The unfortunate reality of innovation, an endeavor that relies on inventive thinking, is that it's often confounded by narrow-minded, inefficient funding. Large companies that conduct proprietary research pour money into conventional approaches that may not be well suited to the needs of the future. And smaller companies that rely on outside funding find their innovation efforts hampered by the shortsighted perspectives and expectations of venture capital firms. HBS professor Josh Lerner explores this paradox—and proposes a "hybrid" approach—in his new book, The Architecture of Innovation.
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