Selling Technological Knowledge: Managing the Complexities of Technology Transactions

OVERVIEW:With the diffusion of the open-innovation paradigm, more companies are selling their technological knowledge, disembodied from physical artifacts, to other organizations in an attempt to maximize the rent-yield potential of the innovation process. However, extracting revenues from technology sale remains a challenge for most firms due to the peculiarities of technological knowledge as an object of commerce. A study of 30 companies actively involved in technology sale and 75 single transactions illuminates two key aspects of technology transactions: (1) the challenges that the technology sale process entails, and (2) the practices that can be adopted to manage the complexities of technology transactions. CTOs and R&D and technology managers can use these insights to build a firm-level capability in selling technological knowledge.