Creating growth with externalization of R&D results - The spin-along approach

After a long period of restructuring and outsourcing, companies are increasingly looking for new growth opportunities. Growth with existing products or by expansion in new markets is limited. Therefore, companies are searching for ways to expand their activities in new businesses. A frequently used tool of multinational enterprises is corporate venturing. Within corporate venturing a further differentiation can be made between internal venturing and external venturing. Internal venturing promotes business ideas generated within the organization whereas external venturing integrates business ideas developed outside the company. This paper presents a special case of corporate venturing: the spin-along approach of Deutsche Telekom Laboratories. It can be seen as a combination of internal and external venturing. In the spin-along approach, employees of the corporate R&D department are encouraged to take their technology or business idea external by founding a separate company. Successful companies might later be bought and integrated back into Deutsche Telekom.