Technology scouting refers to the identification and acquisition of newer technologies, acquisition of whom, can be a potential value add to an entity. The objective of acquiring new technologies is to gain a competitive advantage by identification of opportunities and threats that may arise from such technological developments, at a very early stage. For the acquisition of the newer technology there are three basic questions that must be introspected:

  • Is the technology feasible and easy to obtain?
  • Is it having the potential (or some visible evidences) to fulfill the demands of the consumer?
  • Is it viable for the entity's business?

The impetus for acquiring the technology lies in the answer of the these questions. The entity may accordingly decide whether to use the technology as it is or as a new concept altogether.

Technology scouting is a labor intensive activity and includes the involvement of the technical expertise at the disposal of the entity. The important part of transference of the technology involves the evaluation, valuation and acquisition of the concerned technology patents. Large corporate entities are frequently contacted by or they themselves conduct a thorough market analysis to identify technology and patents that can be acquired. The preferred channels to inquire, used by these entities include Open Innovation networks (OI), intermediaries / brokers and their existing networks of professionals, such as Linkedin.

There is no denying that technology is a necessary part of an entity's corporate decision making. Considering advantages of technology acquisition through scouting, we cannot undermine the risks therein. It is an expensive 'bet'. A large chunk of funds are required for this, acquisition is a tough task that involves complicated legal procedures and ownership issues, etc. Even then, there is always a risk of failure involved. There are questions on the hind sight such as 'What if the entire exercise backfires?' or 'What will be the impact of such a decision on my firm's growth?' and the like. Needless to mention that the stakes are really high.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.