Corporate and University spin-offs are usually formed by individuals who have the vision to see commercial opportunities for inventions and ideas. These companies often experience meteoric growth and enjoy excellent profit margins by being leaders in their particular markets. It is at this point, when they are the most profitable, that they should be committing to new product development. Once their original products reach fruition, they forget that it was their ability to bridge the gap between invention and innovation which caused their success. They begin to focus too heavily on product refinements and improvements and market needs while ignoring new technological developments.
Basic research leads to invention, i.e. the demonstration of some hitherto unproven fact.
Without such explorative efforts, there would never exist the pool of inventions on which the technological entrepreneurs or product managers could draw on to satisfy market driven needs. Hence, it is essential that they participate in an indirect manner, e.g. joint ventures, university connections, consortias, etc.to achieve the same end. As a technology matures, additional research expenditures on that technology begin to produce diminishing returns. This is the familiar S-curve which shows significant performance improvements at the early stages of discovery, then declining as the technology improves. Technology managers must be cognisant of this basic law and commit funding to new technologies as exisiting ones reach the top of the S-curve.