This working paper addresses the interaction processes of separate organisations combining in the development and commercialisation of innovations. A conceptual model is outlined, which expounds the transfer of technology from Dedicated R&D Centres (DRDCs) to manufacturers. The authors term this the ‘intermediate’ technology transfer stage. The paper discusses the role of DRDCs in innovation initiation and suggests that DRDCs differ in their innovation strategy and client base according to their sources of fund