Internal vs. external learning in new product development: effects on speed, costs and competitive advantage

The purpose of this study was to investigate how different technology sourc ing strategies throughout the new product development process influenced in novation speed, development costs, and competitive advantage. We studied 75 new product development projects from ten large, U.S.-based companies in s everal industries. Results indicated that: (1) more external sourcing durin g the early (i.e., idea generation) stage was related with lower competitiv e success; (2) more external sourcing during the later (i.e., technological development) stage was related with slower innovation speed; and (3) devel opment costs tended to rise with greater reliance on external sources of te chnology, but this result was not statistically significant.