Technology Commercialization Strategy
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Transcript of Technology Commercialization Strategy
1
Technology Commercialization StrategyFor R&D Institutions
Prepared by:Dr. Chulho ParkVice President
Strategic Business [email protected]
October 2015
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Business Models for Technology Commercialization
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Classical Role of University TTO
Fundamental Science
Basic Research
Applied Research
Product Development Production
University R&D
Tech transfer
office
New companies
and licenses
Don’t know compelling market or customer needs
Lack of interest and resource for application development
Mostly individual, small group or distributed research
Don’t know/understand state-of-art emerging technologies
Technology is not matured for commercialization yet
Single IP is not good enough for business development
Gap
Standard process Administrative Little recognition Risk averse
Source: SRI International
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Role of CRO and GRO ─ Value Creation Centers
Must bridge the entire R&D spectrum
Translation science & engineering research
Business opportunity idea generation
Technology maturation fund
IP management and bundling
Start-up acceleration fund and service
Business incubation fund and service
Fundamental Science
Basic Research
Applied Research
Product Development Production
University R&D
Value creation center
New companies
and licensesCRO, GRO R&D
Source: SRI, SBI
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Key Success Factors for Value Creation Centers
Fundamental Science
Basic Research
Applied Research
Product Development Production
University R&D
Value creation center
New companies
and licenses
Aligning technologies with customer needs through product/service
Create innovative culture
Recruit diversified talent
Provide education and practical training
Develop innovation principles & process
Incentivize start-up and biz incubation
Develop mentor (champion) program
Source: SRI, SBI
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New Strategic Vision and Alignment with Corporate Strategy and Businesses
Business Model for Accomplishing the Value Creation Objectives
R&D Activities and IP Management
R&D Planning
UnlockingUnlocking ExistingIntellectual Property22
InventingInventing with a Purpose11
AcquiringAcquiringExternal Know-How33CollaboratingCollaborating with Outside Partners44
UnlockingUnlocking ExistingIntellectual Property22
InventingInventing with a Purpose11
AcquiringAcquiringExternal Know-How33CollaboratingCollaborating with Outside Partners44
Commercialization Activities
Commercialization Planning
Royalty
Equity
Revenue
IPs
IP & $
LicensingLicensing ExistingIntellectual Property33
Creating a SpinCreating a Spin--offoff with a Strategy22
Contract Research Contract Research for Commercializationfor Commercialization44
ConsultingConsulting with Internal Know-How55
Technology/IP Transfer Technology/IP Transfer to SBU or its R&D11
LicensingLicensing ExistingIntellectual Property33 LicensingLicensing ExistingIntellectual Property33
Creating a SpinCreating a Spin--offoff with a Strategy22Creating a SpinCreating a Spin--offoff with a Strategy22
Contract Research Contract Research for Commercializationfor Commercialization44 Contract Research Contract Research for Commercializationfor Commercialization44
ConsultingConsulting with Internal Know-How55 ConsultingConsulting with Internal Know-How55
Technology/IP Transfer Technology/IP Transfer to SBU or its R&D11Technology/IP Transfer Technology/IP Transfer to SBU or its R&D11
Revenue
7
Licensing Model
Worth Active Marketing?
Royalty Licensing
Opportunity
No
YesMarketing
Plan & Strategy
PassiveLicensing
From Spin-off Technology
Venture Model
ActiveLicensing
8
Spin-off Technology Venture Incubation Model
Creating spin-offs requires strong, small development teams.
Need Internal Incubation?
Spin-off Venture
Opportunity
Yes
No Spin-offNew
Company
InternalVirtual
Spin-off
Exit Strategy?
SellSpin-off
Company
InitialPublic
Offering
M&A
Ready toSpin-off?
Yes
Not Ready
Fail Demolish team and send staff back to
R&D
Create a New R&D Lab
ActiveLicensing
No
Other Options
Develop Eng. & Consulting Services
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Technology is not matured yet for commercialization
Need to protect potential new business from IP disputes─ File patents to protect your right to use for commercialization
─ Find ways to avoid potential patent infringement dispute
Unclear target market or application/product
Need to demonstrate commercial feasibility or viability
Have to provide continuous (on-site) support from its lab such as materials, equipment, and technical support
Difficult to find potential investors for a spin-off venture
Needs for Internal Incubation
Maximize value and reduce risk for technology commercialization
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Quick Check of Readiness for Spin-off Venture
Demand
Technology Competition
Who are the customers?Why do they buy (needs)?
Market size and growth rate?How much are they willing to pay?
Will the technology be ready?Is the technology competitive?
What is the technical risk?What is the cost?
What are differentiation factors?What are competitive advantages?Are they sustainable in long-term?
CommercialSuccess
Readiness = RDemand x RTechnology x RCompetition x RStrategic-Fit
Must pass the four tests: Will there be markets? Can we make it? Will we be competitive? Does it fit to our strategy?
Strategic Fit
SustainableLeadership
Does this fit with our strategy?Are we capable of executing this?What is the long-term profitability?
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Funds Required to Execute Spin-off Strategy
Need Internal Incubation?
Spin-off Venture
Opportunity
Yes
No Spin-offNew
Company
InternalVirtual
Spin-off
Exit Strategy?
SellSpin-off
Company
InitialPublic
Offering
M&A
Ready toSpin-off?
Yes
Not Ready
Fail Demolish team and send staff back to
R&D
Create a New R&D Lab
ActiveLicensing
No
Other Options
Develop Eng. & Consulting Services
Venture & Licensing
Fund
CV Fund if available, and
VC Funds
VC Funds
VC Funds
R&D FundCreating spin-offs requires strong development teams.
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Systematic Approach of Budgets and Funds to Realize Value Potential
Patents & Know-How Business Thrusts
Royalties,Ventures, or
Large Contracts
R&D Projects
Major ProgramPotential
Investments and Value
Illustrative Only
Angel Fund
Venture & Licensing
Budget
Strategic Investment
Fund
Idea Generation
Budget
Idea Generation
Budget
Venture Capital Fund
Internal Fund
External Fund
Source: SRI, SBI
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Concentrate resources (capital, R&D, commercialization) on a few selected areas
Identify innovation connected to market needs Criteria should include — commercializable, capable,
and competitive Develop technical and business “Champions” Pursue an aggressive IP strategy
• Strategic patents• Patent ownership
Success Factors Related to Business Model
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Case Example:SRI’s Five Discipline for Technology Innovation
Important Needs Value Creation Innovation Champions Innovation Teams Organizational Alignment
Important Client Needs
Champions Value Improvement
Organizational Alignment
SuccessInnovationTeams
Source: SRI
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Some Examples of SRI’s Spin-off Ventures
Customer Service Tools* DTV TechnologiesVideo Enhancement
Systems
LCD technology*Iris Biometric Identification*
Panoramic Image Editing Software*
DTV Equipment*
VOD Services**
Secure Content DistributionWireless mesh networks
Virtual Personal Assistant*iPad App,
Smart Travel Guide*
Speech Recognitionfor Customer Service
Publicly Traded
Web App; Real-time VideoStreaming & Sharing
Content Curation Platform Mobile Productivity App
MPEG-4 CompliantEncoding & Authoring Tool
Gaming PlatformFor Children
Enterprise Social Media*
Electronic SignatureSolutions
Live VideoInsertion System*
Mobile Virtual Personal Assistant Technology for K-12 Education
*Acquired or merged** Dissolved
Personal ContentsSummary*
Information Technology
Robotics: Electroadhesion
Robotics
Surgical Robotics
Publicly Traded
Next-Gen Robot Arms*
Anti-counterfeiting Systems
Ceramics for Electronics *
Portable PowerSystems**
Optical NetworkComponents
ElectroactivePolymers*Next-generation
Fuel Cells**
Publicly Traded
Flexible CircuitMaterials & Components
HQ Phosphor SolutionsFor LED Lighting*
Advanced Materials
Nano-porous Material BasedNatural Gas Storage Systems
Liquid Membrane SeparationFor Chiral Molecules**
Digital Color PrintingApplications**
Biotechnology/Medical
Surgical Robotics
Publicly Traded
Genetic Profiling Drug Dispensing System*
Medical Systems
Drug Discovery
Disposable Hearing Aid*
Drug Development
Simplified Diabetes Management
Bed Bug Detection Products
Business Consulting
Business Intelligence& Consulting Services
Publications & Consulting Services*
IT Consulting Services*
Source: SRI
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Case Example:IMEC Research Programs for the Industry Eco System
Source: IMEC
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Biz Models and Spin-off Ventures of IMECIMEC’s Business Model
Source: IMEC
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Organization for Technology Commercialization
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SBI’s Integrated Framework for Technology Management and Commercialization (R&BD)
Knowledge of External Drivers and Dynamics
Infrastructure: Organization, Resources, Processes
Technology Planning
R&D Project Management
Business Vision and Strategy
• Benchmarking
• Scenarios
• Market Research
• Competitive Analysis
Technology Portfolio Planning
Project Portfolio Selection
Budgeting and Resource Allocation
Project Initiation
Project Execution
Project Management
• Management Diagnostic
• Structure and Teaming
• HR Management
• IT & Knowledge Management
• Cycle-Time Management
• External Network Management
Idea
tion
Technology AcquisitionStrategy
Project Closeout
• SWOT Analysis
• Technology Intelligence
Knowledge of External Drivers and Dynamics
Infrastructure: Organization, Resources, Processes
• Benchmarking
• Scenarios
• Market Research
• Competitive Analysis
• Management Diagnostic
• Structure and Teaming
• Profit Sharing Model
• Business Plan and Model
• Venture Financing
• External Expert Management
• SWOT Analysis
• Technology Intelligence
Intellectual Property Management
Value Creation and Management
TechnologyValuation
IP Portfolio Planning
Budgeting & Resource Allocation
TechnologyLicensing
VentureCreation
Sell, M&A,JV, Alliance
Idea
tion
Technology CommercialznStrategy
InternalUse
Return onInvestment
Technology and Intellectual Property
Creating IP Assets Turning IP Assets into Value
Technology Management Commercialization ManagementIP Management
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Basic Functions of Technology Management and Commercialization
Technology (R&D)Strategy & Planning
R&D ProjectManagement
Intellectual PropertyManagement
CommercializationStrategy & Planning
CommercializationManagement
Technology (R&D) Management
(Creating IP Assets)
Technology Commercialization
(Turning IP Assets into Value)
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Technology Commercialization Activities
IP Portfolio Planning& Management
Patent Process Management
Technology Commercialization
Strategy
Licensing Venture Start-up & Incubation
Patent Research,Market Research, & Opportunity Search
There are many strategic considerations on organizing IP planning and management as well as technology commercialization including licensing and venturing
Organizations should be evolutionarily restructured in accordance with changes in strategy, goals, and external environments
In general, there are many organizational alternatives to be considered including outsourcing and collaboration.
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Commercialization Process and Responsibility
Technology/IPfor Commercialization
IPManagement
TechnologyTransfer (Licensing)
VentureStart-up
IncubationSupport
CommercializationCommittee
LicensingCommittee
ActiveLicensing
PassiveLicensing
Licensing
Venturing
VentureStart-ups
CommercializationStrategy
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Alternative Organizational Structures
IPManagement
TechnologyTransfer (Licensing)
Commercial Development Center
CommercializationStrategy
VentureStart-up
IncubationSupport
Option-3
IPManagement
TechnologyTransfer (Licensing)
Commercial Development Center
CommercializationStrategy
VentureStart-up
IncubationSupport
IPManagement
TechnologyTransfer (Licensing)
Commercial Development Center
CommercializationStrategy
VentureStart-up
IncubationSupport
Option-3
IP Management
IPManagement
Commercial Development
CommercializationStrategy
TechnologyLicensing
VentureStart-up
IncubationSupport
Option-2
IP Management
IPManagement
Commercial Development
CommercializationStrategy
TechnologyLicensing
VentureStart-up
IncubationSupport
IP Management
IPManagement
Commercial Development
CommercializationStrategy
TechnologyLicensing
VentureStart-up
IncubationSupport
IP Management
IPManagement
Commercial Development
CommercializationStrategy
TechnologyLicensing
VentureStart-up
IncubationSupport
Option-2
Option-1
Commercial Management
IPManagement
CommercializationStrategy
Commercial Development
TechnologyLicensing
TechnologyLicensing
VentureStart-up
IncubationSupport
Commercial Management
IPManagement
CommercializationStrategy
Commercial Development
TechnologyLicensing
TechnologyLicensing
VentureStart-up
IncubationSupport
Option-1
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Centralize oversight of commercialization processes and add Venture Start-up for its own technology commercialization – Leverage resource and database in IP management, IT support, and knowledge
management for commercialization activities Assign new business development responsibility to each R&D
unit to spearhead commercial efforts– Will scan and identify innovative and marketable technologies within each R&D
unit– Will involve each R&D unit commercialization strategy decision making
Create a Commercialization Supervisory Board of senior executives as a forum for decision making and oversight– Will act as senior advisors and decision makers; Will assume Board seats on
start-ups or joint ventures Review (and modify, as needed) patent/IP policy, profit sharing
model, R&D project management systems to expedite technology commercialization activities
Recommended Approach at Establishing Stage
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Venture Start-up Team should be led by the office head and at least 2 to 4 staff members (in early/beginning stage):
Manage small portfolio of opportunities into start-ups– Commercial business development plan and strategy– Coordination of R&D, venture planning, market research, and
commercial development– Valuation of emerging technologies and business potential
For each selected opportunity:– Development of business plan– Launching new venture– Venture incubation: hiring new staff, venture financing– Management of venture business– Establishment of networks of technical, legal, accounting, consulting,
and venture finance experts
Formation of Venture Start-up Team
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Organization for Commercialization Supervision
Commercialization Supervisory Board (CSB):– Form the Board with 3 to 5 senior
officers– Approve portfolio strategy– Preview and approve all venture
activities and major licensing deals– Allocate seed funds– Hire CEOs for new ventures– Resolve conflicts among
stakeholders
R&D Org.
Commercial Development
Center
Commercialization Supervisory
Board
R&DDivisions
R&D Planning& Management
Spin-off Ventures Holding Company
(Subsidiary)
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Case Examples: Venture Board Composition SRI: Commercialization Supervisory Board (CSB)
– CEO, CFO, VP of Business Development, One of its R&D Division Head (VP), President of SRI Holdings
P&G: P&G Innovation Leadership Team (ILT)– CEO, CTO, and One of its global business unit presidents
Lucent: Venture board of the New Venture Group (NVG)– President of the NVG division, and 3 VPs, act as the partnership for the
internal venture capital firm
Nortel Networks: Business Venture Group (BVG)– BVG members, some executives of its SBUs, and outside experts
3M: No corporate-wide venture board– The Corporate Enterprises Development (CED) organization had the
leadership
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Profit Sharing Model
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Basic Requirements for Profit Sharing Model
Encourage researchers to conduct innovative, disruptive, high-impact research
Create new culture of technology commercialization and commercial business development through innovation
Sustain the top management’s commitment to successful technology commercialization
Encourage the technology commercialization team to build a profitable, financially sustainable, and self-motivated organization
Provide significant rewards to inventors Retain rewarded inventors and keep them focused on innovative
R&D Comply with government regulations Minimize potential conflicts among stakeholders
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The profit sharing policy must have clearly defined rules The profit sharing process must be perceived as fair The policy must be subject to government The company should recover out-of-pocket expenses incurred in
producing the royalty/equity income before sharing profits For each allocation, the company must conduct a detailed review
of all facts and provide supporting documentation such as written R&D proposals and Lab notes
The company must implement a process for an independent review of distributions by a compensation committee of the board:– Approve compensation and supervise execution– Decide compensation of top management (e.g., CEO, CTO, CFO, and VPs)– Resolve conflicts among stakeholders regarding compensation.
Implementation of a Profit Sharing Model
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Recommended Distribution and Approval Process for Profit Sharing
VP of R&D Div appoints knowledgeable Lead (PI) to recommend allocations
Lead develops list of participants, their contributions, and relative % contribution (except the Lead’s %)
VP recommends distribution %s, Lead’s %, expenses, and reserve, if any
HR distributes the list and top management team reviews recommendations for completeness
CEO reviews with top management team the final distributions, expenses, and reserve, if any
Compensation Committee reviews and approves distributions, expenses, and reserve, if any
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Summary of Recommendations
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InstitutionalFinancialSupport
RegionalEconomic
Growth
WorldImpact
IndividualRewards
Objectives of Technology Commercialization
World-ClassThink-tank &
Innovator
Retain top scientists and engineers Attract new talented technical staff
Diversify income sources Increase incomes Prepare rainy days Develop self-sustainable institution
Contribute to develop local economy
Create a local venture valley Improve national competitiveness
Invent innovative, high-impact technologies Demonstrate big success in commercialization Establish centers of excellence Develop world-class reputation
Nurture culture of commercialization Increase income sources Achieve financial independence Attract more R&D funds Become a world-class R&D institute
Source: SRI, SBI
34
Companies Represent a Range of the Commercialization Continuum
Returns / Cost / Complexity / Compelling Innovations and Market Needs
Passive Licensing
Fee for Services
Active Licensing
Start-up Promotion
Venture Incubation
Source: SRI
35
Technology Commercialization Management Diagnostic Identifies the Needs and Leverage Points for Improvement
Company• Issues in TechnologyCommercialization• Leverage points — Strategy — Organization and resources
— Management systems
• Metrics and benchmark
• Next steps
• Solution options
Vision & Strategy
Commercialization
Strategy
MgmtSystems
Org. &Resources
External
Environment
Technology,and IP
Vision & StrategyVision & Strategy
Commercialization
Strategy
MgmtSystems
Org. &Resources
External
Environment
External
Environment
Technology,and IP
Technology,and IP
Value Creation• Licensing• Start-ups• Incubating• IPOs
Value Creation• Licensing• Start-ups• Incubating• IPOs
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Recommended Strategic Principles in Technology Commercialization
Recommendationsu Build consensus internally and
externally for proactive, strategic technology commercialization
u Go slow initiallyu Build skills, processes firstu Spin-off technology ventures are
preferred over licensing to maximize value creation
u Create some early success stories
u New performance measurement and profit sharing models are needed
Typical Situation Require cultural change Need new skills and
experience Align with R&D planning
needed Have limited capital availability Comply with the government
and company regulation and supervision
Require legal/policy changes to support various technology commercialization activities and profit sharing