EFFECTIVE TECHNOLOGY TRANSFER Methodology and Best Practice for successful Commercialisation of Technological Innovation Dr George Vekinis Innovation Management Strategy Expert
TECHNOLOGY TRANSFER The process through which VALUABLE, INNOVATIVE technological know-how, expertise or knowledge developed by any entity is transferred to and adopted by industry or society with the aim of industrial use, societal or environmental benefit or commercial exploitation
WHY «TRANSFER» TECHNOLOGY? The foundations of our modern Technological Era are the technologies, know-how and knowledge that were generated (invented) by people and were transferred, adapted and adopted by society and industry for the benefit of mankind Currently, a vast amount of utilisable information, knowledge, technology and know-how is discovered, invented and developed by researchers and other people but never gets utilised fully! Valuation, valorisation and utilisation of this huge reservoir of innovative knowledge is essential for our continual technological progress and crucial protection and improvement of our environment and societal standards A formal or semi-formal process of technology transfer is necessary to optimise the innovation process and obtain the maximum possible benefits
INNOVATION What is it? A possible definition: The process of achieving improved capabilities or increased utility by developing new or improved products, methods, processes or services Innovation aims at satisfying future needs and expectations by capitalizing on current knowledge. It is the basis of Economic Growth!
INVENTION vs INNOVATION Invention is the first elucidation of an idea for a new or improved product or process it is usually protected by a patent but it may just be kept secret Innovation is the first attempt to put such an invention into practice and add value to it Invention is a new product or process. Innovation is its implementation and valorisation!
INNOVATION IS A TRANSFORMATION PROCESS The process of Innovation takes a useful and potentially valuable Invention and transforms it into a valuable product or service. The transformation process is NOT automatic, but is complex, arduous and requires: Mutual trust and communication between the parties Adequate financing Expert Legal support Expert Facilitating (Brokerage)
INNOVATIVENESS IS A HARD- ACQUIRED SKILL! Inventive individuals and entities (and nations) are not necessarily successful innovators! Inventiveness in individuals and entities (and nations) does not correlate with industrial or economic prowess! Inventing a patentable product and owing a potentially valuable patent is just the beginning! Inventive individuals, entities (and nations) need to develop specialist skills to transform their invention to a valuable Innovative product or service! Inventiveness does not automatically imply Innovativeness!
WHAT TECHNOLOGY CAN BE TRANSFERRED? Any kind of innovative technology, know-how or knowledge can be formally transferred as long as it has UTILITY for a production or a service activity and is NOVEL A clear benefit (ADDED VALUE) for an exploiting party (Adopter or Receiving Party ) must be demonstrable The technology or knowledge to be transferred must be OWNED by the transferring party (the Provider or Transferring Party) If the technology is secret know-how, ownership must also be demonstrable
WHAT SPECIFIC TECHNOLOGIES CAN BE TRANSFERRED? All types of valuable tangible or intangible technologies and know-how can be transferred: Industrial technologies and industrial methods Novel materials and processes Machinery, devices and equipment Software Designs, standards and specifications Management and administration methods and technologies including training programmes Pharmaceuticals and reactors
WHAT ARE THE NECESSARY INGREDIENTS FOR SUCCESSFUL TT? The transfer, adaptation and adoption of a new technology is complex and requires a lot of effort and energy, without guarantee of success. At a minimum the following are needed in good measure to offer some possibility of success: A technology or know-how that has clear utility ( value ) in industry or society Excellent scientific and/or technological grounding and experience on the technology under question An actual or potential need or demand by a segment of industry, market or society A highly motivated group of individuals willing to take risks, face challenges and work hard towards a mutual benefit A highly experienced TT expert (a Facilitator ) to help with planning and guiding the process is recommended.
WHAT IS THE INTRINSIC VALUE OF THE KNOW-HOW? The Intrinsic Value of the know-how being transferred depends on several factors: The level of development of the know-how Is it a market-pull or a technology-push technology? The further costs for development of the know-how The existence of any competing technologies Whether it is an enabling technology Whether it is a platform technology The degree of automation of the technology The quality and expertise of the inventors to support it etc
INTRINSIC VALUE: Level of Development A useful technology may be at any level to be transferred but its value will, in general, depend on the level of development: Increasing proximity to industrialisation: Increasing Value Industrial or commercial product Industrial prototype Viability Pilot test (pre-industrial) Feasibility test prototype Lab prototype Lab result Model Idea or design based on sound principles
WHAT IS THE EXTRINSIC VALUE OF THE KNOW-HOW? The Extrinsic Value of the know-how being transferred depends also on several factors: The degree of market-need or demand ( market-pull ) The added value provided by the know-how: potential increase in productivity, capacity, profit, sales, recognition, competitiveness etc The cost-benefit: total potential value / total costs of introducing the new technology The existence of competitive technologies in the market The size of the overall potential market The prior existence of any enabling-technologies The existence of trained and skilled operators
TECHNOLOGY TRANSFER: COLLABORATION BETWEEN TWO PARTNERS with a little help The Provider: RD Institution or other Exploitable Know-how Facilitator The Adopter: Exploiting Party Innovative product The utilisation of a Facilitator is generally the most efficient way to ensure effective organisation, objectivity and conflict resolution
EFFECTIVE TECHNOLOGY TRANSFER METHODOLOGY The overall aims of the TT must be clear and focussed at the outset and accepted by both parties The TT methodology needs to be optimised in every case depending on the details of the two parties Formalizing the whole process brings clear benefits by reducing uncertainty An experienced Facilitator or Broker enables faster and more beneficial agreements by enhancing organisation of the process and ensuring objectivity of demands of the parties during negotiations A trusted facilitator, acting as a third-party arbiter, will also help resolve disagreements and conflicts during negotiations and ensure mutually acceptable compromises and overall benefits
THE FACILITATOR - BROKER To be effective, the Facilitator (broker) should be: Independent and trusted by both parties to ensure objectivity and fairness at all times. Highly experienced with Innovation Management and Technology Transfer processes, including contract negotiations Experienced with Exploitation and Commercialisation Strategies, including Business Planning, Licensing etc Knowledgeable in the technological field to be able to correctly convey the key aspects to the parties Well networked with Research institutions and Commercial and Industrial Enterprises An efficient Communicator for effective communications of all aspects to all parties An effective Negotiator to be able to find mutually beneficial compromises An effective and ubiquitous Organiser and Planner An effective Arbiter to resolve conflicts and disagreements Flexible, reactive and sensitive to all parties concerns
INITIAL ACTIONS OF A FACILITATOR For an Adopter, the Facilitator: is the initial contact point for any company looking to address a market or industrial need or solve a problem searches for new technological innovations for the market need carries out initial assessment of technologies identified and draws up a short-list for the Adopter makes the first contact with the technology Provider and for a Provider, the Facilitator: is the initial contact point for any technologist seeking to find a company to industrialise an invention helps the Provider focus the technology on a market need searches for potential exploiters of the technology including spill-overs into other areas advises on methods and routes of exploitation, including spin-offs, jointventures, licensing, patenting, agreements etc
TECHNOLOGY TRANSFER: 7 MAIN STAGES: 1. VALUATION OF THE TECHNOLOGY OR NEED Progress Assessment 2. SEARCH FOR PARTNERS OR TECHNOLOGIES Progress Assessment 3. EVALUATION OF FINDINGS Progress Assessment 4. INITIAL NEGOTIATIONS Progress Assessment 5. EXPLOITATION STRATEGY DEVELOPMENT Progress Assessment 6. INDUSTRIAL DEVELOPMENT Progress Assessment 7. INDUSTRIAL EXPLOITATION F A C I L I T A T O R
Stage 1: VALUATION OF THE TECHNOLOGY OR NEED The Initiating party, assisted by the Facilitator, considers in some detail the technology or know-how on offer OR the need/demand: In the case of a technology or know-how on offer by a Provider: Has the technology been developed as a result of a perceived market need or demand or is it technology-push? what is the level of development? What is the estimated cost for further development? is there enough expertise to support its industrialisation? is it suitably protected? Is ownership clear and accepted? have there been any disclosures (publications etc)?.. etc In the case of a company looking to address a problem or need: what is the nature of the problem or need to be addressed? what are the cost-implications if it is not addressed? what are the competitiveness implications? how has the need or problem been addressed up to now? how old is the current level of the company s technology? how crucial is the need to the company s strategy?.. etc
Stage 1: TECHNOLOGY AUDITING AND ASSESSMENT The Initiating party, assisted by the Facilitator, may decide to carry out a Technological Auditing of its operations before embarking on a Technology Transfer process. This may include the following: In the case of a Provider: If the technology is clearly technology-push type, what enhancements can make it easier to reach the market? what aspects of existing expertise need to be enhanced? how much has been spent developing the technology? how can the technology be protected properly? how should ownership be enhanced and clarified?...etc In the case of a company looking to address a problem or need: what is the current technology in the company vis-à-vis competitive technologies? what is the current level of expertise available in the company? has the company adopted any technologies in the past? how flexible are the operations and management?..etc
Stage 2: SEARCH FOR PARTNERS AND TECHNOLOGIES The Initiating party, assisted by the Facilitator, searches for partners or technologies and makes a short-list of potential candidates using: Documentary searches (paper or internet): Patents Research Publications in trade and scientific journals Projects databases (e.g. Cordis) Conferences, trade shows etc Networking and collaborations Previous contacts and negotiators Advice from the initiating party and collaborators Advice from trade associations Field searches and brochures Other workers, etc
Stage 2: Importance of Networks Technological and Knowledge Networks are crucial and can be formed and built up during: Research or Commercial collaborations Conferences and Trade Shows presentations Cooperative ventures, etc The more extensive an entity s network, the greater the chance for successful Technology Transfer: for a Provider, more potential exploiting partners for a new technology, for an Adopter, more potential sources of new technologies for addressing a need or demand Potential partners can be sourced via primary, secondary or tertiary interactions In stage 1, a list of potential partners should always start by including collaborators that know you and trust you!
Stage 2: Searching via Networks POTENTIAL PARTNER (secondary interaction) POTENTIAL PARTNER (primary interaction) Interactions: Research collaborations Business or trade collaborations, etc INITIATOR Facilitator POTENTIAL PARTNER (via Facilitator s Network) POTENTIAL PARTNER (tertiary interaction) Collaborators POTENTIAL SPILL-OVER PARTNER (via Facilitator s Network)
Stage 3: EVALUATION OF TECHNOLOGY PROVIDERS The short list of potential Providers from Stage 2 are evaluated by the initiating Adopter and the Facilitator and a Partner is chosen, by holding exploratory meetings and considering: How close is the technology s application area to the operations of the potential Adopter? How much further cost will be necessary to bring the technology to industrial application? Will production be affected during the adoption process? Is there enough expertise (scientific and technical) available for effective adoption and adaptation? Is the technology well protected and the owners all in agreement for the transfer? If the technology is the result of a common effort (e.g. a joint project), is there a consortium agreement for IPR and Exploitation Rights? Is the negotiating partner accepted by all? are there any outstanding ownership issues (Prior-Art IPR etc) that need to be resolved? what is the Provider s standing ( name ) in the community? Are there enough confidentiality safeguards?..etc
Stage 3: EVALUATION OF POTENTIAL ADOPTERS The short list of potential Adopters from Stage 2 are evaluated by the initiating Provider and the Facilitator and a Partner is chosen, by holding exploratory meetings and considering: What is the track-record (standing) of the company in the market? What is the financial state of the company? Solvency? Has the company adopted any other new technologies in the past? How big is the market share of the company? How diversified are the company s operations? (to help spill-overs) Can the company carry out the necessary industrial viability tests without endangering its production? What is the potential added value (financial or competitiveness) gained by the company if it adopts the new technology? How close is the new technology to the technological core of the company s operations? How willing/needful is the company to adopt the new technology? Is there enough expertise in the company to be able to fully utilise the new technology s benefits? Does the company have access to any raw materials necessary? Are there enough safeguards to ensure non-disclosure?.. etc
Stage 4: PREPARATORY NEGOTIATIONS Once a potential Partner (Provider or Adopter) has been chosen, full negotiations are initiated, with the help of the Facilitator and any legal counsel necessary, during which: A Confidentiality Agreement and a Memorandum of Understanding is agreed upon by the parties and signed by their legal representatives Further (confidential) details of the new technology or know-how are discussed and any questions from Stage 3 clarified. Potential exploitation or commercialisation strategies are discussed: Licensing for manufacture, marketing, distribution etc Joint Venture Technology Supply on a demand basis Sub-contracting Acquisition Inter-firm linkage Spin-off company development Funding strategy etc A decision is taken on the strategy to be followed and legal and administrative processes thereof are initiated
Stage 4: FACILITATOR S ROLE IN NEGOTIATIONS During the negotiations, the Facilitator plays a crucial role in facilitating trouble-free discussions, including: Planning and organising the meetings and their agendas Preparing, with the legal counsels of both sides, a fair Confidentiality Agreement and Memorandum of Understanding Bringing to the attention of both parties aspects that require attention and resolution by negotiation (e.g. from Stage 3). Finding independent legal and technical experts to help with resolution and clarification of various aspects Suggesting possible exploitation and commercialisation strategies based on previous experience and case-studies Arbitrating conflicts and offering resolutions Suggesting possible spill-over areas and possible market expansion strategies based on the new technologies Suggesting beneficial collaborations with other parties (enabling collaborations) to enhance the main collaboration...etc
Stage 5: EXPLOITATION STRATEGY DEVELOPMENT Once the overall exploitation strategy has been decided, the parties will negotiate the details, which will form the body of the overall Collaboration Agreement. Such details will include: Business Strategy Management and Organisational Strategy Production Strategy Product Development Strategy Intellectual Property Rights Strategy Marketing and Exploitation Strategy Funding and Financial Strategy From these decisions important aspects of the collaboration will emerge such as assignment of responsibilities, need for secondary players etc. All this will then be used to draw up the: BUSINESS PLAN Incorporating the Exploitation Agreement
Stage 5: THE BUSINESS PLAN The Business Plan is the detailed Formal Agreement of all decisions taken towards collaboration and it includes business and RD aspects: Background to the collaboration and the partners Current State of the Art and detailed presentation of competitive technologies A SWOT* analysis of the Technology to be transferred Non-confidential details of the Technology or Know-how Details of the target markets and a SWOT* analysis of the markets and their prospects Detailed economic analysis of the potential collaboration for the first 5-year period, including: Sales and profits Return on investment and projected break-even point New developments and future prospects The overall Exploitation Agreement between the parties Funding and Financial Plan.. etc SWOT: Strengths-Weaknesses-Opportunities-Threats
Stage 5: SWOT ANALYSIS The Business Plan must always contain a detailed SWOT analysis both for the Technology and for the Market. In its basic form, the SWOT analysis will look something like: STRENGTHS Competitive Advantages Economic Benefits Environmental Benefits Societal Benefits Development prospects Patent Protection, etc OPPORTUNITIES Market expansion opps. Market demands Enabling opportunities Niche satisfaction opps. Platform needs opps etc WEAKNESSES Competitive disadvantages Knowledge gaps Know-how dependencies Patent conflicts Societal conflicts, etc THREATS Parallel developments Better products Stronger competitors Vested interests Market inertia..etc
Stage 6: INDUSTRIAL DEVELOPMENT Once the Business Plan has been finalised, Industrial Development follows where the Technology must be adapted for industrial use and gradually adopted by the Adopter. The general aim is to integrate the new technology with the Adopter s Operations as seamlessly as possible, with minimal effect on its current production. The specific aim is to reach Customer Acceptability! In this stage, activities may include: Further laboratory RD, focused towards the Adopter s operations Industrial feasibility studies vis-à-vis the Adopter s operations Pilot plant or prototype construction and operation Industrial enhancements and alternative embodiments Industrial Viability (cost-efficiency) studies vis-à-vis the Adopter s capabilities and market needs and demands Comparison studies with existing technologies Test marketing and feedback Identification and resolution of technical and non-technical risks Potential Customer and market surveys..etc
Stage 7: VALORISATION AND COMMERCIALISATION Once Industrial Development has been completed to a satisfying degree and the market segments have been identified, commercialisation may proceed. This is already beyond the process of Technology Transfer but, a number of aspects need to be kept in mind: Customer Acceptability and Satisfaction is paramount and all operations must remain focused on it! If a new technology is being introduced, customer and market education needs to be prepared carefully! Although First to market is mostly a good idea, it needn t be so. High quality and market satisfaction is more important than an imperfect but quickly launched product Promotion must always include the Provider who can assist the Adopter with his network. Reactivity to the market and frequent reviews of the technology are very important to enable eventual penetration and acceptance!
MEASURES OF SUCCESS The TT process can be complex and lengthy, requiring a great deal of effort and perseverance (and a fair measure of serendipity). When successful, the end result is most often a very satisfying and profitable culmination. During the process, regular assessments can give us a measure of the eventual potential success: The feasibility (lab or pilot) studies are promising Performance comparison studies are positive or routes for performance improvement are identified and pursued in time The negotiations are successful and the Exploitation Plan is agreed by all Sufficient Funds are secured in time Industrial viability studies (cost-effectiveness) are promising The market or society need or demand is strong and holding Non-technical Risks are recognised and solutions identified Ways to reduce weaknesses and threats are identified The Business Plan is followed closely! organise, monitor, resolve SUCCEED!
WHAT CAN GO WORNGG..??? During the whole TT process, many situations may arise that may disturb the process or even lead to failure. Some are: Loss of Vision or Focus on the Technology to be transferred or adaptation process is not monitored carefully (weak feedback) Technology does not meet its promise or is too ambitious for industrial or societal needs Technology adaptation in industry or society proves too costly or not cost-effective w.r.t. alternative solutions Technology development and adaptation is too slow, missing market or societal opportunities Market or society need or demand changes or proves too weak Development Funds are not secured or run out during the process The Adopter or Provider changes direction or interests Negotiations are threatened by inability to compromise Management and organisation not efficient or effective.. etc All the above need to be carefully monitored and addressed as soon as they are identified!
So Successful Technology Transfer depends on: Vision and Focus! Organisation and Planning! Communication and Trust! Exploiting Opportunities! Inspiration and Perspiration! Patience and Persistence!