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A key distinction is the nature of research and development. Manufacturing firms conduct a larger share in house, and the output of that internal activity is more likely to be a proprietary technology. For phone operators, little research occurs in house, and the development activity that occurs is primarily related to enhancing, redesigning, or reconfiguring others' proprietary technologies. Whereas manufacturing firms license/purchase others' technologies in the form of intellectual capital or equipment to be used to produce proprietary technology, phone operators would purchase others' technology in the form of equipment to be modified and integrated into their operational system to deliver modifications to existing products...
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