L4: Partnering

L4: PartneringL4: Partnering

EC10 Innovation & CommercialisationEC10 Innovation & CommercialisationAcquiring and managing relationships Acquiring and managing relationships within a technology based businesswithin a technology based business..

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

4. Partnering4. PartneringL1: Team BuildingL1: Team Building 22

Partnering OutlinePartnering Outline

Screening the IdeaScreening the Idea Licensing & Joint VenturesLicensing & Joint Ventures Technology TransferTechnology Transfer Exit RoutesExit Routes

1. Screening The Idea1. Screening The Idea

Finding the IdeaFinding the Idea

4. Partnering4. Partnering 44

Opportunities & IdeasOpportunities & Ideas

"An "An opportunityopportunity has the qualities of being has the qualities of being attractive, durable, and timely and is anchored in attractive, durable, and timely and is anchored in a product or service which creates or adds value a product or service which creates or adds value for a buyer or and user" (Timmons 1999).for a buyer or and user" (Timmons 1999)."Those situations in which new goods, services, "Those situations in which new goods, services, raw materials and organising methods can he raw materials and organising methods can he introduced and sold at greater than their cost of introduced and sold at greater than their cost of production " (Casson 1982).production " (Casson 1982).An idea which may be a "Plan formed in the An idea which may be a "Plan formed in the mind by thinking" (Oxford dictionary 1981)mind by thinking" (Oxford dictionary 1981)


Entrepreneurs & InventorsEntrepreneurs & Inventors

Finding or spotting a viable business ideas Finding or spotting a viable business ideas is as much an art, or matter of luck, as the is as much an art, or matter of luck, as the use of systematic techniques.use of systematic techniques.the starting point for developing new the starting point for developing new business ideas lies inside the prospective business ideas lies inside the prospective entrepreneur rather than in the entrepreneur rather than in the marketplace, laboratory, business planmarketplace, laboratory, business planinventors and innovators do not inventors and innovators do not necessarily make good business people.necessarily make good business people.


Idea generationIdea generationMost of the worlds most successful Most of the worlds most successful entrepreneurs do not have a EUREKA moment.entrepreneurs do not have a EUREKA moment.

They grasp concepts and deliver them to They grasp concepts and deliver them to customers in a more profitable way than others.customers in a more profitable way than others.

They find customers who are unfulfilled.They find customers who are unfulfilled.– Cheaper ways of making or selling existing products.Cheaper ways of making or selling existing products.– Delivering an existing product in a new way.Delivering an existing product in a new way.– Identifying an unfulfilled market niche, or local market.Identifying an unfulfilled market niche, or local market.– Inventing a new product that people need.Inventing a new product that people need.


Idea generationIdea generationObservations:Observations:– Necessity is the mother of invention.Necessity is the mother of invention.– Learn how businesses operate – work in them first.Learn how businesses operate – work in them first.– Learn from other successful people or experts.Learn from other successful people or experts.– Learn about products from all over the world.Learn about products from all over the world.– Consider markets where products do not exist.Consider markets where products do not exist.– Very few will invent and patent; don’t be precious.Very few will invent and patent; don’t be precious.– Always challenge assumptions and status quo.Always challenge assumptions and status quo.


Putting A different Light on ThingsPutting A different Light on Things

The idea of a lighted flower pot may strike us as pretty humorous, but it was the answer to a lifelong struggle for a Russian immigrant named Conrad Hubert. Hubert came to the United States in 1890 when he was about 35 years old. He was flat broke. He did what he could to earn a living. He worked in a cigar store, ran a restaurant for a while and managed a boarding house. He even tried fanning and repairing watches. Whatever he did, however, he never made much money. All he wanted was to stop worrying about making ends meet. Now Hubert had a friend named Joshua Lionel Cowen who was very interested in electricity. Joshua had invented a flower pot with a battery in it. Electricity from the battery made the flower "light up" when a button was pressed. Hubert decided he would try to sell these flower pots. Meanwhile, Joshua became interested in something new, electric trains and he sold his friend the flower pot idea for almost nothing.

Fortunately, Hubert never went ahead with the flower pots because he had had an idea for a modification. He took the battery, the bulb and the paper tube from the pot and remade it into what he called "an electric hand torch." Hubert sold his invention at first as a novelty, but the usefulness of the flashlight soon became apparent. When he died in 1928 it must have seemed to Hubert a long time ago that he was poor. He was worth $8,000,000.


Six Stages to Evaluating an Six Stages to Evaluating an IdeaIdea

The AuditThe AuditThe strategic audit addresses where are you are now and where are you The strategic audit addresses where are you are now and where are you

going. It deals with ways to build on your (internal) strengths while going. It deals with ways to build on your (internal) strengths while minimising your weaknesses and also identifies the opportunities and minimising your weaknesses and also identifies the opportunities and converts threats that your business faces. From the audit a set of converts threats that your business faces. From the audit a set of objectives is defined which guides the growth and direction that the objectives is defined which guides the growth and direction that the business is to take. An Audit may raise uncomfortable issues but it will business is to take. An Audit may raise uncomfortable issues but it will also address how to overcome barriers to growth of which you may not also address how to overcome barriers to growth of which you may not (yet) be aware!(yet) be aware!

Customer SurveyCustomer SurveyThe next stage is a Customers Survey to find out what potential customers The next stage is a Customers Survey to find out what potential customers

really think of your idea and what else they would like. It is always a really think of your idea and what else they would like. It is always a mistake to assume they you already know about your customer wants mistake to assume they you already know about your customer wants and needs. If questions are asked, interesting opportunities arise! and needs. If questions are asked, interesting opportunities arise!

The trick is to know how to choose and how to ask customers the right The trick is to know how to choose and how to ask customers the right questions. Ask the wrong question you get the wrong answer and this questions. Ask the wrong question you get the wrong answer and this leads to the wrong conclusion!leads to the wrong conclusion!


The Six StagesThe Six Stages

RepositioningRepositioning– Once information has been gathered it is analysed and the results are Once information has been gathered it is analysed and the results are

used to reposition the business in terms of its customers and the used to reposition the business in terms of its customers and the competition. Our approach, which can include existing and potential competition. Our approach, which can include existing and potential customers, will allow you to “segment” customers into groups. Care is customers, will allow you to “segment” customers into groups. Care is taken to develop a method to record, on an on-going basis, customers’ taken to develop a method to record, on an on-going basis, customers’ needs and wants.needs and wants.

TargetingTargeting– The fourth stage is to use all this information to target the different The fourth stage is to use all this information to target the different

groups of customers with the messages that they want to hear. This groups of customers with the messages that they want to hear. This means mixing and matching different types of media whilst making sure means mixing and matching different types of media whilst making sure that a coherent and consistent approach is adopted. Our approach that a coherent and consistent approach is adopted. Our approach means that there is less wastage because information is targeted and means that there is less wastage because information is targeted and also because there are a number of ways the promotions industry uses also because there are a number of ways the promotions industry uses to keep costs down. The Promotions Strategy will aim to take account to keep costs down. The Promotions Strategy will aim to take account of existing promotional material and it will include direct marketing.of existing promotional material and it will include direct marketing.


Six StagesSix Stages

DeliveryDeliveryThe next session concentrates on maximising your The next session concentrates on maximising your

resources. Particular attention is made to ensuring resources. Particular attention is made to ensuring that your company develops multi-channel methods to that your company develops multi-channel methods to deliver and monitor its services. deliver and monitor its services.

Market PlanMarket PlanFinally the information is gathered together into a Finally the information is gathered together into a

working Marketing Plan. The Plan combines the working Marketing Plan. The Plan combines the findings from the audit, customer survey and findings from the audit, customer survey and promotions strategy into a single source for promotions strategy into a single source for growing the customer base profitably.growing the customer base profitably.


Creativity & ConflictCreativity & Conflict

One common way managers kill creativity is by assembling One common way managers kill creativity is by assembling homogeneous teams. The lure to do so is great. Homogeneous homogeneous teams. The lure to do so is great. Homogeneous teams often reach “solutions” more quickly and with less friction teams often reach “solutions” more quickly and with less friction along the way. These teams often report high morale, too. But along the way. These teams often report high morale, too. But homogeneous teams do little to enhance expertise and creative homogeneous teams do little to enhance expertise and creative thinking. Everyone comes to the table with a similar mind-set. They thinking. Everyone comes to the table with a similar mind-set. They leave with the same”.leave with the same”.

Amabile, T, “How to Kill Creativity”, HBR, Sept - Oct 1998, pp 77 - Amabile, T, “How to Kill Creativity”, HBR, Sept - Oct 1998, pp 77 - 85,85,


Creative ThinkingCreative Thinking

““But the truth is that the winning strategies But the truth is that the winning strategies are smart, innovative and original, and are smart, innovative and original, and

break the rules, and most times there is break the rules, and most times there is someone somewhere who has seen someone somewhere who has seen through conventions and traditional through conventions and traditional

assumptions to create a new business assumptions to create a new business idea" idea" Piercy 2002, p 269Piercy 2002, p 269

2. 2. Licensing & Joint Licensing & Joint VenturesVentures

Building an International Building an International NetworkNetwork


Sources ofUncertainty

Technologicaluncertainty

Selection process for standards and dominant

designs emerge is complex and difficult to predict,

e.g. future of 3G

Customer acceptance and adoption rates of innovations notoriously difficult to predict, e.g. centrino, i-pod, Wi-fi, video conferencing

Marketuncertainty

Uncertainty Uncertainty in Technology Environmentsin Technology Environments


Risk in Technology EnvironmentsRisk in Technology Environments

Strategies For

Managing Risk

Cooperating with lead users early identification of customer requirements

–assistance in new product development

Flexibility—use speed of response to adapt quickly to new information—learn from mistakes

Limiting risk exposure—avoid major capital commitments (e.g. lease don’t buy)—outsource—alliances to access other firms’ resources & capabilities—keep debt low


To Lead or to FollowTo Lead or to Follow Is innovation appropriable and Is innovation appropriable and

protectable against imitation?protectable against imitation?– If so, advantages in leadership.If so, advantages in leadership.

Is owning/ controlling industry standard Is owning/ controlling industry standard critical to competitive advantage?critical to competitive advantage?– If so, advantage in being a leader. If so, advantage in being a leader.

The role of complementary resources.The role of complementary resources.– Followers may be able to avoid investing in Followers may be able to avoid investing in

complementary resources due to better- complementary resources due to better- established industry infrastructure.established industry infrastructure.

– Firms possessing portfolio/resources have Firms possessing portfolio/resources have the luxury of waiting.the luxury of waiting.


The Profitability of InnovationThe Profitability of Innovation

Legal protection/IPR.

Organisational resources.

Imitability of the technology.

Turbulence/Churn.

Global Drivers.

Window of Opportunity.

Time to Market.

Endorsements.

Expected Return on Investment

Value set against cost structure

Ability to communicate the

value of the innovation to

target customers.


Assessing Emerging OpportunitiesAssessing Emerging Opportunities

InformationMarket CharacteristicsProduct CharacteristicsBuyer Characteristics

AnalysisCritical relationshipsKey Success Factors

SynthesisRefine Critical relationships

New Opportunity

Process is interactive – each cycle refines the opportunity

Wickham, Strategic Marketing, Pitman, p158, 1998


Uppusala ModelUppusala Model A sequential process of functional migration A sequential process of functional migration

based on a firm’sbased on a firm’s

‘.. Gradual acquisition, integration & use of ‘.. Gradual acquisition, integration & use of knowledge about foreign markets & operations, knowledge about foreign markets & operations, and on its successively increasing commitment to and on its successively increasing commitment to foreign markets..’foreign markets..’.... Its about learning Its about learning .. .. To overcome ‘psychic distance’To overcome ‘psychic distance’ .. Over time, firms enter foreign markets .. Over time, firms enter foreign markets

with greater psychic distance with greater psychic distance


Networks & CollaborationsNetworks & Collaborations

Firms not seen as bounded legal Firms not seen as bounded legal entitiesentities

Instead Instead as a complex set of ‘exchange as a complex set of ‘exchange relationships’relationships’

within & outwith the firmwithin & outwith the firm


Networks & Collaborations…Networks & Collaborations…

Existing relationships are resources Existing relationships are resources used to:used to:– develop exchange relationships with develop exchange relationships with

‘actors’ in new networks‘actors’ in new networks– to make the firm’s own resources to make the firm’s own resources

interdependent with resources of firms interdependent with resources of firms in other networks or areasin other networks or areas

– Internationalization develops from the Internationalization develops from the co-operative development of new co-operative development of new exchange relationshipsexchange relationships


Drivers for Internationalisation

Product Scope

Geo

grap

hic

Sco

pe

Restricted National

Market

Internat-ional

NARROW BROAD

Narrow Niche Strategy

National Broad-based Strategy

International Niche Strategy

International Broad-based Strategy


Bartlett & Goshal’sIdentification of Needs model

Need for National Responsiveness in Selling

Nee

d f

or G

lob

aliz

atio

n

in P

rod

uct

ion

HIGH

LOW

Globalization Strategy

Mixed Strategy:think global; act local

National ResponsivenessStrategy

HIGHLOW

Mixed Strategy:International Standardization


Foreign Direct Investment (FDI)Foreign Direct Investment (FDI)

Greatest Control (supposedly)Greatest Control (supposedly) Greatest Direct Investment CostGreatest Direct Investment Cost Massive local knowledge requirementMassive local knowledge requirement Greenfield & Acquisition alternativesGreenfield & Acquisition alternatives


Contractual AgreementsContractual Agreements

Some Control retained, according to Some Control retained, according to contractcontract

Low or negative cost possibleLow or negative cost possible Can avoid local knowledge needCan avoid local knowledge need Many alternatives of structure/ Many alternatives of structure/

organization possibleorganization possible


Exporting through Exporting through Distributors / AgentsDistributors / Agents

Little Control retainedLittle Control retainedLow cost, low rewardLow cost, low rewardExplicitly avoids local Explicitly avoids local

knowledge needknowledge need


Joint VenturesJoint Ventures

Control achieved through joint Control achieved through joint ownership (supposedly)ownership (supposedly)

Variable Direct Investment CostVariable Direct Investment Cost Local knowledge requirement can be Local knowledge requirement can be

lessened (depending on partner)lessened (depending on partner) Many alternatives of structure/ Many alternatives of structure/



Licensing / FranchisingLicensing / Franchising

Some Control retained, according to Some Control retained, according to contractcontract

Low or negative cost possibleLow or negative cost possible Can avoid local knowledge needCan avoid local knowledge need Many alternatives of structure/ Many alternatives of structure/



AlliancesAlliances

A strategic alliance describes any A strategic alliance describes any relationship between companies relationship between companies involving a sharing of common involving a sharing of common destinies. destinies.

It is an agreement between two or It is an agreement between two or more partners to share knowledge or more partners to share knowledge or resources that could be beneficial to resources that could be beneficial to all involved. all involved.


Types of AllianceTypes of Alliance

Intra-industry alliancesIntra-industry alliances – used to 'protect the home turf.' eg US used to 'protect the home turf.' eg US

carmakers entered into an alliance to develop carmakers entered into an alliance to develop a new battery for an electric car. If successful, a new battery for an electric car. If successful, the battery alliance could help fight off foreign the battery alliance could help fight off foreign competition. competition.

Inter-industry alliancesInter-industry alliances – used to pool expertise and create synergy. used to pool expertise and create synergy. – Eg the alliance between chemical giant DuPont Eg the alliance between chemical giant DuPont

and pharmaceutical giant Merck existed to and pharmaceutical giant Merck existed to combine DuPont's R&D ability with Merck's combine DuPont's R&D ability with Merck's capital and market rights. capital and market rights.


Why are alliances formedWhy are alliances formed

To avoid barriers to entry To avoid barriers to entry To create synergy by pooling To create synergy by pooling

resources and sharing expertise resources and sharing expertise To reduce/share risk To reduce/share risk To gain access to new markets To gain access to new markets To source raw materials To source raw materials


Influencing FactorInfluencing Factor

The state of technology is a major The state of technology is a major influencing factor in selecting influencing factor in selecting partners for alliances. partners for alliances. – Firms seeking immediate competitive Firms seeking immediate competitive

advantage will seek alliances in new but advantage will seek alliances in new but readily available technologies. readily available technologies.

– The fusion of technology, whereby one The fusion of technology, whereby one partner is used to contribute the specific partner is used to contribute the specific knowledge of a process that is critical to knowledge of a process that is critical to gain competitive advantage. gain competitive advantage.


Critical IssuesCritical Issues Goal compatibility Goal compatibility

– Without this, alliance partners may pull in different Without this, alliance partners may pull in different directions directions

Synergy Synergy – One is strong where the other is weak. This is the major One is strong where the other is weak. This is the major

reason for and the advantage of the alliance. The reason for and the advantage of the alliance. The partnership must be more efficient and effective than if partnership must be more efficient and effective than if each alliance partner was performing the similar tasks each alliance partner was performing the similar tasks individually individually

Value chain Value chain – There must be a clear understanding of the value each There must be a clear understanding of the value each

partner will bring to the alliance. partner will bring to the alliance. Balancing contributions Balancing contributions

– This is neThis is ne3434eded in order to avoid one partner eded in order to avoid one partner dominating the alliance. dominating the alliance.

Vya, N, Sleburn W, 2001

3. Technology Transfer 3. Technology Transfer

Sources of Innovation and their Sources of Innovation and their diffusion from pure science to diffusion from pure science to

commercial productcommercial product


Technology PerspectivesTechnology Perspectives

Technology InnovationsTechnology Innovations– exploitation of new ideas – incorporating exploitation of new ideas – incorporating new new

technologiestechnologies, design and best practice is the , design and best practice is the key business.key business.

Commercial InnovationCommercial Innovation– Venture management strategies and structures Venture management strategies and structures

that bring these new technologies to market.that bring these new technologies to market.


Commercial InnovationCommercial Innovation

CommercialCommercial Innovation is about doing things new or Innovation is about doing things new or different (from your competitors). different (from your competitors).

It is a management process that centres on being creative It is a management process that centres on being creative & visionary. & visionary.

It presents itself as the ability to filter It presents itself as the ability to filter and thenand then commercialise.commercialise.

It applies to:It applies to:– new productsnew products– new business practicesnew business practices– new market applicationsnew market applications

These are the skills of the entrepreneur. Are they These are the skills of the entrepreneur. Are they the skills of the scientist?the skills of the scientist?


Innovation TriggersInnovation Triggers

Push Innovation. Push Innovation. – Where an organisation is already active in a market and needs to Where an organisation is already active in a market and needs to

maintain competitive advantage. Here the innovator can be a maintain competitive advantage. Here the innovator can be a prisoner to their own R&D Success. Ideally this form should be prisoner to their own R&D Success. Ideally this form should be continuous. Downside - can be product-centred organisation. continuous. Downside - can be product-centred organisation. Upside is that it is sustainable model.Upside is that it is sustainable model.

Pull innovation.Pull innovation.– Where an emerging technology allows innovations to exceed what Where an emerging technology allows innovations to exceed what

a customer thought was possible. These are quantum scientific a customer thought was possible. These are quantum scientific leaps. These are the real scientific innovations. These are leaps. These are the real scientific innovations. These are disruptive innovations.disruptive innovations.

– Downside - the pull innovation is discontinuous and extremely risky. Downside - the pull innovation is discontinuous and extremely risky. Discontinuous innovation can also be a one product wonder. Discontinuous innovation can also be a one product wonder. SME’s or Corporates??SME’s or Corporates??

This is where the venture management skills comes in.This is where the venture management skills comes in.


Measuring InnovationsMeasuring Innovations

DistinctivenessDistinctiveness– A distinctive innovation rewrites the rules.A distinctive innovation rewrites the rules.

How is this innovation distinct from other ideas that have How is this innovation distinct from other ideas that have historically emerged?historically emerged?

Is it the first of its kind in any form?Is it the first of its kind in any form? Is it the first successful implementation?Is it the first successful implementation? Companies should also ask questions that help us understand if Companies should also ask questions that help us understand if

the “rules of the game” really have been rewritten:the “rules of the game” really have been rewritten: Does your innovation make others react to what you have Does your innovation make others react to what you have

created and now offer?created and now offer? Are others forced to make changes based on your actions?Are others forced to make changes based on your actions? Does this innovation change the basis of competition?Does this innovation change the basis of competition?

Chen, E, Kai-ling Ho, 2001


Measuring InnovationMeasuring Innovation

ImpactImpact– Impact differentiates the innovations from the Impact differentiates the innovations from the

mere inventions.mere inventions. Is a company only dealing with primary impact? Or is Is a company only dealing with primary impact? Or is

it also valuing the effects of the innovation beyond it also valuing the effects of the innovation beyond the scope of its primary customers and achieving the scope of its primary customers and achieving secondary impact?secondary impact?

Is a company evaluating measurable impact today as Is a company evaluating measurable impact today as well as the future potential impact?well as the future potential impact?


Technology TransferTechnology Transfer

Tech transfer is the flavour of the decade:Tech transfer is the flavour of the decade:– EU White Paper on Growth Competitiveness and EU White Paper on Growth Competitiveness and

EmploymentEmployment– EU Green Paper on InnovationEU Green Paper on Innovation– DTI Competitiveness White PaperDTI Competitiveness White Paper– HEFCE Reviews of University-Industry LinkagesHEFCE Reviews of University-Industry Linkages– Lambert ReviewLambert Review– Regional initiatives – PoC, RSE FellowshipsRegional initiatives – PoC, RSE Fellowships– ‘‘Entrepreneurship’ initiatives – EHE, Science Enterprise Entrepreneurship’ initiatives – EHE, Science Enterprise

ChallengeChallenge– The ‘third income stream’ debateThe ‘third income stream’ debate


Non ConformityNon Conformity

New and small firms are not a homogeneous New and small firms are not a homogeneous group with equal enthusiasm, ability, group with equal enthusiasm, ability, resources or inclination to grow. resources or inclination to grow.

Whilst new and small firm sector in aggregate Whilst new and small firm sector in aggregate continues to make a significant contribution to continues to make a significant contribution to the total employment pool, the aggregate the total employment pool, the aggregate data masks a highly skewed distribution. data masks a highly skewed distribution.

Whilst most firms employ a few people, only a Whilst most firms employ a few people, only a few provide significant employment. few provide significant employment.


Industry CollaborationIndustry Collaboration

All focus on closer links (both actual and All focus on closer links (both actual and desired) between universities, industry and desired) between universities, industry and government, and all essentially predicated government, and all essentially predicated on a view that increased UIC is a ‘good on a view that increased UIC is a ‘good thing’thing’

4. Partnering 44

UNIVERSITIES & Technology?

Calls to reinterpret the role of the university as a:Hotbed of entrepreneurshipLocus of economic developmentAgent of regional transformation


SEN Policy Towards AcademicsSEN Policy Towards Academics ““If you are an academic, or academic researcher, working in one of Scotland's If you are an academic, or academic researcher, working in one of Scotland's

higher education institutions, NHS trusts or research establishments, Scottish higher education institutions, NHS trusts or research establishments, Scottish Enterprise can help you to bring your work to the marketplace.Enterprise can help you to bring your work to the marketplace.– Proof of Concept ProgrammeProof of Concept Programme funding to early-stage ideas that have typically funding to early-stage ideas that have typically

reached patent level, and could lead to the creation of new businesses, or the reached patent level, and could lead to the creation of new businesses, or the licensing of innovative technologies. licensing of innovative technologies.

– Enterprise FellowshipEnterprise Fellowship programme, funded by Scottish Enterprise and delivered by programme, funded by Scottish Enterprise and delivered by the Royal Society of Edinburgh, helps individual academic researchers to develop the Royal Society of Edinburgh, helps individual academic researchers to develop spin-out companies. spin-out companies.

– The The University of Edinburgh Stanford University linkUniversity of Edinburgh Stanford University link aims to help establish Scotland aims to help establish Scotland as a global leader in the commercial development of language technology. as a global leader in the commercial development of language technology.

– Kelvin InstituteKelvin Institute aims to transform the ground-breaking research taking place in aims to transform the ground-breaking research taking place in participating universities today into high-value, commercial, innovative solutions, participating universities today into high-value, commercial, innovative solutions, delivering substantial benefits to everyone involved.delivering substantial benefits to everyone involved.

– These initiatives are a part of Scottish Enterprise's commitment to increase the flow These initiatives are a part of Scottish Enterprise's commitment to increase the flow of good ideas from the research base into Scottish industry and commerce.of good ideas from the research base into Scottish industry and commerce.

– We also part fund We also part fund Technology Ventures ScotlandTechnology Ventures Scotland which was set up to provide a which was set up to provide a strategic and overarching role in encouraging the commercialisation of Scotland's strategic and overarching role in encouraging the commercialisation of Scotland's Science and Technology base.”Science and Technology base.”

http://www.scottish-enterprise.com/sedotcom_home/sig/academics.htm

http://www.scottish-enterprise.com/sedotcom_home/sig/academics/proofofconcept.htm

http://www.scottish-enterprise.com/sedotcom_home/sig/academics/enterprise-fellowships.htm

http://www.scottish-enterprise.com/sedotcom_home/sig/academics/stanford.htm

http://www.scottish-enterprise.com/sedotcom_home/sig/academics/academics_-_kelvin_institute_link.htm

http://www.technologyscotland.org/


University Technology IssuesUniversity Technology Issues

Three issuesThree issues– The technology transfer processThe technology transfer process

What is it and what drives it?What is it and what drives it?

– The spin-out company processThe spin-out company process Organising early stage technology developmentOrganising early stage technology development

– The entrepreneurial curriculumThe entrepreneurial curriculum Rethinking the basis for learning in universities?Rethinking the basis for learning in universities?


Technology transfer agendaTechnology transfer agenda

Focus on commercialisation of scientific Focus on commercialisation of scientific and technical knowledgeand technical knowledge– Instrumental – ‘tax dollars have paid for Instrumental – ‘tax dollars have paid for

this’this’– Principled – ‘we ought to make an Principled – ‘we ought to make an

economic contribution (or, ‘save the economic contribution (or, ‘save the planet’)’planet’)’

– Utilitarian – ‘we need a return on Utilitarian – ‘we need a return on expenditure on research’expenditure on research’


FORMS OF COMMERCIALISATIONFORMS OF COMMERCIALISATION

Commercialisation and technology transfer Commercialisation and technology transfer takes many forms:takes many forms:– Licensing technologyLicensing technology– Spinout company formationSpinout company formation– Collaborative research and TT projectsCollaborative research and TT projects– Faculty/student/industry exchange and Faculty/student/industry exchange and

internship programsinternship programs– Consultancy/applied researchConsultancy/applied research– Teaching, education and outreach programsTeaching, education and outreach programs


WHY TECH TRANSFER? WHY TECH TRANSFER?

Funding (especially to replace reduced Funding (especially to replace reduced government core funding)government core funding)

access to new ideas and techniquesaccess to new ideas and techniques improved contribution to economic needs of regionimproved contribution to economic needs of region broaden researchers’ experiencebroaden researchers’ experience improve quality of research: firms as ‘efficient improve quality of research: firms as ‘efficient

testing instruments’testing instruments’


THE BARRIERS TO TTTHE BARRIERS TO TT

Lack of internal resources - individual staff Lack of internal resources - individual staff Lack of internal resources - institutionalLack of internal resources - institutional RAE and the ‘publish or perish’ cultureRAE and the ‘publish or perish’ culture Lack of academic recognition for collaborative activitiesLack of academic recognition for collaborative activities Culture gap: researchers vs industrialistsCulture gap: researchers vs industrialists Priority conflict: publish vs protect IPRPriority conflict: publish vs protect IPR Attitude of business (SMEs especially) - ivory tower Attitude of business (SMEs especially) - ivory tower

stereotypestereotype


INDUSTRIAL PARTNERSINDUSTRIAL PARTNERS

Lack of commercial awareness (markets, Lack of commercial awareness (markets, timescales) by academicstimescales) by academics

Short-term problem solving emphasis by industry Short-term problem solving emphasis by industry (tech transfer is not always ‘leading edge’)(tech transfer is not always ‘leading edge’)

‘‘Culture shock’ in terms of university timescales Culture shock’ in terms of university timescales and project managementand project management

Mismatch between absorptive capacity of local Mismatch between absorptive capacity of local industry and the knowledge/technology available industry and the knowledge/technology available for transferfor transfer


IMPLICATIONSIMPLICATIONS

Most effective forms of technology transfer are Most effective forms of technology transfer are consulting and contract research - improved consulting and contract research - improved efficiency of collaborationefficiency of collaboration

Need for improved ‘marketing’ of tech transfer Need for improved ‘marketing’ of tech transfer activities and support internally and externallyactivities and support internally and externally

Review ‘reward and recognition’ for involvement in Review ‘reward and recognition’ for involvement in tech transfertech transfer

4. Exit Routes4. Exit Routes


Conflicts & Power within a Channel

Traditional Channel Management is about Traditional Channel Management is about dominance.dominance.

Stern and E1 Ansary (1988):Stern and E1 Ansary (1988): Power is the ability of one channel member to get Power is the ability of one channel member to get

another channel member to do what the latter would another channel member to do what the latter would not otherwise have done. Power is the inverse of not otherwise have done. Power is the inverse of dependence: the more highly dependent one dependence: the more highly dependent one channel member is on another, the more power the channel member is on another, the more power the latter has relative to the former.latter has relative to the former.

New paradigm – Trade Marketing = win-winNew paradigm – Trade Marketing = win-win PartneringPartnering


TM as a common effort by suppliers and TM as a common effort by suppliers and retailers to optimize relations and harmonize retailers to optimize relations and harmonize resources so as to better serve the consumer resources so as to better serve the consumer and/or try and achieve mutual economies of and/or try and achieve mutual economies of scale... It is a question of the supplier scale... It is a question of the supplier considering the retailer as a customer, with all considering the retailer as a customer, with all that that involves. The retailer is no longer a that that involves. The retailer is no longer a mere subcontractor, he has become a partner mere subcontractor, he has become a partner – and more than a partner, he has become a – and more than a partner, he has become a customer and should be treated as such.customer and should be treated as such.Marc Dupuis and Elisabeth Tissier-Desbordes, (1996) Trade marketing and retailing: a European approach,, ESCP, Paris Graduate School of Management, 79 av. de la R~publique, 75011 Paris, France.


Supply Chain Supply Chain ManagementManagement

an emphasis on joint reduction in channel an emphasis on joint reduction in channel inventories;inventories;

a focus on channel-wide cost efficiencies;a focus on channel-wide cost efficiencies; a a long-term horizon;long-term horizon; a information sharing as required for a information sharing as required for

planning and monitoring processes;planning and monitoring processes; an emphasis on speed of inventory an emphasis on speed of inventory

operations and information;operations and information;


Alternatives for Exploiting Innovation

Risk & Return

Competing

Resources

Examples

LicensingOutsourcing

certain functions

Strategic Alliance

Joint Venture

Internal Commercialisation

small investment risk, but small returns also limited (unless patent position strong) Some legal risks

Limits capital investment, but may create dependence on supplies/partners

Benefits of flexibility, risks of informal structure

Shares investment and risk. Risk of partner disagreement and culture clash

Biggest investment requirement and corresponding risks. Benefits of control

Few Permits accessing of outside resources and capabilities

Permits pooling of the resources and capabilities of more than one firm

Substantial requirements in terms of finance, production capability, marketing capability, distribution, etc.

Konica licensing its digital camera to Hewlett Packard

Pixar’s computer animated movies (e.g. “Toy Story”) marketed and distributed by Disney Co.

Apple and Sharp build the “Newton” PDA

Microsoft and NBC formed MSNBC

TI divestment of its Digital Signal Processing Chips


Route AdoptedRoute Adopted

Level

of

Control

DirectorshipForm a management team, raise finance and launch.

LicensingCommercial arrangement through which licensor of IPR allows licensee to develop

sell or use in return for a royalty payment.

AssignationSell rights and transfer the ownership of the invention and IPR to third party for lump

sum.

Joint Venture & PartnershipsCollaboration with one or more organisations to exploit IPR. Includes sharing of

costs and revenues.


To Lead or to FollowTo Lead or to Follow

Is innovation appropriable and protectable Is innovation appropriable and protectable against imitation?against imitation? If so, advantages in leadership.If so, advantages in leadership.

Is owning/ controlling industry standard Is owning/ controlling industry standard critical to competitive advantage?critical to competitive advantage? If so, advantage in being a leader. If so, advantage in being a leader.

The role of complementary resources.The role of complementary resources. Followers may be able to avoid investing in Followers may be able to avoid investing in

complementary resources due to better- complementary resources due to better- established industry infrastructure.established industry infrastructure.

Firms possessing portfolio/resources have the Firms possessing portfolio/resources have the luxury of waiting.luxury of waiting.


Assessing Emerging Assessing Emerging OpportunitiesOpportunities

InformationMarket CharacteristicsProduct CharacteristicsBuyer Characteristics

AnalysisCritical relationshipsKey Success Factors

SynthesisRefine Critical relationships

New Opportunity

Process is interactive – each cycle refines the opportunity

Wickham, Strategic Marketing, Pitman, p158, 1998


Going to MarketGoing to Market

Information

Interpreting Understanding

Learning

Operations

Motivation

Responsiveness

Logistics/Supply Chain

AttitudesBehaviour

Reinvention

Value Definition Value Development Value Delivery

Process of Going to Market

Analytical

Behavioural

Organisational

Customer Value

Documents

L4: Partnering