The Drivers of Technology Licensing

The Drivers of Technology Licensing

1. Technological knowledge constitutes a major source of competitive advantage because it influences a firm’s opportunities to reduce costs or increase differentiation from competitors. Thus, protecting a firm’s proprietary technologies is essential in hypercompetitive and dynamic environments.

   • Main drivers of out-licensing
     • Generating revenues
       • Generating revenues refers to the purely financial dimension of technology licensing.
     • Access
       • Intellectual property may be the only possibility to gain access to another firm’s technology portfolio.
     • Industry standards
       • A company may have to actively find external adopters of its technology to establish industry standards.
     • Profit from infringements
       • Intended or unintended infringements of intellectual property may be identified to profit from infringements.
     • Learning effects
       • Technology licensing can be a means to increase the speed of a firm’s R&D activities by realizing learning effects.
     • Freedom to operate
       • Firms may cross-license their intellectual property portfolios to ensure freedom to operate