Int. J. Technology Management, Vol. 10, No.

1, 1995 79
~~ ~ ~

Technical intelligence in business: understanding

technology threats and opportunities

W. Bradford Ashton
Senior Program Manager, Battelle, Pacific Northwest Laboratories,
Washington, DC 20024-21 15 USA

Gary S. Stacey
Senior Economist, Battelle Geneva Laboratories, CH-1227 Carouge-
Geneve, Switzerland

Abstract: In this age of rapid technological innovation, firms that do not stay
abreast of the latest advancements in science and technology (S&T) stand a
greater chance of missing opportunities than firms that maintain vigilance over
the ever-changing technical environment. As a result, a resurgence of interest in
technical intelligence for business is occurring in companies around the globe.
Many firms now have formal technical intelligence programs to gather, analyze
and use S&T information to watch their competitors, to track emerging trends
in technological development and to anticipate significant technology-based
changes in key markets. Careful management of technical information that
affects a business can have a vital influence on corporate profitability and long-
term health. This paper describes the main features of technical intelligence
operations in business, drawing on the experience of several companies that
develop and use intelligence information. The steps of gathering, analyzing,
evaluating and using information for business decisions are described and
examples are given to illustrate how intelligence concepts are implemented in
firms from several different industries. Practical issues such as understanding
user needs, data collection, effective analysis methods and using intelligence
results are covered in the paper.

Keywords: Technology intelligence; technology management; technology

strategy; innovation; product development; R&D investment planning;
technology monitoring; competitive analysis; technology transfer.

Reference to this paper should be made as follows: Ashton, W.B. and Stacey,
G.S. (1995) ‘Technical intelligence in business: understanding technology
threats and opportunities’ Int. J. Technology Management, Special Issue on the
Management of Technological Flows Across Industrial Boundaries, Vol. 10,
NO. 1, pp.79-104.

Biographical notes: Dr. Ashton is a senior program manager at Battelle and

has more than 20 years’ experience in advanced technology development. He is
an industrial engineer with research and teaching expertise in capital investment
planning, technology assessment and R&D management. He has managed
technology development efforts in computer technology and information
systems, and has technical experience in energy conversion and industrial
automation systems. He has developed original methods for technology
monitoring and for using patent information in business decisions. Dr. Ashton
is author to several technical and planning publications.

Copyright 0 1995 Inderscience Enterprises Ltd.

80 W.B.Ashton and G.S. Stacey

Dr. Stacey has been the director of various technology management and
forecasting programs at Battelle for more than 20 years. His scope is
international including projects in the USA, Europe and Japan. With a
background in economics, Dr. Stacey has extensive practical experience in
technology investment decisions, futures analysis, and various corporate policy
analyses. He has made important analysis contributions to use of scenarios for
corporate technology forecasting and valuation of intellectual property. Dr.
Stacey has authored a wide variety of strategic technology planning
publications.

1 Introduction

It has become increasingly important for most firms, especially those emphasizing
technology-based competitive advantages, to stay abreast of technical developments that
might affect them and to be alert for opportunities to exploit external technology. The
rapid pace of technological change in many industries, as well as the escalating costs of
research and development (R&D), make it imperative that firms take advantage of current
information regarding technical activities around the world. Keeping technically informed
is valuable because many business failures result from rapidly implemented new
technologies that unseat current products or outperform current production processes.
Unfortunately for incumbents, technological moves by competitors often come with little
warning. In the copier industry of the early 1980s, Xerox unexpectedly lost substantial
market share and financial resources to the low-cost, high-performance copier technology
offered by Japanese competitors like Ricoh and Canon.
Technological surprises and lost opportunities are an inevitable part of business, but
much can be done to minimize their occurrence and adverse effects. An effective science
and technology (S&T) intelligence effort might have prevented or mitigated severe losses
in many cases and provided new business opportunities in others. Technical intelligence
efforts in business do exist, and some of them have provided benefits many times over. In
Japan, prominent firms in industries that reached global prominence in the ‘70s and ‘80s
are considered world leaders for their success in technology surveillance, acquisition and
adaptation [ 11. Obtaining research and technology from external sources, the same
strategy used by many American firms when Europe was technologically pre-eminent in
the early 1900s, has been at the heart of Japan’s economic successes. Japanese engineers
regularly attend technical academic conferences in the USA and Europe, collecting
information, contacts and research papers. They tour laboratories, factories and plants and
increasingly are setting up laboratories in the USA and sponsoring university research. In
April 1990, for example, Hitachi Chemical Company opened a widely publicized $20
million research facility at the University of California at Irvine to conduct research in
biochemistry and bioelectronics. Moreover, in the past several years, Japanese firms have
been investing in startups, signing joint ventures, and licensing new technologies in
industrializing countries around the world [2].
This paper discusses the emerging area of competitive technical or S&T intelligence
for business as carried out by many firms. A well-known problem facing decision makers
is how and where to obtain S&T information to carefully address technology decisions;
however, the ‘information explosion’ prevalent today has given rise to the more urgent
problem of determining which portions of the vast amounts of available information are
 Technical intelligence in business: understanding threats & opportunities 81

relevant, current and accurate. S&T or technical intelligence refers broadly to the practice
of finding, analyzing and using the best information on technical developments, events
and trends. This paper describes how successful business technical intelligence programs
can help provide and apply this key information in companies, thereby helping to ensure
long-term business success.

2 Internal and external sources of new technology

Scientific and technological innovation provides a continuous stream of new technical

developments that represent opportunities for advanced products and processes. In many
industries, the pace of this innovation is rapid and increasing, making management of
innovation a deliberate and focussed activity. Moreover, technology-based competition is
intense; the number of companies, both foreign and domestic, that are capable of rapid
technical innovation is rising because their survival depends on exploiting new
developments. In this ever-changing environment, the internal company R&D laboratory
is no longer the sole source of new developments; emerging technologies are found both
inside and outside the firm, often in foreign countries.
The importance of external technical information for business innovation was
highlighted in the late 1960s and early 1970s when results from the SAPPHO Project
were released. SAPPHO was designed to study processes of scientific innovation,
including comparisons of both successful and failed attempts to innovate. SAPPHO
researchers found that one of the keys to all successful projects was the innovating
company’s linkages with external science and technology networks [3].These linkages
were established based on monitoring S&T developments in the scientific and technical
communities, as well as those of other firms and industries.
Internal company R&D is the principal internal investment used by most firms to gain
proprietary technology, but many firms have relied on external technology. In the large
market economies of the world, company growth through licensing or buying external
technology is a prominent business practice. More firms today are recognizing that
external sources of technology hold important potential for creating economic value more
rapidly and at less cost than traditional internally-developed advances. For instance, an
important study to ascertain the relative influence of several such sources was conducted
in the USA in 1986 [4]. A group of 76 R&D vice presidents for manufacturing companies
was asked to evaluate 12 different sources of R&D intelligence, using a four-point Likert
scale ranging from ‘always used’ (4) to ‘never used’ (1). The key findings from this
study, shown in Table 1, indicate that without question, internal marketing and
manufacturing groups dominate the sources of R&D intelligence studied. However,
external groups - technical equipment suppliers (vendors), universities and interactions
with peers and customers (an especially important group when R&D is market-driven as
opposed to technology-driven) - are the next most frequently used group. Public sector
groups, such as the National Technical Information Service and other government
agencies, are also used, but much less frequently than other sources. Interestingly, reverse
engineering is not rated very highly.
This study highlights an important trend with regard to external technical information.
The potential for externally-sourced technology increases for virtually all firms as
technology-based competition heightens, as the costs of internal R&D rise and as more
82 W.B. Ashton and G.S. Stacey

and more companies become proficient at technological innovation. In fact, these external
sources are often from industries other than those where a firm competes. Highly
innovative solutions to technical problems often come from adapting the technology of
unexpected sources. And, according to this and other studies, companies in the USA and
elsewhere are beginning to pay more attention to these external developments. The
implication of this trend is that effective management of both internal and external
technical information by companies is becoming vital for business success.

Table 1 Relative importance of technological knowledge sources used by US manufacturing

R&D groups, 1981

Sources Mean usage response

(Likert 4-1 scale)
Marketing group 3.15
Manufacturing group 3.12
Technical equipment suppliers 2.68
Customers 2.61
Professional interaction with peers outside of the firm 2.59
Informal interaction with peers outside the firm 2.49
Universities 2.25
Consulting firms 2.09
National Technical Information Service 1.93
Other government agencies 1.90
Reverse engineering of competitors’ products 1.92
New employees previously working for competitors 1.81
Source: Link, A.N., and Zmud, R.W. (1984) Alternative Sources of R&D Intelligence:
The Influence of Technological Policies, Working Paper. University of North
Carolina at Greensboro, Greensboro, North Carolina

3 Technical intelligence in business

Since the mid-l980s, the field of ‘competitive intelligence’ has increased in size,
visibility and importance in professional and business circles. A prominent business
competitive intelligence organization in the USA, the Society of Competitive Intelligence
Professionals (SCIP), was started in 1986 and now has more than 2000 members. It has
recently initiated chapters in Europe and Japan. Many firms have established business
intelligence organizations and heightened their reliance on existing intelligence units.
And technical intelligence is now beginning to be recognized as an important component
of overall business intelligence activities [ 5 ] .

3.1 Basic competitive technical intelligence concepts

Competitive technical intelligence (CTI) refers to the application of basic intelligence
functions to S&T matters in business. It is defined as business-sensitive information on
technical threats or opportunities that could be harmful to an organization’s business
 Technical intelligence in business: understanding threats & opportunities 83

health if exposed or used improperly. Technical intelligence is a special class of

information, namely information on technical events, trends, activities or issues that has
sufficient competitive value to warrant special protection and handling against unintended
disclosure or misuse.
S&T intelligence already exists in most companies; it often is simply not recognized
as an important company resource. However, intelligence is not just information, and
programs to collect information are not intelligence programs. Many managers claim that
they are aware of the technical environment since their technical staff is expected to ‘keep
up’ with fields of specialization by reading the literature, attending conferences, and other
similar activities. But too often, these firms do not have a systematic way to capture the
important elements of this general staff awareness. Beyond awareness of events or trends,
developing and managing S&T intelligence also requires special information analysis and
communication skills. Gathering information is one thing; gathering the right
information, turning it into practical intelligence and delivering it to people in a useful
form is another.
S&T intelligence is used by businesses for the following three basic purposes:
to provide early warning of technical developments or company moves that could
adversely affect the prospects for business success in an organization
to identify new product, process or collaboration opportunities for a business created
by changes in the scientific or technological environment
to understand technical events or trends and the related competitive environment, as
preparation for addressing potential threats to current or future products and markets
and for exploiting significant new opportunities [6].
Achieving these objectives can provide important benefits to companies. Good
intelligence can eliminate technical surprises or lessen their impact by allowing a better
opportunity to respond. The reaction time a company has in response to moves by others
can be lengthened, permitting more careful consideration of follow-up actions. Finally,
good intelligence can alert company staff to new technical opportunities or approaches to
addressing business problems.
A number of technical intelligence activities are undertaken by firms to keep track of
and interpret relevant events and trends in science and technology. Tactical intelligence
concerns near-term issues and is based on knowledge of recent and current S&T
activities, whereas strategic intelligence addresses broader company directions over the
longer term. Strategic sources, data and findings deal with expectations as to which
technologies will have an impact in the future and the nature of this impact. Combined
with other business information, both types of technical intelligence form the basis for
undertaking a variety of actions to enhance company competitiveness and long-term
survival in both product and process improvements. Good intelligence practice is very
much like good investigative journalism: following leads, checking sources and surfacing
wejl-thought-out ideas regarding technical situations is at the heart of intelligence
operations.
Table 2 contains basic definitions of technical intelligence activities in business. As
indicated, intelligence begins with S&T scanning, which provides broad-based data on
the technological environment. These results feed monitoring activities, and together
these two activities constitute the components of S&T surveillance or watching for an
84 W.B. Ashton and G.S. Stacey

organization. Technical surveillance requires people with a broad range of interests (not
necessarily deep knowledge) and high lateral thinking skills. Such individuals can often
imagine how a change in a relatively unknown or obscure (to the people in the business)
science or technology could affect business success. Frequently, scanning identifies
subjects that are then examined in more depth in monitoring or assessment efforts.
S&T monitoring is a narrow and detailed surveillance that regularly keeps track of
changes in designated technical areas. Successful monitoring does not provide a steady
flow of information but instead, highlights key events and changes in the form of 'red
flags' that are discerned from a larger amount of routinely collected data. Technical
monitoring often produces a repository of information about continuous changes to serve
as a resource base for assessments, while monitoring system users are informed only
about changes that warrant special attention. Thus monitoring provides the basis for
alerting users to developments and emerging trends in predefined areas. This requirement
means that monitoring staff must be sensitive to the implications of the observations
obtained and be effective in disseminating information.
Assessment involves in-depth and focussed analysis of a particular technical area or
topic, often done in preparation for company business moves or investments involving

Table 2 Basic definitions of technical intelligence activities in business

Technical intelligence business-sensitive information on scientific or technological threats or
opportunities which, if disclosed or used improperly, could be harmful
to an organization's business health.
S&T scanning constant surveillance and review of information from a broad set of data
sources to identify technical developments and changes that could be
important to a firm. Frequently, scanning identifies subjects that are then
examined in more depth in the monitoring or assessment process.
S&T monitoring continuous seeking, interpretation and provision of access to
information on selected technical areas. Successful monitoring does not
provide a steady drone of information, but instead highlights key events
and changes in the form of alerts or "red flags." The monitoring activity
becomes a repository of information about continuous changes, while
the system users are informed about changes that warrant special
attention.
S&T assessment or systematic analysis of the impacts or potential value of a science or
evaluation technology development to determine if some form of management
action (e.g., further attention, acquisition, investment or transfer) is
warranted and to recommend action. The need for an assessment or
evaluation would arise as a result of a finding of the monitoring program
or from other independent sources within the business.
S&T acquisition or conversion of science and technology developments into intellectual
transfer property, which can be used to create value for the business. Generally,
the development becomes intellectual property when the idea has been
documented and the potential application of the development has been
defined.
S&T internalization Conversion of the S&T knowledge or intellectual property into a
business asset by incorporating it into routine firm operations. Examples
include using an S&T finding to reduce costs or to create a new product,
allowing entry into a new market or expansion market share.
 Technical intelligence in business: understanding threats & opportunities 85

new technology, including acquisitions. This can be viewed as an elaboration of the

findings of the monitoring activity by including more evaluation of the implications of
external events for a company’s business. However, assessment can also be done in
response to specific technology needs that must be filled outside a company; the field of
‘technology scouts’ has grown up around the need to identify affordable technologies for
acquisition [7].
Acquisition involves taking possession of potentially valuable technical intellectual
property. This might mean:
defining internal S&T developments to create intellectual property (establishing
patents, trade secrets and other related protective measures)
acquiring rights to S&T property generated outside an organization, through
purchase, license or cross-license agreements
identifying useful external S&T knowledge and incorporating some aspect or
variation of the findings in internal technology for commercial use.
S&T property is acquired for commercial exploitation for economic value. This usually
involves some form of further development or adaptation internally, often through an
internal R&D effort.
Internalization is critical in capturing the benefits of the intelligence process because
intelligence findings must become part of the organizational operating process or culture
to eventually have an impact. Purposeful intelligence can be highly informative, but
without an internalization element, it can become too diffuse and lack focus to such an
extent that its effectiveness is severely limited. Thus, by internalizing intelligence results,
firms capture the value from S&T intelligence by creating new externally-developed
opportunities and avoiding detrimental technological surprises.

3.2 Technical intelligence and industrial espionage

The technology intelligence activities covered in this paper do not include any illegal or
unethical activities such as industrial espionage [8]. Competitive technical intelligence is
not spying. Virtually all useful business intelligence is based on information that can be
obtained from public sources using legal and ethical means. These sources do not include
property such as trade secrets or protected materials obtained by illegally covert, intrusive
methods. In the long run, successful intelligence practices depend much more on knowing
what information is relevant, where to find it legally and how to convert it into
intelligence that serves as a real basis for managerial decisions and action.

3.3 Potential applications of technical intelligence

Intelligence on important technical developments can provide a strong foundation for
informed company choices and actions. Although general business intelligence can affect
virtually any aspect of business life, technical intelligence results address use of
technology in the products and processes of the organization and the efforts to acquire,
develop, exploit and retire it. ‘Several examples of the uses of technical intelligence
information are given below.
86 W,B. Ashton and G.S. Stacey

Identify potential technological threats which can cost market share and harm
long-term business health
Knowledge of external technical activities makes it possible for firms to identify potential
technological threats that can cost them market share in existing or planned product lines.
In the 1970s, Whirlpool Corporation monitored developments in the chemical and textile
industries, where it learned about the recent innovations in the area of permanent press
fabrics prior to their commercialization. Using this information, Whirlpool was able to
produce the first washer and dryer with permanent press cycles, beating competitors by
about a year and cornering a large share of the appliance market. Thus, through its
monitoring efforts, Whirlpool was able to turn a potential threat into a major
technological coup [9]. On the other hand, the history of National Cash Register (NCR)
during the 1970s is not as bright. NCR failed to recognize the technological limits of
electro-mechanical cash registers and made large investments to improve existing product
lines in the face of emerging competition from computer-based cash registers. The
computerized systems filled cash register functions well, but also introduced real-time
information processing to automatically update shelf stock and inventory records as well
as to speed up future order planning - all immediately as sales were made. NCR’s
investors lost millions of dollars and large numbers of NCR managers and staff lost their
jobs, in large part because the company failed to keep abreast of competing technology
developments that rapidly outdated their main products.

Identify opportunities for technology investment, including commercialization

Technology intelligence can help firms identify opportunities for technology investment,
including commercialization. In 1985, one of Japan’s leading daily newspapers reported
that a major semiconductor firm had decided to drop out of the 64K D-RAM market.
Because the company had been losing market share for some time, many of its
competitors failed to take note of the announcement and hence were not aware of the
motivation for the company’s decision, which was to switch its R&D to the next
generation 256K D-RAM. Although this D-RAM did not fare well on the market, it was
really the next generation of bit - the 1M D-RAM - that the company was aiming to
develop. As a result, this firm came out way ahead of the competition, with half of the
1M D-RAM market. The firm is considered the leading 1M D-RAM producer, owing to
its yield ratio, which has been estimated at double that of its competitors [lo].

Incorporate new technology advances into products and processes

One of the most important roles of technical intelligence is helping firms to incorporate
new technology advances into their own products and processes. Hewlett-Packard (HP)
was able to do this in the 1980s when it found out about the emerging Canon laser for
electronic applications. After learning about the new technology, HP moved quickly to
establish an agreement with Canon whereby HP could use the Canon technology in its
newly designed Laserjet printers [ 1 13.

Help determine strategy for internal RBD programs

Intelligence results can help managers decide in which direction their own R&D
programs should advance and what technical approaches should be used. Shortly after the
 Technical intelligence in business: understanding threats & opportunities 87

Fanuc company spun off from Fujitsu in 1972, the company analyzed the computerized
numerical controller market to determine opportunities for market share. At that time, the
Massachusetts Institute of Technology’s (MIT) numerical controller, invented in 1952,
was still state-of-the-art. With 2,000 mechanical valves, the MIT’s device was technically
extremely complex. In addition, it was large and very expensive to purchase and operate.
Consequently, many small- and mid-sized firms could neither master it technically nor
afford it. Fanuc thus targeted this niche and developed a controller that was technically
less sophisticated, as well as cheaper and smaller than the then-current generation [12].

Terminate unpromising company R&D efforts

Sometimes S&T intelligence can result in a firm’s decision to terminate R&D on a

particular project. For example, on learning that competitors were considerably ahead in
the development of TPA, a drug used to dissolve blood clots in heart attack victims, the
US pharmaceutical company Searle decided to discontinue its own TPA research.
Although terminating an ongoing R&D project can be both costly and unpleasant, the
ultimate result is to free up resources for more valuable investments [13].

Identify possible partners f o r collaboration

Another function of technical intelligence programs is to help companies identify

possible partners for collaboration, thereby leveraging investment dollars and avoiding
duplication of efforts. In 1990, Searle, an American firm, and the French firm Synthelabo
joined forces to produce a new drug called Kerlone, which is used for the management of
high blood pressure. Searle contributed marketing and drug development skills, while
Synthelabo contributed research and drug development expertise. This joint venture, a
result of monitoring other firms in the industry, allowed Monsanto, Searle’s parent
company, to acquire both research skills and new products. Both the US and French firms
reaped the benefits of this collaboration [14].
Many examples of similar applications of technical intelligence efforts exist. Often,
businesses do not consider these efforts to be technical intelligence. However, the need to
carefully develop information on technical threats and opportunities, along with the need
for secrecy about the particulars of how the information is used, make protection of this
type of information essential for a company’s long-term survival.

4 The technical intelligence process in business organizations

To maximize effectiveness, technical intelligence activities need to be carefully

rationalized and designed prior to implementation. In most businesses, there are usually
far more requests for information than can be handled with available intelligence
resources. This means that intelligence efforts must be organized and conducted with
specific objectives, resources and products in mind.
In general, developing and using technical intelligence involves six fundamental
steps. These steps form a closed process i n which the front-end planning incorporates
feedback information regarding the successful and problematic aspects of an on-going
activity. The six basic steps are given below:
88 W.B. Ashton and G.S. Stacey

Planning Understand user needs and establishing actions to meet them

Collection Seek out and gather data & information
Analysis Convert data & information to intelligence
Delivery Transmit selected information to individuals who can benefit from it
Use Realize value from technology intelligence in decision making and
actions
Evaluation Review the effectiveness of the intelligence results in meeting needs
and identifying corrective actions.
The relationship between these six activities is shown graphically in Figure 1; their
general characteristics are discussed individually in the remainder of this section.

Figure 1 The S&T intelligence process

- methods
..........................

Step I ) Plan intelligence activities

Effective intelligence is based on clear identification of user or customer needs to be

served by the intelligence activity and careful forethought about information gathering
and analysis. The customers for the information are the ultimate beneficiaries of the
work, so their requirements and interests are basic guidance for the effort. Table 3
indicates that different types of intelligence users have different needs; a marketing
manager, for example, will have considerably different information needs than will a
technical manager or a CEO. These information requirements, in turn, will impact key
features of technology intelligence programs such as the type of data sources used, level
of funding, types of analysis and methods of dissemination.
 Technical intelligence in business: understanding threats & opportunities 89

Table 3 Common user S&T information needs

Type of information user Typical information needs

ScientistsEngineers Detailed technical data
- Technical objectives of R&D
- R&D approaches - product/process design strategies
- Manufacturing methods
- R&D results or progress
- Technical contacts/researchers
Technical Managers S&T funding data
- Program funding plans
- R&D or acquisition strategies
Marketing Personnel Competitive product features
- Product sales
- Cost/price data
Senior Executives Technical news
- Technical contacts/researchers
- Announcements of business alliances, new products,
technical breakthroughs
Policy-makers/Regulators Scienceflechnologypolicy
- National S&Tgoals and funding
- New S&T directions

Technical intelligence planning proceeds at two levels. The first level involves identifying
the key needs of potential intelligence users. Successful needs assessment usually
involves a series of direct interactions with potential users of intelligence products. These
meetings should be designed to cover questions such as the type of information sought,
the level of detail, potential uses of the information and possible sources. It is also useful
to identify some of the underlying concerns or issues that drive specific user information
requests, including the sensitivity or type of protection relevant to the driving concerns.
Sometimes users are not able to specify their own needs well in early monitoring
meetings, making follow-up discussions and trial information products essential to
developing a final set of clear needs.
The second level of initial S&T information planning addresses what technical areas
to investigate. This means identifying technical areas that are critical to the long-term
success of the organization, often referred to as ‘core competences’ . In the S&T context,
a program of technical intelligence is built around ‘core technical competences’. The core
technical competence areas of a company can be identified by a series of tests that
include, for example, frequency of a technology’s use across product lines, contribution
of a technology to the organizational ‘value added’, role of a technology in customer
satisfaction, contribution to business volume or market share, or contribution to special
intellectual property positions.
Selection of five or ten such areas for a company is essential for establishing
workable technical domains for information gathering. Our experience shows that these
areas are not usually well defined or widely known within companies. There can be
90 W.B. Ashton and G.S. Stacey

considerable debate or dissention about which of many technical areas are most
appropriate or relevant. However, once established, the information sought can be used to
create opportunities to extend or enhance basic strengths in a core technical competence.
The ideal intelligence plan is effective in both assembling information and evolving to
meet the continuously changing needs of management, management style, culture, the
changing business situation, and perhaps most importantly, the changing technology and
science environment.
Once user needs and core technical competencies have been identified, an intelligence
strategy and specific activities can be established. This activity plan is important to
manage the collection, analysis and dissemination efforts. Undoubtedly, the range of
subjects and areas of interest to users will be extensive - too vast to cover with limited
resources. Thus, a collection and analysis plan is developed by selecting technical areas
to follow, deciding how to scan or monitor them, identifying general S&T information
targets, selecting sources of information, and organizing the intelligence staff in terms of
budget, staff time commitments and tasks.

Step 2 ) Collect source materials

The choice of sources for a technology intelligence effort depends on a variety of factors,
including the technical area involved, user needs, level of funding available and the level
of effort to be applied to the project. Sources can be internal or external to the company,
formal or informal, personal or electronic. It is important to be clear that technical
intelligence efforts should not involve any illegal or unethical activities such as those
considered to be industrial espionage. Many very effective intelligence programs in
companies have recognized that all the information required can be obtained in the public
domain. The secret of the most successful programs lies primarily in narrowing down
what information is relevant, identifying where to find it and knowing how to analyze and
convert it into intelligence that can be used as a basis for managerial decision making and
action.
Table 4 summarizes the major types of information sources on international
technology developments and trends. These sources are grouped into four major
categories that differ in terms of information content provided, overall value to various
users and cost of access. The sources are shown in decreasing order of both information
content and corresponding cost. Each category is summarized below.
Field Observations - The highest quality data regarding technical matters is obtained
from directly observing components, equipment or systems in operation or tests; this
first-hand data is generally also the most expensive because it involves travel and
significant time commitments by key program staff. Field observations include the
practice of evaluating technology through ‘reverse engineering’, or disassembly for
purposes of assessing technical and operating characteristics.
Individual Experts- The second most reliable source is personal contacts with
individuals having direct or immediate connections to the technology areas sought,
including hiring knowledgeable individuals as staff. Examples of these contacts are
technical consultants, ‘referral’ contacts, informal professional acquaintances, and
colleagues working with related firms, occasjonally even competitor firms [151.
Attendance at trade shows, conferences, etc., creates opportunities for contact with
personnel who are directly involved with the work. Since travel to external sites is
 Technical intelligence in business: understanding threats & opportunities 91

often necessary to make contacts, this can also be expensive. However, developing
primary expert contacts offers the advantage of potentially long-term access to
information, if a solid professional relationship has been established.
Technical and Business Literature - Literature, both published and unpublished, is an
excellent source for certain kinds of data; technically detailed information is usually
best obtained from documents. In just one example, Intel monitors scientific

Table 4 Major sources for S&T information

FIELD OBSERVATIONS
first-hand technology system examinations or tests; e.g. reverse engineering
onsite installations
short-term onsite personnel assignments, visits or tours
INDIVIDUAL EXPERTS
professional relationships with individuals having immediate connections with
technology
- short-term interviews
- long-term collaborations

informal personal meetings with technical associates

use of consultants
hiring of key staff
TECHNICAL AND BUSINESS LITERATURE
publications (domestic and foreign)
- referred technical journals - conference or symposium proceedings
- trade publicationhewsletters - technical magazines
- newspapers - industry or trade association reports
- translations and abstracts - government reports or newsletters
- patents or patent applications - abstracts or document summaries
- in-house or company publications
unpublished documents
- trip reports to technical sites or meetings
- correspondence
- computerized databases
- briefing materials
- meeting notes
computerized databases
- commercial
- government
- proprietary
ORGANIZATIONAL CONTACTS
professional technical conferences, meetings or trade shows
general professional contacts through organizational arrangements such as joint
ventures, mergers/acquisitions,licensing agreements, branch offices, sales
representatives, mailings or distributions
membership in international organizations or industry associations
92 W.B. Ashton and G.S. Stacey

literature to keep track of competitors’ progress in developing eight-inch silicon

wafers. Intel staff in Tokyo and California sift the thousands of technical papers
published in Japan each year and translate the most interesting into English.
Unfortunately, this information is not always most current; publication times delay
availability of new material. The major categories of technical and business literature
available are published material, unpublished material and computerized databases.
Each type of literature contains information of primary interest to selected types of
information users. A company’s CEO, for example, probably does not need material
from professional technical journals, (except perhaps in a laboratory setting) but may
seek industry or trade association reports. Unfortunately, even when a user is
matched with the best types of technical literature, several barriers to effective use
must be overcome. The principal barriers include search effort, document availabil-
ity, information timeliness, content limitations and language translations of foreign
documents. S&T literature is a labour-intensive source for technology information.
Acquiring, screening and interpreting the material is often tedious and intense work.
Organizational Contacts - This category contains several sources that are relatively
inexpensive to exploit, while still producing useful information. Contacts with or
membership in international organizations or industry associations permits users to
receive distributed material routinely and be made aware of developments to further
investigate other sources. Although usually secondary, these sources sometimes can
provide primary data. Technical consultants, ‘referral’ contacts, informal
professional acquaintances, and other intermediate parties with knowledge of S&T
targets can be identified through this mechanism. The information is sometimes
general in nature and must be confirmed by primary sources if it is anticipated to be
of value. It is particularly important to use these contacts to ‘network’. Maintaining
such a network gives monitoring staff a way to identify developments or additional
sources that are of prime importance and which can subsequently be exploited
through follow-up actions.
Information sources with the lowest time and funding requirements include personal
networks, databases, trade shows and trade journals. Knight-Ridder’s Dialog system has
some 400 databases tracking corporate and scientific developments, while McGraw-Hill
and Dun & Bradstreet sell computer databases services on specific industries. Although
these are comparatively inexpensive methods of gathering data, their potential
effectiveness can be high. Xerox used newsletters, trade shows, and government
databases to obtain useful information about competitors’ activities in the area of
photocopier development. Consequently, Xerox was prepared when Canon announced a
new deal with Kodak to develop and market high-speed, low-end copiers. It was also
ready when Ricoh and Canon announced a joint marketing partnership in Japan in 1988.
Because of its monitoring activities, Xerox learned many useful things about the Japanese
philosophy regarding design, maintenance, the manufacturing process and pricing. This
knowledge helped Xerox increase its market share in Japan and worldwide [16].
In another relatively inexpensive but interesting example of acquiring information,
the Italian firm Olivetti has a program to offer an annual prize to external inventors and
innovative companies. Candidates submit their suggestions to Olivetti indicating how
their idea could be of value to the company. The firm has received up to 200 applications
for the prize. These are screened down to the 10 to 20 with the most realistic possibility
 Technical intelligence in business: understanding threats & opportunities 93

for success. Each of these candidates makes a more detailed presentation of their ideas,
and Olivetti chooses a winner. For the winner, development support is offered in
exchange for compensation, often including a degree of ownership in the small company
by Olivetti. By this means, Olivetti is able to survey the scientific and technical
developments related to its products and processes and, at the same time, take partial
ownership of the attractive developments at an early stage [17].
The significant advantage in this approach is the fact that the company extends its
intelligence gathering beyond its own internal capabilities. It is as though the company
were writing a functional or performance specification for its products - what services do
they deliver and how can these services be delivered in another way. By asking for ideas
from outside, the company substantially widens the potential range of technology and
science alternatives that can provide solutions.
Methods of gaining access to technological information that require significant
financial investment include sponsoring university research, sponsoring endowed chairs
at universities, acquiring small high-tech firms, and locating laboratories domestically or
overseas where competitors are active. By sponsoring computer research at universities,
Digital Equipment Corporation (DEC) maintains access to major research developments
and leading scientists who perform research of interest to the company. As of 1990, DEC
sponsored more than 240 projects at over 100 universities around the world [18].
Similarly, in 1988, Fujitsu Limited, Japan’s largest computer maker and one of the
world’s largest manufacturers of telecommunications equipment, gave a $1.5 million
grant to MIT to establish the Fujitsu Professorship of Electrical Engineering and
Computer Science. As a result, the company benefited from the results of MIT’s research
in that field [ 191.
Kodak, recognizing the need to learn about the technology of its Japanese
competitors, opened a facility in Japan in 1987. The head of Kodak’s Japanese operations
states that it is easier to collect information on Japan inside the country, since both the
popular and trade presses can obtain write-ups on new technological developments faster
and more consistently than American companies do. In addition, staff are able to pick up
useful information from previous employers, customers and competitors, or while
socializing [20].
Another method organizations use €or technology intelligence is hiring consultants to
collect, develop or evaluate information, rather than creating a program in-house.
Japanese firms have a particularly sophisticated network for technology monitoring in
their extensive use of trading companies, called sogo shoshas. These companies provide
volumes of information to their clients. Information-gatherers at the sogo shosha are
stationed in 180 overseas offices. They send as many as 100,000 pieces of information
daily back to the home office, where it is analyzed and put into a mainframe computer as
part of a larger database [21].

Step 3) Analyze source data

This step involves analysis of the materials and sources to interpret their meaning in light
of intelligence objectives or user needs. Intelligence analysis involves activities like
collating and organizing basic data, discerning the basis or causes for observations or
actions, making comparisons among different components of the issue at hand and
interpreting the meaning of information, and assessing the implications for follow-up
94 W.B. Ashton and G.S. Stacey

actions. The approaches, tools and techniques used for analysis depend on the
characteristics of the source material, the questions at hand and the user needs addressed.
Analysis gives context to the data and develops specific intelligence findings and
recommendations for distribution to users.

4.1 Developing analysis results

The analysis activity is the most difficult intelligence effort to describe. There are few
standard ways to perform analysis, and a wide range of approaches and tools to assist the
process. However, the general issues addressed by the analysis process can be described.
Intelligence analysis can be divided into two basic categories: technology-focussed and
company focussed.
Technology-focussed (product and process) analysis attempts to:
provide technical descriptions of existing or emerging technology systems,
developments, events, trends or capabilities; e.g., developing a technical brief on
applications of fuzzy logic to process or equipment control
identify or predict significant shifts in the rate of progress in an area or the
occurrence of technical breakthroughs that will make a new capability technically or
economically feasible; e.g. describing the impacts of high temperature
superconductivity for advances in scientific instrumentation
identify when substitute or competing technologies for a firm’s products or processes
are becoming available; e.g. recognizing the potential for composite materials to
substitute for metallic components
assess the responses of other firms to new market-influencing technology forces such
as government regulatory actions or structural shifts in consumer preferences; e.g.,
assessing the implications for competitor’s product strategies of new federal rules to
control toxic emissions.
Company-focussed analysis attempts to:
recognize patterns of activity by competitors, suppliers or customers that can have
potential consequences for a firm’s market relationships; examples include formation
of joint ventures between competitors, customers or suppliers; university research
program developments; issuance of patents or licenses; announcements of new R&P
contracts; or new high technology product releases
identify emerging capabilities (new distinctive technical competences) or strengths
and weaknesses in a competitor, supplier or customer that could affect a firm’s
business; e.g. recognizing that a competitor has the capability for recycling and
selling materials formerly handled as waste products for disposal
compare the technical state-of-the-art between external and company product lines or
process methods; e.g. finding a means of chemically treating the surface of a product
that could be adopted in place of widely-used mechanical polishing equipment
compare current product or process technology performance or cost data with past
records to discern trends that may be important in the future; e.g. comparing the
technical performance and cost of new modular manufacturing techniques against
older batch processing methods
 Technical intelligence in business: understanding threats & opportunities 95

produce judgment-based forecasts regarding the implications of events or trends for

future directions and efforts of the firm.
To implement these analysis strategies, many firms have developed proprietary
computer-based systems and databases, with unique data search, acquisition, comparison
and display features.

4.2 Ensuring information is correct, current and complete

The analysis process also includes efforts to evaluate the veracity, timeliness and
completeness of the data used and of the findings produced. To evaluate the accuracy of
source data, the following questions serve as a basic checklist:
Who developed the information and what are their quali$cations? Assessing a
source’s qualifications involves such things as reputation for previous materials and
the extent of potential biases or relevant capabilities.
Is the information hard or soft? Hard information is first-hand information, derived
from actual observations or records of activities. Soft information is derived from
intermediate or indirect source material.
Is the information compatible with what is already known? Some information,
especially projections, may be so out of line with present conditions that its accuracy
should be questioned.

4.3 Interpreting business significance

Analysis results and information on the reliability of the sources and findings must then
be interpreted for action by relevant individuals. This part of the analysis is concerned
with what the findings mean for the user, or what the real business significance of the
material could be for the firm. The implications and risks of acting on the information (or
not acting on it) are the key message to be developed as the process of internalizing the
results begins.

Step 4) Deliver information products

Products can be distributed in many ways, ranging from formal reports or presentations to
electronic mail and one-on-one conversations. Preferred methods depend on the nature of
the information to be distributed, the intended audience, cost, urgency and user
preferences. In S&T monitoring, assessment and internalization, some one-on-one
discussion of key results is usually desirable. Personal conversation provides the
opportunity for analysts to help educate users directly, for highlighting particularly
important findings and for users to ask questions and probe at issues. Interaction with
users is often the point where ‘information becomes intelligence’ since the implications
of findings become more clear.

4.4 User discussion and feedback

User feedback at this stage is crucial to successful technical intelligence efforts.
Comments from users help improve the types of information being produced by the
96 W.B. Ashton and G.S. Stacey

program, as well as the methods of communication. User feedback provides short-term

direction to the dynamics of the monitoring program, as well as long-term input to
program design.
Personal contact is a key feature of the External Research Program (ERP) at DEC.
DEC has developed a variety of mechanisms to enhance the information flow between
outside scientists and the DEC advanced development managers who are in the best
position to utilize that knowledge base. The ERP is the focal point for the firm’s support
of university computer research. Through this program, DEC monitors major technical
developments and identifies leading scientists who are performing research of interest to
the company. ERP staff operate as a catalyst to help build lasting relationships between
these researchers and DEC’s research, engineering, applications development and
manufacturing groups. Examples of the information dissemination methods include
technical seminars at corporate sites and on campuses, forums and roundtables, transfer
of progress and research results from the external projects to DEC’s engineering staff,
electronic communication (such as electronic bulletin boards, computer conferencing and
videotext); and a newsletter of emerging developments, the Digital Technical Journal
P21.

4.5 Protecting sensitive information

Once analysis results appear to have intelligence value, it is important to deal with the
need to safeguard sensitive company information [23]. Issues such as specification of
how the intelligence is to be protected, handled and controlled throughout its useful life
are essential to ensuring that the company’s interests are addressed. Also, appropriate
downgrading with proper safeguards of protected information must also be part of
company intelligence policy.

Step 5) Apply intelligence results

Once developed and disseminated, intelligence results are applied or used in some way to
affect organizational decisions or actions. Typically, the findings are either used as the
basis for specific actions (such as input to decisions) or simply stored as organizational
knowledge for possible later use in actions. Organizational actions involve decision
making, where intelligence is used as an information input to the various choice
processes. For example, the decision to develop a new light-weight, high-strength
polymeric material for substitution in an existing light-weight metallic product line would
include consideration of whether competitors are working on the same or a different
material along with data on the material performance, cost and manufacturability. In the
planning and analysis efforts that precede this type of decision, intelligence results on the
new material and its use by competitors would be invaluable.
Technical intelligence fills two major information roles: early warning and decision
support. In its early warning role, technical intelligence can be used to identify external
events of interest to the company, monitor a number of indicators relevant to company
interest, identify patterns and trends in technological activity, construct plausible
scenarios regarding future changes and recommend company responses to technical
threats or opportunities.
As a decision support activity, technical intelligence personnel endeavor to ensure
that managers have all relevant information delivered in a clear and timely manner to take
 Technical intelligence in business: understanding threats & opportunities 97

appropriate actions. Intelligence information supports a variety of technology

management decisions, including evaluating current or emerging business areas,
commercialization investment planning, technology development strategies, technical
‘make-or-buy’ decisions, product or process development, technology licensing and
transfer, and collaboration with other parties. These decisions all depend on current,
accurate and targeted technical information, which must be developed, evaluated and
protected as intelligence.

Step 6 ) Evaluate program pegormame

Periodically, the intelligence process and results should be evaluated with regard to
whether they serve user needs and ultimately have beneficial impacts on the organization.
The purpose of the evaluation is to improve future operations by making them more
responsive to company needs, to further clarify those needs and to adjust practices
accordingly. These evaluations can be either quick and informal, often in connection with
a particular situation being studied, or in-depth. and structured, where an entire
intelligence program is periodically evaluated before decisions regarding continued
support are made. Intelligence program evaluation involves comparing yardsticks of the
program?s performance against the resources and management decisions to meet the
program’s activities.
These six steps form the basis for technical intelligence staff support functions,
usually comprising part of an organization’s information management infrastructure.
Other information components include the corporate library, information
centre/management information system (MIS) and market research group or strategic
planning functions. Although these steps may not always be discernible as individual
steps in the organizational environment, each of them has been found to be important in
successful business intelligence efforts.

5 Organizational strategies to implement technical intelligence

Although most companies that rely heavily on technology for competitive advantage
could benefit from some form of intelligence activity, certain types of companies have a
strong need for technical intelligence and would gain substantially from using it. These
companies typically have some of the following characteristics:
a technologically dynamic industry environment
- the pace of technological change in the industry is rapid
- entirely new or different technologies are likely to be needed within five years
9 technology-intensive products and processes
- technology is an important differentiating factor in product features or pricing
strategy
- the rate of new product introduction is high
- market entry timing is important to the success of the business
- regulatory approval of new products is complex, time-consuming and costly
98 W.B. Ashton and G.S. Stacey

an important investment in an R&D portfolio

- the business is R&D-intensive, having a high ratio of R&D to sales dollars
- the R&D portfolio contains a high proportion of large, long-range projects
Many companies in the so-called high-technology industries such as chemicals,
petroleum refining, electronics, scientific instruments, medical equipment,
pharmaceuticals and transportation, fit these criteria and would derive great benefit from
technical intelligence efforts.

5.1 Organizational checklist

A variety of organizational approaches to technical intelligence exist. However,

experience in military intelligence settings as well as with business organizations
indicates that there are several issues that must be addressed in establishing and
maintaining an intelligence organization. Several of the more important issues are
identified below.
Mission and expectations -What are the basic goals of the technical intelligence
function and what are the breakdown of responsibilities and the day-to-day duties of
the technical intelligence staff? What are the overall expectations for success of the
unit?
Authority level - To which office and manager does the technical intelligence
function report and which decisions require approval from upper management?
Organizational location (degree of centralization) - Is the technical intelligence
function a centralized corporate or a divisionhusiness unit function?
Staff selection and training - How many staff are assigned, and what is the mix of
core versus field staff? How are staff to be trained?
Technical resources - What kinds of data resources, analytical tools and supporting
information systems will be acquired or developed to provide the insights needed to
make intelligence findings useful?
Evaluation process - What are the measures of success for the intelligence unit and
how will its performance be evaluated?
There does not appear to be a ‘right’ answer in addressing these issues; ultimate choices
depend greatly on what works in the industrial setting where they are used. However,
some general observations regarding attractive approaches can be made, based on
experience in industry with what has worked to date. For instance, a study of large firms
in the United Kingdom in the early 1980s investigated how 31 of the top 100 British
companies in 1981 organized their technology monitoring (a key part of technical
intelligence) efforts [24]. The researchers interviewed planning, R&D and marketing
executives from these manufacturing and processing firms in 1981-82.
The study included the following types of industries (the number in parentheses
indicates the number of firms in the sample): engineering (lo), food/drug/drink (7), oil
and chemicals (3), metals and minerals (3), construction materials (2), utilities (2) and
other (4). Five possible organizational forfis for technology monitoring were
investigated.
 Technical intelligence in business: understanding threats & opportunities 99

Central Unit - Establish a core monitoring unit with dedicated staff and a specific
assignment for technological monitoring.
Existing Group - Include monitoring responsibility within an existing group
function, such as corporate planning, R&D or marketing.
Decentralized - Distribute monitoring responsibility to the operating units of the
company along with other planning functions.
Diffused - Do not establish a formal structure for monitoring, but ensure it is
performed by staff throughout the company as part of their other job responsibilities.
None - Do not devote attention to monitoring the technological environment, and do
not establish institutional arrangements for performing the task.
As shown in Table 5, the study found that the incidence and organizational location of
technological monitoring is related to the product strategy and attitude toward technology
threats in the companies surveyed. Firms with a diversified product mix (multiple
products and business units) tended to use a decentralized or diffused organizational form
for monitoring or had no monitoring at all. There was a clear tendency for the non-
diversified companies to rely on some centralized form for technological monitoring,
either a central unit or an existing group. Seven out of nine (78%) non-diversified
companies used a centralized structure, compared with only five out of twenty-two (23%)
diversified firms. Virtually all of these firms were concerned about competitive
technology developments.
Three types of attitudes toward technology were investigated. The aggressive attitude
included companies where technological innovation was essential to the company's
future. They accept that product substitution will take place, so they seek to have a
continual stream of new products coming on to the market. The concerned outlook was

Table 5 Technology monitoring practices in selected UK firms, 1985

Number of firms having the characteristic shown
Monitoring unit Number of Non- Attitude toward Comments
organization firms diversified technology*
surveved firms
A N C
Central unit 3 3 - 3 - among the 6 largest firms in the
study; even industry
representation
Existing group 9 4 3 5 1 even industry representation
Decentralized 6 0 1 3 2 even industry representation
Diffused 5 1 3 2 - science and engineering based
companies
None 8 1 - 1 7 even industry representation; no
engineering firms
Total 31 9 7 14 10
* Attitude toward technology: A-aggressive, N-concemed, C-complacent
Source: Quinn, 1985
100 W.B. Ashton and G.S. Stacey

represented by firms that paid attention to the threat from technological developments,
but which for some reason do not feel challenged to constantly develop new products
themselves. Finally, the complacent firms are those that do not consider technological
change to be a potential threat to their business. The key to their business future is the
nature of product demand, not the product’s technical characteristics. As the table
indicates, eight companies undertook no monitoring, and all but one of these had a
complacent attitude toward technology.

5.2 An Example technical intelligence program

To illustrate these approaches, we provide here a detailed description of one large
European consumer electronics company that has developed a unique and practical global
business intelligence system with both technical and non-technical activities [25]. The
company intelligence organization consists of a small, centrally-located core staff and a
large field organization made up of a wide range of company employees located around
the world. The main mission of the unit is to follow worldwide developments through its
network of overseas companies, agencies and offices, and to bring key intelligence
findings to the attention of company managers in a position to take appropriate actions.
This process is built around a set of ‘critical topics’ of concern to the firm, which are
identified by considering inputs from key company managers (the users). These topics
include technological, scientific, social, political and economic matters that may affect
the company. These topics are communicated to all of the field staff at ‘outlying’
business elements, to focus field data collection on items of particular interest. The
importance of these topics can change based on a number of factors and, from time to
time when shifts occur, some topics are dropped from the critical list and other emerging
ones are added. Some topics focus exclusively on particular competitor firms, both
domestic and foreign, while others are more policy-oriented, such as tracking impending
communications legislation in a country with an emerging market. Of course, many
topics are purely technical in nature, usually in the form of a list of technologies (e.g.,
fibre optics, chip manufacturing, micro-mechanics, fuzzy logic, consumer software, CD-
ROM and gallium-arsenide components) to be tracked by company field staff.
Connected to the central office by telephone and telefax, the outlying elements send
any and all information on these topics that surfaces from local technical and business
sources. These may be clippings, photographs, short newspaper reports, detailed technical
reports, etc. The central office receives this data from the field, and then proceeds to
catalogue, certify, organize and compare it with other information. If warranted, an
analysis is conducted to develop intelligence findings. The resulting information is then
organized for efficient reporting and communication; items such as information
summaries, graphs, transparencies and other interpretations of the data are always
available for rapid use in presentations and meetings. Staff are on call to travel to
company sites, if needed, to give talks on the current status of knowledge regarding one
or more of the critical topics:
In addition to these quick-response summaries, a cumulative reference file of current
and historical information on each of these subjects is available to the group for more in-
depth review or study if requested by management. Using these current, prepared
materials as well as the historical files, the office supervisor can be called on at a
moment’s notice to present briefings or discussions of the latest material on any of these
topics in any company office.
 Technical intelligence in business: understanding threats & opportunities 101

For this system to be a success, it is essential that the company staff who contribute
data have the experience of seeing that their inputs are useful. This requires feedback
about the utility and ultimate impact of the data provided from the field. To this end, the
core unit manager makes regular, personal, on-site contacts with the outlying business
elements. In addition to coordination activities and some training, these contacts reinforce
the motivation of the gathering sites about the value of their efforts. In addition, as the list
of critical subjects is in continuous evolution, the new subjects are introduced and the
means of obtaining information about these subjects can be suggested and discussed.
This company organization serves as a system for ‘weak signal processing’. That is, it
picks up seemingly minor facts, conversations, news items, occurrences or other data,
which can be thought of as ‘weak signals’ since their relation to other signals is unknown
and their significance to company decisions has not been established. The weak signals
are passed to the central location where they can be checked, reviewed and combined
with other data to possibly form a key intelligence finding. At this company, this
approach has been very effective in identifying upcoming events, technical developments
and other significant changes on critical issues at an early stage, often well in advance of
appearance of relevant items in the scientific and technical literature.

6 Making technical intelligence efforts pay off

The payoff from S&T intelligence systems occurs when the results are used by the firm
and the organization benefits as a direct result. The mechanism by which these benefits
accrue is often the application of the intelligence to make technical business decisions -
particularly decisions that involve resource allocation for technology development or
commercialization. To realize this payoff, however, intelligence organizations must
recognize that two basic factors determine success: the ideas the organizations are able to
foster and the individual people who foster them.

6.1 Managing intelligence ideas

The most crucial part of the S&T intelligence process is to focus on developing and
applying the key findings or ideas. Intelligence ideas are concepts, thoughts or mental
images that combine some type of observation from intelligence sources with analysis
that suggests important implications for company action. Intelligence ideas represent
insight, not just information; they can have important potential impacts on the company’s
future well-being and, as intelligence, should be protected from misuse. Official
intelligence products developed through use of databases and analysis and presented in
the form of reports, briefings or electronic mail messages are not by themselves sufficient
to ensure an impact on company actions. If these products do not present or stimulate
ideas in a user with authority to act, then intelligence information is likely to have only
limited impact.
Developing, nurturing and using ideas is the essence of value provided by the
intelligence process. The most successful approaches to technical intelligence recognize
that creating, forming, encouraging, evaluating and transmitting ideas are the essential
elements of the system. Ideas are fragile and must be carefully developed and nurtured
before they are mature enough to be applied using company assets. Ultimately, the
successful ideas are those that lead to application of science and technology to meet
102 W.B.Ashton and G.S. Stacey

company goals and needs.

In general, ideas evolve through a known sequence of stages: generation or creation,
development and refinement, evaluation and disposition (discarding or implementation
and action). The company work environment can either foster or inhibit the development
and application of new ideas in any of these stages. Obviously, an idea needs a source or
creator, but the creator also must reside in an organizational environment that permits
reasonable development, refinement and testing of concepts prior to disposition. The
most crucial step in the life of an idea is the early evaluation or ‘reality checking’ of an
idea. Often this critical examination is somehow ‘premature’ for many ideas, and they are
‘killed’ before they have a chance to become more fully refined and more carefully
tested. We have all heard the phrase about ideas ‘dying on the vine before their time’. It is
important for an idea to attain maturity before it is examined and discarded.

6.2 Getting the right people

One of the best ways to develop ideas and protect them until they are ready for evaluation
is to promote the efforts of key organizational roles like gatekeepers and intelligence
champions. Gatekeepers are individuals sensitive to company needs who recognize the
significance of the external information and see how to apply it in a useful way, whereas
champions are persons who know how to develop defensible science and technology
ideas from external information and push them through to fruition. To be effective,
gatekeeping and championing usually require one-on-one interactions between the
intelligence staff and company officials, interactions in the form of focussed and probing
discussions, mulling over and questioning the analysis results, looking at related
information or persuading key persons that the consequences of acting (or not acting) on
the intelligence are important.
The application of intelligence-based ideas is the most important element of
intelligence activities in bringing about real organizational gains. All the data collection
and processing efforts that precede application are the more mechanical aspects of
intelligence programs. Creating ideas is also the most difficult intelligence step to
undertake. There are no prescriptions for drawing attention to emerging external
developments, for ‘proving’ that a competitor may have a strong and potentially
damaging patent or for exerting influence on company technical decisions with
fragmentary information. Experience in many intelligence organizations indicates that
ensuring that the ‘right’ people (e.g. gatekeepers and champions) are the key actors in the
intelligence process is the best way to make it work well.

7 Conclusion
This article summarizes the main features of S&T intelligence programs in business and
shows that S&T intelligence represents an essential means by which businesses can take
advantage of technological advances internationally as well as in their own countries.
Effective intelligence activities have helped firms respond to competitors’ moves, take
advantage of technical advances or breakthroughs by others, avoid duplicative R&D and
enhance overall business competitiveness.
Recent trends, including rising R&D costs, continued reductions in product cycle
times and increasing numbers of high technology firms, all suggest that the use of S&T
intelligence is likely to grow for many companies around the world.
 Technical intelligence in business: understanding threats & opportunities 103

Notes and References

1 See, for example, Mansfield, E. 1988 ‘The speed and cost of industrial innovation in Japan and
the United States: external vs. internal technology’, Management Science, Vol. 34, pp.1157-
68. Examples of Japanese successes in several industries, including chemicals, rubber,
machinery, instruments, metals and electrical equipment, are discussed.
2 Buell, B., Gross, N., Armstrong, L. and McWilliams, G. (1990) ‘A shopping spree in the US’,
Business Week, pp.86-87.
3 Freeman, C. (1990) Technical Innovation in the World Chemical Industry and Changes of
Techno-Economic Paradigm, p.77, Pinter Publishers, London.
4 Link, A.N. and Tassey, G. (1987) Strategies for Technology-based Competition: Meeting the
Global Challenge. Lexington Books, Lexington, MA.
5 See, for example, Vatcha, S. May 1993 ‘Competitive technology intelligence’, Chemical
Engineering News. American Chemical Society, and Ashton, W.B. et al. (1994) ‘Monitoring
science and technology for competitive advantage’, Competitive Intelligence Review, Winter
1993. Society of Competitive Intelligence Professionals, Alexandria, VA.
6 Porter, A.L., Roper, A.T., Mason, T.W., Rossini, F.A., Banks, J., Wiederholt, B.J. (1991)
Forecasting and Management of Technology, p.115, John Wiley and Sons, Inc., New York.
7 Technology scouting is discussed in Dicicco, R.L. and Manfroy, W. December 1988.
‘Sourcing technology from small firms in the chemical field’, Les Nouvelles, pp.196-199; an
excellent example of in-house technology scouting is given by S. Barabaschi 1993 ‘Managing
the growth of technical information’, Technology and the Wealth of Nations, N. Rosenberg, et
a1 (eds.), Stanford University Press, Palo Alto, CA.
8 For a discussion of industrial espionage, see S. Carlton, November-December 1992,
‘Industrial espionage: reality of the information age’, Research -Technology Management,
p.18 and McGonagle, J.J. and Vella, C.M. 1990 Outsmarting the Competition. Sourcebooks,
Inc., Naperville, IL.
9 Porter, et al, p. 116.
10 Kokubo, A. 1992 ‘Japanese competitive intelligence for R&D’, Research Technology
Management, January-February, p.33.10.
11 Stacey, G. (1990) Appendices to Mastering New Technologies: Results of a Multiclient Study,
(Geneva: Battelle Europe), p.21.
12 Kodama, F. (1992) ‘Technology fusion and the new R&D’, Harvard Business Review, July-
August, p.74.
13 Schneiderman, H.A. Summer 1991. ‘Managing R&D: A perspective from the top’, Sloan
Management Review, p.58.
14 Op cit, Ref. 13.
15 Even colleagues at competitor firms can be useful information sources. See Von Hippel, E.
(1991) Patterns of Innovation, MIT Press, Cambridge, MA, for examples of ‘information
trading’ by engineers in competing organizations who meet informally.
16 Morgan, J.C. and Morgan, J.J. (1992-93) ‘How Americans can succeed in Japan’, EMR,
Winter, p.96.
17 See Stacey, G. et a1 (1990) ‘Mastering new technologies’, Battelle Multi-client Study, Battelle-
Europe, Geneva Research Centres, Geneva, SW.
18 Cutler, W.G. 199 1 ‘Acquiring technology from outside’, Research Technology Management,
May-June, p.13.
19 Herbert, E. (1989) ‘Japanese R&D in the United States’, Research Technology Management,
November-December, p. 13.
20 Moffat, S. (1991) ‘Picking Japan’s brains’, Fortune, 25 March, p.92.
21 Goodman, E.G. (1992) ‘The Japanese information gatherers’, Research Technology
Management, July-August, p.47.
104 W.B. Ashton and G.S. Stacey

22 See ‘Digital and the research community: partners in technological change’, (1987). Digital
Equipment Corporation, Hudson, MA; D.M.A. Rogers. 1987. ‘Progressive transfer policies:
advancing the frontiers of technology’, presentation to the Second International Technical
Innovation and Entrepreneurship Conference, Birmingham, England.
23 For an example of company security efforts at Apple Computer, see Ohljausen, P. May 1989.
Security Management, American Society for Industrial Security, Arlington, VA.
24 See Quinn, J.J. (1985) ‘How companies keep abreast of technological change?’ Long Range
Planning, 18(2), pp.69-76.
25 Op cit, Ref 17.