Give us ideas! Creating innovativeness through strategic direction of reverse technology transfers

Abstract

This paper addresses the research gap in understanding the role of intra-firm reverse technology transfers for building output versus innovation capabilities. While we understand that some firms use external sources to create new technology before they are able to build internal innovation capability, the role of bridging lack of innovation capability through internal reverse technology transfers has not been explored in this context. We analyze the technology transfer strategy in the case of Huawei Technologies through a mixed methods design combining quantitative survival analysis of patents and qualitative interviews to understand and contextualize its mechanisms. The results show that the company strategically transferred ideas for new and complex technologies from centers of state-of-the-art technology towards its domestic Chinese locations. Tapping into offshore innovation capability is done by hiring experienced personnel that transfers innovative ideas to China instead of developing new products abroad. We find that this systematic transfer of complex ideas enabled Huawei to build output capability by bridging its lack of domestic innovation capability. This might be a way for growing firms to become competitive on the world market before having to build innovation capability at home first.