Article: Wednesday, 17 August 2016

Technological inventions based on equal parts existing knowledge and new discoveries are not only worth more; such inventions also have a higher chance of becoming a technological breakthrough. That is what researcher Pengfei Wang of Rotterdam School of Management, Erasmus University (RSM) found after analysing 36,551 patents in the semiconductor industry. He also discovered that teams of six members with a medium level of experience are best suited for such inventions. He will defend his thesis on 1 September 2016.

It’s a common dilemma in product development: building on existing inventions is a safe and relatively cheap method, but also decreases the chance of finding new and potentially very profitable technologies. Those discoveries are usually the result of riskier and more expensive exploratory research.

One approach firms can take to find the proper balance between those activities is by assigning them to two different departments. In one of his studies, Pengfei Wang demonstrates that it’s more advantageous to have one team that produces so-called ‘ambidextrous’ inventions by combining newly developed technologies with existing knowledge.

He discovered that medium-sized teams of six people are most apt at balancing the search for new knowledge with finding new ways to exploit current knowledge.

Break-through products

Wang came to this conclusion by analysing registered 36,551 patents in the semiconductor industry. He traced those patents back to individual inventions and the teams that developed them. The analysis shows that inventions that are a balanced mix of previous patents and newly patented discoveries have a 5 per cent higher market value. He established the market value of an invention by counting the times a patented invention was quoted afterwards in another invention, a practice that typically generates licensing fees.

Wang’s analysis also showed that an ambidextrous invention has an 18 per cent higher chance of becoming a top-quoted patent by itself – and thus a technological breakthrough – than inventions generated by one single approach.

Team composition

Wang also studied what makes a team best suited for ambidextrous invention. He discovered that medium-sized teams of six people are most apt at balancing the search for new knowledge with finding new ways to exploit current knowledge. More members in a team contribute increasingly smaller amounts of additional new knowledge, says Wang. And bigger teams can develop organisational ‘group-think’ which creates focus on expanding the existing knowledge base. Also, for teams with more than six members it becomes increasingly complicated to successfully combine members’ knowledge.

Team experience

Wang’s results also demonstrated that teams with a medium level of collective experience –with around 100 patents registered to their names – are more likely to produce ambidextrous inventions. Clearly it’s advantageous to have knowledge in the field, because it makes it easier to process and combine new knowledge. But having too much experience in the team can work against it, making it less open to new technologies, Wang says. Indeed, his results indicate that teams with a lot of experience are more likely to come up with inventions that add little in terms of new technologies, but instead recombine existing knowledge.

Dr. Pengfei Wang

Associate Professor

BI Norwegian Business School

Profile picture of Dr. Pengfei Wang

Related articles

RSM Discovery

Want to elevate your business to the next level using the latest research? RSM Discovery is your online research platform. Read the latest insights from the best researchers in the field of business. You can also subscribe to the newsletter to receive a bimonthly highlight with the most popular articles.

Do you want to learn more about this subject?

Check out these RSM education programmes

MSc Business Information Management

MSc Business Information Management

  • 12 months
    • €2,530 (EEA)*|
    • €22,500 (Non-EEA)
    • *see details on page
Diploma Programme in General Management

Diploma Programme in General Management

  • 24 Jun 2024
  • 1 year
    • €14,825 -
    • €15,425 depending on modules chosen *
    • * see details on the page
MScBA Business Analytics & Management

MScBA Business Analytics & Management

  • 12 months
    • €2,530 (EEA)*|
    • €22,500 (Non-EEA)
    • *see details on page

Your contact for more information:

Danielle Baan

Science Communication and Media Officer

Portrait of Erika Harriford-McLaren

Erika Harriford-McLaren

Corporate Communications & PR Manager

Erasmus University campus in autumn, showcasing its iconic red trees, viewed from across the campus pool.