Research On Technology Licensing Decision Of Intrapreneur Based On Process Innovation

Technology innovation is a complete process which produced from a new idea to the new ideas into the corresponding technology and application to market,the process is divided into technology development and technology application,technological innovation includes product innovation and technological innovation.Product innovation can improve the uniqueness of product design and performance.Technology innovation can improve product quality,reduce production costs,reduce consumption and improve the working environment,product innovation is the result of innovation,and process innovation presents innovation through process.Technology innovation can be divided into internal and external innovation,internal innovators can innovate technology innovation independently and use it in the production of their own enterprise operation management innovation enterprise.external innovators is those who assist the enterprise innovation,such as universities,research institutes,etc.This paper mainly studies the technology diffusion of process innovation technology of internal innovators,and an important way of technology diffusion is technology licensing.Under the patent system,the patent holder may transfer the innovative technology to other enterprises or organizations(licensees)that need the patent by way of technology licensing.In the process of technology transfer,for the patent owner,the licensee must be paid to license the new technology,thus patent owners can not only make up for the initial investment in innovative research and development,but also improve the business conversion rate of innovative technologies and improve their own economic benefits.For the licensee,it can obtain the latest technology through the technology market in a short time and apply the innovative technology to its own production and operation,thus making up for the shortage of its innovation research and development ability.In other words,it improves its innovation efficiency and innovation ability at the same time.Therefore,no matter for the licensor or the licensee,the research on technology license is important.Through a systematic review of the previous literature on technology licensing,I found that there are still many aspects to be improved in the current research on technology licensing: Firstly,most of the current literature on technology licensing is carried out under the condition that the R&D outcome of enterprises is determined.In fact,innovative enterprises may succeed or fail in their R&D.No matter how powerful the enterprise is,it cannot guarantee 100% success rate of research and development.Therefore,in the practice of technology R&Dd,the success or failure of technology R&D is often uncertain.The characteristics of technology research and development determine whether the success or failure,the early research and development investment has occurred,Therefore,for innovative enterprises,when the outcome of r&d is uncertain,how to choose technology licensing strategy is an urgent problem to be solved.Secondly,through previous literature review,it is found that for the traditional product market,there are many studies on technology licensing.However,for the market of network products,considering the network externality characteristics of product,the literature on the research of technology licensing strategy for such products is rarely involved.Thirdly,most of the current literature on technology licensing studies the technology licensing between different competitive enterprises in the same product competitive market.No literature has considered the impact of supplier pricing factors on the technology licensing decisions of downstream technology innovation enterprises.That is to study the impact of upstream supplier decision on downstream technology innovation enterprises' technology licensing decision from the perspective of upstream and downstream of the supply chain.In view of the above analysis,this paper intends to carry out research from the following aspects:1)we analyze the technology license knowledge structure based on keyword network,the literature measurement method is used to classify the research on technology license from 2005 to 2016.First,we type "Technology licensing" and “2005-2016” in the Web of Science to obtain literature information on Technology licensing.Then,the knowledge map in the field of technology licensing is constructed by means of co-word analysis,k-nuclear social network analysis and multidimensional scale analysis.Based on the distribution of existing research points of technology licensing knowledge,this paper finds out the research gaps in current technology licensing field,summarizes the deficiencies of existing research and points out the future research directions by combining the results of cluster analysis.The last four research contents are all from the future research direction that focuses on the quality improvement innovation,they are just the detailed and in-depth studies from four different dimensions.2)We analyze the optimal licensing contract of a quality-improving innovation in a Cournot duopoly market.By using game-theoretical models,we examine and compare three licensing contracts(fixed-fee licensing,royalty licensing and two-part ad valorem licensing)in terms of the patent-holding firm's profit,consumer surplus,and social welfare.We also examine how varying quality difference affects the choice of licensing contract.It is general belief that consumer surplus and social welfare are greater under fixed-fee licensing.We show that this conclusion need not hold under quality-improvement technology licensing.We also find that(1)when the degree of quality difference is small,consumer surplus and social welfare are the highest under fixed-fee licensing.Otherwise,royalty licensing is preferred by the consumer and the society.(2)From the perspective of the licensor,no matter how he degree of quality difference is,two-part ad valorem licensing are always profitable for the patent-holding firm.3)We discuss how to choose the technology licensing strategy of innovative enterprises under the uncertain situation of the outcome of research and development.In this part,we assume that in a duopoly market,the research is carried out by establishing a three-stage game model including R&D,licensing and production,The influence of network effect and quality difference on optimal licensing strategy of random R&D enterprises is analyzed by calculating and solving the model.The results demonstrate that:(1)When the intensity of network effect is small(or the relative difference of product quality between two firms is small),three licensing strategies may occur.In this case,two-part licensing is always better than fixed-fee licensing and royalty licensing,and the social welfare under fixed-fee licensing is the highest,followed by two-part licensing.(2)When the intensity of network effect is large(or the relative difference of product quality between two firms is large),all of the three licensing strategies will not occur.In this case,the innovator will choose to monopolize the market.4)We investigate the optimal technology licensing contract of the licensor and licensee engaging in different mixed competitions(Cournot-Bertrand or Bertrand-Cournot)with a potential licensee in a differentiated duopoly market considering one upstream firm(supplier)that provides key inputs.We find that if either the royalty or fixed-fee licensing is applied,the licensor favors royalty licensing under Bertrand-Cournot competition when the degree of substitution is small,and prefers fixed-fee licensing no matter under what kind of mixed competition as the degree of substitution increases.For the case of fixed-fee licensing,the result shows that profits of licensor are the same under different types of mixed competition.Besides,fixed-fee licensing is not always the optimal choice for consumers and they would prefer royalty licensing when the degree of substitution is very small.5)We explore the cross-licensing behavior of technical holder in presence of quality-improving technology and cost-reducing technology in technology market.Then we compare our results with the results derived in a Cournot duopoly model in Zhao(2017).The following is the finding: firstly,there exists a combining field of quality and cost in which consumer surplus and social welfare in cross licensing is the greatest compared with no licensing and single licensing despite the competition model of the downstream firms.Secondly,under cross licensing,consumer surplus and social welfare in quantity competition is superior compared with price competition.This shows the strategic aspect of technology licensing and obviously changes the debate that Bertrand price competition is more efficient than Cournot quantity competition.Thirdly,in expectation of price competition,cross licensing indeed brings tacit collusion and then damages social welfare.However,cross licensing itself is not the chief culprit of monopoly,since cross licensing in quantity competition is good for consumers and social welfare,which shows the vital role of the efficiency of downstream firm competition model.Fourthly,price competition plus the stability of tacit collusion in cross licensing requires moderate bargaining power of the participants,otherwise,greater bargaining power of any party would lead to the party with smaller bargaining power to have motivation to deviate from monopoly output and then suboptimal Cournot-Bettrand competition model will appear.