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

Case | HBS Case Collection | November 2018
JUUL and the Vaping Revolution
Michael W. Toffel, John Masko and Sarah Mehta
In the summer of 2018, San Francisco-based electronic cigarette (e-cigarette) maker JUUL Labs, was experiencing exponential growth. Sales of its JUUL e-cigarette had increased by 783% over the preceding year, projected revenues for 2018 topped $940 million, and the company had captured over 72% of the U.S. e-cigarette market. The company’s success had thrust it into the spotlight, and JUUL Labs found itself at the center of considerable controversy. Whereas the company’s stated goal was to provide tobacco smokers with a less harmful e-cigarette alternative, JUUL Labs’s products had proven widely popular with teenage high school students who had never smoked. Some advocacy groups and public policy makers speculated that the company had purposefully marketed its products to minors—an allegation JUUL Labs’s executives strongly denied. The company now faced an FDA probe and investigations by at least two state attorney generals. It needed a strategy to deal with its mounting regulatory and public relations problems.
Keywords: electronic cigarettes; E-Cigarettes; vaping; Nicotine Replacement; JUUL; Juuling; Advertising; Online Advertising; Customers; Innovation and Invention; Marketing; Ethics; Brands and Branding; Marketing Communications; Marketing Strategy; Product Marketing; Corporate Social Responsibility and Impact; Social Issues; Technology; Technology Industry;

Citation:
Toffel, Michael W., John Masko, and Sarah Mehta. "JUUL and the Vaping Revolution." Harvard Business School Case 619-006, November 2018. View Details
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Case | HBS Case Collection | November 2018
frog design
Srikant M. Datar and Caitlin N. Bowler
The case follows the genesis and development of Palo, a radical urban communications hub designed to replace payphone booths on Manhattan’s city streets, through a joint venture between frog design and a venture-backed firm LQD WiFi. The case explores the complexity of the design and development process and offers lessons on designing products and services that meet end users’ needs as well as the engagement processes that produce them. The case also explores how the partners' innovative venture model allowed for a working relationship far more responsive and flexible than the typical fee-for-service firm-client model.
Keywords: innovation; prototyping; User Experience Design; design heuristics; telecommunications; urban systems; Communication Technology; Urban Scope; Innovation and Invention; Design; Product Development;

Citation:
Datar, Srikant M., and Caitlin N. Bowler. "frog design." Harvard Business School Multimedia/Video Case 118-707, November 2018. View Details
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Case | HBS Case Collection | October 2018
Safecast: Bootstrapping Human Capital to Big Data
Ethan Bernstein and Stephanie Marton
On March 11, 2011 at 2:46pm, a 9.1-on-the-Richter-scale, six-minute long earthquake unleashed a tsunami that ravaged the Tohoku region of Japan, damaging the Fukushima Daiichi Nuclear Power facility and releasing sufficient radioactive material into the air and ocean to make it one of only two “level 7” nuclear disasters in history (second only to Chernobyl).
But just how much radioactive material had escaped was not clear. A tense time was made worse by sporadic disclosures of fragmented information. Those who had power or cell service, mostly friends and family outside the region, were glued to their television and smartphone screens, but, by definition, no one could see the radiation they feared.
Frustrated by their own desires to know what should have been knowable, three technologists—Sean Bonner, Pieter Franken and Joi Ito—founded non-profit Safecast around a volunteer-centered, open, citizen-science, “crowdmapping” model to monitor radiation levels. With the help of thousands of volunteers, by 2018, Safecast had become not just the “go to” source of information on radiation issues in Japan and elsewhere, but also the vanguard example of citizen science.
Yet as Safecast’s dataset strengthened exponentially, the sustainability of its financial model weakened. The same open, crowd-based model that made the founder’s data collection sustainable was still financially unsustainable. Was there a business model that could sustain the organization financially without undermining their volunteer-based operations, and if so, what would it look like?
Keywords: citizen science; creative commons; Open Data; open architecture; volunteer-based organization; human capital; Fukushima Daiichi Nuclear Power Facility; 311; nuclear; radiation; crowdsourcing; bgeigie; geiger counters; kickstarter; sustainability; sustainable business and innovation; Design; Energy Generation; Social Entrepreneurship; Human Capital; Innovation and Invention; Crisis Management; Organizational Structure; Organizational Design; Technology; Business Model; Energy Industry; Technology Industry; Japan; North and Central America; Europe;

Citation:
Bernstein, Ethan, and Stephanie Marton. "Safecast: Bootstrapping Human Capital to Big Data." Harvard Business School Case 419-033, October 2018. View Details
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Case | HBS Case Collection | October 2018
Booking.com
Stefan Thomke and Daniela Beyersdorfer
The case reveals how Booking.com has become the world's leading travel accommodation platform. The company has put online experimentation at the heart of how it designs digital experiences for its customers and partners. To unlock the potential of large-scale testing, the leadership team had to challenge conventional assumptions about culture, process, and the management of innovation.
Keywords: travel; Product Innovation; experimentation; A/B Testing; User Experience Design; digital transformation; Product Development; Product Design; Innovation and Management; Transformation; Information Technology; Travel Industry;

Citation:
Thomke, Stefan, and Daniela Beyersdorfer. "Booking.com." Harvard Business School Case 619-015, October 2018. View Details
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Working Paper | HBS Working Paper Series | 2018
Pioneer (Dis-)advantages in Markets for Technology
Moritz Fischer, Joachim Henkel and Ariel Dora Stern
This study sheds new light on first- and early-mover advantages. Research on this classic topic often assumes that each firm participates in the entirety of the innovation process and that all firms aim to monetize their innovations on product markets. However, a division of labor between innovative new entrants and industry incumbents, endowed with complementary assets, is common in many industries. Such settings are distinct because new entrants have the additional option to sell their innovation in a “market for technology” and may, therefore, seek acquisition rather than shepherding an innovation through the entire commercialization process. We argue that this binary outcome—i.e., success via acquisition—creates different opportunities and threats for new entrants and has important and novel implications for the following question: is it advantageous to be early to market? Using data from the U.S. medical device industry, we find that pioneer (dis-)advantages in a market for technology setting are similar to those typically seen in product markets but different in some important respects. In particular, pioneers must pave the way for a new product type in order to reduce the technological and market risks, where reducing technological risk is of paramount importance. As a reward, pioneers ultimately realize a higher likelihood of acquisition, but among acquired firms, early entrants wait longer for acquisition to happen. To a certain extent, therefore, later movers can free ride on early-movers’ efforts: although they are less likely to experience acquisition, acquisitions of later entrants happen more quickly.
Keywords: Innovation Strategy; Market Entry and Exit; Acquisition; Technology;

Citation:
Fischer, Moritz, Joachim Henkel, and Ariel Dora Stern. "Pioneer (Dis-)advantages in Markets for Technology." Harvard Business School Working Paper, No. 19-043, October 2018. View Details
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Case | HBS Case Collection | September 2018
OYO: Creating Effective Spaces
Das Narayandas, Sunil Gupta, Rachna Tahilyani and Mahima Rao-Kachroo
Twenty-four-year old Ritesh Agarwal, founder and CEO of India-based online hotel branding network OYO Rooms, has tackled the issue of unreliability in India's highly fragmented budget hotel industry. In 2018, OYO branded 8,500 properties across 200 cities and managed to capture almost 1.5% of India's budget hotel market. Ritesh believes that in the process, OYO has honed technological skills and infrastructural capabilities that can transform the company from being a technology player to a hotel developer. OYO now aspires to convert corporate spaces and homes into accommodation spaces and to make its mark worldwide.
Keywords: technology; Accomodation; app development; operations and processes; innovation; strategy; Change Management; Entrepreneurship; Information Technology; Research; Marketing; Operations; Innovation Strategy; Sales; Accommodations Industry; India; South Asia;

Citation:
Narayandas, Das, Sunil Gupta, Rachna Tahilyani, and Mahima Rao-Kachroo. "OYO: Creating Effective Spaces." Harvard Business School Case 519-023, September 2018. View Details
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Case | HBS Case Collection | August 2018
Magnus Resch: Transforming the Art Market Through Transparency
Henry McGee and Sarah Mehta
Economist and entrepreneur Magnus Resch was on a mission to make the art market more transparent. To that end, in 2014, he began building the Magnus app, which catalogued the price and transaction history of millions of works of art. Users could download the app, take a photo of any flat artwork, and the app would display that piece’s price along with other pertinent information. Resch believed that such radical transparency would grow the small, rather insular, network of serious art collectors. By May 2018, the app had garnered strong user engagement, with over 10,000 new downloads per month. But Resch was not yet generating revenue from the Magnus app, which was free for users to download. The case explores Resch’s options for monetizing the app, as well as the benefits and drawbacks of each option.
Keywords: art market; transparency; Art Pricing; Business Startups; Decision Making; Innovation Strategy; Culture; Business Strategy; Mobile Technology; Fine Arts Industry;

Citation:
McGee, Henry, and Sarah Mehta. "Magnus Resch: Transforming the Art Market Through Transparency." Harvard Business School Case 319-002, August 2018. View Details
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Article | Economic Journal (Royal Economic Society) | July 2018
Global Collaborative Patents
Sari Pekkala Kerr and William R. Kerr
We study the prevalence and traits of global collaborative patents for U.S. public companies, where the inventor team is located both within and outside of the United States. Collaborative patents are frequently observed when a corporation is entering into a new foreign region for innovative work, especially in settings where intellectual property protection is weak. We also connect collaborative patents to the ethnic composition of the firm’s U.S. inventors and cross-border mobility of inventors within the firm. The inventor team composition has important consequences for how the new knowledge is exploited within and outside of the firm.
Keywords: patents; innovation; Research and Development; Ethnic Networks; migration; diasporas; foreign direct investment; Technology Transfer; globalization; mobility; Technology; Globalized Firms and Management; Diasporas; Patents; Ethnicity; Entrepreneurship; Research and Development; Foreign Direct Investment; Innovation and Invention; United States;

Citation:
Kerr, Sari Pekkala, and William R. Kerr. "Global Collaborative Patents." Economic Journal (Royal Economic Society) 128, no. 612 (July 2018): F235–F272. View Details
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Case | HBS Case Collection | February 2018
Amazon, Google, and Apple: Smart Speakers and the Battle for the Connected Home
Rajiv Lal and Scott Johnson
Amazon, Google, and Apple all offer their own smart speaker. The devices represent each firm's entry point into the connected home market. All three companies come into the space with their own strenghs and weaknesses. Who will win?
Keywords: Apple; Apple Inc.; google; Amazon; Amazon.com; google home; homepod; echo; smart home; connected home; voice; artificial intelligence; Machine learning; Internet of Things; smart speaker; connected speaker; intelligent assistants; virtual assistants; voice assistants; alexa; google assistant; siri; Technological Innovation; Disruptive Innovation; Competitive Strategy; Business Strategy; Adoption; Hardware; Information Technology; Internet; Mobile Technology; Search Technology; Software; Technology Adoption; Technology Platform; Household; Electronics Industry; Technology Industry; United States;

Citation:
Lal, Rajiv, and Scott Johnson. "Amazon, Google, and Apple: Smart Speakers and the Battle for the Connected Home." Harvard Business School Case 518-035, February 2018. View Details
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Working Paper | HBS Working Paper Series | 2018
Machine Learning and Human Capital: Experimental Evidence on Productivity Complementarities
Prithwiraj Choudhury, Evan Starr and Rajshree Agarwal
Machine learning process technologies usher new questions regarding potential complementarity with human capital. We examine productivity differentials between machine learning and older vintage technology based on interactions with two important human capital attributes: domain-specific expertise and vintage-specific human capital. Our experimental setting simulates the U.S. Patent and Trademark Office examination process. We randomize assignment of novice patent examiners to each process technology and provision of domain-specific expertise. Our analysis of examiner accuracy and speed in patent adjudication reveals, irrespective of process technology, expertise is necessary for identifying prior art that invalidates the patent being examined, and productivity in the machine learning process technology requires computer science and engineering (CS&E) skills. We discuss implications for artificial intelligence and strategic management of the pace of technological substitution.
Keywords: Technological Innovation; Human Capital; Performance Productivity; Technology Adoption;

Citation:
Choudhury, Prithwiraj, Evan Starr, and Rajshree Agarwal. "Machine Learning and Human Capital: Experimental Evidence on Productivity Complementarities." Harvard Business School Working Paper, No. 18-065, January 2018. (Revised September 2018.) View Details
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