Equity carve-outs as a technology commercialization strategy: An exploratory case study of Thermo Electron's strategy

New ventures have advantages in commercializing some emerging technologies, especially disruptive technologies. To the extent that incumbent firms can imitate these advantages, they can create ontogenic capabilities. This study examines a very rare type of ontogenic capability for which there is promising theoretical support—the use of equity carve-outs to commercialize emerging technologies. Only one company, Thermo Electron, has implemented an articulated or formal strategy for technology carve-outs. This paper presents an exploratory case study of Thermo's carve-out strategy that explains why the strategy failed and how technology carve-outs could be made feasible. If used as a temporary way station for technologies until their relatedness and economic potential are resolved, technology carve-outs could be an important tool in technology companies’ portfolios of commercialization strategies.