Community Forum – Internal vs. External Research

Resource Type
Survey (Community Forum)
Author
Innovation Research Interchange
Topics
Open Innovation and Contests, Innovation Metrics
Associated Event
Publication

What is your balance between internal and external research?

What is your company’s balance between internal and external research (university projects, consortiums, government labs, established companies, small start up companies and open innovation forums)?  What percentage of your company’s successful innovations came from outside?  What are the key criteria to decide internal or external research? – R&D Engineer, Worldwide Manufacturing Company

Community Responses

Enos Leed, Technical Planning Director, Mars Inc.​
1. 75% internal, 25% external
2. 10% of our successful innovation is from external research
3. Criteria – Cost, skill set, tools available, internal resource availability

VP R&D, Fortune 50 Mfg Company​
Over past decade we have migrated from 5% of research budget used outside the company to >25% used externally – universities, national labs, suppliers, startups, etc.  About half of expenditures are used for expanding our technology exploration phase (fundamental breakthrough, deep dive scientific studies, high risk technologies). The other half is used for augmented resources for later stage technology execution work.  Each technology workstream is encouraged and funded to expand their collaboration network.  At this point, all activities have external leveraging in their “DNA.”  Therefore, we have dropped any specific metrics to drive this behavior – other than high level organizational budget balance of internal vs. external spend. 

Jonathan Leder, Technical Director, Novozymes Biologicals, Inc.
Approx 90% of our research is internal.  Criteria for outsourcing:
1. Non-strategic resources needed to conduct the work (e.g., agricultural field testing)
2. Initial ‘test the waters’ work to decide whether to invest internally

Difficult to gauge % of successful innovations that came from outside; would estimate 20-30%, but via mainly acquisition of companies having innovative products rather than outright technology/IP purchases or contract research. 

Global Chief Supply Chain Officer, Molson Coors​
10% / 90% 

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