The experiences of Texas Instruments, Polaroid, and IBM illustrate the emergence of an important force affecting the external innovation environment: the growth of ‘intermediate markets’, referring to a market that emerges after the creation of a new technology, before that technology has been sold.
Mortgages and biotechnology drug development illustrate the emergence of intermediate innovation markets. The presence of such markets expands the number of ways a new technology can be used and promotes specialization among different participants in the markets. Some companies result specializing in creating new technologies, others specialize in developing new products and other focus on special services or niches.
These secondary markets are in media, finance, and biotechnology, as illustrated by re-releases of musicals, the mortgage-backed securities industry, and the growth of patent acquisition and licensing in biotech.
For more information, see Ch. 3 Open Business Models by Henry Chesbrough