The Intermediation Functions Connected to the Phases of a New Product Development Process : An Investigation of a Public and a Private Intermediary in a Micro Perspective

Abstract: The process of innovation remains challenging for companies in general and for small firms in particular. Limited resources constitute an obstacle on the small firm’s path towards market launch and the need for supportive measures is evident. Today, as the technology is developing at an exponential speed, the time-to-market shortens, underlining that the innovation challenge of small firms is an urgent matter. Given the limited resources of the small firms, this thesis defines the access to external competence as well as an established new product development process as crucial factors for successful innovation. Providing these necessary functions, a public intermediary, originating from policies, is considered a viable solution. The contribution of this thesis lies in investigating whether or not a private intermediary, not supported by policies, can provide the same functions as a public intermediary. In addition, the thesis expands the knowledge about the intermediary functions present in the innovation process by relating them to specific phases in a generalized new product development process. The results in this thesis are qualitative, based on a profound literary study as well as a comparative case study, examining two diverse kinds of intermediaries in a micro perspective. The first case is a public intermediary, operating with a strong business focus, as its mission is to economically strengthen the Swedish industry. The second case presents a technology based consultancy firm, acting as a private intermediary and centered on questions related to R&D. Applying Howells’ (2006) intermediation functions to the two diverse cases, a comparative study of their offered functions has been performed. The micro perspective study has proved the acknowledged intermediation functions to be applicable to specific phases in a generalized new product development process. As several functions appear in multiple phases of the new product development process, the generalized process is observed to be iterative. This notion questions previous definitions of the intermediation functions during an innovation process, as the processes have been simplified as linear in prior research. Using the generalized new product development process as framework for a comparative analysis, it has been concluded that the private intermediary can provide the same functions as the public intermediary. In extension, the private intermediary is able to offer additional services, not legally permitted for the public intermediary, such as selecting external actors and negotiating agreements. As the private intermediary can provide an extended assortment of functions, while not being dependent on government funding, the question of whether or not the public intermediary still fills a necessary function has been raised. However, additional values, such as objectivity and a non-profit-interest have been linked to the public intermediary. As these attributes are valuable to the small firm, further studies on the support not incorporated in the investigated functions are needed.