EFFECTIVE TECHNOLOGY TRANSFER

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Methodology and Best Practice for successful

Commercialisation of Technological Innovation

Dr George Vekinis

Innovation Management Strategy Expert

EFFECTIVE TECHNOLOGY

TRANSFER

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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

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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

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INNOVATION – What is it?

“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!

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INVENTION

INVENTION vs

vs

vs INNOVATION

INNOVATION

Invention is a new product or process.

Innovation is its implementation and

valorisation!

• 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

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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

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INNOVATIVENESS IS A HARD

INNOVATIVENESS IS A

HARD----ACQUIRED SKILL!

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!

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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

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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

• …

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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.

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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

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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:

I n c re a s in g p ro x im it y t o in d u s tr ia li s a ti o n : I n c re a s in g V a lu e

• Industrial or commercial product

• Industrial prototype

• Viability Pilot test (pre-industrial)

• Feasibility test prototype

• Lab prototype

• Lab result

• Model

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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

• …

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TECHNOLOGY TRANSFER:

COLLABORATION BETWEEN TWO

PARTNERS…

with a little help

Exploitable Know-how

The Provider:

RD Institution or other

The Adopter:

Exploiting Party

Innovative product

Facilitator

The utilisation of a “Facilitator” is generally the most efficient way to ensure effective organisation, objectivity and conflict resolution

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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

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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

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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, joint-ventures, licensing, patenting, agreements etc

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TECHNOLOGY TRANSFER:

7 MAIN STAGES:

2. SEARCH FOR PARTNERS OR TECHNOLOGIES

3. EVALUATION OF FINDINGS

4. INITIAL NEGOTIATIONS

5. EXPLOITATION STRATEGY DEVELOPMENT

7. INDUSTRIAL EXPLOITATION

6. INDUSTRIAL DEVELOPMENT

Progress Assessment Progress Assessment Progress Assessment Progress Assessment Progress Assessment

1. VALUATION OF THE TECHNOLOGY OR NEED

Progress Assessment

F

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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

Stage 1:

VA

VALUATION OF THE TECHNOLOGY OR NEED

LUATION 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 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

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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

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 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?

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• Documentary searches (paper or internet):

• Patents

• Research Publications in trade and scientific journals

• Projects’ databases (e.g. Cordis)

• Conferences, trade shows etc

Stage 2:

SEARCH FOR PARTNERS AND TECHNOLOGIES

• 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

The Initiating party, assisted by the Facilitator, searches for partners or

technologies and makes a short-list of potential candidates using:

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• 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

Stage 2:

Importance of Networks

• 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!

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Searching via Networks

INITIATOR

POTENTIAL PARTNER (tertiary interaction) POTENTIAL PARTNER (secondary interaction) POTENTIAL PARTNER (primary interaction) Interactions: • Research collaborations • Business or trade collaborations, etc Collaborators POTENTIAL PARTNER (via Facilitator’s Network) Facilitator POTENTIAL SPILL-OVER PARTNER (via Facilitator’s Network)

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• 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 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:

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• 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 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:

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• 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:

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:

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• 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 4:

FACILITATOR

FACILITATOR’’’’S ROLE IN NEGOTIATIONS

S ROLE IN NEGOTIATIONS

During the negotiations, the Facilitator plays a crucial role in facilitating trouble-free discussions, including:

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• 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:

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 PLAN

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• 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

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:

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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:

THREATS

Parallel developments

“Better” products

Stronger competitors

Vested interests

Market inertia ..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

STRENGTHS

Competitive Advantages

Economic Benefits

Environmental Benefits

Societal Benefits

Development prospects

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• 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 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!

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• 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!

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:

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• 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!

MEASURES OF SUCCESS

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:

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• 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

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: