Industrial R&D in Italy: Exploration and Exploitation Strategies in Industrial R&D

This paper discusses four types of strategic decisions in technology management in established firms. It is well known that deciding between exploration and exploitation in R&D, and eventually combining the two strategies, is a crucial issue. However, we argue that more attention, both from a theoretical and an empirical perspective, should be paid to the strategic solutions which are implemented as a consequence of such decisions, as well as to the various types of interactions between strategic decisions and organizational solutions in industrial R&D. Here we apply to R&D management concepts derived from the industrial dynamics literature, and use a theoretical framework to describe and analyse four case studies concerning the largest R&D centres of Italian firms operating in different industrial sectors (telecommunications, automotive, communication and cables, and semiconductors). The different approaches that those private R&D centres have chosen in their recent past are compared and discussed. More specifically, we try and analyze the patterns of exploration, technology transfer and commercialization that industrial R&D labs have adopted in order to combine short-term objectives of exploitation of research results and competencies, and long-term goals of exploration of new technological trajectories. The proposed approach is based upon the use of two dimensions: first, the type of technological change, and second the control of complementary assets and the existence of a dominant design. We argue that the interpretation of the four case studies can represent a useful basis for discussion among R&D managers as well as innovation and technology management scholars.