Technology and Innovation

Technology and Innovation is a featured research topic at Harvard Business School.

The early works of William Abernathy on roadblocks to innovation and Richard Rosenbloom on technology and information transfers in the 1960's and 1970's started the Technology Strategy field and helped pave the path for our research today, which focuses on value creation of platforms and two-sided markets; use of open architecture and leverage of its collective value; development and execution of innovation strategies; innovative attributes of executives and firms; development of new markets through the creation of disruptive innovations that displace earlier technologies; development of innovations in sectors; and the impact of innovation on economic growth.

Featured Works

Article | Management Science | December 2014
The Distinct Effects of Information Technology and Communication Technology on Firm Organization
Nicholas Bloom, Luis Garicano, Raffaella Sadun and John Van Reenen
Empirical studies on information communication technologies (ICT) typically aggregate the "information" and "communication" components together. We show theoretically and empirically that this is problematic. Information and communication technologies have very different effects on the decisions taken at each level of an organization. Better information access pushes decisions down, as it allows for superior decentralized decision making without an undue cognitive burden on those lower in the hierarchy. Better communication pushes decisions up, as it allows employees to rely on those above them in the hierarchy to make decisions. Using an original dataset of firms from the U.S. and seven European countries we study the impact of ICT on worker autonomy, plant manager autonomy, and span of control. Consistent with the theory, we find that better information technologies (Enterprise Resource Planning, ERP, for plant managers and CAD/CAM for production workers) are associated with more autonomy and a wider span of control. By contrast, communication technologies (like data networks) decrease autonomy for both workers and plant managers. Treating technology as endogenous using instrumental variables (distance from the birthplace of ERP and heterogeneous telecommunication costs arising from different regulatory regimes) strengthens our results.
Keywords: Communication Technology; Information Technology; Organizational Structure;

Citation:
Bloom, Nicholas, Luis Garicano, Raffaella Sadun, and John Van Reenen. "The Distinct Effects of Information Technology and Communication Technology on Firm Organization." Management Science 60, no. 12 (December 2014): 2859–2885. View Details
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Working Paper | HBS Working Paper Series | 2014
Bridging Science and Technology Through Academic-Industry Partnerships
Sen Chai and Willy C. Shih
Scientific research and its translation into commercialized technology is a driver of wealth creation and economic growth. Partnerships to foster the translational processes from public research organizations, such as universities and hospitals, to private firms are a policy tool that has attracted increased interest. Yet questions about the efficacy and the efficiency with which funds are used are subject to frequent debate. This paper examines empirical data from the Danish National Advanced Technology Foundation (DNATF), an agency that funds partnerships between universities and private companies to develop technologies important to Danish industry. We assess the effect of a unique mediated funding scheme that combines project grants with active facilitation and conflict management on firm performance, comparing the likelihood of bankruptcy and employee count as well as patent count, publication count and their citations and collaborative nature between funded and unfunded firms. Because randomization of the sample was not feasible, we address endogeneity around selection bias using a sample of qualitatively similar firms based on a funding decision score. This allows us to observe the local effect of samples in which we drop the best recipients and the worst non-recipients. Our results suggest that while receiving the grant does bring an injection of funding that alleviates financing constraints, its core effect on the firm's innovative behavior is in fostering collaborations and translations between science and technology and encouraging riskier projects rather than purely increasing patenting.
Keywords: innovation; firm performance; public-private partnership funding; translational research; small and medium enterprises; Partners and Partnerships; Public Sector; Private Sector; Performance; Science-Based Business; Innovation and Invention;

Citation:
Chai, Sen, and Willy C. Shih. "Bridging Science and Technology Through Academic-Industry Partnerships." Harvard Business School Working Paper, No. 13-058, January 2013. (Revised July 2014.) View Details
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Article | Emotion | April 2014
Botsourcing and Outsourcing: Robot, British, Chinese, and German Workers Are for Thinking—Not Feeling—Jobs
Adam Waytz and Michael I. Norton
Technological innovations have produced robots capable of jobs that, until recently, only humans could perform. The present research explores the psychology of "botsourcing"—the replacement of human jobs by robots—while examining how understanding botsourcing can inform the psychology of outsourcing—the replacement of jobs in one country by humans from other countries. We test four related hypotheses across six experiments: (1) Given people's lay theories about the capacities for cognition and emotion for robots and humans, workers will express more discomfort with botsourcing when they consider losing jobs that require emotion versus cognition; (2) people will express more comfort with botsourcing when jobs are framed as requiring cognition versus emotion; (3) people will express more comfort with botsourcing for jobs that do require emotion if robots appear to convey more emotion; and (4) people prefer to outsource cognition-oriented versus emotion-oriented jobs to other humans who are perceived as more versus less robotic. These results have theoretical implications for understanding social cognition about both humans and nonhumans and practical implications for the increasingly botsourced and outsourced economy.
Keywords: Technology; Job Cuts and Outsourcing; Emotions; Cognition and Thinking;

Citation:
Waytz, Adam, and Michael I. Norton. "Botsourcing and Outsourcing: Robot, British, Chinese, and German Workers Are for Thinking—Not Feeling—Jobs." Emotion 14, no. 2 (April 2014): 434–444. View Details
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Article | Harvard Business Review
Digital Ubiquity: How Connections, Sensors, and Data Are Revolutionizing Business
Marco Iansiti and Karim R. Lakhani
When Google bought Nest, a maker of digital thermostats, for $3.2 billion just a few months ago, it was a clear indication that digital transformation and connection are spreading across even the most traditional industrial segments and creating a staggering array of business opportunities and threats. The digitization of tasks and processes has become essential to competition. General Electric, for example, was at risk of losing many of its top customers to nontraditional competitors—IBM and SAP on the one hand, big data start-ups on the other—offering data-intensive, analytics-based services that could connect to any industrial device. So GE launched a multibillion-dollar initiative focused on what it calls the industrial internet: adding digital sensors to its machines; connecting them to a common, cloud-based software platform; investing in software development capabilities; building advanced analytics capabilities; and embracing crowd-based product development. With all this, GE is evolving its business model. Now, for example, revenue from its jet engines is tied to reduced downtime and miles flown over the course of a year. After just three years, GE is generating more than $1.5 billion in incremental income with digitally enabled, outcomes-based business models. The company expects that number to double in 2014 and again in 2015.
Keywords: Digital Innovation; digitization; industrial internet; Technological Innovation; Production; Competitive Strategy; Engineering; Aerospace Industry;

Citation:
Iansiti, Marco, and Karim R. Lakhani. "Digital Ubiquity: How Connections, Sensors, and Data Are Revolutionizing Business." Harvard Business Review 92, no. 11 (November 2014): 90–99. View Details
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Working Paper | HBS Working Paper Series | 2014
The Decoupling Effect of Digital Disruptors
Thales S. Teixeira and Peter Jamieson
While the Internet's first wave of disruption was marked by the unbundling of digital content, the second wave, decoupling, promises to generate more casualties in an even broader array of industries. Digital start-ups are disrupting traditional businesses by inserting themselves at every juncture in the customer's consumption chain. By decoupling—the act of separating activities that people are used to co-consuming—new digital businesses are disrupting retailing, telecom and other industries. Decoupling allows consumers to benefit from the value created at a lower cost or effort compared to what is delivered by traditional businesses. For those companies, the only solutions are to either recouple activities or rebalance to create and capture value (i.e., revenues) from both activities separately. Here, digital technologies can be seen as an instrument that will both disrupt traditional business models and potentially preserve them.
Keywords: Disruptive Innovation; Information Technology;

Citation:
Teixeira, Thales S., and Peter Jamieson. "The Decoupling Effect of Digital Disruptors." Harvard Business School Working Paper, No. 15-031, October 2014. View Details
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Recent Publications

Article | Harvard Business Review | March–April 2020
Building A Culture of Experimentation
Stefan H. Thomke
Why don’t organizations test more? After examining this question for several years, I can tell you that the central reason is culture. As companies try to scale up their experimentation capacity, they often find that the obstacles are not tools and technology but shared behaviors, beliefs, and values. For every online experiment that succeeds, nearly 10 don’t—and in the eyes of many organizations that emphasize efficiency, predictability, and “winning,” those failures are wasteful. To successfully innovate, companies need to make experimentation an integral part of everyday life—even when budgets are tight. That means creating an environment where employees’ curiosity is nurtured, data trumps opinion, anyone (not just people in R&D) can conduct or commission a test, all experiments are done ethically, and managers embrace a new model of leadership. In this article, I look at several companies that have managed to do those things well.
Keywords: experimentation; culture; innovation; online; customer experience; Organizational Culture; Innovation and Invention; Online Technology; Attitudes; Decision Making; Change; Leadership;

Citation:
Thomke, Stefan H. "Building A Culture of Experimentation." Harvard Business Review 98, no. 2 (March–April 2020): 40–48. View Details
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Article | JAMA Network Open
Association of the Meaningful Use Electronic Health Record Incentive Program with Health Information Technology Venture Capital Funding
Samuel Lite, William J. Gordon and Ariel Dora Stern
IMPORTANCE
Although the Health Information Technology for Economic and Clinical Health (HITECH) Act has accelerated electronic health record (EHR) adoption since its passage, clinician satisfaction with EHRs remains low, and the association of HITECH with health care information technology (IT) entrepreneurship has remained largely unstudied.

OBJECTIVE
To determine whether the passage of the HITECH Act was associated with an increase in key measures of health care IT entrepreneurship.

DESIGN, SETTING, AND PARTICIPANTS
This economic evaluation of venture capital (VC) activity in the US from 2000 to 2019 examined funding trends in health care IT, EHR-related companies, and all VC investments before and after the passage of HITECH. A difference-in-differences analysis compared investments in health care IT companies with those of companies in 3 categories: general health care (non-IT), IT (non–health care), and all US VC transactions. Data were analyzed from September 2018 to August 2019.

EXPOSURES
Venture capital funding received by US companies before and after the HITECH Act.

MAIN OUTCOMES AND MEASURES
Venture capital investment in health care IT companies and the proportion of those investments going to seed-stage companies, a proxy for very early-stage entrepreneurship and innovation.

RESULTS
The data included 70 982 investments, of which 9425 (13.3%) were seed stage, 10 706 (15.1%) were early stage, and 50 851 (71.6%) were growth stage. After passage of the HITECH Act, investment in both health care IT companies and EHR-related companies increased at a rate much faster (13.0% and 11.4%, respectively) than VC as a whole (6.9%). In addition, the proportion of investments going to seed-stage health care IT companies increased compared with both overall VC investments and non-IT health care investments. Health care IT companies saw increased probabilities of transactions being seed-stage of 5.1% (SE, 2.2%; 95% CI, 0.8% to 9.3%; P = .02) compared with the entire sample of VC transactions and 13.6% (SE, 1.9%; 95% CI, 9.9% to 17.2%; P < .001) compared with non-IT health care VC transactions. Health care IT had essentially 0 increased probability of a transaction being seed stage compared with IT companies outside health care (−0.8% probability; SE, 2.4%; 95% CI, −5.4% to 3.9%; P = .75).

CONCLUSIONS AND RELEVANCE
Although widespread clinician dissatisfaction with EHR systems remains a challenge, the HITECH Act’s incentive program may have catalyzed early-stage entrepreneurship in health care IT, suggesting an important role for incentives in promoting innovation.
Keywords: Health Care and Treatment; Information Technology; Laws and Statutes; Innovation and Invention; Entrepreneurship; Venture Capital;

Citation:
Lite, Samuel, William J. Gordon, and Ariel Dora Stern. "Association of the Meaningful Use Electronic Health Record Incentive Program with Health Information Technology Venture Capital Funding." JAMA Network Open 3, no. 3 (March 2020). View Details
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Case | HBS Case Collection | January 2020
Celata Bioinnovations
John R. Wells and Benjamin Weinstock
In December 2019, Jon Hu (Harvard Business School MBA, 2019) and Dr. Samantha Dale Strasser, co-founders of Celata Bioinnovations, were raising $1 million to launch their company. They had founded Celata less than six months earlier with the aim of redefining the drug discovery process. Celata’s platform used novel data types and a unique data integration process to generate hypotheses about proteins that were involved in the formation and progression of disease. They believed the platform was better and faster at identifying actionable biological targets, increasing the speed of discovery and reducing the chances of failure, promising to lower costs and bring drugs to market more quickly. Their platform had achieved proof of concept during Strasser’s PhD research at Massachusetts Institute of Technology (MIT), when it helped identify and validate a target related to Inflammatory Bowel Disease (IBD) in mouse models. However, full validation wouldn’t come until their platform was used to develop a drug that successfully treated a disease in humans, a process that could take several years.
In the first instance, Celata’s platform was best suited to identify targets for cancers, inflammatory diseases, and neurodegenerative diseases, which collectively presented a global market opportunity of over $200 billion. However, Hu and Strasser were debating which opportunities to pursue. Should they try to improve the efficacy of current drugs, or go for brand new opportunities, indications for which there were no solutions on the market? And if they focused on the latter, should they just look for large market opportunities, or include “orphan” diseases, for which there was a relatively small market? Should they look for small molecule drug candidates, or include large molecule biologics in their search? And where should they operate in the drug development pipeline? At one extreme, they could sell potential drug candidates to established pharmaceutical companies; at the other, they could “go full pharma” and build a new pharmaceutical company themselves.
Keywords: drug development; drug discovery; Drug Trials; Pharmaceutical Companies; Pharmaceutical Company; Pharmaceuticals; therapeutics; Biologics; biotech; biotechnology; biopharmacy company; biochemistry; technology commercialization; technology companies; Drug Testing; Startup; start-up; Startups; start-ups; Startup financing; strategic decision making; strategic decisions; strategic evolution; FDA; Food and Drug Administration; clinical trials; disease management; market attractiveness; Market entry; market opportunities; Health Disorders; Technological Innovation; Technology; Commercialization; Business Startups; Finance; Decision Making; Strategy; Market Entry and Exit; Opportunities; Pharmaceutical Industry; Biotechnology Industry;

Citation:
Wells, John R., and Benjamin Weinstock. "Celata Bioinnovations." Harvard Business School Case 720-427, January 2020. View Details
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Case | HBS Case Collection | January 2020
The June Oven
Leonard A. Schlesinger and Christian Godwin
The June Oven was a smart oven which was capable of identifying food and cooking it accordingly. This type of smart oven represented the next step in the long history of oven and stove development. Due to the widespread use of traditional ovens, the market for the June Oven was potentially large. The June Oven was primarily a direct-to-consumer product, available through the company’s own website, but it was available through some retail stores. June faced challenges from a relative decline in retail sales, the turn to online shopping, potential smart oven competitors, macroeconomic factors such as the U.S. China trade war, and internal problems such as software malfunctions.
Keywords: Business Ventures; Trends; Customers; Design; Entrepreneurship; Food; Goods and Commodities; Innovation and Invention; Marketing; Brands and Branding; Demand and Consumers; Distribution; Product Development; Sales; Technology; Internet; Software; Consumer Products Industry; Retail Industry; Technology Industry; Electronics Industry; Manufacturing Industry; United States;

Citation:
Schlesinger, Leonard A., and Christian Godwin. "The June Oven." Harvard Business School Case 320-067, January 2020. View Details
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Case | HBS Case Collection | November 2019 (Revised March 2020)
Collibra
Lynda M. Applegate, Jeffrey F. Rayport and Julia Kelley
Founded in 2008 at Vrije Universiteit Brussels, Collibra was a data intelligence company that found product-market fit in the years after the global financial crisis, when many companies were under pressure from consumers and governments to improve their data management efforts. Over the years, Collibra expanded its product offering from a Semantic Data Integration tool to a Data Governance Platform with a range of data management and governance tools, and also expanded geographically from Belgium to the U.S. and other countries. In 2019, with more than 350 clients, Collibra became a unicorn with a valuation of more than $1 billion. Now, co-founders Felix Van de Maele, Stijn Christiaens, and Pieter De Leenheer needed to decide how to move from “data governance” to “data intelligence.
Keywords: Entrepreneurship; Governance; Innovation and Invention; Technological Innovation; Markets; Technology; Information Technology; Software; Technology Adoption; Technology Platform; Semantic Web; Customer Focus and Relationships; Customer Satisfaction; Expansion; Information Technology Industry; Technology Industry; Europe; Belgium; Brussels; North and Central America; United States; New York (city, NY); New York (state, US);

Citation:
Applegate, Lynda M., Jeffrey F. Rayport, and Julia Kelley. "Collibra." Harvard Business School Case 820-013, November 2019. (Revised March 2020.) View Details
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Case | HBS Case Collection | November 2019
TripAdvisor: An Itinerary for Growth
Jeffrey F. Rayport, Spencer Rascoff and Susie L. Ma
In 2019, TripAdvisor was one of the best-known and most-trafficked online travel sites. For nearly 20 years, its founder and CEO Steve Kaufer had steered TripAdvisor through many phases of growth and profitability, but recently the company’s growth had started to slow. TripAdvisor was an aggregator of travel information, including travel listings, third-party content, and a vast array of user reviews. Most of its revenue derived from selling advertising on a cost-per-click basis to online travel agencies (OTAs), such as Expedia and Travelocity, and suppliers, such as Hilton and Starwood. TripAdvisor relied largely on Google for both organic and paid traffic. As Google began to promote its own travel search services and OTAs as well as travel suppliers focused on increasing direct traffic, TripAdvisor sought to diversify its offerings with listings and information for vacation rentals, restaurants, and experiences. In addition, the company had created a new team called Core Experience (CoreX) to forge an integrated product strategy across its business units and to deliver a more seamless user experience. Could Kaufer and his executive team fend off threats and restore the business to its historical pattern of double-digit growth?
Keywords: Business Growth and Maturation; Decision Making; Business or Company Management; Growth Management; Innovation and Invention; Brands and Branding; Operations; Customer Value and Value Chain; Technology; Travel Industry; Massachusetts;

Citation:
Rayport, Jeffrey F., Spencer Rascoff, and Susie L. Ma. "TripAdvisor: An Itinerary for Growth." Harvard Business School Case 820-039, November 2019. View Details
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Article | Organization Science | November–December 2019
Pivoting Isn't Enough? Managing Strategic Reorientation in New Ventures
Rory McDonald and Cheng Gao
New ventures often experience deviations from their plans that oblige them to reorient in pursuit of better fit between their evolving products and their target customers. Yet research is largely silent on how managers explain such changes and justify their ventures in the wake of fundamental redirections in strategy. Ventures initially attain legitimacy and amass resources on the strength of aims that audiences find compelling; later, those early claims can complicate course corrections. To shed light on how ventures manage strategic reorientations, we conducted an inductive, comparative-case of software-based financial advisors. The ventures pursued parallel reorientations and produced comparable end products, but diverged conspicuously in managing audiences during transitions. Our process model, inspired by these differences, proposes a sequence of stratagems that may enable entrepreneurs to alter strategy while portraying faithfulness to enduring aims. Our theoretical framework posits that for ventures, reorientation without penalty may depend on how they anticipate, justify, and stage changes to various audiences.
Keywords: strategic reorientation; technology entrepreneurship; innovation; product development processes; organizational adaptation; qualitative methods (general); Entrepreneurship; Technology; Organizational Change and Adaptation; Strategy; Innovation and Invention; Product Development; Communication Strategy;

Citation:
McDonald, Rory, and Cheng Gao. "Pivoting Isn't Enough? Managing Strategic Reorientation in New Ventures." Organization Science 30, no. 6 (November–December 2019): 1289–1318. View Details
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Case | HBS Case Collection | November 2019
DeepMap: Charting the Road Ahead for Autonomous Vehicles
Shane Greenstein and Nicole Tempest Keller
Founded in 2016, DeepMap developed high definition (HD) mapping software and localization services for Level 4+ autonomous vehicles. Traditional navigational maps were accurate to a few meters, which was sufficient for drivers but not for machine-driven vehicles that required centimeter level accuracy. Autonomous vehicles required a new form of map that was highly precise, produced a 3D representation of the surrounding area, enabled vehicles to locate themselves within the map, provided information for how to navigate safely using the correct rules of the road, and was updated continuously as road conditions changed. DeepMap was not selling a static mapping database but was rather licensing its software under a software-as-a-service model. As a startup with limited resources navigating a nascent market, DeepMap faced uncertainty across several dimensions: the timing of overall AV market adoption, which countries would adopt fastest, which AV segments would move most rapidly, which sensor technologies would become standard, and what impact regulation would have. They also faced the challenge of serving customers on a global scale. As DeepMap looked ahead, it had to decide how and where to focus and allocate its funding in order to achieve its short- and long-term objectives.
Keywords: mapping software; autonomous vehicles; Business Startups; Software; Technological Innovation; Technology Adoption; Service Delivery; Global Range; Resource Allocation; Strategic Planning; Technology Industry; Auto Industry;

Citation:
Greenstein, Shane, and Nicole Tempest Keller. "DeepMap: Charting the Road Ahead for Autonomous Vehicles." Harvard Business School Case 620-047, November 2019. View Details
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Case | HBS Case Collection | October 2019
Leading Bank Leumi into the Future
Joshua D. Margolis, Allison M. Ciechanover, Nicole Keller and Danielle Golan
An unlikely but highly effective leader of a traditional bank, Rakefet Russak-Aminoach, simultaneously leads a classic change effort and an unconventional effort to innovate. She focuses her initial energy on making the bank more efficient in the face of industry changes and then rolls out a self-disrupting, independent mobile-app bank, aimed at millennials and designed to anticipate the coming transformation from fintech. The case documents the difficult situation she faced stepping into the CEO role, her change efforts, and her distinctive leadership style and how it has evolved. It ends with the enduring question of when to integrate an incubated business unit that was separate intentionally to spark innovation.
Keywords: mobile banking; digital banking; fintech; Startup; financial services; artificial intelligence; leadership; innovation; efficiency; Organizational change; personal development; female ceo; Banks and Banking; Mobile Technology; Leadership; Organizational Change and Adaptation; Innovation and Invention; Disruption; Information Technology; Opportunities; Performance Effectiveness; Personal Development and Career; Financial Services Industry; Banking Industry; Israel;

Citation:
Margolis, Joshua D., Allison M. Ciechanover, Nicole Keller, and Danielle Golan. "Leading Bank Leumi into the Future." Harvard Business School Case 420-063, October 2019. View Details
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Case | HBS Case Collection | September 2019
Earth Bank of Codes: Making Nature's Biological Assets Visible and Valuable for the Benefit of All
Tarun Khanna, Raffaella Sadun and Susie Ma
In 2019, entrepreneur Juan Carlos Castilla-Rubio was developing a project he hoped could generate and share wealth from the natural resources of the Amazon without destroying those resources. His idea, called Earth Bank of Codes (EBC), would create a library of the genomic codes of all known species that could be tapped for discovery and innovation, from new medical interventions to more efficient manufacturing processes. He proposed to use blockchain technology to make the data both accessible and trackable so that its use could be monitored. Castilla-Rubio envisioned a time when a company in the U.S. could access a biological asset from the Peruvian Amazon, develop and commercialize a product based on the asset, and have a fraction of the resulting sales land directly in the bank account of various beneficiaries, including the Peruvian government and indigenous communities. Now he was facing major decisions about how to structure EBC to achieve his goals. Should he start at the top and build partnerships with national governments and inter-governmental organizations as the cornerstone of EBC? Or would it be better to forge ahead with a few stakeholders in an entrepreneurial project?
Keywords: Decision Making; Development Economics; Entrepreneurship; Innovation and Invention; Intellectual Property; Emerging Markets; Market Design; Marketplace Matching; Science; Genetics; Natural Environment; Environmental Sustainability; Climate Change; Social Enterprise; Strategy; Strategic Planning; Technology; Ownership; Social Psychology; Trust; Society; Biotechnology Industry; South America; Amazon Basin;

Citation:
Khanna, Tarun, Raffaella Sadun, and Susie Ma. "Earth Bank of Codes: Making Nature's Biological Assets Visible and Valuable for the Benefit of All." Harvard Business School Case 720-356, September 2019. View Details
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