Commercializatio Commercializatio n Challenges n Challenges Eli Fathi, Sorin Cohn & Andrew Maxwell The Federal Partners in The Federal Partners in Technology Transfer Conference in Technology Transfer Conference in Ottawa Ottawa June 17, 2009 June 17, 2009
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Commercialization Challenges Commercialization Challenges Eli Fathi, Sorin Cohn & Andrew Maxwell The Federal Partners in Technology Transfer Conference.
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IngressIngress = get meaningful info from the market EgressEgress = convince market of company info
Sales Execution
Customer Satisfaction
Globalization has changed the competitive landscapeGlobalization has changed the competitive landscape
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Universal access to information makes competition global
Sales and marketing costs are dominant
The BRIC factor: Transfer jobs to where the market is. Brazil, India, Russia, China, etc. are becoming significant in market size, manufacturing costs and innovation prowess
Net transfer of jobs to developing countries: off-shoring
management e.g. Project delivery e.g. Marketing e.g. Sales execution e.g. Customer support
e.g. Customers – globally e.g. Capital - globally e.g. Business influencers -
globally
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Commercialization - Problem Analysis Commercialization - Problem Analysis
$RevenuesEmployment level$Earnings
Time
$?? M /yr$?? M /yr
$?? M /yr$?? M /yr
$?? M /yr$?? M /yr
““Failed”Failed”
““Stalled”Stalled”
““Target”Target”
Too many technology companies can not pass certain thresholds
There appear to be barriers other than demand (e.g., access to capital, global channels to market, business savvy) that are insurmountable for most companies
Thresholds and barriers may differ by sector (cluster)
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Commercialization & Community ImpactsCommercialization & Community Impacts
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Gaps to Full Success & Their SolutionsGaps to Full Success & Their Solutions
Innovation Gap - moving from an idea stage to developing first prototype
Solution: Create and support a culture for Solution: Create and support a culture for entrepreneurshipentrepreneurship
Business Commercialization Gap - turn a prototype into a market-demanded product/service
Solution: Create a culture of commerce Solution: Create a culture of commerce
Conference Board of Canada 2007 ranked Conference Board of Canada 2007 ranked Canada in the 14Canada in the 14thth palace out of 17 countries palace out of 17 countries in Innovationin Innovation
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Gaps to Commercial SuccessGaps to Commercial Success
Idea “Commercialization”from Idea to Technology to Prototype...
Product Commercializationfrom Product to Channel to Customer to repeat Business...
Commercialization SupportCommercialization Support
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Innovation in CanadaInnovation in Canada
Canada’s prosperity in a global economy is dependent on:
Be innovative and create Intellectual Property (IP)
Commercialize inventions = Successful conversion of inventions into thriving businesses
Be timely to market - Rapid implementation of new innovations
Identify new market opportunities
Expand market reach outside of Canada
Canada must rely of innovation to maintain its competitive edgeTechnology Transfer Offices play a major role in Technology Transfer Offices play a major role in implementing Canada’s commercialization effortsimplementing Canada’s commercialization efforts
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Challenges for Technology Transfer OfficesChallenges for Technology Transfer Offices
Over 80% of TTOs do not make money from their licensing activities (Bostrom, 2005)
Excluding technologies licensed to inventor, more than 90% of innovations patented by TTOs do not recover costs (Blake,1993)
TTOs rarely have required financial or human resources to optimize commercialization potential (Litan et al. 2007)
TTOs operate under the same as their institution. This limits with decision-making speed and risk tolerance (Lockett & Wright, 2005)
Less than 17% of opportunities commercialized are taken to market through a new venture (Markman et al. 2005a)
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New Ventures RisksNew Ventures Risks
Competitive riskMacro-economic risk
Performance riskDevelopment risk
Financial riskImplementation risk
Commercial risk assessment, management and mitigation Commercial risk assessment, management and mitigation are skills not easily available in a government or academic are skills not easily available in a government or academic institutioninstitution
(Rothaermel et al., 2007)
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The Federal Government & the TTOs The Federal Government & the TTOs
Focus on knowledge transfer (preferably to Canadian entities) - not license revenue
Commercialization should occur in the private sector: Streamline transfer processes to accelerate innovations’ emergence from
technology labs into actual business undertakings Mitigate risks for industrial partners to encourage increased industry
interactions with TTOs Nurture collaborative relationships with and within industry:
bidirectional knowledge flows , contract research, internships and industrial exchanges
Empower TTOs Provide adequate Mission, Staff and Program Resources Staffed by individuals with substantial private sector experience in
business development and technology commercialization
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What Can TTOs Do to Accelerate Success?What Can TTOs Do to Accelerate Success?
Reduce focus on license income and focus on facilitating new venture creation as a viable option to licensing
Increase collaboration with similar institutions and with industry - knowledge flows, contract research, internships and industrial exchanges
De-risk technology commercialization by encouraging industrial deployment and/or filing patents
Find early adopters and/or foster new technology ventures
Support partnerships/collaborations aimed at commercializing innovation
Forge relationships with large organizations more capable to access market
Minimize effort spent until a real market opportunity is validated
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Summary: Canada in Global Summary: Canada in Global MarketsMarkets
Investments in R&D innovative ideas are necessary but not sufficient to secure business success
Greatest risk factors involve market development and business leadership
Developing channels to market is costly and time consuming
RecommendationsRecommendations
Foster culture of innovation in academic institutionsFoster culture of innovation in academic institutions Become a feeder system/farm team to businessesBecome a feeder system/farm team to businesses Encourage support of Colleges to SMEsEncourage support of Colleges to SMEs
Accelerate the build up of SMEsAccelerate the build up of SMEs Typically idea rich and resource poorTypically idea rich and resource poor Require significant support to get innovation to product to marketRequire significant support to get innovation to product to market
Outsource effectively and efficiently non-core value Outsource effectively and efficiently non-core value operations operations
Develop global connectivityDevelop global connectivity
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The Future is Bright
After all one must remember that you are: Braver than you believeBraver than you believe
Stronger than you seem, and Stronger than you seem, and
Smarter than you thinkSmarter than you think
as Christopher Robin Told Winnie the Pooh in Pooh’s Grand Adventure
Canada has all the ingredients to Canada has all the ingredients to create global companies and be create global companies and be successful on the global markets successful on the global markets (such as RIM)! (such as RIM)!