Projects or products: Sseeking for the business logic of contract R&D

This research addresses the question of building and exploiting competence in connection with contract research and development (R&D), by means of a longitudinal case study. The research involves VTT as a supplier and internal research customer, Tekes as a funding body and several firms as external industrial customers. We are looking into their mutual relationships to gain a better understanding about the evolution and exploitation of competence on the so-called code generation techniques used in the development of software embedded in electronic products. The analysis of the code generation case is based both on written material and on interviews of persons involved in code generation related activities at VTT, Tekes and industry from the mid-eighties to the present date. The building of the code generation competence of VTT is analysed and explained within the R&D process based on project relationships. The marketing and purchasing of the competence is also addressed. Differing logic of action of the interacting parties have been found to affect the evolution of competence, within networks established for creating and making use of the competence. In the code generation case, the managers of VTT aimed at creating a growing portfolio of fully contractual project relationships, involving machine automation firms, in particular. The researchers favoured marketing the competence as a commercial style tool, with a minimum of tailoring done in projects. The customers of VTT had difficulties in coping with these two logic of action, in a rapidly and radically changing business environment. It may have been for this reason that the competence was, after all, utilised mainly by VTT itself in joint research projects. This did neither benefit its developers nor did it advance the evolution of the competence. The differing logic of action of the two key parties, which resulted in the lack of any considerable portfolio of external customer relationships, lead to a rather rapid withering of the competence at VTT. However, the developed code generation technology has recently been sold to the former researchers, who have established a company based on their own business logic. This kind of competence survival through many years and despite conflicting viewpoints is, after all, one of the key factors in making business out of research.