Research and development (R&D) portfolio management in the electric utility sector : Does it change for the service sector?

Purpose – The electric utility industry, unlike most other technology‐intensive industries, does not spend much money or effort on research and development. Many utilities do not possess an in‐house R&D facility, nor is there an R&D line item in their budgets. Over the last several decades the rate of change in the electric utility industry has been very slow and in‐house R&D efforts have not been required. As the rate of change in the industry is beginning to change, the need to pursue R&D is increasing. The electric utility industry is responding to this increasing requirement by increasing R&D budgets, and in some cases re‐initiating the R&D process within individual utilities. The purpose of this paper is to focus on R&D portfolio management efforts of various actors from different industrial sectors, to find out the best practices by using benchmarking method. Design/methodology/approach – The paper used case study approach and on‐site interviews as research methods. Findings – The authors found that R&D management is in its infancy in the electric utility sector, while the methods established in the manufacturing sector are applicable there. Originality/value – This study is exploring R&D management in the electric utility sector and contributes to the service innovation research stream.