Digital versus Deep Tech
Thoughts on DeepTech #4
Talking to innovation managers from the corporate world during the recent MIT Sloan EMBA Idea Week, I often experienced a lack of clarity regarding how exactly deep tech ventures differ from the digital ventures, that have been around within their companies in the context of their digital and digital and AI transformations.
Therefore, below, I would like to briefly highlight three exemplary attributes that can help distinguish deep tech ventures and some of their basic mechanisms from their digital counterparts:
Rooted in the scientific development of novel technology: Both digital and deep tech ventures are entrepreneurial ventures1. Deep tech ventures are tech-push and first-of-a-kind (see also this previous post), meaning that they bring out disruptive technical inventions based on cutting-edge research. This stands in contrast to digital ventures, which are of a difference-in-kind, meaning that instead of bringing out new technological inventions, they create products or services by (re)combining already established digital technology platforms (e.g., cloud computing, proven web-design techniques, etc.) to satisfy a specific customer need (tech-pull)2.
Dual risk landscape: Deep tech ventures navigate a dual risk landscape, encountering not only venture-typical commercialization and market risks but also technological and engineering risks. Unlike digital ventures, which build on what already exists and works, research-based deep tech ventures come with the inherent risk that their technological inventions may not work as expected at all (see also my remarks on the two valleys of death in this previous post).
Built around hardware assets: Deep tech companies are asset-heavy, meaning they are primarily constructed around physical products, tangible, typically centered around highly defensible IP. This distinguishes them from digital ventures, which usually are asset-light, revolving around the creation of innovative software and service-based offerings. Consider Aperion Labs, which builds unmanned autonomous drones for maritime use, or MIT Media Lab spinout Akasha Imaging which is developing an imaging system that enables higher-resolution feature detection, tracking, and pose orientation. This technology is intended to be applied to robots, facilitating complex non-repetitive processes in manufacturing or logistics contexts.
Lastly, of course, the specific technologies themselves differ, whereas digital refers to technology, devices, or systems that process information operating using discrete numerical values, represented as 0s and 1s3, deep tech ventures encompass a whole range of different technologies where it is about much more than just information processing (which, by the way, is also a major challenge when discussing and researching deep technology - but that’s another story).
In addition to the three differences mentioned above, there are several more, although I believe the ones mentioned above are key.
To the innovation managers of the corporate world: I am curious to learn how the topic of deep tech is being discussed in your companies. Is it even a topic? And if yes, for what reason and how do you get involved with deep tech ventures or plan to?Please answer the poll, share your thoughts in the comments or drop me a mail, I look forward to learning from your insights.
von Briel, F., Recker, J., & Davidsson, P. (2018). Not all digital venture ideas are created equal: Implications for venture creation processes. The Journal of Strategic Information Systems, 27(4), 278-295.
See e.g., Huang, J., Henfridsson, O., & Liu, M. J. (2022). Extending digital ventures through templating. Information Systems Research, 33(1), 285-310; Lehmann, J., Recker, J., Yoo, Y., & Rosenkranz, C. (2022). Designing digital market offerings: how digital ventures navigate the tension between generative digital technology and the current environment. MIS Quarterly, 46(3).
https://www.techtarget.com/whatis/definition/digital