l3. legal & technical ec10: innovation & commercialisation the acquisition and use of...

L3. Legal & TechnicalL3. Legal & Technical

EC10: Innovation & EC10: Innovation & CommercialisationCommercialisation

The acquisition and use of knowledge as a The acquisition and use of knowledge as a management tool to build competitive management tool to build competitive

advantage.advantage.

Marcus ThompsonMarcus [email protected]@stir.ac.uk

3. Legal & Technical Barriers3. Legal & Technical Barriers 22

Legal & Technical OutlineLegal & Technical Outline

Crossing the ChasmCrossing the Chasm Business SupportBusiness Support Intellectual PropertyIntellectual Property Product Development StrategiProduct Development Strategi

eses

1. 1. Crossing the ChasmCrossing the Chasm

EC10 EC10 Innovation & CommercialisationInnovation & Commercialisation


Changing Industry StructuresChanging Industry Structures

4 Characteristics are:4 Characteristics are:– ScaleScale– Magnitude (to include status quo)Magnitude (to include status quo)– DurationDuration– Strategic importanceStrategic importance

Benefits of managing change must occur Benefits of managing change must occur at the human level. at the human level. A leader must manage change at this level A leader must manage change at this level while still retaining the values, sense of while still retaining the values, sense of identity and culture of the organisationidentity and culture of the organisation


Moores Theory of DiffusionMoores Theory of Diffusion

““The point of greatest peril in the The point of greatest peril in the development of a high-tech market lies in development of a high-tech market lies in making the transition from an early market making the transition from an early market dominated by a few visionary customers to dominated by a few visionary customers to a mainstream market dominated by a a mainstream market dominated by a large block of customers who are large block of customers who are predominantly pragmatists in orientation.”predominantly pragmatists in orientation.”


Discontinuous DiffusionDiscontinuous Diffusion

the rate of diffusion in the Technology Adoption the rate of diffusion in the Technology Adoption Life Cycle curve is not continuous in high tech Life Cycle curve is not continuous in high tech marketsmarkets– the product's perceived advantage or benefit the product's perceived advantage or benefit – riskiness of purchase riskiness of purchase – ease of product use - complexity of the product ease of product use - complexity of the product – immediacy of benefits immediacy of benefits – observability observability – trialability trialability – price price – extent of customers behavioural changes required extent of customers behavioural changes required – return on investment in the case of industrial products return on investment in the case of industrial products


Buying Theory & InnovationBuying Theory & Innovation

Innovators The enthusiasts who like technology for its own sake.

Visionaries (or early adopters)

Those who have the vision to adopt an emerging technology to an opportunity that is important to them.

The Chasm Time gap in technology adoption, which is between the early adoptors and the pragmatists.

Pragmatists

(early majority)

Early majority pragmatists are the solid citizens who do not like to take the risks of pioneering, but are ready to see the advantages of tested technologies. They are the beginning of a mass market

Technology Life Cycle Model – adapted from Geoffrey Moore 1991, Crossing the Chasm


Diffusion TheoryDiffusion Theory

Everett Rogers ‘Diffusion of Innovations’ (1962) eEverett Rogers ‘Diffusion of Innovations’ (1962) emerged in the merged in the 1960s out of rural studies of innovation adoption1960s out of rural studies of innovation adoptionA dominant model that has influenced thinking about the spread of A dominant model that has influenced thinking about the spread of new ideas, products and processes.new ideas, products and processes.The rural ‘extension’ programs are based on the diffusion model of The rural ‘extension’ programs are based on the diffusion model of knowledge transferknowledge transfer

Diffusion Theory Is concerned with:Diffusion Theory Is concerned with:– the factors that affect the take up of an ideathe factors that affect the take up of an idea– the factors affecting the spread the factors affecting the spread of of ideas or products and processesideas or products and processes– Diffusion is seen as information exchange, a Diffusion is seen as information exchange, a communicationcommunication process process– the notion of the notion of social communication networkssocial communication networks through which information through which information

flows to reduce uncertainty flows to reduce uncertainty


Information & KnowledgeInformation & Knowledge

5. Confirmation4.Implementation 3. Decision2. Persuasion1. Knowledge

CommercialisationUseKnowledge

Adapted from Rogers (1995, p.163)

Information exchange Intense information exchange

Three levels of Technology Transfer

Five Stages


Diffusion Theory & R&DDiffusion Theory & R&DDirectDirect

collaborative research direct transfer to users collaborative research direct transfer to users

spin-off companies spin-off companies

tacit knowledge transfers readilytacit knowledge transfers readily

PackagedPackagedpapers, papers, seminars, conferences, workshops, seminars, conferences, workshops, journals, licenses, patentsjournals, licenses, patents..

ConsequencesConsequencesthe knowledge has been produced and packaged the knowledge has been produced and packaged so responsibility ends?so responsibility ends?

adoption of an innovation is not a research adoption of an innovation is not a research problem?problem?


‘ ‘the situated and intensely practical the situated and intensely practical

nature of the mechanisms involved nature of the mechanisms involved

in the transition of technology’ in the transition of technology’ (McMaster, Vidgen & Wastell, 1997)(McMaster, Vidgen & Wastell, 1997)


An Alternative Construct:An Alternative Construct:Actor-networksActor-networks

from Studies in Science, Technology and Society (STS) from Studies in Science, Technology and Society (STS)

Developed in the mid 1980s by sociologists studying soci-technical Developed in the mid 1980s by sociologists studying soci-technical interactions.interactions.

Technology is a social constructTechnology is a social construct,, as such the social and the technical as such the social and the technical cannot be separated cannot be separated

Based on notions of knowledge and power interrelationships as Based on notions of knowledge and power interrelationships as they relate to change, including innovationthey relate to change, including innovation

Defines and acknowledges the Defines and acknowledges the human and the non-human ‘Actors’human and the non-human ‘Actors’ in in the innovation processthe innovation process

Defines three periods of Defines three periods of network buildingnetwork building with messy borders with messy borders

EmergenceEmergence

development development

stabilisationstabilisation

2. Support for Innovation2. Support for Innovation

EC10EC10Innovation & CommercialisationInnovation & Commercialisation


New Technology Based FirmsNew Technology Based Firms

"independently owned businesses "independently owned businesses established for not more than 25 established for not more than 25 years and based on the exploitation years and based on the exploitation of an invention or technical of an invention or technical innovation which implies substantial innovation which implies substantial technological risks". technological risks". Arthur D. Little, Consultancy


innovative and technology-based firms are no innovative and technology-based firms are no more likely to fail than other small firmsmore likely to fail than other small firms

innovative or technology-based new and small innovative or technology-based new and small firms are more likely to create employment than firms are more likely to create employment than similar firms in the overall population,similar firms in the overall population,

growth amongst innovative and technology based growth amongst innovative and technology based new and small firms tends to be concentrated in a new and small firms tends to be concentrated in a few firmsfew firms

even amongst the fastest growing firms the even amongst the fastest growing firms the absolute number of jobs created tends to be absolute number of jobs created tends to be modestmodest

growth is seldom an objective of those firms.growth is seldom an objective of those firms.


Innovation: Innovation: Visionaries V PragmatistsVisionaries V Pragmatists

VisionariesVisionaries– AdventurousAdventurous– Early buy-in attitude Early buy-in attitude – Think "big"Think "big"– Independent of the Independent of the

"herd" "herd" – Spend bigSpend big– First-use capability First-use capability – Think Pragmatists are Think Pragmatists are

pedestrianpedestrian

Corporate PragmatistsCorporate Pragmatists– Prudent Wait-and-see Prudent Wait-and-see – Manage expectations Manage expectations – Part of the "herd" Part of the "herd" – Spend to budget Spend to budget – Staying powerStaying power– Think Visionaries are Think Visionaries are

dangerousdangerous– Pragmatists don't trust Pragmatists don't trust

visionaries as visionaries as references.references.


Do not think about selling to . .Do not think about selling to . .

Pragmatists or Late MajorityPragmatists or Late Majority The majority pragmatists, who represent about one-third of The majority pragmatists, who represent about one-third of

available customers, dislike discontinuous innovations and believe available customers, dislike discontinuous innovations and believe in tradition rather than progress. They buy high-technology in tradition rather than progress. They buy high-technology products reluctantly and do not expect to like them. products reluctantly and do not expect to like them.

Traditionalists or LaggardsTraditionalists or Laggards do not engage with high technology products - except to block do not engage with high technology products - except to block

them. They perform the valuable service of pointing out regularly them. They perform the valuable service of pointing out regularly the discrepancies between the day-to-day reality of the product the discrepancies between the day-to-day reality of the product and the claims made for it. and the claims made for it.

At least until you have the organisation & team to do it!At least until you have the organisation & team to do it!


Innovation ChecklistInnovation Checklist Does it create new value for customers? Does it create new value for customers?

– A response to unmet customer needs or problems?A response to unmet customer needs or problems? Is asking price related to value for the customer – Is asking price related to value for the customer –

rather than to cost to produce?rather than to cost to produce? Reasonable speed to market is possible? Reasonable speed to market is possible? Does it delivers benefits not product attributes? Does it delivers benefits not product attributes? Simple and focused Simple and focused

– Does one thing much better than anything elseDoes one thing much better than anything else– Satisfies one needSatisfies one need– Satisfies one group of customersSatisfies one group of customers

Can it create first leadership advantage position in the Can it create first leadership advantage position in the market quickly? market quickly?

Not too clever nor too far ahead of market? Not too clever nor too far ahead of market? Consistent with an organisation’s strength and not too Consistent with an organisation’s strength and not too

diverse in terms of product?diverse in terms of product?

3. Intellectual Property3. Intellectual Property



Knowledge transfer & Knowledge transfer & Commercialisation Commercialisation

Commercialisation is the process of taking Commercialisation is the process of taking these innovations and turning them into these innovations and turning them into goods and services that add value in the goods and services that add value in the marketplace marketplace (see (see Etzkowitz, Webster and Healey, Etzkowitz, Webster and Healey, Capitalizing Knowledge)Capitalizing Knowledge)

It takes entrepreneur(s) with the right It takes entrepreneur(s) with the right combination of skills, abilities, resources, combination of skills, abilities, resources, timing—and sometimes luck—to timing—and sometimes luck—to successfully commercialize technologies.successfully commercialize technologies.


Commercialisation services provided Commercialisation services provided by the Science Centre:by the Science Centre:

Incubation: Providing physical space and a range of supportive Incubation: Providing physical space and a range of supportive services to new companies.services to new companies.

Tech Transfer: Commercializing IP created in corporate research Tech Transfer: Commercializing IP created in corporate research centers. centers.

Business Planning: Drafting formal business plans.Business Planning: Drafting formal business plans. Strategic Partnering: Facilitating the licensing of new technology or Strategic Partnering: Facilitating the licensing of new technology or

making the connections necessary to advance business goals.making the connections necessary to advance business goals. Executive Training: Educating the decision makers in technology and Executive Training: Educating the decision makers in technology and

life science companies.life science companies. Product Development/IP Strategy: Fine-tuning your product and Product Development/IP Strategy: Fine-tuning your product and

service and developing a solid IP strategy.service and developing a solid IP strategy. Industry Education: Finding out about your business environment, Industry Education: Finding out about your business environment,

including your competitors and industry leaders. including your competitors and industry leaders.


Tech Transfer & Science ParksTech Transfer & Science Parks Management strategies used in United Kingdom Management strategies used in United Kingdom

– University led and funded strategyUniversity led and funded strategy: Park established and developed : Park established and developed and managed by a HEI on its own (this is the least common model). and managed by a HEI on its own (this is the least common model). Examples include Cambridge, Heriot-Watt and Surrey.Examples include Cambridge, Heriot-Watt and Surrey.

– Joint venture company strategyJoint venture company strategy: Science Park run as a separate : Science Park run as a separate legal entity. This mechanism ensures a continuing positive role for legal entity. This mechanism ensures a continuing positive role for the HEI and other investors in the joint venture company. Examples the HEI and other investors in the joint venture company. Examples include Aston (Birmingham Technology Limited), Southampton include Aston (Birmingham Technology Limited), Southampton (Chilworth Centre Limited) and Warwick (University of Warwick (Chilworth Centre Limited) and Warwick (University of Warwick Science Park Limited).Science Park Limited).

– Co-operative venture strategyCo-operative venture strategy: Partners work together within a : Partners work together within a flexible and informal framework. A local authority or development flexible and informal framework. A local authority or development agency usually leads the development. Least input from the HEI. agency usually leads the development. Least input from the HEI. Most common strategy. Examples include Aberystwyth, Antrim, Most common strategy. Examples include Aberystwyth, Antrim, Durham and Stirling Science Parks.Durham and Stirling Science Parks.


Commercialisation ServicesCommercialisation Services

Scientific Product Review:Scientific Product Review: Reviewing the scientific merits Reviewing the scientific merits of your product or service.of your product or service.

Financial Planning:Financial Planning: Building the financial infrastructure Building the financial infrastructure needed to support your business goals.needed to support your business goals.

Grantwriting:Grantwriting: Seeking grant-based research funding. Seeking grant-based research funding. Access to capital:Access to capital: Providing the entrée to venture Providing the entrée to venture

capitalists and investment bankers.capitalists and investment bankers. Investor Presentations:Investor Presentations: Preparing and refining successful Preparing and refining successful

presentations.presentations. Market Positioning:Market Positioning: Determining how your product fits Determining how your product fits

within the marketplace.within the marketplace. Sales Strategy:Sales Strategy: Finding new markets for your products Finding new markets for your products

and services.and services.


Clusters and Regional innovationClusters and Regional innovation

The concept of clusters developed to explain national or The concept of clusters developed to explain national or regional successregional success– Innovation seldom takes place in isolation but is systemic. The Innovation seldom takes place in isolation but is systemic. The

cluster is a ‘reduced scale innovation system’cluster is a ‘reduced scale innovation system’– Clusters as networks of production of strongly interdependent firms Clusters as networks of production of strongly interdependent firms

linked to each other in a value-adding production chain.linked to each other in a value-adding production chain.– Clusters mostly also encompass strategic alliances with Clusters mostly also encompass strategic alliances with

universities, research institutes, knowledge-intensive business universities, research institutes, knowledge-intensive business services, bridging institutions (brokers, consultants) and customers. services, bridging institutions (brokers, consultants) and customers.

Communities of practice and networks of practiceCommunities of practice and networks of practice Knowledge communities e.g. Motorsport clusterKnowledge communities e.g. Motorsport cluster


Creativity and TalentCreativity and Talent

Cluster success requires and encourages flow of Cluster success requires and encourages flow of talented individualstalented individuals

Especially important in new economy, multimedia, Especially important in new economy, multimedia, creative industries etccreative industries etc

Work in the US on the geography of talent focuses Work in the US on the geography of talent focuses on role of urban amenitieson role of urban amenities

Association between creative employment and Association between creative employment and open, vibrant communitiesopen, vibrant communities

Successful places are cosmopolitan, young people Successful places are cosmopolitan, young people oriented, buzzing etcoriented, buzzing etc


Scotland and Innovation Scotland and Innovation

Scotland's innovation activity stems from the Scotland's innovation activity stems from the analysis set out in the analysis set out in the Framework for Economic Development in SFramework for Economic Development in Scotland (FEDS)cotland (FEDS) and the and the Smart, Successful Scotland strategy for the Smart, Successful Scotland strategy for the enterprise networksenterprise networks. .

Progress to date (2004)Progress to date (2004)– On-stream projectsOn-stream projects

http://www.scotland.gov.uk/library5/government/fedsm-00.asp

http://www.scotland.gov.uk/library5/government/fedsm-00.asp

http://www.scotland.gov.uk/library5/enterprise/sssen-00.asp

http://www.scotland.gov.uk/library5/enterprise/sssen-00.asp


On Science ParksOn Science Parks

““Faced with the magnitude of the task of innovation, Faced with the magnitude of the task of innovation, appendixing to the science park the role of innovation appendixing to the science park the role of innovation ‘seedbed’ or regional development ‘growth pole’ may be an ‘seedbed’ or regional development ‘growth pole’ may be an unrealistic expectation from a project that in many unrealistic expectation from a project that in many instances is not much more than a real-estate instances is not much more than a real-estate development. development.

Thus, if there is some disappointment in the fact that Thus, if there is some disappointment in the fact that science parks are often not much more than high-tech science parks are often not much more than high-tech ‘islands’ with minimal interactions both between themselves ‘islands’ with minimal interactions both between themselves and with their neighbouring universities, it could be that and with their neighbouring universities, it could be that hopes were pitched too high in the first place” (Felsenstein, hopes were pitched too high in the first place” (Felsenstein, 1994, p.108).1994, p.108).

4. Product Development 4. Product Development

StrategiesStrategies



Continuous DevelopmentContinuous Development

According to Elfving et al., (2003) ‘According to Elfving et al., (2003) ‘success in success in manufacturing requires continuous manufacturing requires continuous development and improvement of how development and improvement of how products are developed and produced. products are developed and produced.

There is a need for new methods, tools and There is a need for new methods, tools and procedures to improve product development procedures to improve product development especially due to increased complexity and especially due to increased complexity and amount of relations between different actors.’amount of relations between different actors.’


Levels Problem Definition Levels Problem Definition

Macro Level Macro Level The Market, Usage, Organisational The Market, Usage, Organisational

Structure, Environment, Social, PoliticalStructure, Environment, Social, Political Meso Level Meso Level Competitiveness, Education, Research, Competitiveness, Education, Research,

Technology PolicyTechnology Policy Micro Level Micro Level Technology, Product Development, ProcessTechnology, Product Development, Process

Winkless, Cooney, Altran Technologies, 2005


The Product Life CycleThe Product Life Cycle

Total IndustryProfit

+

–

$ 0

MarketIntroduction

MarketGrowth

MarketMaturity

SalesDecline

Total IndustrySales

Time


Introducing NewProducts

Managing MatureProducts

Future Adaptation

New Markets

Dying Products

Budget / Rate of Growth

Persuasion / Less Profit

New or Improve?

New Strategies

Phase Out

Focus:

Focus:

Focus:

Focus:

Focus:

Innovation Planning for Life Cycle Innovation Planning for Life Cycle StagesStages

l3. legal & technical ec10: innovation & commercialisation the acquisition and use of...

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legal technical barriers1

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socitechnical interactions

consequencesthe knowledge

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