words, the quality of a decision is only determined once the outcome is known. Outcome bias occurs when a decision is based on the outcome of previous events without regard for how those events developed.
Hindsight bias is the tendency for people to perceive past events as more predictable than they actually were. The result of a presidential election, for example, seems more obvious when the winner is announced. The same can also be said for the avid sports fan who predicted the correct outcome of a match regardless of whether their team won or lost. Hindsight bias, therefore, is the tendency for an individual to convince themselves that they accurately predicted an event before it happened.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
