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Summary.
Most companies fear competition from a rival’s product innovations and the risk of falling behind their industry’s technological frontier. Firms affected by such competitive pressure usually react by trying to strengthen their R&D capabilities and close the gap between their and their rival’s technologies as quickly as possible. But how exactly can firms catch up? Our research shows that rather than innovating from scratch in house or partnering with others in strategic alliances, the most effective solution may be to buy access to an already existing technology and incorporate it into your R&D.