Multi-Technology Management – the Economics and Management of Technology Diversification

Recent research in large corporations in the world has shown that technology diversification has important economic and managerial implications with a major potential for growth. While there are many contributions in the literature on business or product diversification of firms, only very recently have there been some attempts to understand the patterns of technology diversification and their implications on various strategic dimensions of corporate development, such as internationalisation, business diversification, strategic alliances, external technology acquisition, organizational structure and economic performance. This chapter provides an account of some of the recent research with analysis of data and case studies of the phenomenon of diversification into multi-product/multi-technology firms and its theoretical underpinnings in terms of economies of scale, scope, speed and space. The chapter also addresses the managerial capabilities needed to develop a multi-technology management approach for reaping the dynamic economies of diversification arising from converging technologies. This type of economies at the same time challenges the conventional wisdom of the economies of specialization, emphasizing focus on core business and core technologies, “back to basics”, “stick to your knitting” etc.

Keywords: Diversification, multi-technology, R&D, innovation, corporate strategy, corporate innovation system, technology convergence, technology assembly.

Published in Granstrand, O. (ed.): Bringing Technology and Innovation into the Boardroom, Palgrave Publ., 2004, Ch. 7, pp. 133-163.