Developing Dynamic Capabilities through Acquisitions

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UCL Institute for Innovation and Public Purpose (IIPP) Working Paper Series: IIPP WP 2024-01

Developing Dynamic Capabilities through Acquisitions: A patent lens on M&A’s impact on Big Tech’s technological profile

Authors:

• Ilan Strauss | Senior Research Associate | UCL Institute for Innovation and Public Purpose (IIPP)

• Jangho Yang | Assistant Professor | Management Sciences in the Faculty of Engineering, University of Waterloo

Reference:

Strauss, I. and Yang, J. (2024). Developing Dynamic Capabilities Through Acquisitions: A patent lens on M&A’s impact on Big Tech’s technological profile. UCL Institute for Innovation and Public Purpose, Working Paper Series (IIPP WP 2024-01). Available at: https://www.ucl.ac.uk/bartlett/public-purpose/wp2024-01

Abstract:

Using a unique dataset covering all patents ultimately owned by Big Tech, including through M&A, we describe the dynamic capabilities acquired and developed by Big Tech. We examine the nature, evolution, and differences in the technological capabilities of the five major Big Tech companies, highlighting the vital role of M&A in this process. Our analysis, combining M&A and patent data, reveals that M&A has been crucial in Big Tech developing integrated hardwaresoftware ecosystems. Big Tech’s evolving capabilities closely track their competitive potential and market entry strategies. Our analysis of patent data, including through a logit regression, reveals diverse strategies and motivations behind Big Tech’s external patent acquisitions.