Business innovation is risky: how technology transfer can help

Business innovation, besides being a buzz phrase we all love to hate, is also difficult to define.  Most advice revolves around one central school of thought:

Companies need to “innovate” if they want to achieve persistent growth and exist on the friendly side of disruption.

But what does that really mean?

As it is, the concept is fluid and experts’ opinions vary widely.  So much so, that some of the best definitions are a melding of similar ideas:

The Definition of Business Innovation

Image credit: idea to value

However, a definition is merely words unless and until it is accompanied by action.

There are three main actionable business innovation strategies.  Each approach has its own set of positives and negatives, and each requires a business to recognize their own strengths and weaknesses.

Business Innovation Strategy 1:  Radical or Breakthrough Innovation

If innovation is likened to scaling a mountain, radical, or breakthrough, innovation is Mount Everest.

The Mount Everest of Business Innovation

Image:  Mount Everest

The infinite challenge of breakthrough business innovation is that to be radical, a company needs to design and/or manufacture and implement an unprecedented product.

However, and somewhat obviously, an infrastructure for an unprecedented product doesn’t exist. A company, and company decision makers, has to go where no company has gone before.  And consumers are skeptical of what they have never been introduced to, making it difficult to succeed.

Radical or breakthrough business innovation adds a little extra dose of risk, making it a rare choice and not for the faint of heart.

Business Innovation Strategy 2:  Disruptive Innovation

The term “disruptive” is often used interchangeably with “breakthrough” innovation.  In actuality, disruptive innovation was coined by Harvard Business School professor, Clayton Christensen.

He gives disruptive innovation a very specific definition, stating that disruptive business innovation “transforms a product that historically was so expensive and complicated that only a few people with a lot of money and a lot of skill had access to it.  Disruptive innovation makes it so much more affordable and accessible that a much larger population have access to it.”

Personal computers, which disrupted mainframe and mini computers, are a mainstream example.

Disruptive business innovation typically occurs because larger companies pursue high-tier markets that will give them their greatest profitability: charging high prices to their most sophisticated customers.

In doing so, these companies open a door to disruptive innovators entering in at the bottom of the market.

Business Innovation Strategy 3:  Incremental Innovation

Incremental innovation, a process of enhancing and innovating existing products, doesn’t make for newsworthy success.  And yet, it’s a formidable option.

Sandeep Kishore discusses the power of incremental business innovation and explains that “[i]nnovators, business leaders and experts often focus on creating breakthrough innovations to create new markets and categories for new technologies, products and services – which also help them in establishing a significant lead over competitors.  While this is true, the importance of incremental innovation must not be underestimated…incremental improvements often hold the key to mass adoption.”

By adding a layer to an already existing product or technology to make it better, faster, smarter, more relevant, companies seeking to remain relevant are given a quick and relatively cheap option.

There is a preexisting infrastructure, and the wheel doesn’t need reinventing.

The Challenge and Risk of Business Innovation

Businesses know they need to innovate.  They’ve read the articles.  They’ve hired Chief Innovation Officers and built innovation labs.  And yet they falter at the execution, because the outcome of implementing a business innovation strategy often isn’t crystal clear.

Transitioning an oftentimes vague idea into a commercially viable product is an arduous, expensive, and risky process.  And the results are bleak.  Very few research and development projects will ever gain traction.

Moreover, companies are commonly averse to accepting the risk of throwing money behind an innovative idea.  They prefer predictability over change.  And this mentality extends from startups to Fortune 500s.

Startups and small businesses are historically more agile, resilient, and willing to take on risk.  This makes them ideal candidates to pursue a risky strategy for business innovation growth.  However, they often have limited funding and lack the resources needed to front-load the heavy research and development needed to create a new product.

Inversely, Maxwell Wessel suggests that big companies “don’t struggle to identify the next great idea” but can’t innovate because they “fail to acknowledge the limits of the organizations they’ve put in place.”  Corporate leaders “hear about the advantage of disruptive innovation…and decide that their organization should do ‘some of that.’ But their organizations are designed to do something else very well.  Namely, what they were already doing.”

And the challenges extend beyond these broad categorizations.  They filter down and through internal structures, quite often causing a company to thwart its own attempts to innovate.

Research led by Crowd Companies into how corporations are addressing innovation and overcoming challenges found that business innovation leaders are often stagnated by traditional company culture and mismatched goals with management.

Image credit:  Crowd Companies

As a solution, Harvard Business Review explains that in order to circumvent challenges and effectively innovate, companies need to implement a formal, rigorous innovation pipeline process that operates with “speed and urgency, and that helps innovators and other stakeholders to curate and prioritize problems, ideas, and technologies.”

In this lean innovation process, the transition from idea to product needs to be focused and fast; the very thing companies struggle to accomplish.

How Technology Transfer Can Help Ease the Pain of Business Innovation

Very few companies know that there are invaluable resources they can use to quicken the process and mitigate some of the risk preventing them from fully adopting one of the three business innovation strategies.

The Department of Defense has over 100 labs and research facilities strategically located around the country, of which a large portion continuously develop cutting-edge inventions. And these labs are heavily funded.

Furthermore, discoveries made by defense scientists and engineers are patented and then offered for businesses to license. This enables businesses to commercialize the technology and then sell to the private sector and/or back to the military.

This is a monumental, often overlooked, opportunity for companies to tap into a $70 billion federal research and development budget.

Technology Readiness Levels of DoD InfographicAnd these patented technologies are typically developed to a Technology Readiness Level (TRL) that dramatically reduces the cost and risk associated with companies starting from scratch.

Technology Readiness Levels are a “method of estimating technology” that allow consistent categorizations of technology’s stage of maturity. The higher the TRL number, the closer the technology is to its final form.  This means that the risk for a company to invest in further development is much lower.

Licensing the sophisticated technologies invented in defense labs can be used to create new product lines or enhance existing ones. The opportunity created through technology transfer makes it possible for companies to more efficiently and easily implement any of three business innovation strategies.


Innovation doesn’t have to be as daunting as the buzzword-y definition suggests.  By understanding company goals and limitations, developing a business innovation strategy that aligns, and utilizing existing resources to minimize risk, a business can weather disruption and cement its position in the market.

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