Corporate Venturing: Organizing for Innovation by Jessica van den Bosch and Geert Duysters

Venture capital increasingly plays an important role in the exploitation of innovations and scientific advances, leading to the development of new businesses, markets and industries. According to the National Venture Capital Association ( NVCA and PwC ), venture capitalists invested US$48.3 billion in 2014. An important subset of this type of financing is corporate venture capital. While the majority of venture capital is deployed by independent firms, a large, and growing, number of companies, both public and private, have created their own venture capital units, accounting for US$5.4 billion in investments in 2014 ( NVCA ). Despite the magnitude of venture capital investment, its role in the innovation system has received little attention in science policy. It has received a great deal of attention in public policy circles, primarily focused on topics such as economic and regional development and job creation. Of particular concern for science policy is the extent to which corporate venture capital pushes out or supplants corporate R&D. It has been argued by some that corporate R&D is not particularly good at dealing with a rapidly changing competitive environment ( Lerner 2013 ), but corporate R&D has been an important source of long-term focused research that has led to significant advances, especially when conducted in collaboration with universities and public research organizations. Given the relationship between venture capital, in general, and science, a greater understanding and appreciation of this interface is needed.