Mastering Technology Transfer: From Invention to Innovation: A Step-by-Step Guide for Researchers and Inventors (Studies on Entrepreneurship, Structural Change and Industrial Dynamics) 3031443683, 9783031443688

Table of contents :
Preface
Contents
About the Author
List of Figures
List of Tables
PartPart10005704505
Chapter 1: An Invention Is Not an Innovation
1.1 In Summary
Chapter 2: Can Every Idea Be Transformed into an Innovation?
2.1 Radical, Associated and Incremental Innovations
2.2 In Summary
Chapter 3: What Are the Driving Forces for Innovation?
3.1 In Summary
Chapter 4: Can Everybody Be an Innovator?
4.1 The Right Mindset
4.2 In Summary
Chapter 5: The Long, Hard Road Ahead
5.1 The Ten Stages of the Transformation
5.2 In Summary
Chapter 6: The Critical Milestones
6.1 Decisions and Actions
6.2 In Summary
PartPart20005704506
Chapter 7: The Birth of the Idea
7.1 Forecasting and Foresighting
7.2 Counter-Intuitive, Accidental and Subconscious Ideas
7.3 In Summary
Chapter 8: How Do You Determine If a New Technology Has Value?
8.1 Practical Evaluation of an Idea
8.2 Competing Technologies
8.3 Formulating for Value
8.4 Strategic Activities for Value and Success
8.5 In Summary
Chapter 9: Critical Milestone 1: Proof of Concept
9.1 Fit for Purpose
9.2 Technical Risk
9.3 Publishing Your Technology While Retaining Its Value
9.4 SWOT Analysis
9.5 In Summary
Chapter 10: Research and Development
10.1 Project Proposing for Success
10.2 Confidentiality
10.3 IPR Ownership
10.4 Project Impact of the Technology
10.5 Relative Value
10.6 Regulations and Standards
10.7 In Summary
Chapter 11: Strategy for Protection and Freedom for Use
11.1 In Summary
Chapter 12: Critical Milestone 2: Validation of Technical Feasibility for Applications
12.1 Action Plan
12.2 Continue Alone or in a Joint Venture?
12.3 Confidentiality During Discussions with Potential Partners
12.4 More on Implementation Strategy
12.5 A Brief Primer on Entrepreneurship
12.6 In Summary
PartPart30005704507
Chapter 13: Out Into the Real World: Scaling Up
13.1 Extent and Duration of Scaling-Up Activities
13.2 Scaling Up in Practice
13.3 Collaboration for Effective Scaling Up
13.4 Contractual Matters
13.5 More on the Nature and Extent of Scaling Up
13.6 Evaluation of Scaling-Up Operations
13.7 From the Implementer´s or User´s Viewpoint
13.8 In Summary
Chapter 14: Business Planning for New Entrepreneurs
14.1 A Convincing Opportunity and Your Promising Solution
14.2 Clarity of Objectives and Aims
14.3 You, the Team and the Company
14.4 Funding and Development
14.5 Target Markets, Competitors and Collaborators
14.6 A Balancing Act
14.7 Identification and Analysis of Commercialisation Risks
14.8 Risk Management
14.9 In Summary
Chapter 15: Critical Milestone 3: The Industrial Prototype and Validation of Economic Viability
15.1 Funding and Building the Industrial Prototype
15.2 Economic Viability
15.3 In Summary
Chapter 16: A Researcher´s Strategy for Successful Technology Transfer
16.1 A New Technology Searching for an Application and a Partner
16.2 A Need or a Problem Searching for a Technology
16.3 In Summary
Chapter 17: Industrialisation
17.1 Refinements Possible During Industrialisation
17.2 Ripe for the Taking?
17.3 In Summary
Chapter 18: On to the Market!
18.1 Entering the Market
18.2 Rapid Market Adoption
18.3 In Summary
Chapter 19: What Can Go Wrong?
19.1 Overambitious Technical Objectives and Claims
19.2 Higher Than Anticipated Costs for Introduction/Production
19.3 Overlong Duration of the Project and Weak Time Management
19.4 Inadequate or Erroneous Knowledge of Markets and Mistaken Expectations
19.5 Poor Project Management Skills
19.6 Wrong Choice of Co-Developer
19.7 Over-Optimistic Business Plan and Inadequate Resources (Manpower, Budget and Equipment)
19.8 Extraneous Reasons for Commercialisation Failures
19.9 In Summary
PartPart40005704508
Chapter 20: Case Study 1: Microwave Heating Process for Bulk Ceramics
20.1 Description
20.2 The Technological Proposal
20.3 SWOT Analysis
20.4 The Project
20.5 Results
20.6 Lessons
Chapter 21: Case Study 2: High-Hardness, High-Toughness, Nanostructured Coatings for Gears and Axles
21.1 Description
21.2 The Technological Proposal
21.3 SWOT Analysis
21.4 The Project
21.5 Result
21.6 Lessons
Chapter 22: Case Study 3: Advanced Energy Cells for Portable Power Tools and Other Devices
22.1 Description
22.2 The Technological Proposal
22.3 SWOT Analysis
22.4 The Project
22.5 Result
22.6 Lessons
Chapter 23: Case Study 4: Advanced Nanostructured Coatings for High-Precision Turning of Very Hard Materials
23.1 Description
23.2 The Technological Proposal
23.3 SWOT Analysis
23.4 The Project
23.5 Result
23.6 Lessons
Chapter 24: Case Study 5: Nanostructured Medical Preparation
24.1 Description
24.2 The Technological Proposal
24.3 SWOT Analysis
24.4 The Project
24.5 Result
24.6 Lessons
Chapter 25: Case Study 6: Specialist Cross-Platform Interface Software
25.1 Description
25.2 The Technological Proposal
25.3 SWOT Analysis
25.4 The Project
25.5 Result
25.6 Lessons
Chapter 26: Case Study 7: Low-Cost Inorganic Pigments
26.1 Summary
26.2 Description
26.3 The Technological Proposal
26.4 SWOT Analysis
26.5 The Project
26.6 Result
26.7 Lessons
Chapter 27: Case Study 8: Low-Cost Contact Brushes for High-Power Electric Motors
27.1 Summary
27.2 Description
27.3 The Technological Proposal
27.4 SWOT Analysis
27.5 The Project
27.6 Result
27.7 Lessons
PartPart50005704509
Chapter 28: Glory Years
28.1 Going Public
28.2 Under Siege
28.3 In Summary
Chapter 29: Decline and Renewal
29.1 In Summary
Chapter 30: Closing Remarks
30.1 In Summary
Appendices
Appendix A
Sample of a Non-Disclosure Agreement (NDA)
Appendix B
Sample of a Memorandum of Understanding (MoU)
Appendix C
Sample of a Technology Transfer (Licensing) Agreement
Suggestions for Further Reading

Citation preview

Studies on Entrepreneurship, Structural Change and Industrial Dynamics

George Vekinis

Mastering Technology Transfer: From Invention to Innovation A Step-by-Step Guide for Researchers and Inventors Second Edition

Studies on Entrepreneurship, Structural Change and Industrial Dynamics Series Editors João Leitão, University of Beira Interior, Covilhã, Portugal Tessaleno Devezas , Atlantica—Instituto Universitário Oeiras, Lisbon, Portugal, C-MAST (Center for Aerospace Science and Technologies)—FCT, Lisbon, Portugal Editorial Board Members (Bert) EA De Groot, Erasmus School of Economics, Erasmus University Rotterdam, Rotterdam, The Netherlands Joao Ferreira, Management and Economics Department, University of Beira Interior, Covilha, Portugal Arnulf Grubler, International Institute for Applied System, Laxenburg, Austria David LePoire, Argonne National Laboratory, Bolingbrook, IL, USA Joao Carlos De Oliveira Matias, DEGEIT, University of Aveiro, Aveiro, Portugal

The ‘Studies on Entrepreneurship, Structural Change and Industrial Dynamics’ series showcases exceptional scholarly work being developed on the still unexplored complex relationship between entrepreneurship, structural change and industrial dynamics, by addressing structural and technological determinants of the evolutionary pathway of innovative and entrepreneurial activity. The series invites proposals based on sound research methodologies and approaches to the above topics. Volumes in the series may include research monographs and edited/contributed works. This is a SCOPUS-indexed series.

George Vekinis

Mastering Technology Transfer: From Invention to Innovation A Step-by-Step Guide for Researchers and Inventors Second Edition

George Vekinis National Centre for Scientific Research Demokritos Agia Paraskevi, Greece

ISSN 2511-2023 ISSN 2511-2031 (electronic) Studies on Entrepreneurship, Structural Change and Industrial Dynamics ISBN 978-3-031-44368-8 ISBN 978-3-031-44369-5 (eBook) https://doi.org/10.1007/978-3-031-44369-5 1st edition: © The Author 2013 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Paper in this product is recyclable.

Preface

An oft quoted mantra is that achieving a high degree of “innovativeness” is critical to ensure a healthy and growing economy, that it is crucial for our development, and that we all need to do what we can to become “innovators”. We hear governments reiterate that if we learn to “innovate” as a matter of course, everything will miraculously improve. It’s certainly not as straightforward as that. A successful economy is built on the basis of many dynamic parameters which are often intertwined and can’t be described that simply. But what I am sure of is that if new and bright ideas are not brought to use, if they are not transformed into valuable innovations, they are wasted for the economy and society. But how do you reach the holy grail of innovativeness? How do you transform a promising idea into a valuable innovation? Many papers and books have been written and the one thing that is clear is that it is not a straightforward or remotely obvious transformation. But it is a journey that has a starting point—a bright idea— specific stations in between, and a final destination—the Innovation—be it a product or a service. And it is a trip that cannot be avoided. In the vast majority of cases, there are no shortcuts and no easy short-cut route. The transformation has to be learnt and it has to be travelled. It is hardly ever easy going. Inventors who have undertaken this trip will tell you that it’s one of the most difficult and frustrating jobs that they have ever done. It’s a route full of potholes, wrong turns, and dead ends, replete with many Y junctions, turn-arounds, and re-starts. And yet those, who after a well-fought journey, succeed in reaching the result— the Innovation—will tell you that it was well worth it! They are, more often than not, rewarded with financial profit, even with fame: they are successful Innovators. They may even be running their own company as self-made entrepreneurs. Of course, for many people the greatest reward is the feeling of success in having achieved the Innovation. At least that’s how it has been for me. To undertake this journey, it helps to be an adventurer—a person who loves challenges, who sees every hill and mountain as something to conquer, not as an v

vi

Preface

obstacle. It isn’t for the faint-hearted. And as any great adventurer will tell you, preparation, organisation, and planning is everything! This book will take you along this journey from the birth of your Idea to its rebirth as an Invention and to the triumph and rewards of the resulting Innovation. In it I have tried to include as much of my personal experience as I felt might be useful, especially lessons I have learnt along the way to my own innovations that have arisen out my research. Many of the issues I have mentioned are based on the experience that I’ve acquired while mentoring in technology transfer a large number of researchers and entrepreneurs taking part in projects funded by the European Commission and elsewhere. I have also adapted some of the most useful “best practices” used worldwide for effective technology transfer. It is not meant to be a textbook but a practical guide and you will only find as much theory as is necessary to help you with the ideas. The rest of the theory I leave to university teachers. I have put more emphasis on industrial technologies on purpose, i.e. those dealing with materials, devices, systems, processes, methods, software, protocols, standards, etc., since industry is the mainstay of an economy with its ability to offer concrete, long-lasting benefits. But I believe the book will also be very useful for any type of prospective innovation, in any field. Every idea needs to be guided from its birth to its maturity and I hope that this book will help in this quest. In most cases you may be able to adapt some of the advice to suit your particular technology. You can join the transformation journey at any stage, depending on the state of development of your idea or technology, but I would recommend you read the earlier chapters as well—I believe they will be very helpful too. Many ideas are born already with a particular purpose in mind; others are more abstract, perhaps a physical phenomenon or an idea that is looking for an application. Whether they are the former (“market-pull”) or the latter (“technology-push”), they both need to go through the same transformation to become innovations. The main difference will be that of duration and effort. The former will probably have the support (coercion, even) of interested users whereas you’ll have to push with all your might to get the latter to be accepted, albeit sometimes with greater rewards. In a book such as this, examples from everyday life (and more) are extremely useful so I have sprinkled them liberally throughout. I have included discussions of many everyday objects in it and I hope they will help your understanding of many of the ideas and aspects we discuss. On purpose I have avoided all brand names because I think they could distract from the discussion—not to mention that it would have been hugely time-consuming to obtain permissions to use them! The book is meant to be used as a manual—a flowchart—to guide you along the necessary stages that need to be covered and to help you avoid at least some of the pitfalls. I hope it will help you to reach the other side with minimum trouble. In this, the 2nd edition of the original book which was entitled “Technology Transfer in Practice: From the Invention to the Innovation”, I have made a few revisions on various subjects and I have added more case studies, further widening the application areas of many of the best practices I have discussed.

Get ready for the adventure of a lifetime; get ready for the quest for your Innovation! Agia Paraskevi, Athens, Greece June 2023

George Vekinis

The original version of this book was revised, and the author biography has been included in the front matter of the book on Page xv.

Contents

Part I

The Long Road Ahead

1

An Invention Is Not an Innovation . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 8

2

Can Every Idea Be Transformed into an Innovation? . . . . . . . . . . . 2.1 Radical, Associated and Incremental Innovations . . . . . . . . . . . 2.2 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9 12 14

3

What Are the Driving Forces for Innovation? . . . . . . . . . . . . . . . . . 3.1 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17 24

4

Can Everybody Be an Innovator? . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 The Right Mindset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27 31 32

5

The Long, Hard Road Ahead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 The Ten Stages of the Transformation . . . . . . . . . . . . . . . . . . . 5.2 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33 35 41

6

The Critical Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 Decisions and Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43 48 50

Part II

Cloistered Creativity

7

The Birth of the Idea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 Forecasting and Foresighting . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Counter-Intuitive, Accidental and Subconscious Ideas . . . . . . . . 7.3 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55 58 60 63

8

How Do You Determine If a New Technology Has Value? . . . . . . . 8.1 Practical Evaluation of an Idea . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 Competing Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 Formulating for Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

65 68 73 75 ix

x

Contents

8.4 8.5

Strategic Activities for Value and Success . . . . . . . . . . . . . . . . In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

78 79

9

Critical Milestone 1: Proof of Concept . . . . . . . . . . . . . . . . . . . . . 9.1 Fit for Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 Technical Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3 Publishing Your Technology While Retaining Its Value . . . . . 9.4 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.5 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

81 83 84 86 87 89

10

Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 10.1 Project Proposing for Success . . . . . . . . . . . . . . . . . . . . . . . . . 93 10.2 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 10.3 IPR Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 10.4 Project Impact of the Technology . . . . . . . . . . . . . . . . . . . . . . . 98 10.5 Relative Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 10.6 Regulations and Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 10.7 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

11

Strategy for Protection and Freedom for Use . . . . . . . . . . . . . . . . . 107 11.1 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

12

Critical Milestone 2: Validation of Technical Feasibility for Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1 Action Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 Continue Alone or in a Joint Venture? . . . . . . . . . . . . . . . . . . 12.3 Confidentiality During Discussions with Potential Partners . . . 12.4 More on Implementation Strategy . . . . . . . . . . . . . . . . . . . . . 12.5 A Brief Primer on Entrepreneurship . . . . . . . . . . . . . . . . . . . . 12.6 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . .

117 120 124 129 130 132 135

13

Out Into the Real World: Scaling Up . . . . . . . . . . . . . . . . . . . . . . . 13.1 Extent and Duration of Scaling-Up Activities . . . . . . . . . . . . . . 13.2 Scaling Up in Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3 Collaboration for Effective Scaling Up . . . . . . . . . . . . . . . . . . . 13.4 Contractual Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5 More on the Nature and Extent of Scaling Up . . . . . . . . . . . . . . 13.6 Evaluation of Scaling-Up Operations . . . . . . . . . . . . . . . . . . . . 13.7 From the Implementer’s or User’s Viewpoint . . . . . . . . . . . . . . 13.8 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

141 145 149 151 154 155 158 159 160

14

Business Planning for New Entrepreneurs . . . . . . . . . . . . . . . . . . 14.1 A Convincing Opportunity and Your Promising Solution . . . . . 14.2 Clarity of Objectives and Aims . . . . . . . . . . . . . . . . . . . . . . . 14.3 You, the Team and the Company . . . . . . . . . . . . . . . . . . . . . .

163 164 165 167

Part III

Maturing in the Real World

. . . .

Contents

14.4 14.5 14.6 14.7 14.8 14.9 15

xi

Funding and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . Target Markets, Competitors and Collaborators . . . . . . . . . . . . . A Balancing Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Identification and Analysis of Commercialisation Risks . . . . . . . Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

169 170 172 172 178 179

Critical Milestone 3: The Industrial Prototype and Validation of Economic Viability . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1 Funding and Building the Industrial Prototype . . . . . . . . . . . . . 15.2 Economic Viability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

181 183 186 190

A Researcher’s Strategy for Successful Technology Transfer . . . . 16.1 A New Technology Searching for an Application and a Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.2 A Need or a Problem Searching for a Technology . . . . . . . . . . 16.3 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. 193

17

Industrialisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.1 Refinements Possible During Industrialisation . . . . . . . . . . . 17.2 Ripe for the Taking? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.3 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . .

201 204 205 206

18

On to the Market! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.1 Entering the Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.2 Rapid Market Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.3 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

207 208 211 212

19

What Can Go Wrong? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.1 Overambitious Technical Objectives and Claims . . . . . . . . . . . . 19.2 Higher Than Anticipated Costs for Introduction/Production . . . . 19.3 Overlong Duration of the Project and Weak Time Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.4 Inadequate or Erroneous Knowledge of Markets and Mistaken Expectations . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.5 Poor Project Management Skills . . . . . . . . . . . . . . . . . . . . . . . . 19.6 Wrong Choice of Co-Developer . . . . . . . . . . . . . . . . . . . . . . . . 19.7 Over-Optimistic Business Plan and Inadequate Resources (Manpower, Budget and Equipment) . . . . . . . . . . . . . . . . . . . . 19.8 Extraneous Reasons for Commercialisation Failures . . . . . . . . . 19.9 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

215 216 217

16

Part IV 20

. . . .

. . . .

. 194 . 197 . 200

218 218 219 219 220 220 221

Case Studies in Technology Transfer

Case Study 1: Microwave Heating Process for Bulk Ceramics . . . . 225 20.1 Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225

xii

Contents

20.2 20.3 20.4 20.5 20.6

The Technological Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

226 226 226 227 227

Case Study 2: High-Hardness, High-Toughness, Nanostructured Coatings for Gears and Axles . . . . . . . . . . . . . . . . 21.1 Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.2 The Technological Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.3 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.4 The Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.5 Result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.6 Lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

229 229 230 230 230 230 231

Case Study 3: Advanced Energy Cells for Portable Power Tools and Other Devices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.1 Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.2 The Technological Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.3 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.4 The Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.5 Result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.6 Lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

233 233 234 234 234 234 235

Case Study 4: Advanced Nanostructured Coatings for High-Precision Turning of Very Hard Materials . . . . . . . . . . . . 23.1 Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.2 The Technological Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.3 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.4 The Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.5 Result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.6 Lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

237 237 238 238 238 239 239

24

Case Study 5: Nanostructured Medical Preparation . . . . . . . . . . . . 24.1 Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.2 The Technological Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.3 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.4 The Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.5 Result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.6 Lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

241 241 242 242 242 243 243

25

Case Study 6: Specialist Cross-Platform Interface Software . . . . . . 25.1 Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.2 The Technological Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.3 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.4 The Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.5 Result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.6 Lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245 245 246 246 246 246 247

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Contents

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26

Case Study 7: Low-Cost Inorganic Pigments . . . . . . . . . . . . . . . . . . 26.1 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.2 Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.3 The Technological Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.4 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.5 The Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.6 Result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.7 Lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249 249 249 250 250 250 250 251

27

Case Study 8: Low-Cost Contact Brushes for High-Power Electric Motors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.1 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.2 Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.3 The Technological Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.4 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.5 The Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.6 Result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.7 Lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

253 253 253 254 254 254 255 255

Part V

Glory Years, Natural Decline and Renewal

28

Glory Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.1 Going Public . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.2 Under Siege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.3 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29

Decline and Renewal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263 29.1 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265

30

Closing Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 30.1 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269

Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix A Sample of a Non-Disclosure Agreement (NDA) . . . . . . . . Appendix B Sample of a Memorandum of Understanding (MoU) . . . . . Appendix C Sample of a Technology Transfer (Licensing) Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

259 260 260 261

271 271 273 276

Suggestions for Further Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291

About the Author

Dr. George Vekinis is Director of Research at the National Research Centre “Demokritos” (NCSRD) in Greece. In the past, he served as Director of the Education Office of NCSRD, President of the Researchers’ Association, President of the Hellenic Society of Condensed Matter and in numerous scientific committees of various conferences. In the past, he worked as a Chief Researcher at the Council for Scientific and Industrial Research in South Africa and as an associate researcher at the Engineering Department of the University of Cambridge, UK. He is currently teaching post graduate courses in Innovation Management at the Technical University of Crete and in Advanced Materials at the Aristotelian University of Thessaloniki. In the past, he was a visiting professor and speaker to many institutions in Europe, Asia, and the USA, a senior consultant in Technology Transfer and Entrepreneurship for the European Commission and a reviewer and impact assessor of many international research projects. He is the President of AIT SA and has mentored a number of start-up companies. He has published nearly 300 publications, reports, and conference presentations, two monographs on technology transfer and entrepreneurship and a popular science book entitled “Physics in the kitchen.”

xv

List of Figures

Fig. 1.1

Fig. 10.1

Fig. 11.1 Fig. 12.1 Fig. 12.2 Fig. 16.1 Fig. 16.2

A schematic diagram of the idea → invention → innovation transformation process showing the 10 stages and 3 Critical Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schematic of shielded core technologies behind layers of other, non-confidential technologies that may be part of a dissemination or marketing campaign . . . . . . .. . . . . . . . . . . . . . . . . . .. . . . . Decision flow chart showing the different protection strategies . . Decision flow chart for your exploitation strategy in Stage 5 . . . . . Schematic of the various levels of network contacts you might develop . . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . .. . . .. . . .. . .. . . .. . .. . . .. . A technology transfer strategy for a new technology-push invention . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A flow chart for a “market-pull” technology transfer strategy . . . .

7

97 108 126 127 194 198

xvii

List of Tables

Table 5.1

Table 6.1

Table 6.2 Table 9.1 Table 10.1 Table 14.1 Table 14.2 Table 14.3

The ten stages of the transformation process from the idea to the realisation of the innovation. For details of the various programmes within Horizon see later . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 The nine Technology Readiness Levels and approximate correspondences with the ten stages and three Critical Milestones in Fig. 1.1 and Table 5.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Summary of actions that need to be carried out at the various stages of the transformation process . .. . . . . . . . . . . . . . . . . . . . . .. . . . . . . 48 SWOT analysis for a new technological idea at TRL 1–2 . . . . . . 88 A provisional ownership table for a multi-partner RD project . . 98 The Risk Index calculated by the product of probability × impact. It can range from low risk to intolerable risk . . . . . . . . . . . . 173 a–f The main non-technical risks to exploitation of a technology developed by a researcher or a consortium of partners . . . . . . . . . . 174 Risk Control Matrix that may be used for identified risks (sample answers) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

xix

Part I

The Long Road Ahead

In human life, art may arise from almost any activity, and once it does so, it is launched on a long road of exploration, invention, freedom to the limits of extravagance, interference to the point of frustration, finally discipline, controlling constant change and growth. Susanne Langer Educator & philosopher (1895–1985)

The journey from the birth of an idea to the useful, valuable innovation in its final form is long and often frustrating, but the end result more than makes up for all the trouble. It is a trip with many twists and turns which, in most cases, have to be traversed carefully as the decisions you take at each stage will affect all the ones that follow. In this chapter, I introduce the general aspects of the quest, emphasise the crucial difference between the idea, the invention and the final innovation, discuss the various sources from which the incentive to invent and innovate springs, and provide a general introduction to the various stages of the trip. Most importantly, I try to dispel the mistaken belief that once you have a good idea and you develop it and perhaps patent it, users will come rushing to buy it and use it, thereby making you rich in the process. Although this can happen occasionally, real, long-lasting innovations which lead to industrial success and support the economy are the result of very hard transformative work. As we’ll see, the transformation from an idea to a final innovative technology—a device, material, method, technique, and so on—is not a straightforward process. The overriding principle here is that of value. As you develop the original idea through the stages we’ll discuss in this book, its real value—as manifested by the perceived need and acceptance of it by the eventual users—increases gradually. It generally grows slowly, even tentatively, but with the achievement of each of the three Critical Milestones it increases in leaps and bounds until you reach the final valuable Innovation. Historically, in Europe, Archimedes was probably the first engineer who successfully transferred many of his original ideas and inventions into useful machines. He was probably the first formal innovator. But before him, many other people all over the world tried and succeeded in getting their ideas to work for their own and their society’s benefit.

2

Part I

The Long Road Ahead

The great technical achievements that we admire today throughout the world— many of which we still use in some form—all started out as ideas which were painstakingly transformed for final use. Methods for tilling earth and shaping wood, stone and marble, various methods for counting and reckoning, food-making, wound-healing techniques, medicines and medical implements, geometrical instruments, construction methods for small abodes but also for great temples and churches, the block-and-tackle, wheeled instruments, the Archimedes screw, the battering ram, gunpowder, the hot air balloon, papyrus for writing, astronomical instruments, smelting, hardening of iron and copper, shaping and hardening of earthenware, steel making, the steam engine, the railway, the internal combustion engine and the automobile, the airplane, the jet engine, the turbine, the rocket, the computer, the internet, and thousands more, large and small are all great technical innovations that have shaped and enabled whole civilisations over millennia. In all civilisations, Innovators were always elevated to the highest levels of respect. Following in their footsteps is a much more complicated and arduous process nowadays, but the aim is no less significant nor the result more satisfying.

Chapter 1

An Invention Is Not an Innovation

Very often I hear that such and such a person or company is a great innovator or that he or she has developed an important innovation. I am duly impressed, but on closer inspection I discover that what is being referred to is not an innovation but a bright idea, a clever brainwave, an invention even. It is certainly not, yet, an innovation. It is only the origin of a long trip, certainly not its destination. This is a very frequent misunderstanding that seems to occur everywhere, especially in the media. It illustrates the confusion that exists in many people’s minds between the starting point and the final result, between the origin and the destination, as though once you have the idea, the innovation is “as good as done.” Nothing could be further from the truth. There are hardly any examples of an industrially relevant idea being so ready as soon as it appears that it finds applications and is used almost immediately. In fact, in most cases, an invention never even becomes an innovation. Most ideas don’t even reach the intermediate status of invention, let alone an innovation. They are never transformed effectively or properly. They remain an idea and a wish. There are many reasons why this transformation does not take place or is not successful: perhaps the idea does not have any obvious utility, or it is not competitive enough in comparison with others vying for the same application, or it is too expensive or too complicated to realise, or there is no market1 or need for it (or the target market is the wrong one), or it has not been developed enough or properly, or perhaps the originator underestimated or misjudged the competition, or tried to enter the market at the wrong time in the investment cycle, or had to deal with strong vested interests against it, or simply didn’t plan the trip properly and crucial steps were skipped and so on. All of these obstacles are possible reasons for the failure of the transformation and all of them occur, unfortunately not infrequently,

Throughout this book I use “market” meaning any use, including societal, environmental, economic, etc.

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© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_1

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1 An Invention Is Not an Innovation

sometimes as an isolated cause and other times as combined causes. We’ll have a chance to consider many of them in some detail. An innovation is where you want to go whereas an invention is where you are starting from. The difference, which is crucial, is one of value: an innovation contains real, actual value, which depends mostly on the interest of the market for it, whereas an idea or an invention contains potential value which is still to be developed or acquired by transformative activities. The innovation may be a product, a service, a process that is actually used (or about to be made available) in the market. It may be something that can be valorised and put to use, sold or bought. An idea, on the other hand, is the spark that starts the trip, a brainwave, a discovery or sudden insight with some potential, but its real value is still very much unknown and still needs to be developed and demonstrated. It first needs to be conceptualised and formulated unambiguously, then transformed into an invention (protected if necessary) by rigorous proof and iterative development, then tested quasi-industrially and finally tested industrially and made into an actual product and commercialised. Don’t confuse the beginning and the end of the transformation. If you have a great idea, if you’ve come up with a potential invention and wish to transfer it to the market, you still need to take the long and difficult journey to the innovation and to the market. There are hardly ever any shortcuts. There are many activities to be carried out and many steps to be taken, some well laid out, others not clear at all, before you reach your destination. It takes a long time, sometimes many years of iterative tests and corrective actions, it costs a lot of money and a great deal of effort, and it is not for the faint-hearted. It requires commitment, perseverance, patience and determination. Above all, it requires you to have a clear vision and the singlemindedness to succeed! Much of the journey involves aspects which are not wholly in your hands to affect or change. These include market changes, trends, fads, perceptions and many others. There are many risks that need to be identified and managed. It is up to you to be aware of them and to develop a strategy for dealing with them. Such extraneous factors are part and parcel of your transformation journey and you cannot move forward successfully if you ignore them. Many times you may find that you need to stop and wait until the market (or the economy) is right again before you move on. Other times, it might mean abandoning the journey completely, because the potential value has faded away. That’s what makes this transformation journey so difficult and that’s why excellent preparation, continual feedback, corrective actions and continuous proactivity are so critical. You may be a strong researcher and inventor, with very good ideas and successful research projects under your belt, but for this quest, you also need to develop your innovation strategy before you can reach a successful end.

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An Invention Is Not an Innovation

5

Strategies for Commercialisation Industrialisation and commercialisation cannot be carried out successfully in a laboratory and very rarely can they be done in person. It almost always involves a legal entity i.e. a company. The main reasons for this are legal and financial, including risk and tax management. However, the perceptions and expectations of the market are also very important. The most usual legal routes that are used for the industrialisation of a technology are: • a start-up company set up by the inventor, alone or in partnership with an experienced manager or businessperson. This may also be a spin-off from a research centre, university or company. If the invention was carried out by more than one inventor (e.g. something developed in a collaborative research project), then a cooperation agreement between them is usually signed before the start-up is set up. • a joint venture of the inventor with a company or a contract research organisation (CRO) which is experienced in the field and has a strong presence and good name in the market, and they both work together towards industrialisation. • a half-way arrangement wherein a licensing agreement is signed between the inventor(s) and a company which then transfers the technology to industrial application and pays royalties to the inventor(s). • a combination of the above: i.e. a start-up is set up which develops the technology up to a point and then signs a joint venture or a licensing agreement for final industrialisation and commercialisation. In all cases, aspects that need to be clarified include ownership, protection, reciprocity, further developments, etc. We’ll look into all these in the following chapters. In many cases, your strategy (see box) may be to go it alone, that is, to become an entrepreneur, which always translates into entering a whole new world of business and market economics by setting up a start-up company. In other cases, you might decide to join forces with an experienced implementing company in a joint venture or in collaboration with a specialist industrial research establishment scheme to take the technology into industrial development. Or you might compromise and get a professional manager to manage your start-up, while you steer the technological direction. Yet another way would be to license out your technology and let a more experienced company to develop it further. It is not necessary to decide at the outset which route you will follow. You might even start one way and change routes along the way. But what you must realise and accept from the beginning is that the world of the laboratory and the world of the

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1 An Invention Is Not an Innovation

industry or market are completely different. Not only do they have different viewpoints, but they are different in almost every other way imaginable as well: • In the lab the emphasis is on understanding phenomena, coming up with and testing new ideas, and following up new findings; freedom of vision and freedom of thought are key. In industry, however, the emphasis is on following set rules, on production, reproducibility and productivity, and on the financial bottom line. • In the lab we can always change the form and character of the technology, but in industry the innovation must be in its final form once it is in production. No further developments are allowed. • In the lab we have the time to test different manifestations and formulations of an idea or technology in order to optimise it or to make it more competitive. In industry the only non-productive time allowed is for repairs to the production line. • Research funding is provided with an understanding and acceptance of the high risks; production, on the other hand, expects real returns on the investments made. • In the lab we don’t have to follow the whims and trends of the market (although it may help); industry must do so in order to survive. All this means that the transformation from the idea to the innovation will need to take place in parallel with the transformation of your approach and viewpoint regarding the technology, which is rarely possible without contact and help from the eventual implementer of the innovation. This means that you, yourself, will have to change to some extent as the transformation proceeds. Whereas in the beginning your viewpoint and interest will be on getting the science right, at the later stages, you’ll be concerned more with how to “fit it in production.” We’ll consider and discuss all these aspects in more detail as we through the transformation process and especially during the later stages of this book. No matter what your route will be, advance knowledge of what’s to be expected during the transformation trip is useful. Preparing you for and guiding you along this trip is what this book is all about. In Fig. 1.1 I have drawn a schematic of this journey with its various stages and critical milestones. Depending on your idea, you may find the journey easier than expected, or more difficult, but if you believe strongly in what you want to do, you’ll certainly find it worthwhile. Remember, you will be in very good company: many successful entrepreneurs and self-made “tech billionaires” had to travel exactly the same road all of the way of their journey to success. I can’t think of any successful entrepreneurs who did not have to undertake the same journey. But I can think of many who attempted to go straight to industrialisation without due preparation and without taking into account of the many parameters that are different in industry and failed.

An Invention Is Not an Innovation

Fig. 1.1 A schematic diagram of the idea → invention → innovation transformation process showing the 10 stages and 3 Critical Milestones

1 7

8

1

1.1

An Invention Is Not an Innovation

In Summary

To sum up, an invention is not an innovation and no matter how exciting or promising an idea appears, it has no intrinsic value until it is transformed into an innovation. The transformation process adds value sometimes gradually sometimes in leaps and bounds. While in some cases, the transformation can be completed without support, in the vast majority of industrial technologies you’ll require the support and collaboration of industrial implementers or specialists. Guiding you through the stages and milestones along this transformation route are what this book is all about. Tips • Successful inventors recognise that having an idea is only the beginning. To be successful, the idea must be formulated as an invention and then transformed into an innovation. • Only a very small fraction of ideas is ever recognised as inventions (useful technologies) and even a smaller number eventually become valuable innovations. • The failure of many ideas and inventions to become innovations and reach the market (i.e. to be used) is mainly a reflection of their limited perceived usefulness but also of their inadequate or incomplete transformation into an innovation. • The transformation of an idea into an innovation is carried out by the inventor along a specific sequence of tasks and activities with the aim of convincing the market of its usefulness, its technical feasibility for the application and its economic viability in industry, market or society.

Chapter 2

Can Every Idea Be Transformed into an Innovation?

The ability of any enterprise or entity (or a whole country) to develop new products is a strategic factor in determining its economic competitiveness and overall economic robustness. A strategy for helping inventors to develop innovations based on their ideas is at the core of such success and this is especially true for industries and companies. Nearly all products, however successful, have a specific lifetime and are eventually overtaken by other, more advanced, more efficient, better designed or completely novel products. If a company sticks with the same product for too long, it’ll soon stagnate and be overtaken. The development of innovations, as an essential tool for boosting economic success, is particularly crucial in fast-changing and cutting-edge sectors such as consumer electronics, industrial software, military technology, transportation, aerospace and entertainment. Challenging environmental or other problems also require innovative solutions and very often have an indirect influence on the economic success of a country. It is my firm belief that, even though environmental pollution and global warming are by-products of technological developments, the solution is not to go backwards but to seek and develop innovative technological solutions for them instead, or to adapt our existing processes (and ways of life) in innovative ways so that they produce less pollution. This is already happening. Efficiency increases alone have had a major impact on CO2 emissions by vehicles and factories. Catalytic processes can transform most polluting materials into benign or even useful, valuable materials. Recycling processes have changed completely the way we use and think about material utilisation. In the final analysis, humans are, by their very nature, curiosity-driven animals. We are always wondering how to change this or that to make it more comfortable, more efficient, more valuable, more ergonomic, to improve its characteristics and properties and so on. This ability to make something valuable out of an abstract wish is exactly what has separated us from other animals. The strange thing is that most of us are inventive in our everyday life but often do not realise it. This is because an © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_2

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2 Can Every Idea Be Transformed into an Innovation?

idea on its own, without undergoing the necessary transformation into something useful and usable, is quickly lost. Consider how many times you, as an inventor or researcher, have thought, “. . . this could be handled like this, or this could be used there,” etc. If you go ahead and carry out the change, you have added value to that thought. An idea might not be transformable in its own right, but it could help to give rise to other ideas or approaches. In any case, it is most useful if it, or its descendant idea, can be transformed into an invention and then into something tangible and usable. And once an idea is transformed into an innovation, it can be used or leveraged for our own as well as the common benefit. So, we are talking about a transformation process: the transformation of an idea into a useful innovation. Specifically, the transformation process takes a useful and potentially valuable invention or idea and transforms it into an actually valuable product or service. It is a process of adding value to an idea: a valorisation process. This implies that an idea as it stands does not have innate, actual value, but only when it becomes an innovation. This is not quite right, as an idea may have a prospective value which increases as its development level increases; when an idea, then, is transformed to an invention, it might already be judged as having significant prospective value. Apart from valuing the idea’s application potential, a company may buy a new, not fully developed idea in order to preserve its competitiveness in their field. They will do this on the strength of a simple calculation: if they buy the idea early enough, they can get it much cheaper than if it is fully developed into an innovation. It is of course a risky decision and one that is not taken lightly. Naturally, once the company buys it, they’ll still have to develop it through all the stages we’ll discuss in this book, but at a lower risk of the idea becoming widely known. In this way, they’ll be able to protect their core competitiveness better. To remain valuable, an invention should be protected in order for its owner to have maximum competitiveness and be identifiable clearly. Whether this protection will be ensured by formal means (patent) or by keeping the technology secret is a strategic decision to be taken in due course. But can every idea be transformed into an innovative product? Well, nearly everything can. There is no restriction as to the kind of technologies, know-how and knowledge that can be transferred between the lab and the market. The only prerequisites to a successful transformation are that it must be useful (have utility) and that its ownership status is clear and can be identified. If this is confirmed, all types of tangible or intangible technologies and know-how can be transformed into innovations. Some ideas or technologies may already be used successfully in one field and you discover that they can solve a problem in a completely different field. Not only are these spillover ideas or technologies considered novel (and may thus be patented), but they can also offer synergies and significant added value by being adapted in a new field. A good example is the spreading use of specific change-of-phase materials to absorb and remove excess heat from many applications such as high-power computer chips, spacecraft components, etc. Nowadays they are also used in specialist toys and sensors, among other things. Other good examples are the use of

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Can Every Idea Be Transformed into an Innovation?

11

high-energy powder mills for “mechanical alloying” of metals and the development of friction welding for rapid welding of fasteners, used in airplanes and many machines and structures. Spill-Over Ideas It is surprising how easy it is for a researcher, immersed in their lab and their research, to underestimate the value of their technical knowledge in another field. Something that is everyday routine for them may be the breakthrough that a person in an unrelated field needs in order to push ahead! The main challenge is matching the need to the solution. It helps to keep one’s eyes and ears peeled for such opportunities. That’s what technology transfer specialists do well. Some examples may help to clarify. • A European consortium working on the development of micro-fluidic liquid delivery was at a loss because they couldn’t get a good coating on their micro-capillaries for easy flow. The solution? From the field of biology in the form of a natural coating on some plants’ parts. • Another example. Flocculation (sticking together of small particles) is a perennial problem in food and pharmaceutical emulsions. A number of chemical solutions exist, but they are all difficult to remove completely in the final stage. The solution was found in the science of advanced ceramic powder processing. • Machining of special tiles to cover a complicated shape precisely (e.g. a conical shield of a spacecraft or the undercover of the space shuttle) is usually carried out with five-axis computer-controlled milling machines on the basis of CAD drawings. The problem is that, for precision, the exact substrate shape needs to be taken into account which is exceedingly difficult. The result is an irregularly fitting mosaic with surface troughs and bumps. The solution was to ignore the thickness and first build the whole structure to fit in-plane before finally shaping the top surface using surface grinding and sandpapering—just like violin makers do! Opportunities for spill-overs exist everywhere! To draw all the above together, we can say that every kind of innovative technology, know-how or knowledge can be transformed to an innovation as long as • It is novel and has potential utility in industry or the market—this includes existing technologies in a novel application. • It offers a clear benefit (“added value”) for some user. These criteria are very wide and accordingly innovations may arise from, and take the form of technologies such as

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• • • • • • • •

2 Can Every Idea Be Transformed into an Innovation?

Industrial processes and industrial methods Novel materials and their production processes Machinery, devices and equipment Pharmaceuticals and reactors Software and methods for writing code Designs, standards and specifications Know-how on how to solve problems, carry out processes or use methods Management and administration methods and technologies including training programmes and many more.

2.1

Radical, Associated and Incremental Innovations

Not every innovation is revolutionary. Many are just enhancements of everyday technologies, incremental improvements of existing products or services, wherein the innovation offers improved efficiency and effectiveness. These contrast completely with major “radical” innovations. It is actually very rare to encounter really radical or revolutionary innovations. Although they do occur and often seem to have fantastic potential, they usually need to be watered down first in order to enable very gradual adoption and acceptance for use and as such they tend to be taken for granted. Gradual adoption of radical innovations is often necessary for compatibility reasons but also for technical reasons. In the 1960s it was quite common to see the new solid-state transistors coexisting with vacuum tubes in various types of equipment, not only because of the slower development of solid-state components, but also because certain subsystems were optimised for the older, vacuum tube technologies. It would have been too difficult or expensive (and it would not have offered any added value) to change them as well, all at the same time. Full adoption was achieved by the development of many incremental and associated innovations. The main difference between incremental innovations and revolutionary or radical innovations is that of eventual impact: radical innovations are “visionary” and may, once fully accepted, create whole new industries or markets where none existed before. They may even change the way that society works and interrelates. The development of the solid-state transistor, the automobile and the personal computer are very good cases in point as are the mobile telephone, the rocket and the Internet. Interestingly, the first of these (the transistor and its associated field of microelectronics) is the main enabling technology behind the last three and a main transformation driver for the modern automobile and spacecraft too. In extremely rare cases a radical innovation such as this may force a paradigm shift, as has been brought about by the computer and its most important associated development, the Internet (and the World Wide Web). On the other hand, incremental innovations are enhancements or corrections which address industrial or societal problems or weaknesses. Such innovations arise all the time and are successful responses to everyday challenges, needs or

2.1

Radical, Associated and Incremental Innovations

13

demands. This does not make them any less valuable. Incremental innovations serve to “fine-tune” and optimise radical innovations, industries, and markets, sometimes with major effects which appear gradually. The automobile was a radical innovation, but nearly all improvements of it since have been incremental; the nett result has been a completely transformed vehicle. One of the largest sources of radical, but also incremental, innovations which have given rise to whole industries is the field of “engineering materials,” that is, artificial materials for engineering use. A century ago very few engineering materials existed. They included simple steel, some basic alloys, clay ceramics and simple cement. The ensuing hundred or so years, however, have seen an explosion in the development of new and advanced engineering and other “functional” materials, a large number of which have actually been enabling for many new fields, whole industries and markets. Polymers (plastics), semiconductors, catalysts, hightemperature alloys, cutting tools, cements, pure ceramics, composites, nanomaterials, etc. are all invented materials, most often in response to industrial needs and demands. Some have been so instrumental in transforming our world that our modern technical civilisation would not have been possible without them. They include pure silicon monocrystals (microelectronics), WC-Co (“hard-metal” cutting tools), Platinum group catalysts, cement (buildings), special alloys (construction, machines) and many others. We’ll meet a number of them along the way in this book. Another radical innovation is the software operating system and its corresponding computer languages. Associated with these are innovations in the form of software applications and their evolution. Incremental innovations are the upgrades and updates of many of the programmes we use every day which eventually transform and enhance them almost unrecognisably. Associated innovations are also the satellite software supporting the main operating systems and their applications. They capitalise on the popularity but also on the perceived weaknesses of the main programmes although eventually only the best few survive. It is worth noting that, whereas at the beginning of the computer and WWW eras, there were a large number of word processors and browsers respectively, with various levels of functionality, only very few have survived into the present time, albeit in an extremely advanced form. Interestingly, the same has happened to the operating systems of modern computers. Initially there were several such OSs, but nowadays only three main generic types remain. Smart phones and their applications are following a similar trend. Another type of associated innovation is one that does not address any pressing current need but aims at nurturing a potential emerging demand or satisfying a wish for ease of use or an alternative route to something, often already existing in a different form. Examples include various knowledge or education offerings such as software applications, for example, dictionaries, thesauruses, serious games, online polling systems and targeted advertising systems. This type of innovation also includes online or computer versions of various entertainments and games which have existed for a long time in a non-digital format. The e-book is a further example

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2 Can Every Idea Be Transformed into an Innovation?

of such an innovation, as are many information-offering online programmes, social networking and communication applications, and their offshoots. A further type of associated innovation is the gadget or game, that is, a device or software application that does not necessarily answer a need or demand, but rather appeals to our sense of curiosity or demand for entertainment. These innovations are often ephemeral and many only have novelty value but are nevertheless quite valuable in the market, especially those that satisfy (or initiate) some trend or fad. The World Wide Web was a radical innovation; the mobile cousin of the computer, the smart phone is a major associated one and is also a most fertile ground or platform for other valuable associated innovations; the smart phone also offers many useful and utilitarian applications and a continuously widening range of uses. The sheer number of smart phone and computer users almost guarantees a large return on the investment of many associated innovations, however obscure or niche they may be. Part of the success (financial and otherwise) of such innovations is the ability to second-guess the next craze or fad or an emerging need. They are seldom obvious and often need further coaxing and marketing for success, while the risk for failure is very high. When the highly innovative social media applications first appeared about a decade ago (early 2000s), it was not at all obvious that they would have the success they do now. In fact, the very early attempts ended in failure and much of their current value is actually “projected,” meaning that their revenue is still much smaller than their actual share value. Nevertheless, public expectations are so high that they easily sustain very high share values.

2.2

In Summary

The transformation of an idea to an innovation is crucial for the continual development of our technical civilisation. Nearly every useful and usable idea can be transformed into an innovation. It is this transformation that gives the idea its value and ensures that it can offer support to economic development and is not lost. Tips • An idea has innate market value only insofar as it offers the possibility of being transformed into an innovation. • Nearly every useful and usable idea can be formulated first into an invention and then transformed into a valuable innovation, as long as there is some demand or need for it (actual, projected or perceived). • Only a very small fraction of ideas is ever developed as inventions (useful technologies) and an even smaller number eventually become valuable innovations. (continued)

2.2

In Summary

• The failure of many ideas and inventions to become innovations and reach the market (i.e. to be used) is mainly a reflection of their limited perceived usefulness and their inadequate or incomplete transformation into an innovation.

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Chapter 3

What Are the Driving Forces for Innovation?

Apart from the needs and wishes that drive innovation, there are a number of major external forces that have strong positive effects on innovativeness. These galvanise inventors into action and bring about major changes in their way of thinking. Most of these external forces are related to changes occurring in society and the economy, often in response to global factors, and manifest themselves as strong, often sudden “instabilities.” Environmental crises (e.g. waste pollution or global warming), health emergencies (AIDS or threatening viral pandemics), safety concerns (terrorism) and even political emergencies such as war all result in instabilities that force the birth of new ideas which rapidly transform into innovations. Most instabilities of this kind require a substantial rethink of products, services and processes, which is addressed by the development of inventions which are then transformed into innovations. Many of these are incremental innovations, but they can also be radical, as in the case of renewable energy technologies. Although many of these have been known for decades, they have only recently become pertinent and valuable. This is especially since the realisation (recently confirmed) that global warming is the result of fossil fuel burning, which in turn has forced governments (and especially supra-governmental associations such as the European Commission) to start putting pressure on suppliers to reduce their carbon footprint. The result has been something of a “green” revolution with some countries (e.g. Denmark and Iceland) becoming almost completely independent of fossil fuels for their energy. This “green” revolution in renewable energy generation is a huge technological paradigm shift and is expected to continue for many years to come. It has already been responsible for the development of many other “push-pull” technological couplings such as the electric plug-in engines for cars and low-consumption light bulbs. Many other innovations owe their success to this “push-pull” effect (see box). Software, games and computer power are a well-known example. As computer power and versatility have increased, so have the capabilities of software applications and the innovativeness of computer programmers. As these took off, the © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_3

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3 What Are the Driving Forces for Innovation?

computer hardware itself had to develop even more to be able to cope. This type of almost evolutionary “arms war” is a good example of a push-pull development with strong positive feedback and is responsible for other runaway developments too. The “Green” Revolution and “Push-Pull” Technological Couplings The current push for all things “green” is promising to change our life in many ways and is a very fertile ground for innovations. Because it is such a major technological paradigm shift, it is enabling a host of other technologies that have been waiting in the wings for years, sometimes even decades to become relevant. They in turn are helping to accelerate the development of the green revolution in a positive feedback type of “push-pull” interrelationship. Some examples of such inter-dependences in the case of the green revolution are: • Electric plug-in cars will take off when electric charging points become more widespread, thereby spurring on greater green production of electricity. • The surcharge placed on electricity consumption to subsidise the development of renewable electricity production has encouraged the development and sales of low-consumption bulbs and LED (“light-emitting diodes”) lights and many other innovative lower consumption technologies. They in turn are reducing the pressure on base-electricity supply, thereby making renewable energy generation (with its inherently weak capability for immediate response to sudden demand spikes) more favourable. • The new (innovative) regulations in the EU that all products must be produced in tandem with a full “life-cycle analysis” and “end-of-life” arrangements have spurred on the development of new innovative “green” designs which have allowed even more greening of the regulations. Related to this has been the sudden emergence of the pertinence of many green technologies that have been developed over the years but could not find applications due to the lack of enabling regulations. During times of war in particular, push-pull innovativeness is very evident and new technologies may mean the difference between winning and losing. The invention and eventual implementation of the radar and the rocket (and its myriad associated innovations to make it viable) were both radical innovations which resulted directly from the needs that arose during the Second World War. The huge acceleration of the production of airplanes to serve the war effort on both sides of the Atlantic became possible only as a result of innovations that would not have come about otherwise. In fact, the airplane itself was a late development to address the needs that were identified during the First World War. So was the “cermet” (a ceramic-metal composite made of tungsten carbide (WC) and cobalt (Co) also known as “hard metal” or “Widia”), which is one of the most important enabling high-performance materials ever developed and is still the mainstay of

3

What Are the Driving Forces for Innovation?

19

cutting, grinding, digging, and drilling tools worldwide. It has been said that without “Widia,” many metallic alloys would not have been developed since they cannot be shaped without it. Even the major innovation of artificial industrial diamonds would not have been possible without it, since WC-Co is the main component of the highpressure anvils used at very high temperatures to synthesise artificial diamonds. Without them and WC-Co, mining of most minerals would have been completely uneconomical and so on. Innovations can also be driven and facilitated by top-down policies. “New Visions” and Foresight studies carried out by many government authorities (as well as the EC and similar bodies) can pave the way for radical and large-scale incremental innovations, by instigating and leveraging a push towards technological or other breakthroughs in various fields. This has been the case in some non-scientific areas such as the new economic and societal ideals that have taken hold since the sixties such as National Health Services and Space Exploration. Leveraging Innovations Whereas directly funding or subsidising research is the usual method for supporting RD activities, a much more effective way to encourage new ideas which may become innovations is “leveraging”, a successful and valuable innovation in its own right. The term is well known in finance and essentially means to use a sum of money as guarantee for a much larger loan to buy something (e.g. a company) which is added to the collateral. If done properly, both sides can be winners. In industrial development, leverage is also used widely. A well-known route is to guarantee part of a loan to a company to industrially develop a new technology as long as the company agrees to invest an equivalent amount. This is currently being offered to small-medium enterprises (SME) within the Horizon Framework Programme (H2020) of the European Commission to help them bridge the industrialisation gap of the transformation towards innovation. A second non-financial type of leveraging also offers a very effective way to spur on innovations and their use. This is the enabling effect that environmental regulations and standards developed by central authorities have on hitherto non-competitive (or non-pertinent) innovations. For example, advanced high-density battery research and ensuing technological innovations became relevant and valuable principally when renewable electricity generation was legislated and pushed heavily. The same happened with many other associated innovations such as sensors, low-density strong materials for wind propellers, advanced photovoltaics and others. Finally, leveraging also occurs in cases of perceived emergencies. For example, ageing populations, global warming and new security threats have all created emerging markets which spur the development and application of many innovations.

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What Are the Driving Forces for Innovation?

The League of Nations (set up after WW I and which evolved into the United Nations Organisation after the Second World War) was a radical political innovation. In the scientific sphere, the push for the development of the mobile telephone may be considered the result of a vision for enhanced communication. In the industrial sphere as well, new visions and foresight policies are a very fertile ground for innovations. New top-down directions (“multi-annual plans” such as the Framework Programmes of the European Commission), new missions (and visions) by the management of corporations giving rise to quantitative or qualitative changes in operations (e.g. changing markets or direction) and, most importantly, new regulations or legislative changes (e.g. responding to an environmental or health or energy emergency) are all very important sources of innovations. Interestingly, what may seem to be small, everyday challenges may also bring about radical innovations with huge impact. This was the case with Tim BernersLee, a scientist at the high energy physics laboratory CERN, who in the late 1970s wanted a simple way to share data over a distance with his colleagues. He set up a simple system for this purpose, thereby kick-starting the Internet and World Wide Web (WWW) revolutions. In fewer than 30 years’ time, these two innovations (themselves enabled by the computer) have completely revolutionised global communications and ushered in first the Information era and now the Knowledge era. Both of these eras have spawned whole new economic paradigms. In the eighties and nineties the information economy was the hotbed for the development of myriad innovations and companies in the sphere of computing and programming which gave a huge productivity boost in nearly every industrial and social sector, from science and research to industrial production, societal cohesion and protection. Apart from the emergence and development of a huge computer industry (with associated supporting industries) where there was nothing before, the influence of computer automation in our lives is so pervasive and widespread that it is almost impossible to imagine our lives now without computers and their various manifestations. At the dawn of the twenty-first century, the information economy is still growing and has been joined and supplemented by the knowledge economy, which depends on innovations whose objective is to analyse and make available to the market the information and the knowledge accumulated during the previous decades. In fact, the latter would probably not have been possible without the former as the knowledge economy relies totally on computers and their cousins such as smart phones for its growth and survival. It is another example of push-pull development. We now see huge families of computer applications dealing with everything under the sun, from medical advisories and gaming to materials’ properties and engineering design advice. Along the way, the computer revolution and the information economy have also given birth to another vast offspring: instant communication by email and mobile telephony and its supporting trillion Euro industry which is getting stronger and more sophisticated by the day. Both of these support other vast offshoots: the online searching and advertising industries which in turn have also branched out and support other industries. The list seems endless. And all this happened because

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What Are the Driving Forces for Innovation?

21

Mr. Berners-Lee simply wanted to share his data with his colleagues easily and quickly. All types of industrial and market changes and challenges beget innovations. Market changes, due to shifting or changing expectations, perceptions, demands, regulations, etc., bring about new ways of addressing problems and give rise to new innovations. The same is true for changes that occur in the competition environment. A “new kid on the block” often motivates existing entities into finding ways to improve. As mentioned before, this can result in a very fertile “arms race” between companies or even countries resulting in numerous competitive and competing innovations. The original arms race of course happened when nations developing weapons motivated the other side to develop the means for counteracting them (better armour, sensors, monitoring means, etc.) leading to a cycle which has been going on for centuries and is still very much in evidence. Technology-Push vs. Market-Pull Ideas and inventions can and do arise as a result of research which is not aimed at any specific problem-solving. Many major technological revolutions are the result of such “non-targeted” or “basic” research results. Even very esoteric areas such as quantum mechanics or genetics have brought forth very important technology-push innovations already in use in industry and society. The main difference as far as the development of innovation is concerned is that of speed. Market-pull drives the development of innovations which directly solve problems or address market or societal demands. As a result, they tend to be developed and used much faster than technologies that are discovered in a laboratory (occasionally serendipitously) as a result of non-targeted research. Major examples of unexpected physical phenomena that have resulted— eventually—in very useful industrial innovations include penicillin, superconductivity in metals and ceramics, the Hall effect, giant magnetoresistance, quantum tunneling, radioactivity and X-rays, energy from the fission and fusion of atoms, the thermoelectric and photovoltaic effects, the dual nature of light, matter-energy equivalence, etc. etc. Each of these phenomena—and many more besides—has had a major (often momentous) influence on the development of our modern technological civilisation and the reader is invited to read more about them. In the future we can expect more major innovations as a result of our better understanding of matter at the atomic level, of quantum entanglement, even of gravity. It should be a very exciting time! But technological, even revolutionary, discoveries often result in the obsoleteness of current technologies which stimulate the development of new ideas and eventually new innovations.

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3

What Are the Driving Forces for Innovation?

Innovations are favoured when industrial instabilities threaten and challenge current operations. Market-pull innovations are most likely to be adopted and funded early on by industry and often act as a “preamble” or “testing ground” to major radical innovations themselves. The advent of the whole social media phenomenon was created first by market demand for easy communications and has since given birth to a massively successful industry. On the other hand, innovations can also arise as the result of technological discoveries that, initially at least, did not have a clear application. Eventually, however, they can also have major impact. These are the “Technology-push” innovations and generally they are rarer and riskier but may lead to radical changes to whole industries or markets, resulting in very substantial rewards. This is the case of the discovery of the transistor effect in the late 1940s which of course led to the electronics and computer revolutions two to three decades later. In contrast with market-pull innovations which are readily applied, technologypush innovations need to offer very large added value to the users in order to overcome the natural conservatism of industry and justify their high introduction cost. This means that many significant discoveries or inventions that did not initially appear to have obvious applications have taken many years to become innovations and reach the market. This was the case with the laser: while for many years it was only used as a scientific instrument, today it is ubiquitous in many everyday applications. Bio-mimicry and Bio-sourcing Nature is probably the best source of ready-made and well-tested innovations, not least because of the huge tracks of time and test samples that it has had at its disposal. Throughout humans’ evolution, humans have always looked to their surroundings for guidance and suggestions as to how to improve their lives. Whether it was the transformative powers of fire to produce a tasty meal or a hard ceramic pot, or one of a plethora of herbs whose medicinal powers could save a life, nature nearly always provided the answers. All we needed to do was watch carefully and try to emulate it. Bio-mimicry and bio-sourcing are modern versions of the same actions. Bio-mimicry is the art of emulating and copying nature whereas bio-sourcing takes ready-made natural solutions and adapts them for our use. Using modern analytical methods we can analyse and understand nature well enough to be able to apply lessons learnt to the development of a huge number of technologies, such as advanced materials and structures, motors and transportation, methods of energy transformation, and medicinal compounds. One can safely say that nature is by far and away the greatest source of inspiration for innovations, not only in the past but also in the present and the future. Evolution has had a huge laboratory to experiment with over billions of years and has always delivered successful products. All we need to do is to learn how to do this but on a much faster scale.

3

What Are the Driving Forces for Innovation?

23

Serendipity is of course another source of many minor and even major innovations and it happens nearly every day in research laboratories. The discovery of radioactivity, antibiotics and the development of the now ubiquitous microwave oven are very interesting cases in point. Funnily enough, the last two effects were initially seen as irritations in the form of a mould affecting a microbial culture and of a chocolate melting in the pocket of a scientist working on the development of radar during the Second World War! Luckily, the persons concerned realised quickly that what they were witnessing was significant and studied the effect. The related innovations soon followed. In industry, technology-push innovations are more likely to be adopted by highly competitive, mature industries that need fresh technologies to remain in contention. These include many of the consumer industries such as the automotive, home appliance, computer and mobile telephony industries and of course the software industry aimed at consumers. Past generations, with their accumulated knowledge based on experience, can often be the source of modern successful innovations. Many medicines and systems are based on knowledge accumulated over centuries by many generations of humans, based on trial and error. Cement and fibre-reinforced (e.g. carbon fibre) composites (and reinforced concrete) are two other good examples. The first is based on ancient observations that volcanic ash (i.e. thermally treated material) mixed with water becomes a very strong solid, whereas the second is based on the widespread use of hay and animal hair mixed with mud to make long-lasting and tough house walls, a practice which has survived for thousands of years. The military and space sectors are huge drivers for the development of innovations. As mentioned previously, for better or worse, wars have always led to urgent and very extensive technological developments in many fields, many of which have been spun-out to civilian and scientific use afterwards. The space sector has had a huge influence in spurring on technological developments over the past fifty or so years. Rocket technologies and satellite telecommunications—together with their plethora of supporting technologies—are very good cases in point. Lately, human exploration technologies are a very important and continuously developing sub-sector. While robotic exploration has to deal mainly with the technological capabilities of spacecraft and their supporting technologies, human explorers require a whole host of technologies for safety, survival, maintenance, psychological and physical well-being and many others. The International Space Station (ISS), probably the largest international collaborative project ever developed, has now been operating for over a decade and we have acquired a plethora of crucial information on human survival in space and the many problems associated with it. But because of the proximity of the ISS to Earth, the astronauts there are comparatively safe. Real space travel in open space presents many other problems which have not yet been solved. The recent resurgence of the idea (and dream) of humans travelling to Mars has accelerated many of the technological developments needed for the 500-day return trip. An exhaustive list would be too extensive for this book, but technologies are needed to address:

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3 What Are the Driving Forces for Innovation?

• Long-term human endurance, including technologies for addressing the known physical and psychological problems encountered in space. • Highly energetic galactic cosmic rays (charged particles originating in supernova explosions) which present serious dangers to DNA as well as cellular structures and particularly the eyes. A related problem concerns the solar protons usually ejected during solar explosions. • Medical and other emergencies in space. • Technologies for landing, living, exploring, etc. on Mars. • Technologies for harvesting energy and eventually escaping from Mars and returning to Earth, and many others. Last but certainly not least, nature itself is an excellent guide and source for many very successful innovations. One only needs to think of the lattice structures used for building roofs (based on the structure of wood), the Velcro™ fasteners (based on the burrs of the burdock bush), the modern, very bright mobile phone displays (based on butterfly wings), aerodynamic vehicles, trains and planes (most birds and fish), super water-repellent surfaces (based on the water lily), numerous medicines (based on organic substances found in natural habitats all around the world) and many more. In all of the above innovations, the picture is clear: the innovation becomes possible only when an application or market is found (or created) where a new (or existing) idea or technology could be aimed at. And this is one of the overriding prerequisites for the successful transformation of an invention to an innovation: somebody must want it and be prepared to pay for it!

3.1

In Summary

As in most endeavours, the birth of an invention and its eventual transformation to an innovation are pushed forward actively by driving forces. While new knowledge that arises without a specific objective sometimes may sometimes find eventual application, inventions are more often than not the result of conscious attempts at solving specific bottlenecks or improving processes as a conscious response to demands or needs. Sources of ideas and inventions are found in all sorts of places in our everyday life, from our work and home environments to nature and natural phenomena. Tips Ideas for inventions are everywhere: • Look around you, at the constructed world—you will always find objects, processes, devices, systems, etc. that could be made more efficient, more user-friendly, more robust, more accessible, of higher quality, designed (continued)

3.1

In Summary

•

•

•

• • •

better, more appealing, better connected, better fitting with their surroundings, more energy efficient, more environmentally friendly and so on. Look at nature for inspiration and ideas. She has had billions of years to perfect most things and she can teach us a lot. Can the way that animals and plants grow, adapt, utilise, share, build, treat, process, use, sense, cover, hide, camouflage, react, respond, convert, cut, chop, combine, catalyse, communicate, warn, fight, survive, heal, etc. inspire new ideas and inventions? What about the nature and mechanics of the microscopic natural world such as insects, microbes, bacteria, amoebas, viruses, cells, organelles, mitochondria and inanimate objects such as rocks, clay, soil, crystals, amorphous materials, etc.? The ways in which other people use things, deal with situations, address problems, face challenges, communicate with others, try to get things to work, try to fix things, try to avoid things, try to get on top of things, try to recover things, etc. will often give you ideas as to how to make improvements, enhancements, changes, etc. Consider the environment—is there anything you can do to offer better protection for it, better warnings, better monitoring, better remediation, better sensing, better ways of sharing information about it, etc.? Consider energy—is there any better way of saving, preserving, converting, producing, distributing, sharing, monitoring, sensing it, reducing its impact, increasing its efficiency and so on? Listen to the pronouncements and decisions of industries, companies, governments, authorities, etc. Announcements of new policies, regulations, restrictions, standards, changes in direction, funding decisions, research and development plans, etc. all contain information which can offer new ideas for inventions.

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Chapter 4

Can Everybody Be an Innovator?

An interesting question often arises: can any professional researcher or inventor be taught to be a successful innovator? To carry out a successful transformation, does he or she have to be a born innovator, or can they be taught to become an innovator? Can you, as a successful scientist/technologist/inventor, be a successful innovator? There is no clear-cut answer to this question. My experience is mixed—some people manage it well, others not. What I am certain of though is that many bright people that have excellent ideas are not good innovators. These are the people who prefer to be in their lab, explore their ideas extensively, publish their results and gradually move deeper or to another idea. They are the scientists and technologists “pushing back the frontiers” of science and technology. At the back of their minds they might like to see their ideas become innovations for society’s benefit but generally prefer to leave this to others. Or they don’t know how to go about it or they may simply be the type of people who are content in their lab. To be honest, these latter seem to be getting fewer and fewer. Perhaps it’s the influence of funding bodies preferring to fund directed or targeted research and expecting an innovation at the end of the project. Or it may be the influence of the evident economic success of countries such as the USA, Japan and Germany and now China, where ideas are more easily transformed into innovations, that has gradually pushed researchers of all disciplines to consider the transformation route to innovation for their work, instead of just publishing. Be that as it may, how many researchers (or independent inventors outside institutions toiling alone somewhere) actually embark on the journey? Not many, unfortunately. They might think about it, consider the possibility, but at the end of the day it is considered to be too much hard work without any guarantee of success. It’s far easier to soldier on in the lab and try out new ideas and publish occasionally. In my own institution (a public research centre), a small minority of about 5–10% of the active researchers have attempted over the years to take their technologies to industrialisation and only a handful have even come close to succeeding. And yet, discussing the point with many colleagues, I find that the will is there, but they don’t © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_4

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go any further. Some consider the risks too high and the journey much too dependent on luck rather than careful preparation and judgement. This is simply not true, as we will see later. Research or Innovate? It is by no means self-evident that a professional, non-industrial researcher (i.e. one who works in a public research centre or university, etc.) automatically investigates and acts upon the utility potential in any discovery or invention they make. In fact, the opposite is more likely to be true. Most utilitarian (i.e. non-theoretical) discoveries and research results are published without protection and often end up being transformed to an innovation by someone other than the discoverer! Although the situation in the USA, China, Japan and other heavily industrialised countries is generally better than in most of the European Union (and many other states), most professional non-industrial researchers still do not perceive their discoveries as inventions or potential innovations, or as vehicles towards entrepreneurship. Each research finding, whether it has utility or not, is seen as just another small step on the ladder of academic success, and commitment for “results exploitation” has generally been very low (see e.g. the EVIMP2 report of nearly 1000 completed EC/FP5 RD projects). To rectify this, the current conditions for European funding (FP7, Horizon) have made it obligatory for all useful results to be protected and developed for use by the beneficiaries before any publication. This has been demanded by the European Parliament as a minimum requirement towards ensuring better returns on investment of RD funding. This has slowly been recognised by many national authorities which have belatedly acknowledged the need to reward researchers for their innovation efforts as well as publications. This is, unfortunately, a very slow process and it will still be many years before the EU catches up with other large countries as far as converting ideas into valuable innovations is concerned. As a result, I have come to believe that the reason why so few technologies eventually become innovations is mainly due to inadequate knowledge on behalf of the inventors on how to go about it. Relevant experiences are so few and far between and on top of it all, they have never been shown the correct way to go about it. It is a worrying reflection of this that many ex-post “impact assessment” studies of research projects funded under the framework programmes of the European Commission (EC) show that about 60%1 of successfully developed technologies never go further than the lab! This means that a huge number of new ideas were

1

See, for example, EVIMP and EVIMP2 reports available at: http://ec.europa.eu/research/ industrial_technologies/pdf/evimp2-brochure_en.pdf

4

Can Everybody Be an Innovator?

29

successfully developed up to the level of proof of concept or even further but never went further or became innovations. Digging deeper into the results indicates that, of those technologies that did reach a pre-competitive stage, only about a third were introduced into pilot production and about a quarter of those were successful in the market! That is to say, only about 5% of the projects produced a marketable product or service, whereas nearly 95% of the projects funded were actually successful technologically! If you now take into account the fact that only about one in five research proposals gets funded, then the nett number of ideas that became innovations is just 1%. Adding the number of spin-off technologies or spillovers to unforeseen applications over time, we get a total of about 1–2% of original ideas which become innovations. The vast majority of the researchers (and companies) involved in those RD projects that did produce their technology successfully (i.e. they achieved their technological aims) never undertook the subsequent journey from invention to innovation. And many of the ones that ended the journey early did so not because of impossible obstacles, but, I believe, because of incorrect preparation or judgement or ignorance of the steps to take and ways to prepare properly. In some cases I encountered a final summary that stated that “the economic viability of the technology was too low” even though no activities to actually assess this conclusion were presented. A cop-out? Perhaps, but it does show the negative attitude—or low commitment or risk aversion—of many researchers to take their technology further than the technical feasibility tests in their lab. It is not possible to get an exact estimate of the economic return on the investment (RoI) of the billions of Euro invested in research over the years by the EC, but, at least in the earlier Framework Programmes, the situation is very worrying. Actually, if one takes into account the indirect benefits on the entities and persons involved such as new and updated skills, advanced technological training, improved business and scientific networking, new international collaborations, etc. the RoI improves. But think of how much higher it could be if the many well-developed technologies had been taken further than the lab. No wonder the European Commission (with support from the European Parliament, EP) has been putting greater and greater pressure—both with the carrot and the stick—on research consortia over the last years to develop their work industrially and not abandon new technologies just when their technical feasibility has been proven. A final industrialisation success rate of just 1–2% is a worryingly small fraction, but it does roughly agree with the general expectations by many venture capital firms that only a very few ideas are ever developed as moneymaking innovations, and that these are generally in “hot” fields such as medicine, environment, energy and nowadays, of course, the ubiquitous apps for smart phones. To be fair, the researchers, institutions and companies that take part in RD projects do benefit indirectly in various ways, such as reskilling, research and business networking, reducing risk in testing dubious ideas etc., but the fact remains that only a few market success stories have come out of thousands of funded research projects over the years.

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Of course, the European and National funding agencies are concerned about this huge waste of money and is continuously trying to find solutions. It is becoming clearer that the main reason for this unexploited potential is not through any actual lack of commitment on the part of the researchers (although low motivation and lack of incentives are major factors), but rather the ignorance of researchers and technologists as to the correct way of going about it. In an effort to bridge this knowledge gap, many institutional funding bodies (national as well as supranational bodies including the EC) have been offering support in the form of mentoring, one-stop shops and road-map building, but with very limited success. It seems to be a case of “you can take a horse to the water, but you can’t force it to drink.” The researchers themselves need to believe in their technology, to understand the route and to follow it themselves. The apparent lack of awareness on the part of researchers and inventors who do decide to attempt the transformation is reflected in their seemingly going about it the wrong way. Prospective innovators make many mistakes but some in particular stand out: • There is a tacit assumption that the end-user would have the same understanding of the technology and would grasp its capabilities immediately. This is definitely wrong. The innovation must be a distillation of the technology and must not be too “clever,” otherwise it will be rejected. It needs to be clear and self-evident— that’s what the transformation must ensure. • There is often loss of focus and an innovation is produced trying to “please everyone at the same time.” This rarely works. • The innovation is pitched for an application that does not yet exist, or the assumptions regarding the actual industry or market needs are not based on reliable information. • The prospective innovator has not listened carefully to the wishes of the customers and/or there is a wrong perception of them. • The prospective innovation is too inconsequential from the start and does not fulfil any real need or demand, expressed or perceived. It can be seen that all the above mistakes depend on the innovators themselves and can therefore be corrected. From my experience I believe that everyone can be taught to take the road to innovation, as long as they really want to, and stay clear of the above mistakes. I accept that not every researcher or inventor will actually attempt the journey and even fewer will succeed. Some drop out early, others later, others lose their way and in many cases, what looked like a very useful idea with a good chance of becoming a successful innovation, turns out to be anything but. Some people who take the road to innovation succeed of course and never look back. It is an interesting phenomenon that those who take the trip, go back again and again. It is a bit like adrenaline sports: once you try them, you go back again and again. Serial innovators fascinating individuals, and almost all are very wealthy.

4.1

The Right Mindset

31

The fraction of successful innovators still seems to be very low: from my own estimates, about 5–20% (depending on the field, the industry need and market demand) of those who start industrialisation efforts succeed. I hope this book can in some measure help to increase this fraction. Those who do succeed will surely be well compensated for their trouble.

4.1

The Right Mindset

What is the mindset of a successful innovator? This is another difficult question, but it certainly seems to be independent of the field and sector. Distilling my own experience and assuming that the idea or invention is potentially useful, it seems to me that the successful innovator needs to have, at the least: • Very clear vision and sense for the technical goal and the markets. This requires excellent preparation and good knowledge of the field and associated market. • Ability to separate the wheat from the chaff and see the value among many different approaches to or manifestations of an innovation. • Ability to simplify the problem and thereby arrive at a simple and effective solution, that is, not to be too clever. • Self-knowledge to determine what are his or her real strengths and build on them. • Clear understanding of his or her own capabilities and when he or she needs to find support and advice. • Very good sense of the industry and the potential market, or at least reliable advisors who have this knowledge. Again, this requires extensive preparation. • A clear knowledge of all current developments (especially competing ones) related to their technology and, crucially, the potential areas of application. This includes industrial and market trends connected to these applications. • A very strong motivation and incentive (monetary or other) to succeed. • Commitment to the task and complete devotion to the goal of transforming the technology, that is, to remain focused and not shy away from hard work. • Patience, perseverance, persistence and a one-track mind for success. Although it is possible to do this in parallel with other research, a researcher needs to concentrate on the transformation to achieve success. • Capability of identifying and dealing with technical and non-technical risks. • Very good ability to organise, plan and manage the tasks ahead. • Good interpersonal skills and interpersonal relations. • Ability to talk convincingly, to negotiate effectively and to listen carefully. • Ability to take decisions quickly and follow them through, but also an open mind to correct course quickly when necessary. • Ability to follow through on actions and decisions. • A supporting group of legal, administrative, management, etc. experts. • A very good technical network to offer advice and support during the initial stages when the technical characteristics of the technology are being optimised.

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• A very good business and industrial network to offer advice and support during the industrial optimisation stages, from the pilot tests to final industrialisation and commercialisation. This network will also be very useful when the decision whether to join forces with an industrial strategic partner arises. If this sounds like a tough and challenging task, that’s because it is. Most of us are not born with these capabilities and universities certainly don’t teach you much about them—not even in an MBA. But all of these capabilities can be learnt and any bright person can become better by practising, experiencing and trying. Yes, you too can become an innovator!

4.2

In Summary

Nearly every inventor or researcher can be an innovator as long as they are committed and dedicated to converting their (potentially useful) invention into a valuable product. The obstacles are mainly related to inadequate knowledge of the various stages to be followed as well as insufficient perceived incentives to take the technology further than technical feasibility. The procedures to be followed are specific and can be taught but will only work if the inventor or researcher is directly involved, either in a start-up company or within a joint venture with a directly interested company. The transformation process from idea to innovation is arduous, costly and very time consuming—commitment and dedication are crucial, as well as having the right support and collaborators. Preparation, proactivity and excellent management are critical and will ensure a higher chance of success. Tips • To be an inventor you need to have an enquiring and open mind, to consider the world around you and come up with ways of improving it. But to be an innovator, you need to go much further than that: you need perseverance, commitment, organisation and a capability for self-criticism and analysis. • Whereas not everyone can be an inventor, nearly everyone can learn to be an innovator—transforming an invention to an innovation is a case of carrying out various tasks in usually ten specific stages, each one leading into the next in a more or less rigorous progression. • The transformation of an idea to an innovation takes a long time and can be very costly, but the end result of a carefully planned and followed route is nearly always high dividends indeed.

Chapter 5

The Long, Hard Road Ahead

As I have emphasised, the journey between the birth of an idea and its successful transformation to a valuable innovation is generally long, often hard and at times arduous. But it is also well laid out and, if well organised and planned, the trip can be fun and certainly welcome, since it can lead to a good measure of economic prosperity and a sense of achievement. In the case of a technology or invention that is needed or demanded by the market very urgently, the journey can take as little as a few months or a year and may not cover all of the stages (see later) in detail. This means that just a few short months after an idea is first formulated, it might already appear in the market for use. The same is often the case for technologies that tend to address a new fad or trend, for example, a software application (“app”) for a new smart phone or a new game for a “hot” social media platform or other application. This is also the case for ideas that solve pressing problems, or whose “time has come.” For example, software applications which offer high productivity for running production processes or optimise production routes, etc. all take the short route to commercialisation or use. This means that some of the early stages (shown in Fig. 1.1 and Table 5.1) may be combined or are completed very quickly. Some medical emergencies, for example the development of vaccines against the Covid19 pandemic of the past few years, tend to force a shortening of the usual route by combining or shortening some of the stages, especially the pilot stages, and go directly to clinical trials to save time to market. At the other extreme, many ideas and technologies can take decades to reach the market. This is usually due to strict regulations and standards that need to be met, as happens in the case of pharmaceuticals that require multiple and long clinical trials and in the case of aeronautical technologies that also require long and complicated tests. These very long development and innovation cycles are also evident, of course, in the very high costs (and prices) of such technologies. In most of these cases, all of the stages are necessary and the Critical Milestones are indeed crucial. The above extremes represent a very small minority of innovations. The vast majority of new products take anything between about 2 and 10 years to reach the © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_5

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Table 5.1 The ten stages of the transformation process from the idea to the realisation of the innovation. For details of the various programmes within Horizon see later

# 1

Stage Birth of idea

2

Proof of concept

3

Research and development

4

IPR protection

5

Technical feasibility validation

6

Scaling up

7

Industrial prototyping

8 9

Industrial viability testing Industrialisation

10

Commercialisation

Focus of activities Originality, non-ambiguity, formulation, potential utility, precursors HORIZON/ERC/Ideas proposal, clarity of formulation, precision, reformulation, previous work HORIZON/RD proposal, rigorous research, potential applications, confidentiality Patent or keep secret, first open announcement Potential applications followed by focused tests on technical feasibility, preliminary decision on start-up or joint venture HORIZON/SME Instrument proposal, pilot tests, pilot plant processing, industrial advice, final decision on start-up or joint venture Design and building industrial prototype, probably in collaboration with industry Economic viability of the industrial prototype Innovation is ready. Actual installation in industry or actual production of a product Valorisation of the Innovation and industrial production or marketing and sales

TRL and Critical Milestone TRL 1

TRL 2–3 CM1

TRL 3

TRL 4

TRL 5 CM2

Comments Start of the process, sometimes not clear or obvious Preliminary proof of concept for generic application Systematic and rigorous RD, reformulation and realignment if necessary Crucial decision on protection before first open announcements Decision on which specific application to focus on, seeking support for industrial tests

TRL 5-6

First exposure to real world, decisions on appropriate scaling up

TRL 6

Based on pilot tests build and test an industrial prototype for application Cost-benefit analysis to prove economic viability Lessons learnt finally applied in industry

TRL 7 CM3 TRL 8

TRL 9

Final Innovation in industrial production and sales

market. And they follow approximately the same course. If you follow this course carefully for your technology, making sure that each stage is completed fully before embarking on the journey to the next stage, you will succeed in getting your innovation on the market in a robust and profitable way, having minimised risks

5.1

The Ten Stages of the Transformation

35

effectively and maximised the chances of a good market acceptance. In some cases, if you are lucky and really hard working, you may be able to complete some stages in parallel or very quickly, especially if their tasks can be dictated from the results of the previous stage or from prior experience. For example, the development of new materials always benefits from the experience of earlier developments of similar materials or from the parallel development of time-saving operations or processes. A case in point is the adaptation of powder processing for materials. Since ancient times, nearly all metallic materials and components have been shaped mainly by smelting followed by forging (beating into shape), casting or similar operations. Powdered metals were used only very rarely, for example, handmade jewellery in ancient Egypt and South America. On the other hand, ceramics have always been shaped from powders—whether dry or wet as in clay—and then fired. During the last few decades, it became apparent that higher-quality advanced metallic alloys with unique properties and characteristics could be obtained by adapting the powdershaping methods known well and used for millennia for shaping ceramics—pressure shaping followed by high temperature consolidation. This has resulted in the development of modern “powder metallurgy” which produces very high strength metallic alloys now used extensively for advanced aerospace, defence and other applications. An ancient knowledge has been rediscovered and adapted for modern needs in another field. Such crossovers emphasise the continuity of knowledge. We’ll discuss more of such instances later.

5.1

The Ten Stages of the Transformation

Of the many steps and activities involved in getting a promising idea valorised to become an innovation, there are ten stages that you need to go through to reach commercialisation success. These are tabulated in Table 5.1 and shown schematically in Fig. 1.1. Each of these stages is made up of various tasks that need to be carried out in order to reach a certain “Technological Readiness Level” (TRL, defined below in Table 6.1). Once you reach the target TRL, you can then proceed to the next stage. It is rare to be able to skip over any of these stages. It happens only in cases when the tasks have already been completed in a previous or parallel activity or some urgent need requires you to speed up the innovation process (and take a chance). Within these ten stages there are three Critical Milestones at which you must stand back and consider your technology very critically (and comparatively) and make some hard decisions in order to answer a “go/no-go” question. These Milestones are the critical points in your transformation route by which time you should have enough information to be able to decide whether or not it is worthwhile to continue with the technology. Naturally, it is impossible to know what you may encounter further down the road, but at least at these three junctures, you’ll know enough to decide whether to push forward or to cut your losses and run. We’ll discuss them in some detail in the next chapter. The whole process from Stage 1 (TRL 1) to Stage 10 (TRL 9) assumes that the technology is actually able to be developed and is potentially commercialisable.

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These assumptions are by no means given—in practice the development can be interrupted at any stage along the route—but the process presented here assumes that the idea you have come up with can be developed and its technical feasibility can be proven and that it is industrially viable (see box) and that eventually it can reach commercialisation. Let’s now take a look at the transformation process shown in Table 5.1 and Fig. 1.1. It is of course a schematic representation of the development of the innovation over time through all the stages that most (if not all) technologies need to go through in order to become commercialised. It is not meant to be a precise time graph (the axes are arbitrarily scaled), but only a sequential representation of the route in which I have tried to amplify some of the nuances to be encountered. In the vertical axis I have indicated a number of things: a rough “measure” of your personal expectations and your confidence, your enthusiasm and your motivation, all related to the attempt at transforming your new technology. The shape of the curve is born out of the many such attempts I have helped and witnessed over the years and is only meant as a general guide. It is to be expected that it would be different in each case but its main use is as an illustration of a number of interesting aspects of the process. Initially, we are excited, enthusiastic, full of dreams and expectations for our new idea or invention. As we succeed in getting past Critical Milestone 1, our enthusiasm and expectations increase apace and reach a maximum at the technical feasibility stage 5 and Critical Milestone 2. From then on, however, as we enter the more difficult “real world,” our expectations are generally moderated as they become more realistic and down to earth. When we pass Critical Milestone 3 we—and the potential industrial implementers—know that commercialisation is now within reach. We gradually become more confident of success and our expectations, enthusiasm and confidence slowly recover until the successful finale. But the vertical axis is also a rough measure of the inward cash flow you should expect as you move forward. It gives you a preparatory warning of the hard financial choices you need to make as you move on. Initially, research funding will (hopefully) be forthcoming from a “proof of concept” type of grant (e.g. the ERC or “Ideas” type of grants offered by the EC), to be followed by a “Research and Development” type of grant to allow you to develop your technology and prove its technical feasibility before Stage 5. But beyond that, things get much more difficult, financially and otherwise, and the curve turns sharply downwards. Funding becomes much more difficult to obtain and you’ll probably have to turn to a joint venture with an existing company to fund a pilot plant and then an industrial prototype. The problem is that the technology is generally not “proven” enough at TRL 5 to be able to attract any bank finance or other loans and too advanced for more RD funding. You are at the infamous “valley of death” which has been recognised for years as the main stumbling block of many otherwise promising technologies. Unfortunately—in Europe at least—not much has happened to resolve it over the years, although in the USA (and now in China) the situation is more favourable with less risk aversion (see box) on the part of the various venture capital funds that offer more risk capital than anywhere in Europe. Currently, this conundrum is being recognised by many countries in Europe and there seems to be some effort at improving funding availability for pilot and industrial tests.

5.1

The Ten Stages of the Transformation

37

If you decide to go it alone after Stage 5, you may be lucky and win one of the highly competitive grants offered by the EC under its new “SME Instrument” funding programme of the Horizon Framework Programme. This is meant to bride the period between Stage 5 and Stage 8, from technical feasibility (TRL 5) to industrial viability (TRL 7), as shown in the figure, but, in reality, the chances of winning such funding are less than about 10%. The only other way to fund your own start-up is private funding. Risk Taking or Risk Balancing? To carry out the transformation from your idea to the eventual innovation successfully, you need a lot of attributes, but thoughtless risk-taking is not one of them. I doubt whether any successful innovators are gamblers. What they are good at is “risk-balancing”. This quest is not for the risk-averse, who like the easy, smooth, no-surprises type of life: it involves many different risks and all need to be considered, mitigated if possible and balanced against the potential benefits. In fact, risk-balancing is going to be part of life in many stages of this trip, for you and for everyone involved in many of the decisions you’ll have to take, such as: • • • • • • • • • • • • • • •

is the idea valuable enough to devote time to it? how much time to devote? which approach to take? which way to focus? where to apply for funding? how to protect the invention? when to announce? where? how? which application to focus on first? go it alone or in a joint venture? is the scaled-up prototype enough for economic validation? what size industrial prototype? which industrial implementer? which and what type of market? exclusivity or not? license out or sub-contract?... etc.

Of course, the same risk balancing is carried out by funding bodies, customers, implementers etc. If they are risk-averse, nothing will go forward. Risk-balancing needs practice but it is crucial for success. Once you prove the industrial viability of your technology in Stage 8 and reach TRL 7, however, you will be able to attract funding from many sources, including direct bank loans, venture capital funding and the new loan guarantees programme

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5 The Long, Hard Road Ahead

under Horizon. More discussion on funding possibilities is included in Part III below. Don’t have any doubt: all of the stages shown in Fig. 1.1 are necessary in order to reach Critical Milestone 3. This is certainly the case for the vast majority of industrial technologies and many non-industrial ones such as software, etc. It is thus important to prepare well ahead of time for all of these stages and real investment in such preparations (and cash if possible) will help you to pull through the difficult parts. In particular, preparations such as proposals for funding during the early development stages until Critical Milestone 2 when the going will really start getting tough are essential. The better you prepare in the early stages, the more “fat” (as well as motivation and confidence) you will have in reserve to use later. There are three possible routes shown in Fig. 1.1, all of them starting at the “Birth of the Idea” and moving, via the “Proof of Concept” stage (Critical Milestone 1), to Critical Milestone 2 where the technical validation of the technology has been successfully completed and its feasibility demonstrated, usually focused on one or more applications. In this early part of the route, everything is looking good— enthusiasm, motivation, expectations and, most importantly, funding, are all healthy and strong. After that, however, things begin to change. We now enter the real world of the industry and the market, exposing the technology to often uncontrolled and extraneous factors where we have much less influence. Gradually, we discover adaptation and compatibility difficulties (which are almost certain to occur) and, critically, funding becomes much more difficult to secure, as mentioned above. If we have prepared very well we might have enough funds (whether going alone in a start-up or as part of a joint venture) to fund a small pilot activity. In any case, we’ll need to have enough to see us through the most challenging period on the way to Stage 8 and Critical Milestone 3, the industrial viability proof of the technology, generally on a full industrial prototype. Once that is achieved, our life becomes much easier with more financing opportunities opening up and certainly much greater confidence of final success. But if this is not achieved, or the investments and industrial backing required to go through Stage 8 cannot be secured, it is possible that the technology must be abandoned and the whole process ended. If this happens, it is tremendously frustrating and unfortunate, but it is during this late Stage 8 when we offer the final ready technology up to open scrutiny and testing that most failures occur. In fact, overall, it is the industrial viability (the economic competitiveness and added value) that determines the eventual applicability and potential for utilisation of a technology, not its performance or other factors. The dotted line at the bottom of Fig. 1.1 tells this final story. Thankfully, some technologies can be adjusted to improve their economic viability. This means that if Stage 8 is unsuccessful, it is possible (under some circumstances) to go back to Stage 6, make any necessary adjustments and repeat the process again. It is rather rare and expensive but it is possible. An example can help to illustrate both positive and negative outcomes. A new process was developed in the late 1980s and proven to be technically feasible for producing industrially useful functional ceramic powders with very competitive

5.1

The Ten Stages of the Transformation

39

characteristics. A preliminary analysis showed that the cost-benefit was potentially very good and, in addition, the process was fairly simple to apply in industry and offered capability for “just-in-time manufacturing,” wherein small batches could be manufactured on demand with a very competitive cost. The environmental impact was also smaller than the normal calcination process used in industry. A core patent and three anchoring patents were applied for and a pilot plant to produce them was built and tested. The pilot tests came out positive and an industrial prototype—about one quarter of a full industrial plant—was designed and built. By this time, the inventor had spent a large amount of money (RD funding as well as personal funds) and about 6 years of effort. Unfortunately, however, the technology was never industrialised since during industrial testing it was found that the semi-continuous nature of the production necessitated a much greater amount of maintenance. This increased the overall effective running costs which reduced the apparent cost-benefit and competitiveness of the new process substantially. This, in conjunction with the high cost involved in replacing the original installation made the new technology only marginally competitive and viable and it was thus decided not to proceed with it. In other words, the technology did not pass Critical Milestone 3 and faded away. Nevertheless, the story has a positive ending because the inventor did not give up. He went back to the drawing board at Stage 5 and changed some major technical aspects of the process to make it less maintenance-intensive. The technical feasibility was tested and proven again, the pilot plant was adapted accordingly and the industrial prototype was also retrofitted. Finally, the viability tests were carried out again over a few months and the results were positive this time—Critical Milestone 3 was indeed achieved! The process could thus be taken further with fresh industrial funding and it has since been applied in a number of factories in Europe with more planned elsewhere. The main lesson to be learnt from the above case study is the crucial influence of the effective cost-benefit of a technology on the final decision to invest in it industrially. Although it is possible to carry out a preliminary cost-benefit analysis at earlier stages (e.g. at Stages 5 and 6), it is almost impossible to know all aspects of production one needs to include and at what level. In this case it was the maintenance costs which were all but impossible to know before the industrial tests at Stage 8. In other cases, it may be something as simple as market instability or as serious as unforeseen intellectual property rights conflicts or additional royalty payment demands. As discussed above, generally, the trough in the process at TRL 7 is deep and challenging, as shown by the middle route in Fig. 1.1 which most successful innovations would follow. But under certain conditions (and circumstances) it is possible that things can go much faster with much less pain. If it is confirmed during the early stages (usually between stages 3 and 5) that the technology is highly enabling and highly competitive in its targeted industry or market, it might require much less pilot testing, or it might combine pilot testing, industrial prototype building and viability testing. In this case, funding will probably be much easier to obtain anyway and the route may thus be shortened substantially. Be that as it may,

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5 The Long, Hard Road Ahead

the process will probably still have to follow the same stages as before, but over shorter times, as indicated by the upper curve in Fig. 1.1. An example of a technology which, because of the perceived urgency dictated by the market, was rushed through the stages successfully can be found recently in the smart phone industry—but the story has a twist in the tail. A few years ago, a very well-known company was pressed by the market (and, presumably, by its shareholders) into releasing a major upgrade of its main product in time for the main selling season. The product was rushed through the stages successfully and it was released in record time. Its (mainly captive) market received it very well as usual and everything looked fine. Fine that is, until reports started appearing that there was something wrong with its Wi-Fi connection when used as a phone. Apparently, in the rush-up through the stages (in this case probably Stage 7), it had not been noticed that the internal antenna had been installed in such a way that the signal could be obscured depending on the way the phone was used! The end of the story was positive but only after the company recalled the product and made the necessary adaptations, something which must have been very costly. As the above story indicates, rushing through the stages can have significant time benefits (first out in the market, etc.) but if something—however small—is missed out during the industrial testing stages, it can cost a lot in remediation costs, especially in a very demanding market. One often sees similar stories in the automotive industry with the occasional recalls of otherwise very successful cars for one or another (usually safety) reason. This essentially shows that rushing through the final stages doesn’t always pay as you can miss out something that may result in a problem later. Ideally, the idea → invention → innovation transformation process leads gradually to commercialisation by the successful completion of all stages in sequence. Go/ no-go decisions are of course considered frequently along the route but at Stages 3, 5 and 8 we have to put down our tools, stand back and take stock of where we are and what are the realistic prospects for the future of the technology. This is where we have to consider very critically whether the corresponding Critical Milestone at each of these three stages has been achieved. Whereas at all other times we can possibly delay a decision and push ahead in the hope of coming across a solution to a problem further on, at these junctures we have to take a long hard look and make a definite go/ no-go decision. If we find that the corresponding Milestone has not and cannot reasonably be achieved, then we have to stop, cut our losses and give up the process. We’ll talk more about Critical Milestones in the next chapter. A decision to stop all development is indeed a very difficult decision to make but it may have to be made. Personally, I have had to do this several times and each time it was very hard. It is a truism that we can very easily lose objectivity regarding something we have worked on for years. We know it so well, we have spent our life’s savings and huge efforts on it and we can’t accept that it can fail to be taken up by industry and the market. It is after all our “brain child” and we cannot understand why companies and customers don’t jump at the chance we are offering them. So what if economically it is a bit more expensive—look at its performance! Unfortunately, the heart is no substitute for objective decision making. We have to face the

5.2

In Summary

41

facts and conclusions head on and take our decisions as objectively as possible. It is much less painful and costly to take a deep breath and say “no-go” if we are sure that it has no future, even in the early stages, than to persevere and expend time, money and energy in the process. As mentioned previously, Fig. 1.1 also shows the approximate correspondence between each stage and the associated Technology Readiness Level as originally developed by NASA and ESA and recently adopted for use in the new 7-year Horizon Framework Programme of the European Commission, whose three main programme categories are also shown at the top of Fig. 1.1. The nine Technology Readiness Levels are explained further in Table 6.1 in the next chapter. In actual usage, they serve to identify the level of development of a technology (or project) as related to its value and current status relative to similar technologies.

5.2

In Summary

The transformation process from idea to innovation and commercialisation passes through ten stages: all are necessary and each leads into the next. It is generally not possible to skip any of these stages, but in some cases where the technology is enabling and highly competitive it is possible to shorten the route by combining stages or executing some tasks in parallel. The main go/no-go decisions as to whether to proceed or not are taken at the three Critical Milestones, indicating successful passes through the proof of concept, technical feasibility and industrial viability stages. The route is roughly divided into three sections. The first section is where the research and development takes place and, although scientifically challenging, it is characterised by upbeat expectations and relatively easy funding opportunities. It culminates in the technical feasibility proof and passing Critical Milestone 2, ready for the real world. In the second section, however, where we enter the real world and the technology has to be scaled up and a prototype built and tested, the process become uphill and funding is very difficult to obtain. This section culminates in the industrial viability proof and Critical Milestone 3 which eventually allows entry into industry proper. The final section is much easier and involves industrial optimisation and eventual commercialisation. Throughout the process the technology is reviewed continuously and the process can be stopped at any time but Critical Milestone 3 is the most important decision point. Unfortunately, the majority of technically well-developed technologies fall by the wayside at this point: even if proven to be technically feasible, they fail to prove industrial economic viability.

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The Long, Hard Road Ahead

Tips • The process of transformation from the original idea to the final innovation almost always transforms the original idea in such a way that it may be quite unrecognisable in the resulting product (or industrial service). This requires careful handling to make sure that the principles are not lost during the transformation. • In the vast majority of cases, it is not possible to skip any of the transformation stages. But it is possible to combine them or speed through them by carefully planning your work. For example, protection and feasibility tests may be carried out in parallel or scaling-up may be combined with industrial prototyping. • It is very easy to lose objectivity while developing your technology. It is after all your “brain child” and you cannot easily admit it isn’t as fantastic as you thought originally. But it is much more beneficial to take a deep breath and say “no-go” when you are sure that it has no future, even in the early stages, than to persevere and lose time and money. • If a technology proves technically feasible but not economically viable, it does not mean that it is dead in the water. It may still be viable in another application, perhaps in a different field altogether. This of course necessitates going back to Stage 5 and repeating the industrial and viability tests.

Chapter 6

The Critical Milestones

A technology already developed up to a certain Technology Readiness Level (as defined in Table 6.1) can of course enter the transformation process at any of the stages and then proceed along the remaining stages. But, as mentioned before, each technology must be objectively evaluated at each of the three Critical Milestones where the probability of eventual success (or failure) must be critically assessed and a decision on whether or not to proceed further must be made. In this chapter we take a brief look at the three Critical Milestones you are going to encounter in your transformation journey and their significance. Further discussion is included in the following chapters where we consider each stage in sequence. Critical Milestone 1 is at the end of Stage 2, “Proof of Concept,” at the juncture between the original brainwave and its scientific validation. A successful culmination of the proof of concept stage means that the technology has reached TRL 3, as we’ll see below. But what does “proof of concept” actually imply? Even if an idea appears very interesting and exciting at first, it is only when clear and unambiguous scientific proof is obtained that the concept can be considered a potential invention (let alone a potential innovation). By “potential invention” (and not actual), I mean that even if the scientific proof is secured, this does not necessarily indicate that the idea can definitely be turned into an invention (see box). This is the main task of the next stage (Stage 3), where advanced research and development are carried out before the technology is turned into an invention. In Stage 2, the research to be carried out is extensive but mainly preliminary and concentrates on proving the principles of the concept and the technology without regard to the actual application. The proof must be reliable, reproducible and, if possible, since we are still in the early stages, associated at least generically with the specific functionality that the new technology will be expected to have in the future. Other tasks at this stage include obtaining careful and clear formulation, ensuring unambiguity, enhancing the precision of the presentation of the concept and a clear understanding of its connection with existing work and any pre-existing or

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_6

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Table 6.1 The nine Technology Readiness Levels and approximate correspondences with the ten stages and three Critical Milestones in Fig. 1.1 and Table 5.1

TRL 1

Title Basic principles are observed

2

Technology concept is formulated

3

Proof of concept is confirmed

4

Technology is validated in the lab

5

Technology is validated in a relevant environment

6

Technology is demonstrated in a relevant environment

7

Prototype system is demonstrated in operational environment

8

System complete and qualified

9

Actual system proven in operational environment

Description This is the starting point and the lowest level of technology readiness. The idea has been born and early-stage scientific research is carried out, including documentary research and exploratory studies. Once the basic principles have been clarified, the concept is formulated. Research includes analytical studies and experimentation, perhaps with a specific application in mind. Systematic research and development validates the predicted functionality of the technology. Design, development and lab testing of technological components are performed. This is a relatively “low fidelity” prototype compared to the eventual system. Potential applications have been identified and protection sought. The technology is tested in a lab environment simulated to correspond to the real application. This is a “high fidelity” lab prototype and is used to check technical feasibility for a specific application. A scaled-up prototype is built, developed beyond Stage 5, and tested in a relevant operational environment corresponding to the eventual application. Based on the scaled-up prototype, a full prototype at the final design level is demonstrated at operational system level. Engineering and manufacturing risk is identified and minimised and the economic cost-benefit of a full industrial prototype is satisfactory. Technology is shown to work in its final form under the expected conditions for the specific application. Industrial development is complete. The system has been used in full operational environment satisfactorily and is ready to be commercialised.

Corresponding Stage and Critical Milestone 1

1–2

2 CM1 4

5 CM2

7

8 CM3

9

10

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The Critical Milestones

45

previously announced technologies. Successful completion of all these means achievement of Critical Milestone 1. Idea, Invention, Innovation A useful technology will go through a number of transformations during the process to develop it into an innovation, the main intermediate one being an invention. The starting manifestation will be the idea, the concept, our original brainwave, sometimes in response to a stimulus such as a bottleneck in production or another challenge, sometimes “out of the blue”. At this point, we have not given any thought to its applicability or viability, only that it “could” offer a solution. Once the concept’s basic premises (i.e. the science and / or the rationale behind it) have been proven and its general applicability extrapolated from its characteristics, then it can be developed further until it reaches the stage where we can say we have an invention which can be protected, perhaps by a patent. Actually, to reach the status of an invention and be patentable, a concept should pass demonstrably the three criteria of originality, non-obviousness and potential utility. In fact, it is these three criteria that are always at the crux of many legal challenges that attempt to defeat a patent award by attacking its inherent validity. Only after the technology has acquired the status of an invention can it enter the industrialisation stages until finally it becomes an innovation, which, as we discussed above, is distinguished by its value. Some examples of new concepts that require such proof of concept are completely new or improved materials (e.g. new nanostructured multi-layers for microelectronics) at an early stage with promising properties (mechanical, physicochemical, catalytic, etc.), new ideas for pharmaceuticals (e.g. compounds found in nature before the isolation of their active ingredients), initial attempts to develop new or improved processes (e.g. for joining materials or components), new algorithms for producing software programmes (e.g. new games or better physical simulation in games) and others. Once CM1 is achieved and the proof of concept has been established, we enter Stage 3 where extensive research and development (RD) takes place, culminating with Stage 4 where the technology has reached a sufficient level to be considered for protection. At the end of this stage, you should make the first public announcement of the technology (after due protection) and you can then commence the search for a strategic partner if necessary. By this point, certain specific applications of the technology will already have become clear and a task will be to select the most promising ones: these will form the focus of your research in Stage 5 where you’ll prove the technical feasibility of your technology, as shown in Table 6.2 below.

Invention

–

CM2

–

4

5

–

6

7

8

9

4

5

6

7

8

9

10

–

–

Scaled-up invention Industrial Prototype Technology Viable industrial Technology Industrial Innovation Commercial Innovation

Focused Invention

Industrial— commercial Commercial

Horizon: Loans and guarantees

Techno-economic viability Industrial application Commercial

Horizon: SME Instrument Horizon: Loans and guarantees

Horizon: Cooperative Horizon: Cooperative, ERA-NET, etc. Horizon: SME Instrument

Funding sources Horizon: ERC/Ideas Horizon: ERC/Cooperative

Scaled-up validation Industrial viability

Focused technical feasibility

Strategic actions Technological decisions Originality, physical basis Formulability, obviousness, ambiguousness RD directions, identification Applicability, protection

Commercial

Industrial

Industrial

Joint venture/ CRO Industrial

Joint venture/ CRO

Technological

Scientific

Scientific

Potential collaborations None

Economic

–

Technoeconomic

–

–

Focused Technological

Industrial Marketing Marketing

Presentation at industrial fairs

Industrial announcement

Publication/ Conference presentation –

Patent

–

Commercial

Industrial

Technological Industrial

Technological Industrial

Technological

Scientific and technological services Technological

–

–

– –

Exploitation actions –

Dissemination actions –

Technological

Scientific

SWOT analyses –

6

CM3

–

Technology

–

–

3

Proven Concept

CM1

2, 3

2

Status Idea

TRL 1

Stage 1

Critical Milestones –

Table 6.2 Summary of actions that need to be carried out at the various stages of the transformation process

46 The Critical Milestones

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The Critical Milestones

47

The next Critical Milestone (CM2) is at the conclusion of Stage 5 and the technology is now at TRL 5. This means that extensive tests to rigorously ascertain the actual feasibility of the new invention and confirm its applicability in one or more of the selected applications have been successful. The patent or other protection that you have filed for during Stage 4 will have made specific reference to these applications, otherwise an anchoring patent must be filed. Ideally, CM2 needs to be achieved and validated independently for each of these selected applications since the ensuing pilot and industrial tests will be carried out on each application separately. This has major financial implications so it is important to select the most promising of the potential applications to carry out the scaling-up pilot tests and the industrial prototype. Technologies that are at the intermediate level of CM2 may be described as “highly promising.” These could include new or improved materials that have been thoroughly tested and their properties confirmed for use in aerospace (e.g. low density, high-strength aerogel panels and new carbon-fibre composites), new medicines tested for efficacy for a specific ailment at the lab level with validated animal tests, new or improved processes confirmed at the lab level producing products of a specific quality, etc. TRL 5 is generally the end point expected for most RD projects funded by public bodies, for example, Framework Programmes of the European Commission. Interestingly, the current FP, Horizon, allows some RD projects to go a bit further, to Stage 6, where a scaled-up (or closer-to-industry) prototype should be built and validated, or, in some cases, even Stage 7 (TRL 6), where the prototype is validated at industrial level, as indicated in Fig. 1.1. Finally, the most important Third Critical Milestone (TRL 7) is only achieved when the industrial validation has been completed successfully and the technology’s economic viability under realistic conditions is proven. At this point, the go/no-go decision to proceed with full-scale industrialisation is taken based on the results of the viability tests. Note that it is possible to have technical feasibility (CM2) without economic viability (CM3), but not the other way around. Many technologies unfortunately fail at Stage 8 by not achieving CM3, that is, the economic viability of the technology is unsatisfactory. It is a fact that the economic viability is very often unrelated to the technology’s technological prowess or ability to deliver technical performance. In many cases, even though the economic viability tests come out positive, the technology is not taken further because the added value (over and above existing technologies) is not judged to be sufficient and the return on investment (still to be tested by industrialisation in Stage 9) is just not enough to carry the investment risk involved. The state of the market (and the economy at large) plays a large role here as well as the positioning of the technology in the market.

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Examples of major technologies which have been abandoned at this stage over the years include various designs of spacecraft for space exploration (NASA and ESA are littered with projects that were abandoned at this stage or a bit earlier), nanotechnology-based medicines (due to toxicity scares and too high risk), various designs of automobiles (so-called “concept cars”), electronic chips for computers and sensors and many others.

6.1

Decisions and Actions

I hope it has become clear by now that each stage during the transformation process expects of you specific actions and decisions. In the early stages where the work is carried out in the laboratory, the actions and decisions expected all relate to scientific and technological directions as well as tests and decisions on originality, formulation, (un)ambiguity, technical performance, etc. In Table 6.2, I have included some of the most important actions and decisions that must be completed at every stage. The actions are tabulated “Technological decisions,” “Funding sources,” “SWOT analyses” (Strengths-Weaknesses-Opportunities-Threats), “Collaborations,” “Dissemination actions” and “Exploitation actions” and they naturally evolve at each stage, starting from the more scientifically oriented actions and decisions in the starting stages, going through technologically oriented actions in the middle stages and ending with industrially and commercially oriented actions and decisions in Stages 9 and 10. The table illustrates this progression and gives an integrated picture of all activities and decisions at the different stages. The sequential progression is also reflected in the “status” of the technology as it evolves (indeed, it is an evolutionary process, as we try many different ideas before the optimum one becomes clear) from an Idea, through a Proven Concept, a Technology, an Invention, a Focused Invention, a Scaled-up invention, an Industrial Prototype Technology, a Viable Industrial Technology, an Industrial Innovation, finally ending as a Commercial Innovation. In some way, this progression is also reflected in the type of collaborations that you would be involved in during the route to the innovation. In the early stages you would have scientific collaborations (in order to check, confirm or improve the science behind the idea), but as your idea turns into a technology the collaborations need to emphasise that. In this regard, you will be looking at technological collaborations to bring your idea to a more useful shape, possibly with the support of one of the EC-funded collaborative projects. Finally, past TRL 5, your collaborations will be industrial which will help to test the industrial applicability of the invention, ending with commercial collaborations between you and your implementers, end-users and customers. Part I of this book deals with Stages 1 to 5 where you will ensure that your idea is based on a firm and persuasive scientific background before it is revealed in public where it will be scrutinised and tested. This will usually happen at Stage 4 or 5, by which time you will be more or less committed (technologically speaking) and no

6.1

Decisions and Actions

49

major changes in the technological foundations will be possible. It is thus critical that the actions and decisions in this Part are taken very seriously since everything else further down the road will be built upon them. The foundations need to be absolutely solid before you start creating your industrial edifice. It goes without saying that if you find any fundamental scientific or technological weakness during the investigations, you must either find a solution or delay any further development until it is resolved. It is not only that any technology based on flawed principles is bound to fail, but it is almost a certainty that no patent will be issued to cover it by any patent office. As shown in Table 6.2, Part I will be completed by assessment of Critical Milestone 2 and by the critical decision of whether to go it alone or in a joint venture with an industrial implementer or a Contract Research Organisation (CRO) with expert knowledge in this area. Whereas going it alone will give you independence and will simplify many aspects of the work such as confidentiality, decision making, taking corrective actions, etc. it does mean a greater amount of risk, especially financial and industrial risk. All this will be looked at the end of the first section of Part II, where we will discuss the designing and building of the scale-up of the technology. An important tool of analysis that will certainly offer substantial benefits, both during Part I activities in the laboratory and later during the pre-industrial tests, is SWOT analysis. This is used to identify the strengths and weaknesses of your new technology—especially in comparison with competing technologies—which will pinpoint the direction of improvements, as well as new opportunities that you should look into capitalising and threats which you should be careful of. We’ll talk about SWOT analyses in later chapters. Post TRL 5, we’ll enter Stage 6 (Part II of the book), where you’ll leave the safety of your laboratory and start preparing for the real world. Here the stakes are much higher. In order to scale up your technology you’ll need major funding as well as technical and industrial support and advice. If you are on your own (with a start-up or spin-off), you’ll have to deal with the additional risk of ensuring that you are moving in the right direction. In addition to a whole new type of research approach (industrial), Stage 6 is also the time when you start “advertising” your technology, that is, disseminating information on it to a wider, industrial audience. Although the first scientific mention of your new technology would have been made after you ensure protection at the end of Stage 4, in Stages 6 and later you’ll start speaking about it at industrial meetings and conferences, thereby getting people to familiarise themselves with it and understand its capabilities. At the same time, you’ll be able to start capitalising on the technology’s clearer capabilities and potential and apply for industrial funding and to strengthen your industrial collaborations. These will be crucial for the industrial development in later stages, especially for the industrial prototype and its viability tests in Stage 8. Finally, once TRL 7 is achieved, we’ll enter Part III of the book, where we’ll discuss industrialisation (Stage 9). Once that is completed, you’ll finally offer the completed innovation either outright for sale in the market or on licence to an implementer or an end-user, according to your commercialisation strategy.

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In the following chapters, each of these stages is discussed in detail and the tasks and decision-making processes are explained. These include decisions on go/no-go at each of the three Critical Milestones, decisions on valorisation, decisions on the most promising business route to commercialisation and others. Each task and decision will be presented and analysed in detail as each decision you take will directly affect the ones you take in the next stages.

6.2

In Summary

I hope it has become clear that the successful transformation of your idea to a valuable innovation is dependent on you obtaining the right information and making the right decisions, in particular at the three Critical Milestones. Each stage you’ll have to go through is important and each requires its own decisions, but at the Critical Milestones, your work will have to be assessed critically before you go any further. The systematic process presented here will ensure that you’ll have all the resources to take these decisions with a maximum chance of success. Tips • At each stage the tasks you’ll carry out (as indicated in Table 6.2) will offer guidelines towards the next Critical Milestone. Keep your focus on it and adjust your activities to make sure your aim stays on it. • Failed Critical Milestones do not mean that your quest is over. Even if you realise you cannot achieve one, the assessment will give you information on what needs to be done in order to achieve it in the next iteration. Be as critical and objective as you can. In the long run, such critical information will be invaluable. • A SWOT analysis is an extremely flexible tool. It can be adapted to any situation, technical, economic or other. It can even be used to decide on the ideal course one needs to follow to take a decision. • If you happen to obtain an already partly developed technology for use in your own system, it would be very useful and instructive to examine and adjust its level with respect to one of the Critical Milestones for your chosen application. In this way you’ll enhance its compatibility with the other technologies in the system.

Part II

Cloistered Creativity

I am among those who think that science has great beauty. A scientist in his laboratory is not only a technician: he is also a child placed before natural phenomena which impress him like a fairy tale. Marie Curie (1867–1934) Chemist, Nobel Prize winner

There is a widespread impression that researchers work in isolated environments, hardly aware of the “real world” outside. Well, this is mostly (although not quite) true. And for good reason. In order to be free to develop ideas and follow your vision, you need to be isolated from the real world with its industrial restrictions and perceived taboos. By isolated, I mean free from influences, pressures, preconceptions, and prejudices (although even in a lab, you are still very much in contact with other ideas and concepts) and not encumbered by what’s generally perceived as “not possible”, or influenced by coercions such as “no sense in trying”, “it has been tried before”, etc. It is in this cloistered laboratory environment where the first stages in your technology transformation will take place, up to Stage 5 which leads to Critical Milestone 2. It is in the laboratory environment where you are able to think freely, be creative and try different ideas, guided by your experiences as well as those of others’, developing them until you are satisfied they are right. It is also the place where you’ll carry out most of the early formative development activities and thus be able to take decisions on the direction, value and potential of the new technology and thereby adjust and correct the objectives, aims, and targets and associated activities as necessary. Beyond Critical Milestone 2, the technology development should be more or less complete and ready for industrial development. The progress from one stage to the next until Critical Milestone 2 is illustrated in the decision flow chart in Fig. 1 where I have included the main decisions to be taken during these early stages and their end-point TRLs. Nearly all ideas and technologies need to follow this process through these stages and address the decision questions shown, in order to reach TRL 5. Let’s consider it in some detail. The flow chart in Fig. 1 illustrates the progression that is generally followed up to the point where the idea has become an invention and has been technically validated

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Part II

Cloistered Creativity

Fig. 1 Flow chart of the main decisions to be taken from TRL 1 to TRL 5

in the lab for a particular application or applications. It should be read in conjunction with Tables 2 and 3 and includes the main actions (and decisions) that should be followed along the progression from TRL 1 to TRL 5. There are a number of go/nogo decisions that must be made—and made very objectively—before any

Part II

Cloistered Creativity

53

technology reaches the level of Stage 4 where it should be protected. In particular, the decisions regarding formulation of the idea are emphasised since it is a common finding that many good technologies fail to proceed to industrialisation because of their wrong technological approach, emphasis or focus, in terms of their provability (i.e. capability of obtaining a proof of concept, i.e. TRL 3), their non-obviousness and their potential utility, before protection can be sought at TRL 4. After protection has been sought mentioning possible applications (remember, a patent can only be awarded if a technology has some utility, even if only tentative, or potential), it is then necessary to focus the work on one or a small number of applications and seek validation of the new protected technology for those applications. This is carried out during Stage 5 which, once completed successfully, leads to the achievement of Critical Milestone 2 and TRL 5. Unfortunately, many researchers do not seem to recognise that this is only the intermediate stage of development and that industrialisation activities are still to come. It isn’t rare to encounter situations where the inventor, after securing IPR protection, seems to think that “that’s enough, I have a good exploitable result and all I need to do now is to advertise it and wait for it to be picked up by an interested implementer who will do the industrialisation”. This fallacy or misunderstanding (or simply wishful thinking) is another major source of failure to exploit new technologies. In the context of the transformation, this is the reason why TRL 5 is also Critical Milestone 2. In the discussions in the following chapters, I have tried to emphasise that the successful industrialisation of your technology is in your hands. If you want to succeed, you need to follow the progression laid out here, to be continuously pro-active, to always query and analyse your actions and their possible repercussions and results. Decisions need to be taken after full analyses at all times. During Stage 5 activities in particular, the decisions you take will decide the future of your industrialisation progress. One of the major decisions you’ll take is whether to continue alone (setting up a start-up company or at least lead a spin-off from your employer company or research centre) or seek a strategic partner to maximise the effectiveness of your later actions. Let’s now consider each stage in turn, Stages 1 to 5 in this Part 2 and Stages 6 to 10 in Part 3 of the book. We’ll first go back to the start and consider how original ideas appear before they are transformed gradually into technologies, inventions, and innovations.

Chapter 7

The Birth of the Idea

The beginning of our journey to an innovation is the Birth of the Idea (an idea which may or may not become an invention) which we identify as Stage 1. This stage is the early development of the first thought of something new and it is, more often than not, just an abstract brainwave with no specific application or target. Good research scientists do this all the time, even in their sleep—probably the only professional group who never forget their work, and for good reason: they wouldn’t be doing this if they didn’t enjoy it and be happy being immersed in it. Ideas occur all the time, often in response to various stimuli from publications, announcements, lab results, a chat with a colleague or student, a worry of an industrial or commercial collaborator, a vocalisation of a new trend or fad, etc. In fact, researchers are trained to do just that—to come up with new ideas—and the PhD degree is nothing more than a 3 or 4 years of training (usually followed by another 2 years of postdoctoral research) which gives them that capability. Every time a good researcher reads a paper or studies results they subconsciously think of how it fits with other questions or existing knowledge. Very often, ideas come from completely disparate directions, even philosophy and of course nature. Let’s not forget that the first scientists were “natural philosophers.” As discussed earlier, there are many sources, or driving forces, from which ideas for new technologies can spring. Apart from the obvious “science for its own sake” type of idea, sometimes based on previous work, many sources of ideas are not obvious and very often they are not even conscious. The discovery of the cyclical nature of the benzene molecule happened in a dream when Friedrich Kekule dozed off! Creativity never sleeps. How many of us have hit upon a solution to a nagging problem in the middle of the night while just lying on the bed relaxed and somewhere between sleep and wakefulness? Einstein had many of his paradigm-shifting and ground-breaking ideas when he was pondering other things, sometimes completely removed from his main aim. In everyday life, it is an oft-repeated piece of advice that, if you can’t solve a problem, just take it out of your conscious

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_7

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mind, do something else and a solution will appear out of the blue! It is our subconscious mind in action. It is well known that feeling passionate about something very often helps to show the way to a solution. Thinking passionately about a problem almost always helps you in finding an original solution for it. New ideas and new insights are very often born to people who think and feel particularly intensely about a problem or a question, whether in their professional or personal life. Somehow, originality and creativity go hand in hand with passion and excitement about something. Nearly every major technological revolution was created by passionate people. The whole modern computer revolution, from desktops to smart phones, from games to software platforms, has been built by passionate persons who had a vision and pushed and fought their way towards establishing very successful global companies. In fact many, originally very successful, technology companies have since weakened and even disappeared because they seem to have lost their passion and vision along the way. It seems that their loss of passion also led to a loss in innovativeness and capability for generating new ideas. Although this is not the place to look into this in detail, it does seem that, very often, business success and its routine management somehow reduce the capability for originality and the ability of coming up with fresh ideas. I don’t think the reason for this is well understood but it could be supposed that the stress of day-to-day work as well as the need to respond to outside pressures and financial demands reduce the ability to relax and somehow sap the brain of its capability for original thoughts. One very large Internet-based company tries to reduce this possibility by offering its staff a “creative play” work environment, complete with slides, colourful surroundings, game areas and other “toys” in the hope that this will bring out their creativity and originality. Of course, more often than not, a fertile idea arises simply as a result of a need or demand. Remember, “Necessity is the mother of invention.” A bottleneck in some process or activity is identified and you start thinking of it, trying different viewpoints or approaches. Sometimes, the answer is easy and you have your solution, original or adapted. Other times the solution is not at all obvious. It requires a “lateral” type of thinking, as when you try to solve an intelligence puzzle. You wrack your mind to solve it, you are getting nowhere, until suddenly, Eureka! The solution was lying there in front of your eyes, but required a mental somersault to reach it. Archimedes of course was trying to solve a practical problem—how to determine whether a gold item was adulterated with lead or not. He got his idea while sitting in the bath, no doubt trying to calm down, frustrated and stumped by the problem, when he noticed that by entering the bath, an equal amount of water was displaced while his weight in the water felt much lower. One can actually carry out a number of practical activities to coax your mind to come up with a solution to a vexing problem. Some of the tricks I personally use (though not all are applicable all the time) to enhance my creativity are • Think “away” from the problem, give your subconscious mind a chance to solve it. • Consider other similar challenges—how were they solved?

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• Break the problem down to smaller (or simpler) parts and think up solutions to each independently—afterwards try to combine or adapt the part solutions. • Think of some obviously crazy solutions that probably have no chance and then adapt them gradually towards your problem. • Invert the problem and think up a solution for that. • Think of what would happen if you can’t come up with any solution—can you live with it? • Solve one bit of the problem at a time, sequentially. • Speak and listen to others about a generic aspect of the problem—they might give you a hint. • If nothing works, go back to basics and exercise your mind with the myriad types of intelligence puzzles—the ones that require lateral thinking. They work wonders with problem solving. It’s nice to know that, although looking for an idea to solve a problem is probably a tough job at this stage, it is also the easiest since its eventual application is known. By definition, the application is waiting for someone to come up with a solution and if it is validated and developed suitably, it will just fall into place! In fact, professional inventors use their quite unique way of thinking (i.e. problem solving) and make good money by developing practical solutions to everyday problems or demands such as, “It would be great if this thing could do . . . .” The well-known British inventor who thought up of the cyclone vacuum cleaner and lots of other gadgets is one type of such person. But how do you go about coming up with original ideas that don’t yet have an application and don’t (yet) solve a problem? Good advertising companies come up with ideas all the time of course, and not all of them are aimed at solving problems. But, in an indirect way, they do solve a problem: how to sell a product, even though there is no specific technical target that they should aim at. What about ideas for new materials, products and services that one can then develop and, if all goes well, commercialise? When it comes to original ideas for industry and especially the market, the capability to second-guess or anticipate the (sometimes not obvious) needs of implementers and the mood of the public and “feel the pulse” is an extremely valuable asset to every inventor and company whose aim is to develop new and original ideas. As a corollary, instead of passively anticipating, good innovative companies have learnt to (surreptitiously, if not insidiously, but this depends on the viewpoint) manipulate the mood of a whole group of people or even whole societies prior to releasing their new innovations. In recent times, this has become more and more evident as the love of a very large number of people with self-entertainment or social communication (also a kind of entertainment in some way) has created a very fertile ground for anticipatory (or cultivated) ideas that can create whole new sectors. This has been the case with the various social media, messaging services, reviewing and assessment sites for services or products, online gaming, etc. Naturally, this type of technologies tends to be ephemeral and new ideas and activities need to be continuously generated to maintain the, often elusive, interest of the customers.

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Trends and fads connected with these or developed independently are continuously being developed, nurtured, pushed, and then allowed to fade away to be replaced by new ones. This is innovativeness on an industrial scale! And every one of these technologies needs to be taken through its paces and it has to complete all of the stages and achieve all of the Critical Milestones we discuss in this book. Some types of ideas (many of which eventually are transformed into innovative technologies) reflect the almost insatiable appetite that that many people have for unusual gadgets, games, puzzles, etc. Creativity has no bounds. It is commonly accepted that what can be built with nuts and bolts can be even more impressively built in the virtual world. So the Internet is busy with a vast number of sites, games and information services all vying for our attention and money. Nowadays, the baton of the race for such services and gadgets has been passed on, to some extent, to the huge number of “apps” (software applications) being developed at an amazing rate for mobile smart phones, which are really miniaturised computers with a phone feature. Many of these innovations do not address any pressing need or demand but are just “nice to have” and therefore rarely succeed to any great extent in making money.

7.1

Forecasting and Foresighting

Ideas and inventions need not necessarily address current problems or situations; they may also address projected or future challenges. A company or entrepreneur that can correctly forecast future trends, problems, challenges, directions, etc. will have a tremendous competitive advantage over their competitors (see box). This need has resulted in the emergence of “technological forecasters” who try to predict future trends based on past and current experience and who are paid or employed by companies to support their business planning. Apart from the fact that such technoforecasting is a very good entrepreneurial idea in its own right (addressing a strong need and demand, independent of its success rate), its success very much depends on the distance to the future one is asked to predict and the extremeness of the predictions. Nevertheless, the apparent (at least partial) success of such endeavours has meant that some large companies have instituted “shoot for the moon” brainstorming sessions or offices where employees are encouraged to come up with extreme or outlandish ideas for products or services for the future. Unfortunately, many such predictions don’t materialise or materialise in a very limited version, or need time to materialise. Examples include ideas that seem to be frequently refloated such as hover cars, personal robots, moon bases, cheap space exploration, etc. On the other hand, similar predictions, such as “big brother” surveillance, child gender selection and cloning have all come to fruition.

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Forecasting and Foresighting

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Forecasting vs. Foresighting The two different processes of forecasting and foresighting are very often confused in business (and other) literature. While they both deal with the future, they have completely different objectives and aims. Forecasting is an attempt at guessing or predicting the future, as it is expected to arise from the knowledge we currently have. Its main aim is to offer enough information to be able to take some preparatory actions to face what may happen in the future. It’s based on the study and analysis of current trends and conditions and tries to extrapolate on what we know now, generally also reflecting on past experiences. It is generally a passive exercise since it does not include any planning or any specific actions towards influencing the future. Forecasting of the weather or the financial results of a company are good examples. On the other hand, foresighting is a detailed preparation towards achieving various possible scenaria for various futures, taking into account specific actions that may need to be carried out towards reaching them. All the various futures considered are based on past and current knowledge and experiences but they are pro-actively considered, not just passively predicted. A foresight exercise therefore asks “what if” questions and determines what kind of future each answer will lead to. At the conclusion of a foresighting exercise a decision on which future to aim for may be taken, but it is not necessarily part of the exercise. In this case, pro-active preparation and construction of the future may be decided. This is generally the eventual aim of technology companies and also the basis of policy-making by governments and authorities. If the future is not easy to predict, then how about actually constructing it somehow? If this could be achieved, it would be much easier to prepare ideas and technologies to fulfil future needs, demands and expectations. Well, this is the aim of foresighting where companies come up with a number of scenario for possible futures and then anticipate them by taking specific proactive measures to realise them (see box). In this way, they can second-guess their customers’ wishes and therefore prepare new ideas and technologies accordingly. When it works (and it doesn’t always work), it is like having the cake and eating it too! Successful examples of foresighting in action include the various ways in which social media sites have been developed (not evolved, as some people say, incorrectly) to offer pre-planned services that were first suggested to their customers, building up their appetite as it were, and then rolled out gradually. Another example is the way in which many Internet services providers have encouraged customers, using various ploys sometimes, to disclose their personal details and preferences so that these can later be used for targeted advertising (as well as surveillance, as we have recently discovered). Another example, from a different sector this time, is the way the tourist industry works hand in hand with the development of commercial

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flying. Both industries push-pull one another and both benefit, but their success has always depended on planning ahead. The protection of the environment and the decisions regarding green energy are all examples of foresighting in action. So are many military plans for new technologies. We prepare a future that we want and then direct innovative activities with the aim of eventually reaching these general targets, as in calls for directed research in specific, appropriate technologies under EC/FP7 and HORIZON. Although nobody could have predicted how far the web would develop since its original conception as a simple communication protocol, it is now so widespread and so many people are dependent on it for their social interaction and communication that foresighting is getting easier and more and more widespread, often without us realising it. Think of stay-at-home employees, paperless offices, long-distance video conferences, etc. These are all the result of conscious or subconscious foresighting where the future is first imagined and then planned. I am sure we’ll be witnessing (and be subjected to) a lot of this in the future.

7.2

Counter-Intuitive, Accidental and Subconscious Ideas

Many times an idea for a solution is not obviously logical at all and even appears opposite of what would be considered rational. Over the past decades, airplane manufacturers have been trying to improve the fuel efficiency and stability of their planes in bad weather and have carried out long and complicated projects involving modelling the planes with many parameters under many different conditions. At the end, they came up with many obvious solutions (e.g. higher turbine operating temperatures) but also one solution that at first sight appears counter-intuitive: they found that if you attach small “winglets” to the tips of the plane wings, perpendicular to the wings, the plane becomes very stable and lift improves, even in rough weather, and there is considerable energy saving and lower noise. These winglets are now ubiquitous in every new airplane and they have been attached on nearly all old planes too. An almost counter-intuitive idea that proved true! In this regard, the structure of the DNA molecule discovered by Franklin, Crick and Watson was certainly non-obvious and even counter-intuitive. In retrospect, the X-ray diffraction results Franklin had found could only be interpreted if the DNA was a double strand, but this was far from obvious and required very painstaking work first to think of and then confirm. It might not itself be a technological innovation but the train of thought that eventually brought about this leap of the imagination can be categorised as highly innovative even though there was, at the time, no obvious application in mind. It was a Eureka! moment, albeit one that was still based on lots of hard work. Nowadays, of course, the whole field of genetic engineering and genetics has taken off and a hugely successfully industry has resulted—all based on that discovery. What all such examples prove to some extent is that while preconceived ideas and previous knowledge, based on logic and knowledgeable intuition, help most of the

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Counter-Intuitive, Accidental and Subconscious Ideas

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time to guide and correct our thinking, they can also be an obstacle to free thinking and the birth of ideas “out of the box” which sometimes are the only way to solve a difficult problem. Another example of a counter-intuitive idea comes from the field of high-pressure vessels. Until the 1960s, it was always assumed that, for safety, you should build a pressure vessel as thick as you can. But after many serious and deadly accidents, it became obvious that something was amiss. It took the development of a whole new field of mechanical engineering, Linear Elastic Fracture Mechanics, for engineers to eventually realise that the missing information was the fracture toughness of the material and that the thickness of such a vessel should be less (not more!) than the minimum crack length for catastrophic failure. Such a vessel “leaks before breaking,” which ensures the safety of the vessel under all pressures. It is now used routinely. Interestingly, many ideas are born without any particular need or demand or foresight. They just “happen”; they simply pop into our heads even when we are not actually thinking of any particular problem. Sometimes, they are subconscious attempts at addressing a problem, other times, they reflect past experiences or situations. Accidental innovations can become hugely significant. While most social media sites and applications address specific (often latent) human needs to communicate and reach out to others, many associated services simply arise from the vivid imagination of their inventors. These include, and of course are not limited to online games, virtual currency, virtual gift giving, joke competitions, avatar clothes and shoes comparisons, donations and group calls, etc. In a sense, these also address certain latent needs and wishes—but their principle function is to entertain rather than provide a combined entertainment and communication package like the social media platforms do. As mentioned in the introduction, nature is an excellent source of ideas and many successful innovations have been developed by studying nature. After all, she has had billions of years to perfect (or optimise) many structures. If you consider the microstructure of a cuttlefish bone, you will recognise the lattice structure used in many buildings which offer very high rigidity and strength at low weight. A similar structure is found in trees and other plants as well as the amazing aerogel foams which can be almost lighter than air, yet very stiff. Aerogel (and other similar substances) is so light that it is the subject of projects by NASA and ESA to use it in spacecraft to save fuel and increase thermal insulation without sacrificing stiffness. Of course, many structures are designed like this, including the large metallic electricity pylons carrying electricity cables. People have taken up nature on her own game and designed aerogel to be an even more advanced material than she could have done. Many other bio-inspired inventions have been thought of by researchers and some are counter-intuitive as well. Consider this design for the turbine blade which does away with smooth edges and instead incorporates bumps on the edge, just like the Humpback Whale, which allow it to be incredibly agile. Before it was tested and modelled, this design was thought to be completely insane, but detailed tests showed

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that it offers amazing improvements in efficiency for many types of blades (wings, pumps, turbines, etc.). Creativity can arise in completely unforeseen ways and contexts. In the field of automobiles, have you ever wondered why some manufacturers use tiny aerofoils—almost like a small sill—at the back, above the rear window of many cars? How could such a tiny foil make any difference? Well, it does and quite a bit too! It helps to create small wind vortices behind the car, filling in the space which otherwise would be a low-pressure region (due to the Bernoulli effect) dragging the car backwards. Again, this is a non-intuitive idea which was developed into an innovation and has helped to decrease drag and fuel consumption. Incidentally, exactly the same effect dictates that you should open (not close!) your windows and doors at home a little when there is a very strong gale blowing outside, to avoid having your windows blown out. In more everyday settings, ideas for solutions may come to us out of frustration or irritation. I am sure you have had many times the “what if . . .” feeling about some irritating item or machine or situation that just isn’t working properly. Nearly every small improvement at home or in the office or in the factory had such a beginning. And you yourself may even have had an idea of how to handle it or improve it. A small eureka moment about something apparently small, which could become very substantial if properly developed. The water cooler, food or drink dispenser, washing machine, dishwasher, TV remote control, pressure cooker, dimmer, twist water tap with ceramic valves, baby’s drinking cup with a spout, baby’s chair supported on a table’s edge, invalid’s reclining bed, sweat-reducing cyclically inflatable mattress for invalids, etc. were all born when someone “clicked” or was annoyed enough to sit down and think of a solution. All I can add is that you should never underestimate your brain’s capacity for solving problems, big or small. Your small idea today may be the beginning of a whole industry. Even if it originally came off the top of your head! While squeezing your mind for new ideas for any particular challenge, be on the lookout for generic ones. These are ideas for technologies that seem to touch many areas and may have a wide range of potential applications, even in different fields by enabling the development or enhancing the effectiveness of many technologies. This type of “enabling” ideas may have huge industrial and market effects, but sometimes their specific areas of potential application are not all that obvious. Often, these ideas have their origins in discoveries in physics or chemistry, which are then elucidated and formulated in such a way as to give rise to targeted technologies. An important example is the tungsten carbide-based composite materials originally developed for military use by combining a hard ceramic (tungsten carbide WC), which on its own is extremely brittle and prone to oxidation, with a metal that dissolves part of the WC and acts synergistically with it to create a very efficient material. Since its invention (I believe it was actually accidental), its use has spread into cutting tools, diamond-synthesis anvils, drilling and crushing tools in mining and engineering and so on. Many other examples of generic ideas that produced enabling technologies, each of which themselves gave birth to a large number of specialised technologies, exist.

7.3

In Summary

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Many of them are materials with special electronic and mechanical properties and others are generic processes for producing materials or products. Alloyed steels and the various heat-treatment processes to produce them (quenching, tempering, etc.) are very good examples as are the processes for producing fibrous polymers, extrusion processes for plastic bottles, etc. On the other hand, another type of generic idea, the “platform” technologies, does not arise out of any discovery but is usually the result of planning (or foresight) and is developed hand in hand with specific targeted technologies. A famous example is the well-known mouse-controlled interface for personal computers which arose from an original idea for a non-textual interface and then went on to become a ubiquitous part of many people’s life and work. The new touch-sensitive interface is the modern manifestation of the same idea. Finally, an idea for an invention may simply be an improvement or an alternative approach to an existing technology that somehow is unsatisfactory or does not fulfil its purpose anymore. Or it may be the application of an existing technology in a different field or sector. This type of spillover inventiveness happens very frequently in various generic fields such as materials or processes, when a new direction occurs to the inventors or other, unconnected persons. In fact, it is often a very good source of new inventions, since a patent can refer to a previous patent and extend it for a new use. If at the time of the original application some particular uses hadn’t occurred to the original inventor (things do move on!), they can be the subject of later patent filings by other inventors, in order to satisfy a new demand or need. A huge number of materials were never designed or invented to be used in all of the uses they have since found themselves in and eventually found success in other applications. When nylon was invented (by accident) it had no specific applications, but it has since been applied in a myriad areas. The same is true for nearly all materials. Powder-processing methods were originally developed as a way to make solid ceramics from ceramic powders (still the predominant method for advanced ceramics) but they have since found tremendous success in “powder metallurgy” to make very strong and tough metallic alloys. This is actually a bit ironic, since these same advanced metallic alloys had in fact been one of the main obstacles for the limited utilisation of advanced ceramics.

7.3

In Summary

Ideas for new technologies are born or created mainly as a result of need and demand, but also sometimes out of the blue, when we least expect them. They can also be born as a result of forecasting or foresighting studies in an effort at planning the future. The capability for bearing ideas can be nurtured and honed from our everyday life experiences. Just look around you—I bet you can see at least a few things that could be improved and many others that can be used in different ways. Even counter-intuitive phenomena can offer new ideas. Nevertheless, in whichever way ideas are born, they need a researcher or an inventor to give them life.

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Tips • Creativity and inventiveness often go hand in hand and one can spur the other one on. They both benefit from one’s capability to think laterally and “outside the box” and both aim at new ways of looking at the world. • In any attempt at improving a product, device, material, etc. you might arrive at many possible ideas for this purpose. While deciding which of them is the most efficient or promising, be on the lookout for other possible applications for any of them as well. • A generic idea can be the fountain of many offshoots with applications in many areas. These enabling ideas may sometimes go unrecognised because their application areas are not always obvious. • While a forecasting exercise can prepare you for what’s coming, a foresight study can be very useful for planning the future development of any technology or group of technologies towards a pre-planned goal.

Chapter 8

How Do You Determine If a New Technology Has Value?

Any innovation to be valuable must have clear utility and be in demand. For this reason, in this book we only deal with ideas and technologies that have some (potential) utility, that is, things that can be utilised somewhere. It doesn’t matter what utility or use they’ll be put to. Utilisation may be in industry, as a new process, a new material or a new sensor, or it can be a service or product for the market. The problem is that at the very early stages, we often don’t know if our new idea has any utility, let alone its real value. And yet this is what we need to estimate in order to proceed. The actual value of an innovation is not innate but depends mainly on external factors. As a result, it is difficult to determine even after the technology is fully developed, let alone at its early stages as a new idea. This begs the important question: how do you determine the utility and value of an idea, which is not yet developed as a technology, at an early enough stage to allow you to decide whether it’s worth the trouble to develop it? How do you determine whether some idea will have some use and will be a valuable innovation at the end? It isn’t always easy. In fact, early indications can be completely misleading. One of the most important criteria which is always paramount in determining value (and patentability) is the originality or novelty of the idea. If your idea or approach is not clearly original (as determined by a very detailed and in-depth search that you should do as soon as you can), go back to the drawing board. There is absolutely no sense in embarking on any project (and certainly not worth taking the road to innovation) if the idea for a new technology has been thought of before. And yet, this is exactly what many researchers and would-be inventors do and waste their time. Many inventors, besotted by their own perceived bright spark, forget to do a thorough search to determine its originality. And by the time they discover that their idea is not original or that it impinges on prior intellectual property rights, they may have already spent a good deal of effort and money.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_8

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Technology Watching Throughout the duration of any research or industrial project, all researchers should continuously monitor the appropriate journals, conferences, product and technology announcements, etc. for anything related to competing technologies. This is known as “technology watching” and is crucial if you want to remain competitive, whether you are a researcher developing the next innovation or an industry preparing the next product or process. Technology watching is done at various levels, depending on the depth required: • at the level of industrial announcements, e.g. new or advanced products, processes, materials, etc. Such information is usually contained in industry newsletters, fairs, product literature, etc. • at the level of patents and patent filings. An excellent database for global patent searching is espacenet.com but others are also very good. Patent families filed by the same owner also give important information on longterm plans by industries and other entities. • at the level of scientific publications and conference presentations, most of which are listed on the internet. The current push for Open Publications (compulsory for all publications arising from Horizon projects) helps a lot in this regard. • at the level of RD projects, national or transnational. For example, all European Commission-funded projects are listed at cordis.europa.eu. Similar databases exist for other parts of the world. In addition, experts in the field may need to be consulted, possibly for a fee. Once you have an idea, therefore, the very first action you should do is to carry out a desk search to find out a number of important aspects. Firstly, a thorough search should be carried out looking for any similar ideas announced in publications, patents, theses, public announcements, know-how in the public domain and, in particular, any “public knowledge” or “obvious knowledge” that a skilled person in the field is expected to have. The trouble is that, whereas such a documentary search tends to be comparatively straightforward, the search for know-how and obviousness requires much deeper investigations. It is nonetheless necessary. The research is generally first carried out over the Internet and then expanded, if needed, by other means ideally with the help of a patent office or patent expert. The problem is that a technology might be under patent review and has not yet been announced publicly. Technology watching (see box) needs to be routinely carried out regularly, certainly throughout the duration of this transformation.

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In any case, you need only look for publicly available information, that is, anything that has been published or presented somewhere and any information contained in a product or publicly available technology. Industries and companies always keep their core technologies secret but any information that is kept secret is no problem in this case, since if you happen to think of your idea independently it is still considered original and therefore you can patent it and continue its development. Beyond that, a further search is necessary to look for any research or development projects under execution or already completed that may or may not have resulted in a public announcement. This is even trickier and may involve deeper investigations, but generally, most information sources are Internet-based. Even so, this is not always easy to accomplish, since even if no projects are found it might not mean that the idea has not been thought of before. For example, many proposals for a new project are rejected and the idea is then published in a paper or conference announcement. There is a corollary to this: any invention that you disclose before you get formal protection (i.e. patent) will lose much of its (marketable) value, even if you go on and develop it into an innovation. If you talk publicly (or privately to the wrong people) about your new idea, you risk both losing its value and to have it stolen. Therefore, in the starting stages, make sure you keep your idea to yourself and only announce it after you obtain formal protection in Stage 4. But even after due protection has been secured, you must never disclose the core aspects of the technology. We’ll discuss protection strategies later. Intrinsic vs. Extrinsic Value When considering a new technological innovation, it helps to systematise abstract things like value. With this in mind, we can say that the value of any technology or know-how can be distinguished into two main categories: • its “intrinsic value” which depends on the technology itself irrespective of external non-technical influences and • its “extrinsic value” which is determined by the interaction of the technology with external factors such as industry, the market and society at large. While the former is amenable to improvements by the researcher or inventor to improve its properties, characteristics and thereby its applicability and value, the latter is not and, because it is so fickle, constitutes a high risk parameter for determining value. In fact, extrinsic value is actually an estimate of the comparative value of the technology with respect to other competing technologies, already developed or on their way. Again, the inventor has little control over such competitors and therefore their development again constitutes a risk. (continued)

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Finally, extrinsic value is also heavily influenced by non-tangible parameters such as perceptions, hearsay, previous technological failures or scares and other public attitudes. Some ideas are obviously valuable because they are particularly useful. These are the ideas or inventions that are based on need and are expected or designed to fulfil a specific purpose. They may even be designed to acquire the value expected of them. Sometimes the value, or the nature of that value, may change according to the applications they are put to or even the circumstances. For example, a catalyst may be economically valuable for its capability to produce some industrially useful chemical, but it may also have significant societal value for its capability to convert carbon dioxide in the atmosphere, thereby lessening its contribution to global warming. One such catalyst I have personally been involved in developing has this double value. It facilitates the process of dry (carbon dioxide) reforming of methane (both are greenhouse gases) to produce highly valuable “synthesis gas” made up of hydrogen and carbon monoxide. Other catalysts that allow the efficient conversion of natural gas (consisting of about 95% methane) into a liquid fuel are also valuable as they can convert a strong greenhouse gas into a highly useful commodity, liquid fuel, thereby reducing the methane content of the atmosphere while reducing our dependence on fossil fuel at the same time and helping to keep the ordinary car running without the need of petrol. As a result, automobile manufacturers are heavily backing such technologies. Chemical engineering and metallurgy are full of such examples of multi-value inventions. Sometimes they have nothing to do with chemistry or metallurgy as such. For example, one of the by-products of petroleum refinery is bitumen (tar) which is of course used in road construction all over the world. Slags (waste metal oxides) are a major waste of metallurgical blast furnaces but are finding increasing use in the making of durable road surfaces or construction elements or even highvalue inorganic functional materials such as pigments. Even fly ash, a waste of coalfired power stations, is finding some use as an additive in the making of structural units (bricks, pavers, etc.).

8.1

Practical Evaluation of an Idea

So, how do you evaluate an idea or a potential invention at its earliest stage? The simple answer is: if someone wants it, then it has value. Remember that almost nothing—materials, ideas, any type of invention—has any real value until some use is found for it or someone is prepared to pay for it. Such is the case of the famous “1856 British Guiana 1c Magenta” stamp, probably the rarest and most expensive stamp in the world. Its intrinsic value is zero (a few were originally printed on a newspaper press to cover a shortage) and yet because so many people would love to

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have it (and it being so rare), its extrinsic value is huge, in the millions of Euro. But even in this case, the actual value only became clear not when it was made but further down the line, at the market. It would be great if we could develop a structured approach to determining value at an early stage, when the eventual applicability of the idea is not at all clear. Few ideas or even patented inventions are valuable intrinsically before they become innovations. Note, by the way, that all final innovations are valuable extrinsically; otherwise there would be no sense in developing them from the original idea and invention. Nevertheless, their intrinsic value may acquire real value if it reflects other, non-market-related aspects. For example, it may reflect the quality of the inventors (reputation, capabilities, expertise, understanding of industry and market, etc.) or secured funding or other support for its conversion to an innovation. Actually, ideas and scientific findings have some intrinsic scientific value in as much as they succeed in “pushing back the frontiers” of science, but this is only translatable to real world value (economic or other) if there is demand for it somewhere down the line. I must add some qualification here: many obviously promising inventions actually acquire real value even before they are properly developed, based on expectations and highly drummed-up prospects. Paying up front for something for which you have no guarantee of any returns is of course a huge gamble, but because it is much cheaper to buy a technology at a low TRL (usually at TRL 5, after technical feasibility has been demonstrated, but at an even lower level is not too uncommon) many investment decisions are made soon after Critical Milestone 1 (proof of concept) has been achieved. This means that a really promising technology may be recognised and acquire value long before it is fully developed as an invention, let alone an innovation. The risk is there, but it has been analysed and judged to be well balanced to the eventual possible benefits. But even if none of the above conditions are met, it is still possible to estimate the potential value of a new idea, discovery or phenomenon and extrapolate this to its eventual real value, once developed. First of all, as discussed previously, an idea or technology, at a minimum, must be original, have utility and not be obvious to a skilled person with experience in the field. In fact, these are also the minimum criteria for a patent to be granted. Furthermore, there are a number of other indications one can look for to gain insight into a new idea and its potential value. To do this, you should consider the following: • Are there any similar ideas or phenomena which have acquired value, perhaps in completely separate fields? Then perhaps the new one will as well. A number of such examples of value-sharing technologies exist, especially in the materials and processing areas, where one was developed originally and others followed. Bio-mimicry, bio-inspiration and biomimetics all fall under this category. Medical care innovations are often the result of the application of physical and chemical principles—these include blood pressure monitors, pacemakers, blood

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8 How Do You Determine If a New Technology Has Value?

sugar monitors, robotics, prosthetics and nerve-activated limps, hearing and seeing sensors, etc. Do the physical and chemical properties and characteristics of the new findings, materials, effects or phenomena address a gap in some physical or chemical theory or explain some unforeseen scientific findings? Such discoveries may lead to major innovations (e.g. the Hall effect, the Peltier thermoelectric effect, amorphous diamond and martensitic transformations in non-steels) although they would generally only be protectable once they find specific applications as components and devices. Does the idea fit in with long- or medium-term plans of any regulatory authority or the conclusions of a foresight study? This is particularly pertinent for environmental protection, security and health issues, etc. Does the idea follow on from a previous technology or innovation and does it show promise for improving it? This is important in the case of existing technologies that have “hit a wall” in terms of performance needed, for example, energy storage capacity of batteries. Can the idea be formulated in such a way that its transformation is easy to plan and execute? Can it be formulated so that it is not obvious to any skilled person?

Naturally, even if an idea or finding is determined to have potential value, one can only be sure of its actual value once it has been developed further, at least past Stage 2 (proof of concept, Critical Milestone 1) and certainly after it has been protected in Stage 4. Nevertheless, if a positive answer is given to at least a few of the above questions, then there is a good chance that, as long as originality is assured and secrecy is preserved, the eventual innovation to be developed from the idea will have real value. Be that as it may, valuable ideas are not always easy to be recognised as such, even with careful consideration. In fact, valuable ideas may sometimes be staring us in the face and we don’t recognise them as such. I am referring to the situations where we are so deep in the forest that we “can’t see the wood for the trees.” This happens to many inventors and researchers who are so deeply engrossed in a particular area of their work that they don’t realise that many of the small solutions that they develop routinely as part of their work or use in the lab as a matter of course have real value on their own. Think about it. How many small (or large) solutions to pesky little problems in your everyday research work have you developed over the past years? They may be as small as finding a simple chemical process to prepare a surface or a new clever little software algorithm to produce specific numerical input to be used in a programme. Or it may be a simple way to integrate a number of sub-systems when building a large system, e.g. a machine. Over the years I have witnessed this many times when presenting “exploitation strategy” seminars to consortia carrying out large EC-funded projects. During one of the sessions we discuss how to identify the actual valuable exploitable results among a large number of research results obtained. It is during those sessions that we always end up augmenting the original list of a few main exploitable results with at least as many which the consortium partners hadn’t thought of as valuable but instead had taken

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Practical Evaluation of an Idea

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for granted. An example I remember was a special treatment for glass fibres developed by a partner which was valuable enough to be used in mirror-making by a company external to the project. The partner had developed it as a matter of course but never thought it might be useful in another area. Another related example is a simple surface treatment used routinely by a lens manufacturer which another partner discovered works perfectly for ultra flat glass, something which had bothered them for years. Many such collateral technologies have become very successful over the years. It is up to the inventors to keep their eyes open for them at every turn. This type of spillover of technologies is very frequent and of course constitutes a separately exploitable result and can be protected separately. The cyanoacrylate instant “superglue” was developed for completely different purposes but it has found invaluable use in microsurgery (retina, vessels) where it can be used to join very fine tissues instantly. Also, the central technical results of projects may very well be found to be separable exploitable results in completely different application areas. This of course occurs all the time in the materials field, but we also find it in other technologies. The CPU chips in gaming consoles are particularly fast, powerful (generally much more than those used in ordinary computers) and highly specialised and have therefore found extensive use in space exploration and in the military, where very fast, very large-scale calculations are often needed. Be aware that value can grow where none existed before, due to new regulations or rules that create a space where your technology can grow. Unfortunately, the opposite is also possible: your technology can also disappear, sometimes overnight, due to changed circumstances or new regulations which your technology is not built for. For example, new environmental or energy regulations may destroy one whole set of technologies (e.g. traditional benzene-based glues) but create a market space for water-based glues to grow in. Such ephemeral situations are dangerous because they create instabilities. By keeping a close technology watch, however, you should be able to avoid them and even profit from them. Actually, instabilities of many kinds are often a fertile ground for creativity. New opportunities may result or the destruction of an old order may signal the beginning of a new one. The two main categories of value—intrinsic and extrinsic—may be detailed further, which helps with a new technology’s real-world valuation at different points in its development. Breaking the criteria down to details allows reliable comparison between various ideas and technologies. In this regard, starting with the intrinsic aspects, the value of a new invention may depend on a number of parameters, some of which have already been mentioned briefly. They include: 1. The overall quality of the science behind the technology but also the quality of its inventors are important indicators of value, that is, (a) (b) (c) (d)

The quality of the science behind the invention The quality, reputation and expertise of its inventors and technologists The quality and expertise of the technologists to support it The prospects for further developments

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2. The technological potential of the invention is of course paramount in determining value: (a) (b) (c) (d) (e) (f) (g)

The level of development of the know-how. The reliability and viability of the technology. The further costs for development of the know-how. Its position vis-à-vis competing technologies. Is the technology self-sufficient? Is it is an “enabling” technology? Is it is a “platform” technology?

3. Specifically, the current level of development of the technology is an important indicator of its intrinsic value, and we may identify the following levels: (a) (b) (c) (d) (e) (f) (g) (h)

Idea or design based on sound principles Analytical or experimental model Lab result Lab prototype Feasibility test prototype Economic viability pilot (pre-industrial) Industrial prototype Industrial or commercial product

(Notice how these levels of maturity correspond approximately to the stages and the TRLs in Fig. 1.1.) 4. The strategic aspects of the technology are also important indicators of value: (a) Is the technology fully protected and anchored? (b) Is there sufficient confidentiality, especially with respect to the “core” aspects? (c) Are patents carefully written to avoid disclosure of core knowledge? (d) Is the technology “branded” or at least well recognised? (e) Is there a “fallback” alternative (or enabling) technology? (f) Is there a strategy to minimise technical risks in place? (g) Is there a strategy to minimise non-technical risks in place? Turning now to the extrinsic influences on the value of an invention, the most important are related to the eventual market and societal applications: 1. Its interaction with the market (or society), that is, (a) Is it a “market-pull” (the market needs or demands it) or “technology push” (the market knows nothing of it, but might want it if it knew)? (b) The degree of market or societal need or demand (i.e. its market-pull) (c) Is it compatible with the market or society forecasted trends? (d) Is it compatible with the policies and standards laid out and any foresight recommendations?

8.2

Competing Technologies

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2. Its potential market penetrability: (a) (b) (c) (d) (e)

The prior existence of any enabling technologies to make it work The vested strength of competitive technologies in the market The size of the overall potential market The existence of a pool of trained and skilled operators The existence of a good “valorisation” network put in place by the inventor

3. The potential direct benefits to the user: (a) The added value provided by the know-how: potential increase in productivity, capacity, profit, sales, recognition, competitiveness, etc. (b) The cost-benefit: total potential value/total costs of introducing the new technology (c) The existence of trained and skilled operators at the Adopter (d) Will the new technology “fit” in nicely with existing operations or will it interfere? (e) Will there be any disturbance of current operations during installation? This last category relating to the benefits of the new technology to an eventual user is a huge area of discussion and we’ll look at it in more detail when we discuss industrial viability (Stage 8). It suffices to mention at present that the earlier the value of a new technology is identified, the easier the road to innovation will be.

8.2

Competing Technologies

At this point it is worth considering the effect that other, competitive technologies which address the same problem could have on the value of your idea. In other words, what would make your idea and eventual innovation valuable enough to make customers want to queue for it? Should you try to imitate another, apparently successful approach, or should you forge ahead with your own ideas and approach? The best advice I can give is “do not follow, lead!.” In other words, to catch a bird, do not just make a better trap but offer a completely different way of doing it (see box). Of course, if the current ways of catching birds are clearly not satisfactory, then by all means make a similar but better trap. But if you want to excite people and make them ask for your new product, it’s far better to develop a completely new idea for catching birds. The risks may be higher (you may have to create a whole new market for your new technology), but the rewards can also be huge, at least until the market followers (and there will be many, if the need is hot!) catch up. A famous example is the very well-known computer company which first recognised the latent interest (demand) of many customers for something more than a phone: a mobile computer with a phone, that is, a smart phone, which of course captured a huge chunk of the market for years.

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While it can be very profitable to forge ahead, it entails many risks and not just technological, so it has to be decided carefully. For one, it may be very difficult to go back and correct mistakes if the market moves on or if there is a negative reception. In addition, if the idea does not fully catch on immediately, you may incur a large loss. Competitors may wait to see the market or industry response and produce competing ideas minus the problems. It is a matter of strategy. A very important aspect that must be kept in mind at this stage is the fact that competing technologies are, in general, also developing (otherwise they’ll soon be overtaken). Therefore, it is the relative speed of your development activities (always confidentially) with respect to the speed of the competitors’ development that can decide your technology’s value. Don’t ever make the mistake of lying back on your laurels, sure of the invincibility of your technology. A winner always begets many emulators and, no matter how protected your technology is, there will always be others trying to overtake you. This can be illustrated by a case study alluded to earlier: throughout the 1970s and 1980s one of the biggest growth areas in the advanced materials sector was that of advanced ceramics (pure forms of oxides, carbides, borides, nitrides, etc. of metals such as aluminium, silicon, zirconium and others). Because of their very good properties (high hardness, strength in compression, high-temperature resistance, wear resistance, etc.) in comparison with most of the best metallic alloys at the time, they were touted as the “logical replacement” for those alloys, especially for use under corrosive or high-temperature conditions. The only “little” outstanding problem was their lower fracture toughness: they tended to break catastrophically under tensile loads, whereas most alloys fail gradually, giving some “warning” by plastically deforming, a fact which translates into higher engineering reliability. At the end, although advanced ceramics did develop very well, they hardly achieved any of their aims for replacing metallic alloys in critical areas. This was partly because their reliability could only marginally be improved, but mainly because metallic materials continued improving themselves, in part due to the advent of powder metallurgy (e.g. turbine blades and high speed tools) but also due to the development of many new advanced alloys. Be that as it may, advanced ceramics are now found in many critical niche and very high value applications in microelectronics, anti-corrosion and anti-wear coatings, cutting tools, high-temperature protection, etc., but generally not where the main effort was concentrated in those early days. To be fair, they have also since diverged into ceramic-based composites (which have higher fracture toughness) which are used in some extreme applications in aerospace and high temperature engineering. In addition, there are many instances where they actually combine their special advantages with advanced alloys, in turbines, spacecraft engines, etc.

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Formulating for Value

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Forge the Way or Follow Safely? The value of a new innovation (and whether it wins or fails) is often determined by whether it is attempting to cash in on a trend (and offer improvements on it) or whether it is bringing a new idea into the market. Whereas in the first case you have to catch the wave as it forms (if you catch it too late, like a real wave, you’ll just go under), in the second case you often have to make the market. In the mobile telephone market, the very first mobiles (in the US) were analogue devices which captured a nascent market with tens of millions of users within a few short years. But the market really exploded when the much more versatile digital devices came onto the market in the early 90s (the original company, insisting on the analogue format, nearly went under). In this case, the leaders forged the trend but the followers won hands down as they offered superior products. On the other hand, the operating system based on windows not only forged a new market but did it in such an all-encompassing way that follower operating systems could hardly touch it, even if they offered some better functionality. In fact, leading is often wrought with potential potholes. Not only are you trying to forge a new way and open a new market (however “nascent” it may be), but you generally also have to contend with natural conservatism (“I’ve been fine without this for years, why should I need it now?”) and attacks from existing, entrenched ways of doing things. Followers, on the other hand, have to rush to make up for lost time, but the market has been opened up and people’s appetite has already been well whetted, so they can still make money.

8.3

Formulating for Value

Once the idea has more or less crystallised in your mind, some substance needs to be added to it which will help to clarify its nature and value further. In other words, the idea needs to be put into context, evaluated, compared, critically appraised, re-evaluated, etc. to form a clear technology concept. This is at the level of TRL 2, somewhere between Stages 1 and 2 in Fig. 1.1 and is referred to as “formulation.” Proper formulation early on is not only necessary but it adds value to the technology and can guide the later stages of development. The main actions to be carried out for effective formulation of the concept are connected with the preliminary scientific and technological development. And it all starts with the unambiguousness of the formulation of the idea or invention. While this sounds easy, it isn’t and it is crucial. In fact, if a technology cannot be formulated unambiguously (i.e. it cannot be clearly stated independently of any other technology or idea), then its value and usefulness as an innovation may be compromised.

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You have to pay a lot of attention to this aspect. Your eventual protection strategy may also be dependent on how you formulate your invention. For example, a particular process for the production of a material or product needs to be analysed, stated and described in such a way as to leave no doubt as to its originality and non-obviousness—both critical criteria for the granting of a patent. The aspects that are original need to be emphasised and enhanced during the development phase and those that are similar to other technologies need to be clarified. At this stage, an exploratory project for the early testing of the capabilities and potential of this technology is a very good way of proceeding. Precise and clear formulation is critical in you getting support for your project. Since it is such a novelty, most people will need a clear explanation of the technology and its potential functionality and capabilities. Objectives vs. Aims “Objectives” and “aims” are very often confused in everyday life, let alone in research projects. They couldn’t be more different, but confusing the two often leads to confused development programmes. Briefly, an aim is where you want to get to (the technical target) whereas an objective is the way you’ll get there (the method or route). For example, you may want to develop a new material, eventually having a particular set of properties (say XYZ). This is the technical aim. To achieve this, you need to set and achieve a set of objectives: development of a process, a particular microstructure, a particular composition. Objectives and aims are often confused in RD projects as well. Lately, the European Commission evaluators and reviewers expect to see the objectives and aims clearly set out in the form of work packages (made up of tasks) and quantitative targets, respectively. In this way, the progress of a project can be clearly ascertained and any corrective actions decided in time. This is done firstly by comparing progress to the objectives set and, at the end of the project, comparing the final quantitative specifications achieved to the aims set at the outset. Aims of a project may also be non-technical, for example, “to commercialise the results”, and in Horizon such aims are also quite important. Setting aims is not the same as setting objectives. Whereas you know approximately what you want to do, your quantitative aims are always related to a certain baseline, e.g. percent improvements. Further, a clear comparison and distinction with any existing technologies (or those that are already in the pipeline) need to be made, both for yourself and for others later, when you start disseminating the technology. This is important as it serves to clarify the specific niche that your technology is aiming to fill as well as its specific advantages over other technologies. Your exploratory project must cover

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Formulating for Value

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these aspects. For example, if your invention refers to a new optoelectronic technology made by a clearly novel process which offers specific technical advantages (e.g. cost-benefit and higher resolution), these need to be contextualised and quantified vis-à-vis existing processes. The novelty, as well as its advantages, is always a relative attribute or may even be “in the eye of the beholder,” that is, it may only be perceived to be so. A somewhat hidden prerequisite for an idea to be eventually commercialisable is that it must be provable experimentally in the lab. There is no point in trying to formulate an idea in such a way that it cannot be shown experimentally to be valid. Usually the formulation is the step which determines the provability (experimentally) of an idea or invention. This is, incidentally, the main reason why theoretical works cannot be patented: if there is no way to prove their feasibility, then there is no point in protecting them. Formulation of a new or improved technology also requires an early assessment of its possible eventual characteristics and properties, vis-à-vis its possible applications. This means that you need to set certain aims (quantitative if possible) which would allow the technology to become competitive once it is a developed innovation. This is not as easy as it sounds. Firstly, you need to understand what is needed or demanded by the various markets. Such information is not easy to obtain but, by looking at competing products or processes or systems, you will get a good idea of what level of performance you need to aim for and what objectives need to be part of the work. The aimed for eventual cost-benefit ratio is important of course, but at this early stage you can probably ignore this. Further, you should formulate the new idea or technology towards answering an acute or dormant need or demand, especially a latent demand, if it isn’t already there. Pay attention to the market and industry trends, especially fads and fashions. They will give you strong pointers of what to aim for. Another aspect to keep in mind when formulating your idea is the state of a technological field. It’s no use inventing something that will soon become irrelevant or obsolete. For many years, analogue devices were the only game in town. When digital devices were developed (once binary computers became widespread), most analogue ones slowly disappeared. The modern world is predominantly digital. Interestingly however, analogue devices have not died out completely. The reason for this is that most high sensitivity sensor elements (thermocouples, audio, chemical, etc.) are based on physical principles and therefore have analogue signals— hence they need an “analogue-to-digital converter” (ADC) interface to be able to connect to a digital device such as computer. In so doing, they lose some of the signal since the digital world can only work with binary “bits” (“on” or “off”). So, for example, an 8-bit interface offers a signal resolution of only 1/256 (1/28) of maximum signal and even expensive 20-bit interfaces offer resolutions of 1/1,048,576 (1/220). This is sometimes not enough for a signal that lasts a very short time or for a response that needs to be extremely fast. An analogue interface, on the other hand, has almost no such limitations and its resolution depends mainly on its quality. That’s why vinyl records are coming back in vogue and are appreciated by music purists. In fact, the master recordings of new songs apparently still rely on

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analogue machines to ensure recording of the complete range of frequencies and tones. Furthermore, formulation of the concept of the technology must take into account existing competing technologies. The new technology should be formulated and placed at a “position” where the existing technologies are not performing very satisfactorily. Software and computer game developers are very good at this and they continuously develop new or improved products in order to carve a strong niche and cover areas which other products do not. It is not surprising that many global successes were built upon earlier entries’ failures. They looked at the earlier products’ weaknesses and correctly understood what was lacking or needed. Finally, correct formulation of the concept is crucial for technologies that do not currently have a clear use or application. Many phenomena discovered by physicists originally had no application and were just intriguing and exciting. Once they were formulated and studied extensively, they gradually found their niche. The transistor, the fission (and soon, one hopes, fusion) reactor, the integrated circuit, the Internet, etc. are all innovations that originally started as discoveries without specific application. It took decades before they were eventually properly formulated and could be transformed into a valuable innovation.

8.4

Strategic Activities for Value and Success

Simultaneously to the scientific and technological formulation and development of your project, a number of strategic actions need to be initiated as soon as possible, at Stage 1 or 2 at the latest. These will ensure that the technology will retain (and increase) its value in the market, but also smooth the transition from the lab to the market. They include, but are not limited to: • Making sure that confidentiality is preserved at all times. This is important at all stages, but specific strategies for retaining confidentiality should be initiated as soon as the technology is recognised as having potential. • Preparing a strategy for effective dissemination which should be focused only on the potential functionality of the technology and nothing on the “how it’s made.” This is a type of early marketing of your technology without losing the technological edge. Actually, it’d probably be safer to talk about the potential functionality at a later stage (usually after protection in Stage 4), but if a competitor is too close for comfort, a simple announcement at a conference would help to ensure some recognition at an early stage. • Formulating to make sure that the scientific aspects (which may or may not be publishable) are separable from the technical aspects. This is important vis-à-vis later needs to protect your technology formally (patenting, etc.). Theoretical aspects cannot be patented. By keeping the two aspects separable (as much as

8.5

In Summary

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possible), you can publish the theoretical aspects while keeping the technical aspects for later IPR (Intellectual Property Rights) protection. • An important early action is the preparatory actions for the development of strategic alliances with complementary research teams (for characterisation, processing, etc.), industrial implementers and possible end-users. Such strategic alliances are only necessary later (usually at Stage 5 or after) but preparing for them early is very useful. This way, you will have a faster and more effective entry into the industrial development stages. The EC’s insistence on at least some industrial partners in a project (ideally representing all stakeholders) even at TRL 2–3 has this aim. • Early considerations of the type of protection that would be appropriate would also help to pave the way, even though final decisions need only be taken in Stage 4. It is important to realise that the formulation of the concept of the idea or technology is not to be “set in stone.” It may sometimes be necessary to re-formulate it and adjust it according to new findings, new improvements, enhanced processes, etc. But at some point before Stage 2 (Proof of Concept) you should finalise the formulation of the idea and thereafter stick with it as far as possible. This will ensure stability and continuity for later stages.

8.5

In Summary

An idea for a new technology is potentially valuable if there is potential demand for it or if there is clear indication that its properties or characteristics are competitive in one or more fields. Many intrinsic and extrinsic factors decide the value of the idea but usually the inventor can only influence the former. Value of a new idea for a technology is a relative quantity and is often determined in comparison to or in juxtaposition with other, competing, technologies for the same application. It is thus imperative that other developments in the same and related fields are continuously watched. Be aware that value can grow where none existed before but it can also disappear, sometimes overnight, due to changed circumstances or regulations, etc. Correct formulation of your new technology is crucial in ensuring optimal value and future development.

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Tips • When attempting to estimate the potential value of your idea, look around for similar efforts or at least ideas that have attempted similar challenges. How did the market or industry behave towards them? What lessons can you learn from previous attempts? • Technology watching is important at this early stage and also during all the following stages. But don’t forget that while you are watching, your competitors are doing the same. Keep your cards close to your body and only publish the what, not the how. • Horizon projects are all expected to disseminate their results in Open Access publications, but at the same time you are obliged to exploit and use all your results and derive maximum benefit from them. There is no contradiction in this—it just means that you should publish the results of your work after you protect them. • When you formulate your new idea, make sure your formulation is appropriate to the field and sector you are aiming at. Every sector and field has its own nomenclature. • Be careful with setting aims in proposals that are either too high and overambitious or too low and non-competitive. The evaluators will punish both as unrealistic. • Prepare your future strategy as soon as you have identified the value of your idea and formulated it in technological terms. Keep a watchful eye and be prepared to adjust as necessary.

Chapter 9

Critical Milestone 1: Proof of Concept

Once the technology or idea has been carefully formulated, the scientific and technological development can commence. This always starts by designing and developing a (sometimes very extensive) programme of work which will allow you to check your assumptions and decide whether the new technology can achieve the aims you have set out. This means that the objectives formulated earlier need to be specified clearly and the tasks described appropriately. These need to work together for the aims to be reached satisfactorily. The research and development effort needed is usually set out in a research project, often publicly funded and only rarely industrially or privately funded at this early level. Even seed capital would be difficult to secure before this stage is completed successfully. The objectives of such a project all aspire to prove the concept. We are now at the “Proof of Concept” (PoC) Stage 2, aiming for TRL 3 and hoping to achieve Critical Milestone 1. The technical risk is still very high at this stage, since neither has the concept been well established, let alone proven, nor have the characteristics of the new technology been ascertained to be competitive. This is the reason why we set the result of this stage as Critical Milestone 1. Before this stage, the technology is more or less speculation and only assumptions can be made regarding its properties, characteristics and actual suitability for any application. Once the concept is proven during this stage and Critical Milestone 1 achieved, then the technology can be thought of as being promising, as having some potential and being worth developing further. Projects at this stage are considered to be upstream projects and can get funding from bodies such as the European Research Council or various National funding agencies, under basic (or exploratory) research funding programmes. The Cooperative sub-programme of the European Commission Framework programmes (currently the Horizon) may fund PoC projects under certain conditions, but it is generally aimed at projects that will reach TRL 5, namely, those aimed at demonstrating the technical feasibility of the technology for particular applications. So what do we mean by “Proof of Concept”? Simply put, it is the scientific and technological validation of the statements and assumptions you made in the earlier © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_9

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formulation of your idea in Stage 1. Before you start on a rigorous programme of research and development to develop the idea in Stage 3, it is necessary to demonstrate that the idea is valid and based on sound scientific principles. At this early stage, you are only really interested in finding out if your idea can “hold water,” not how effective it is, or its level of performance. An application target may be obvious (or planned), but it is not essential. For example, if your idea involves a new material with new or improved properties, the proof of concept may require you to check whether the material is indeed capable of living up to its expectations, even if it is not optimised yet—this will come later, during the development stage. The proof of concept of a new device or system might involve you checking whether it can deliver a particular function, even if only roughly. The proof of concept of a piece of software is similar: you only need to establish whether your approach (logarithm or process, etc.) can give the desired result. Finally, the proof of concept of a new method or process needs to demonstrate that the said method or process can have at least the same result as existing methods or processes. If there seems to be little chance of a real added value over the existing situation, there is no real point in proceeding. The amount of work you put into demonstrating proof of concept should not be excessive. You should not spend too many resources on it—just enough to validate the general aspects of the concept. But the demonstration needs to be conclusive, and this is why we identify its successful culmination with Critical Milestone 1 and TRL 3. It is your first major test of the idea and if the proof of concept is not 100% conclusive or at least highly promising, there is no sense in going further. Perhaps you need to change the direction or approach (or method or process) to demonstrate the concept. Your assessment of the results of any PoC work should be strict and objective without compromises, if possible. Since this stage leads to TRL 3, you should make sure you are not making any mistake and that the added value promised by your new idea will at least have a fair chance of materialising. It is important to be systematic and methodical when you assess and evaluate the results, and to be especially strict when comparing it with competing technologies. For example, you could make a list of various technical and non-technical characteristics that could be decisive in determining its prospects. Some of them could be: • Are its critical properties significantly better than those of competing technologies, especially those that are already entrenched in the industry or market? • Is your first estimate of the cost-benefit suitably favourable to encourage a user to make the change or at least to give it a try? • Is there sufficient need or demand for it? Perhaps pent-up or potential demand? • Does it solve a particular bottleneck or problem in industry, society or market? • Does it fit with the current technological, societal or market trends? • Could there be some resistance to it on environmental, societal, industrial, health, safety, energy grounds, etc.? • Does it rely on other enabling technologies that do not yet exist? These could be materials, software, electronics, etc.

9.1

Fit for Purpose

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• Can the new technology be produced (or used) in a range of qualities or functionalities? • Even if the technology fails on some of the above criteria, is there perhaps a niche (market, application, use, etc.) where it could be applied? And so on. Naturally, even if your technology fails on some of the above criteria, it could be amenable to corrections and revisions until it is valid. Many of the above criteria allow for corrective actions or for different levels of satisfactory outcomes and with appropriate actions you could eventually adjust your idea enough to pass the above criteria and achieve Critical Milestone 1.

9.1

Fit for Purpose

Fit for Purpose If an application (or applications) is more or less known at the start, the experienced inventor will quickly recognise the level at which they should focus their proof of concept activities. They will not try to invent any material, device or system that will offer any more than is required. This is called “fit for purpose” targeted design and has some huge cost and production advantages. By design, it is possible to adjust material, colour, feel, wear resistance, finish, shape, functionality, adaptability and many other characteristics to fit the target market, industry, regulations, country, etc. A related design criterion, which should also be considered at the proof of concept stage if the eventual application is known, is “planned obsolescence”. This means that the lifetime of the product is planned very approximately beforehand, especially if it is expected that new designs or functions will be needed after that period (perhaps based on a foresight study). Although this design practice has acquired a negative connotation (“built to throw away”) and has in general been abandoned for most high value items, it is a valid way of building something “fit for purpose” because the cost is generally much lower. It is very much in evidence in the production of low cost toys, devices, clothes, shoes, consumables, containers and in general anything that is not meant to last a long time. If you can already think of clear potential applications for your idea or technology, then the PoC activities allow an additional level of decision (which is usually taken only at a more advanced stage): you can adjust the idea to be “fit for purpose” (see box). In other words, the proof of concept activities may be more successful if you target the technology to the most favourable application. For example, nylon is not useful for high strength or high-temperature applications (for which you would use an alloy or a ceramic respectively), but it is perfectly fine for toys, small containers, small chassis, small geared machines, etc. Nearly everything (materials, devices, systems, services, etc.) can be designed and built at different levels of quality,

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strength or functionality, depending on the target market. So, if the application is more or less known and it allows for a range of performance, the proof of the concept may also follow a sliding scale of “fit for purpose.” For example, the same mobile telephone may be built cheaply for a low-income market, or expensively with many functions for a high income or more demanding market. The same is true for cars, computers, electronic or mechanical components but also for services (e.g. airplane class) and nearly everything else. Innovatively, the “fit for purpose” idea has also been extended to the outward appearance (design, finish, etc.) of a product which is identical in nearly every other respect to other (competing) products, in order to be able to separate it and associate a higher value with it. What happens if the concept cannot be proven experimentally? Remember that an invention needs to be proven and have utility in order to become an innovation. Even if the theoretical background is fine, your idea cannot be called an invention without experimental validation. In the absence of this, Critical Milestone 1 is not attained and any further work would be too risky. The usual way to approach this conundrum is to go back to the original formulation and attempt a different approach. It is rare that a potentially useful idea cannot be reformulated so as to ensure experimental validation and proof of concept. You need to find the right way which will make this possible. The proof of concept tests are crucial and determine to a great extent the degree of risk you will take when you move forward. My advice is that if you are not reliably persuaded that your PoC results are valid, positive and promising, you should not move forward without making corrective adjustments. Every corrective action you take here will save you a lot of money and effort later. Even so, I have personally witnessed many ideas (and even funded projects) skipping this crucial step to go straight into development and months or even years later discovering that the concept does not work properly! Or that the concept is only partly valid and requires a completely different approach. What a waste of effort! Of course, achieving proof of concept is not a guarantee that the technology is completely valid and its further development is not without risks. But carrying out a systematic—even if just a first-order—study to demonstrate proof of concept will definitely save you a lot of difficulties down the road. It will also reduce the overall technical risk involved in the development process.

9.2

Technical Risk

This brings us to a very important topic—technical risk and how to analyse it and mitigate it. Technical risk is present whenever a new technology is being developed. It is worthwhile taking time at this stage to consider the various types and effects of technical risks, especially those that may present a serious obstacle to eventually reaching your technical aims. At a later stage we’ll also discuss the non-technical risks that could compromise your efforts to reach the innovation and achieve commercialisation.

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Technical Risk

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During the early development stages, especially during the “proof of concept” stage, the main risks are often associated with the very validity or relevance of the idea (at least with current knowledge), especially in relation to the applications it is aimed at. Such risks may include the following aspects: • The idea may conflict with accepted physical principles. This sounds obvious, but you’d be surprised at how many ideas sound interesting but, on second thoughts, turn out to be baseless or well-hidden nonsense. Think of the multiple attempts at making a “perpetual motion” machine or one that apparently produces energy and uses only part of that energy to keep on moving, without any external input. Any serious physicist will tell you that there is “no free lunch” and yet we’ve all seen pseudo “inventions” using gravity (water or weights falling, etc.), magnetic fields, various contraptions and so on, that apparently allow movement or some action without obvious external energy input. This is of course impossible and on closer inspection you’ll always find some hidden source of energy. Nonetheless, many people still fall for the idea’s inherent seductiveness, however improbable the idea or its manifestation may be. • Ideas which may sound fine in theory, but are way before their time or ill understood, or a lot of the theory behind them is not known, or one or more enabling technologies are missing, etc. This includes way-out ideas such as faster-than-light transport, breathing gills for humans living in the sea, hotels and homes in space or underwater, interstellar travel, personal commuter planes above roads, self-healing nanobots, space elevators, etc. • The idea may initially look valid, but on closer inspection the physical basis is not yet in place or something crucial (often non-technical) has been overlooked. In the materials field, the decades-long attempt to produce tough advanced ceramics using “ideal” pure ceramic powders is a good example. While the idea worked to some extent, the toughness of the ceramics would immediately fall as soon as any surface flaw appeared, during misuse as well as normal use. Another example is the early attempts to produce “expert systems” software for various uses, such as medical diagnosis. The problem was that the person responding would often have to know the correct questions to ask or answers to give. At the present time (2014), expert systems are getting better, but the above problem has still not been solved satisfactorily. In many such cases, it is the human parameter that is often overlooked. At or beyond the “proof-of-concept” stage, the nature of the technical risk faced by new ideas change and now include: • Qualitative risks wherein the new technology may work well (concept is proven) but it does not “fit” efficiently or effectively with the remainder of a system. Such risks may simply be due to wrong design, or to the use of an incompatible process or operation. For example, a new medical or other remedy used for a different application does not offer the same effectiveness because of side effects. Or a new material (catalyst or similar) is equally successful in a new application but its use has knock-on effects and creates collateral problems.

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• Quantitative risks wherein the new technology does not live up to its technological promise and its properties do not reach the levels initially aimed for to make it acceptable. This happens very frequently in materials science and materials engineering where a new material may indeed be an improvement on competitors but not to the extent necessary for market acceptance, or it is only a partial improvement (some properties are better, others not), etc. • Technological risks wherein the concept is proven and the technology feasibility is tested successfully, but a major obstacle is discovered further down the road which stops further developments or application. This happens sometimes when a technology is very promising technologically but is found to be incompatible or even dangerous during later studies, or even during applications. Examples include SiC whiskers (very fine fibres) tested for toughening protective composites, many types of nanoparticles that have turned out to be innately toxic due to their size (not their composition), plastic for bottles leaching out in drinking water, insecticides killing off bee populations, etc. • Finally, there are a myriad of technical problems that can go wrong during the development stage, where we may find it very difficult or impossible to develop the material to the technical level needed to achieve the aims (the specifications or functionality) that will make the technology competitive. In fact, these risks are often the biggest obstacle in most projects dealing with the development of materials, devices, processes, and even subsystems. Further down the line of development and use, we find risks that are only discovered much later, even after extensive application of an innovation. These include the restriction or even banning of an innovation because of the presence of many dangerous chemicals originating from human diets and medicines or industrial processes (asbestos fibres, CrO3), such as the problems faced by recycled water, colour pigments containing toxic materials (cadmium, lead, etc.), phthalates in plastics, hormones in water and so on.

9.3

Publishing Your Technology While Retaining Its Value

You’ll have noticed in Table 6.2 that right up to Stage 4 I have not included any dissemination activities (and certainly no exploitation activities). This is not a mistake. It is an important consequence of the need to maximise the value of your idea as a technological invention with the prospect of eventually transforming it to a valuable innovation. It is simple: if you publish your core idea, its value as an industrialisable technology is all but gone. If everybody knows, why should anyone invest in it? If you do have to publish something, make sure it is not your core idea! Apart from the fact that anything published is automatically public property (journals keep the copyright), you will not be able to protect it and certainly not capitalise on it. If you are a researcher (in academia or a research centre or a CRO, less frequently in a

9.4

SWOT Analysis

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company) you may be under pressure to “publish or perish.” This is a real and pressing dilemma for many researchers. My own opinion is that this is a false dilemma. In most cases, when it comes to publishing your work and deriving benefit from it, you can have the cake and eat it too! Here is how. The safest of all is to wait until you have filed an application and been awarded a patent and then publish it in a scientific journal. Unfortunately, this takes time and you, like most academics, are probably under pressure to publish. The next best is to file for a patent, wait for the report (about 6 months in most cases) and then publish the technology, but without the core idea. With a bit of careful planning, both the patent and the publication will come out together and you should be able to refer to the patent application in the publication. This is allowed in most cases: you just need to include a sentence in the chapter where you describe your methodology or process (it is mostly in this chapter where the value lies) where you declare that “the process/ method/material, etc. is the subject of a patent application with reference XYZ, filed on such and such a date in such and such a country.” Again, this does present some danger as your patent application only protects you in the country where you file the application (the European Union is now covered by a single European Patent) and a person can make or sell your technology in any other country almost with impunity until you are able to extend your patent. My own advice to get around this problem is to think very carefully of what you include in your patent and your publication. The key aspect is to protect your core technology at all costs. Every potentially valuable technology is based on or incorporates a key original idea that is not obvious to any skilled person in that field. That key idea may be technological or it may be a new, non-obvious application for an existing technology. It may also be a set of parameters (processing, characteristics, etc.) which give your technology a competitive edge, or some design aspect or the use of a combination of materials and so on and so forth. If you can think of a formula which allows you to publish a generic form of your specific technology, without disclosing the key aspects, then you are home and dry! In both your patent and your publication you can offer this generic form (which may be ranges of process parameters or characteristics, etc.) in the description of your methodology and place emphasis on the results of your technology and their impact. This means that you are announcing your technology but not disclosing the core aspects which give you the competitive edge (e.g. the optimising or enabling parameters). You can have the best of both worlds!

9.4

SWOT Analysis

During the PoC activities, you must stay focused on the potential value of the technology. As we discussed earlier, value is, more often than not, identified in comparison with other similar solutions to the same problem. But how can you do this in practice?

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Table 9.1 SWOT analysis for a new technological idea at TRL 1–2 Strengths • Completely original • Does not depend on other ideas • Explains or addresses an observed physical phenomenon • Explanation is based on known physical principles • Unique explanation or approach • Not obvious to a skilled person • Easy to prove • Easy to formulate unambiguously • Clear potential applications • Can easily be transformed into a technology • Wide range of application fields Opportunities • Enables other technologies’ applications • Environmentally or energetically favourable • Public or specialist interest in the field • Timely and opportune

Weaknesses • Not completely original • Depends on other, unproven ideas • Does not explain or address any observed physical phenomenon • Explanation is not consistent with known physical principles • One idea of many similar ones • Obvious to a skilled person • Not easy to prove or validate • Not easy to formulate unambiguously • No clear applications • Cannot easily be transformed into a technology • Narrow range of application fields Threats • Proof of concept is not accepted • Environmentally or energetically unfavourable • No special interest in the field • No particular need for it

A tool that is generally very useful for analysing the scientific status and value of your idea and helping you decide on specific actions to take to improve it is SWOT (Strengths-Weaknesses-Opportunities-Threats) analysis. This is well known and used in the case of business decisions but it is very useful in many other areas. Table 9.1 gives the general idea for carrying out a SWOT analysis of a new technological idea or theory at its early stages. A similar SWOT analysis can be carried out for most of the decisions that need to be made during the course of your work. For example, the decision of whether to continue alone by setting up a start-up company (at Stage 5 or later) can be analysed and made using a SWOT analysis. Furthermore, if you do decide to join forces with an existing company, a SWOT analysis will help you decide which company would offer the most benefit. Finally, SWOT analysis can be used quite successfully to decide on which application you should focus on first. Many other applications are possible. Let’s look at the details of a SWOT analysis. The “Strengths” box is used for identifying those attributes of the new idea or technology that set it apart from the competition (applying weights if necessary). Essentially, it includes all the technological and other advantages you can think of which could be important selling points. You should think of these attributes very carefully. This should be an objective listing and requires reliable comparisons with all other technologies or approaches to the same problem. In the “Weaknesses” box you should enter those characteristics of your technology that have a negative effect on the competitiveness or applicability of your idea. They may be identified in juxtaposition with the attributes under “Strengths,” but

9.5

In Summary

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they can also be independent. Again, be as objective as possible and include everything that may influence or have a bearing on the effective application of the technology. Ideally, all of these weaknesses should be eliminated and therefore the characteristics you enter here should be correlated with actual objectives of your research and development activities later. The third box, “Opportunities,” contains the aspects of your technology which promise to offer “added value” to its application. They are generally related to the potential your technology has for further technological development, but also to the positive role that forecasted or foresighted changes in the market, society, the environment, etc. may play in your technology’s success. These aspects are all factors that will increase the “impact” of your technology. The more opportunities you can show here, the greater the potential value of your technology. The research and development activities will focus on these aspects and try to maximise the potential benefits arising from them. Finally, the fourth box, “Threats,” tabulates all those aspects that pose a direct or indirect threat to your technology’s success. These include internal threats, such as technological obsoletenesses, as well as external threats, such as regulatory, legal, and administrative threats. Market acceptance, vested interests, entrenched competing products and public perception threats are also included here. Again, your RD activities should take all these threats into account and try to develop solutions or evasive actions to counteract them. For maximum value, you should have as few threats as possible. It is also possible to co-opt many threats, for example by joining forces with a competitor for common development of the technology.

9.5

In Summary

Once the idea has been formulated clearly, the concept has to be proven in such a way that it is convincing to any external assessor. Proof of concept activities are part of your initial research activities and should provide reliable and convincing evidence of the scientific and technological validity and promise of your idea. No application may have been identified yet, so it is likely that your activities will be mainly generic. Funding for PoC activities is usually easy to come by although the value is usually small. The first risk and SWOT analyses should be carried out at this stage, mainly in relation to the scientific and technological attributes of your technology, especially in comparison to any competing technologies. Tips • Proving the concept does not necessarily mean that you need to go through and prove every detail. It is usually sufficient to prove the general feasibility of the idea and show that it may be applicable to one or more applications. (continued)

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• It is generally difficult to get a large grant for proof of concept activities. Think carefully about which are the major points (the most competitive aspects) on which you must concentrate when writing a proposal for PoC. • Sometimes the concept may appear counter-intuitive. In such a case, a proposal for a PoC grant must show some preliminary experimental evidence and the work during this stage needs to include both pro and con arguments. • Remember, this stage needs to be convincingly carried out to get you to Critical Milestone 1. Spending a lot of effort here will help your journey and diligence and assiduity will spare you a lot of effort down the line.

Chapter 10

Research and Development

Once the proof of concept has been suitably proven and the concept has been shown to be valid—even if not 100% guaranteed—then the research and development (RD) activities can commence in order to develop the technology’s properties and functionalities. This is Stage 3, approximately between TRL 3 and TRL 4. The RD at this stage is mainly generic: you might not yet have any particular applications in mind but some ideas are already forming. If you are developing a new material or medicine or process which may eventually be used in various areas, you don’t want to narrow its remit yet. This stage aims at optimising your technology’s properties in general, often in comparison to existing materials or processes. Once this stage is successfully completed, you can start focusing on specific applications and, possibly, decide to protect your technology for these (during Stage 4) and eventually optimise it for a specific application (Stage 5). On the other hand, you might already have settled on an application you want to focus upon so the RD activities during this stage will be focused on optimising the technology towards this target. Many of your resources will be spent during this stage, since research activities to prove feasibility need to be rigorous and systematic. In most cases, it will take at least a few years before your technology can be developed well enough to be evaluated reliably. This is important as you need to understand its capabilities and potential very well in order to be in the position to protect it formally. In addition, the RD activities will clarify your technology’s weaknesses and threats and elucidate possible solutions and remediation actions. These are necessary before you can proceed to prove and validate its technical feasibility for any application. Most technologies at this point are considered developed enough to attract substantial RD funding. For example, a large number of the cooperation sub-programmes of the current very large HORIZON Framework Programme of the EC (see box), which is for the first time open to almost every legal entity globally, is aimed at supporting projects at this level. These include the Nanotechnologies, Materials and Production Technologies (NMP) sub-programme, the IT sub-programme and various other sub-programmes supporting projects which © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_10

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address societal challenges and various “Key Technologies.” Whereas the ERC sub-programme mentioned previously is aimed at early-stage ideas up to the level of proof of concept, these sub-programmes offer funding for technologies that have demonstrated their PoC and then wish to proceed further. Horizon “HORIZON” (currently called Horizon Europa) are the Framework research and innovation programmes over the period 2014–2020 of the European Commission. Nearly 90 billion Euros have been earmarked for this period of seven years, mostly for competitive research and development projects led by legal entities (universities, research centres and businesses) in the European Union, though this doesn’t preclude entities from nearly every country in the world. As mentioned before and indicated in Fig. 1.1, in a major departure from the usual practices of previous framework programmes, which concentrated on research support, the HORIZON programmes also include direct grant support for SMEs (small-medium enterprises) for taking new technologies from the lab (TRL 5-6) to a pre-industrial level (TRL 7-8). In addition, it includes loan guarantee support for SMEs and other entities to take new technologies all the way to commercialisation. Fields supported include nearly all economically significant fields including industry, space, security (and dual use technologies), biotechnology, medicine and pharmaceuticals, etc. Calls for proposals are usually announced once a year, more frequently for the “SME Instrument”. For more information see http://ec.europa.eu/programmes. Even at this point there is no guarantee that the technology can be developed enough to make it technically competitive (let alone industrially and economically viable), so your RD project needs to have its own milestones and intermediate critical assessment stages. It is at these points that a critical evaluation of the technology’s potential should be carried out. Objective evaluation of your own technology is an activity fraught with difficulties. It is very easy to confuse one’s own wishful thinking with real value, but you must nevertheless carry out the evaluation as objectively as possible. To this end, you have to remain focused on the objectives and technical aims you have set in your project and at the same time to be critical and balanced in your criticism of all the results and data you obtain to make sure you don’t look at them through rose-tinted spectacles. You are, after all, trying to develop our own idea, something you really believe in, so it’s difficult to accept it might not work as expected. There is, however, a very important additional reason for looking at all of our data objectively: if we don’t, we may very well miss some valuable discovery! Examples abound in Physics or Chemistry where apparently insignificant, irritating even, phenomena appearing in results turned out to be major discoveries. The discovery of quasi-crystals with their ostensibly impossible fivefold symmetry on

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Project Proposing for Success

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strange crystallographic results from an intermetallic compound in the 1970s was the result of exactly such a double take (this discovery went on to win the Nobel Prize three decades later). A highly critical look and a capability to think beyond our own expectations may also lead to major discoveries out of “ill-fitting data.” Super glue (cyanoacrylate), the microwave oven, nylon, Teflon™ non-stick coating, the pacemaker, Post-it™ note paper, some surface treatments, etc. were all invented as a result of observations of “wrong data.” Apart from that, this is the stage where many researchers confuse the technical objectives with their technical aims, as we discussed earlier. RD projects are certainly not about the trip, but about the end result. Granted, as we just discussed, the trip may offer significant benefits too, but our main aim needs to be kept in focus. And this is none other than the attainment of a technology with enough added value to ensure its competitiveness as a completed innovation. Staying well focused on the aims and continuously refocusing the project when necessary, is a crucial, albeit not sufficient, condition for success. And this also includes knowing when to call it quits, if the potential of the technology is eventually assessed to be insufficient. It is an incredibly difficult decision to take if you need to halt the development of your own technology. Unfortunately, in my experience, many projects waste valuable time and resources because they continue with their objectives even after it becomes clear that the technical aims cannot be achieved. It is true of course that we generally give such non-promising intermediate results the benefit of the doubt and hope that we‘ll be able to optimise them later. It is very important to know, however, when we should persevere and when we should stop—the rule of thumb is that if we keep getting unpromising results, after many attempts and many changes, it is time to call it quits. A valuable mantra in the case of technology development is this: if you want to be successful and produce valuable innovations from your inventions, you can’t afford to stick with projects that lead nowhere. To paraphrase a well-known phrase: don’t throw good energy (and money) after bad. Once you establish that the technical aims of a project cannot be reached with a reasonable amount of effort, you should either refocus the project to different aims (alternative application, change of materials, etc.) or drop the project entirely and redirect your energies to other projects and other ideas and inventions. This is the best stage at which you can take this go/no-go decision. However, if you allow benefit of the doubt regarding the feasibility of the technology, you should always keep in mind the need to be critical and strict with this aspect at all later stages.

10.1

Project Proposing for Success

Let’s now take a step back and consider things from the point of view of RD activities. Stage 3 is the time when you’ll be requiring the most RD funding, so you’ll need to write and defend a proposal for funding. The details vary from agency

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to agency, but the general aspects are all the same. Above all else, the proposal has to be convincing and to convey accurately your own enthusiasm for your new technology. But the details are very important since they are the ones that will influence the decision. What are the most important elements of a well-organised and well-run project? What are the necessary stages of a project and what should be the main parts of a project? A look at the main evaluation criteria used by many funding agencies to evaluate proposals should give us some clues. They are actually very similar to the main objectives of a business plan which we’ll discuss later. If you know how to write a good RD proposal, you are a good way towards learning how to write a good business plan. The first criterion for a project proposal with a high probability for success is the high scientific and technological standard of the proposed project. This is a direct reflection of the need to ensure that the underlying physical principles of the new technology are valid. Even though you might have proven the concept in Stage 2, you still need to spend a good amount of time to ensure that your technology is well researched, well prepared and well understood (by yourself as well as others) and that it is based on solid underlying principles. Of course, the proof of concept results will guide the activities at this stage, but now you also need to consider the possible development routes and decide on the most promising route for developing your innovation in the most efficient and effective way—in other words, your proposal should already include tasks towards optimising your technology. For example, you need to consider all of the alternatives already tried to address the problem and why they have not been successful. Certain catalysts, for example, are very active if produced in one way rather than another because the number of “active centres” in the atomic structure close to the surface is often dependent on the processing method. After nylon was accidentally invented, it still took many years before its processing was developed enough for eventual use. You need to be convincing in your arguments that your proposed approach and the preliminary results from the PoC auger well for the successful culmination of the proposed project. It is not enough just to discuss a list of possible routes for development; you need to show persuasive results from preliminary work you have carried out in order to achieve the proof of concept and, based on that, to argue for the proposed scientific and technological route you propose to follow in the RD activities. Together with this, you’ll need to explain how other technologies might have any bearing on your project and, if you need any third party technologies, how you will ensure their availability. This last point is crucial in the case of thirdparty technologies that might have an enabling influence on your project. The second criterion for a successful research and development project is the management and structure of the project. Again, it is exactly as you’d be expected to argue in a business plan. Is there a good technical team which will ensure reliable and effective technical development? If the project is going to be executed by a consortium of scientific and industrial partners, have you arranged for effective coordination and management of the project? Is there trust between the partners and co-workers? Has the project been structured in such a way as to offer a good

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Project Proposing for Success

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chance of success? And, most importantly, are you, as the owner of the idea, fully committed and dedicated to its development and conversion to a commercialisable innovation? This last part is a prerequisite for all European Commission projects, although it has not been sufficiently enforced in the past. It seems that for HORIZON it might be enforced to a greater extent. The first part of the management criterion is the most difficult to ensure and demonstrate. Not only do you need a good scientific team for the theoretical, experimental, modelling and other scientific support, but you need skilled technologists to help you develop the technological details as well as skilled engineers to guide you towards an industrially feasible technology. You also need a strong project management capability, to make sure that your project is managed professionally and without time or wastage. Herein lies a dilemma for the researcher. It is my experience that scientific researchers are usually not the best people to manage the projects dealing with their own technologies. Ideally, your project should be managed by a professional manager with you as the scientific coordinator and advisor. This will help to keep the activities focused on the technical objectives and you will have the maximum time possible to concentrate on the scientific and technological tasks. Nowadays, such an arrangement is more or less expected by many funding bodies (including the HORIZON programme) as they want to ensure that projects proceed as effectively as possible. In the past, I have encountered projects that foundered exactly because their management and coordination was muddled and ineffective. Managing a small team which has worked on the new idea from the very beginning can present problems, but managing an international team with disparate sub-units in different countries, all working on different parts of a complicated project, is especially difficult. This is the situation with many international EC projects where the manager and coordinator face particular challenges. It is not only the different sub-projects that need to be coordinated, but a variety of backgrounds and methods of working and managing a project that need to be synchronised as well. Personalities, expertise, capabilities, and background all have to be carefully interwoven for optimum effect. It is especially in this case therefore that it is certainly very important to have a professional manager who will set strict milestones and offer guidance and leadership. As the project (and your technology) progresses, the relative importance of each part of the team will change. But the one thing that must not change is your commitment and determination to succeed. It is of course fully understandable, as Fig. 1.1 shows quite clearly, that after we leave the lab at Stage 6 and enter the real world, it may happen that our enthusiasm suffers because of the new set of unknowns which we have little control over. We’ll discuss ways to address this later. But at this stage, you must believe completely in your task and be fully focused on it. Even if you are busy with other projects as well, you should keep it in mind at all times. A crucial part of good management of an RD project is the ability to motivate the team towards the common goal. This doesn’t sound too difficult until you realise that, apart from you, as the initiator of the project, the rest of the team are probably

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supporting or advisory players with limited IPR ownership (see box) and therefore limited direct interest in the project’s eventual success. Motivation in teams may vary tremendously and the quality of work produced often reflects that. Again, it is the management’s responsibility to keep the project focused and take the difficult decisions (to make changes in course, go/no-go, etc.) as the project proceeds. IPR Ownership Identification Challenges If the research and development activities involve a number of partners, ownership issues need to be addressed as soon as possible, if not right at the start. The same is true for technologies which are initiated by more than one person. You definitely don’t want to reach the stage where your innovation acquires value but you don’t exactly know who the owners are (and what are their shares). Simply put, the owners of an innovation are those partners who contribute with unique and innovative input to its development. Supporting partners (e.g. those carrying out independent testing and measurements) do not in general own any of the IPR. Of those partners that do contribute innovatively to the technology, the IPR distribution needs to be carried out so as to be (and seen to be) fair to all. This generally requires negotiation but a simple way to start is to consider the original budget sharing in any of the work packages (sub-projects). An example may help to highlight these problems. A project I know of was initiated and led by a large space technology integrator which was interested in developing supporting technologies (materials and processes) for a new functional system of which they retained most of the IPR. As a result, some of the partners who were involved only in characterising and testing the supporting technologies attached low priority to the project and the project in turn developed delays and some of the deliverables were unsatisfactory. On the other hand, those partners who actually benefited by developing specific IPR within the project gave it higher priority and thereby helped the team to complete the project successfully. This specific case has since been assessed as a “success story.”

10.2

Confidentiality

An important aspect of management during this research and development stage is guaranteeing confidentiality and ensuring effective contractual interrelationships between partners. It is a fact that even if the technological development team is homogeneous, it is still difficult to ensure confidentiality. Some members may become careless or over-enthusiastic (e.g. during question time at a conference) and disclose some key element of the technology too early. This could be disastrous

10.3

IPR Ownership

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Core technologies Second layer, may be visible Visible layer of the system, free to disseminate

Fig. 10.1 Schematic of shielded core technologies behind layers of other, non-confidential technologies that may be part of a dissemination or marketing campaign

for the eventual value or commercialisability of the new technology and it is the responsibility of the management and coordination team to ensure this does not happen. Confidentiality (non-disclosure) agreements should be signed by all members of the development team right at the beginning of the project and less experienced members need to be clearly instructed on how to handle “innocent” requests for information by outsiders. Last but not least, the core knowledge of a technology (that which gives the key competitive edge) should be known to as few people as possible. It helps to think of your complete technology or system as consisting of many layers of technology encompassing various levels of confidential information (Fig. 10.1). Only the outside layer should be visible to the outside world and made available for marketing or dissemination. Confidentiality is a major source of communication problems during RD but it is also a crucial source of value for any innovation at the commercialisation stage. It is very rare indeed for any industrial entity to want to invest in a technology which has not been properly protected. As we’ll discuss later, all implementers want some guarantee of exclusivity in order to invest in a new technology and this must be kept in mind early on.

10.3

IPR Ownership

Technology ownership aspects need to be managed transparently and effectively, already at this early stage. While there is no problem when there is only one owner working alone at this point, it becomes a tricky balancing exercise when the RD work is being carried out by a team or a consortium. To determine the IPR ownership shares, each team member’s contribution needs to be estimated and weighed very carefully and it would help tremendously if such estimations are carried out at the outset, even at the proposal stage (see above box). It is unfortunate that many otherwise well developed and technologically sound technologies fail to become valuable commercial innovations because of a breakdown in communication

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Table 10.1 A provisional ownership table for a multi-partner RD project Exploitable result Result 1 Result 2 Result n

Background IPR Associated Owner of prior art prior art

Foreground IPR Main owner Other owners (and %) (and %)

Patenting/ exploitation plans

regarding the ownership aspects early on. As a result, I recommend that ownership distribution of the technology (or sub-technologies or supporting technologies in the case of a system) is clarified already at the level of the proposal, even before the team starts working together. For this purpose, in all EC projects, the (multinational) consortium is expected to have agreed and signed a Consortium Agreement where such ownership aspects are addressed before commencement of the project. I would recommend to go further than that and to include a provisional ownership table under the Management section of the proposal, as shown in Table 10.1. To do this, you first need to identify all of the expected foreground exploitable results (those developed or to be developed during the project) which are described in the table, together with their prior art (background IPR). You should then identify the owner(s) as well as the expected ownership share of each of these new results, as shown. This IPR ownership table should be kept updated throughout the project (in case ownership distribution shifts) and finalised at the end of the project with the agreement of all partners, so that it can form the basis of the exploitation agreement between them. The group industrialisation activities will also be easier to manage and coordinate based on this agreement.

10.4

Project Impact of the Technology

The third main criterion for a successful project proposal is the description of the potential “impact” of the eventual innovation on the industry you are focusing on and on the market or society which may possibly be the end-user. Here you are expected to argue conclusively for the usefulness and imperativeness of your technology. The “impact” of most funded projects is expected to be multifaceted: in addition to the technological usefulness of your idea, you should argue for its societal, economic, and environmental impact as well as any other indirect impact on skills, education, jobs, etc. These are all important projected results and should thus be clearly discussed and elucidated, taking into account all the possible markets and sectors your technology could be used in. Impact, in particular the economic impact, is also the main criterion upon which the evaluation of a business plan is made. This is because of the need to ensure that return on the investment is clear and has a good

10.5

Relative Value

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chance of materialising. It is in relation to this criterion that you have to argue convincingly for your strategy and plans for eventually converting the technology to a valuable innovation. This criterion is where most of the emphasis is being placed for most of the cooperation programmes under the current HORIZON of the EC, with the exception of the ERC programme which only funds early development of upstream ideas. The vast majority of projects under HORIZON will be funded based on their potential and expected impact on the economy (or society in the case of environmental or security projects). Naturally, when we submit a proposal we tend to be over-optimistic regarding its potential impact. This is to be expected as it is a natural consequence of our enthusiasm for the capability of the technology. At the same time, however, we need to remain as realistic as possible so as not to insist on overambitious targets. Finding the optimum and most feasible target for the aims (and impact) is a challenging task and should be the subject of very careful discussions with the partners at the outset. You should definitely take into account previous related work and similar products, the market or industry situation, and the advice of market experts and experienced project managers. The challenge for a project (once it has been approved for funding) is both to remain technically relevant and to be convincing in its potential impact. The impact of the technology is of course directly related to the technical aims you have set out to reach. The closer you succeed in reaching these goals, the higher the potential impact. This depends on the application but, in general, the better the properties or functionality of a technology the easier it is to penetrate an industry or a market.

10.5

Relative Value

It is during this stage that the real value (and potential or current weaknesses) of your technology will become clear. Remember that the true value of your idea is always determined in relation to the market need and demand in conjunction with any competing technologies. “Competing technologies” here refers not only to similar technologies but also to the different ways of achieving the same end result. For example, a chemical or a material may be producible by a variety of processes and methods and your technology introduces a new process or a new variation of an existing one. Energy can be produced by a variety of fuels and methods and new, sometimes competing, ways of improving efficiency are sometimes announced. Many methods for transforming energy into usable forms exist and new, unforeseen ones are sometimes added for the same purpose. In all such cases, the new technology offers “added value” and this makes it competitive. During this research and development stage, you should continuously evaluate the position of your technology vis-à-vis the market and society in order to maximise its relative value. Because market and societal needs vary and evolve, you should always try to steer your technology so that its cost-benefit ratio is optimised with

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respect to the eventual applications you have in mind. This does not necessarily mean that your technology must reach some pinnacle of performance (although this may be expected in funded projects). It’s all relative. Very often certain applications require less than the maximum level for one property in order to ensure optimum acceptance (we called it “fit for purpose” earlier). Many technologies are designed so that they can be produced at various levels, and are made available in a range of qualities for a range of markets. For example, sound systems (analogue or digital) come in many different fidelity levels, depending on the materials or quality of construction. A speaker housing made of fine ceramic can offer incredible performance but is so expensive that it is aimed at a niche target market. A similar speaker housed in a wooden casing is much cheaper so it reaches a much wider market, although its sound quality is lower. Mobile phones (smart or not) come in a great variety of styles, specifications, etc., and each is priced accordingly. Even some advanced materials have ranges according to their applications. “High-speed” steel used as a cutting tool needs to offer a different balance between hardness and toughness to cut different materials. Even synthetic diamonds (made at extremely high pressures and temperatures, emulating the earth’s own hard work) come in various grades according to their projected use. Relative value changes with time. It is possible that what was valuable at the start of a project loses some of its value by the end, and vice versa. This can happen because this research and development stage can take a very long time to be completed and conditions change. Don’t set your aims in stone but allow flexibility according to intermediate developments, to take advantage of opportunities as they arise. For instance, if a new, promising opportunity is identified during the development of a new technology, the technology should be steered towards this new opportunity, whilst continuing to aim for the original target as well. If the main target loses its appeal (e.g. due to shifted market interest or sudden regulatory restrictions), it’s certainly recommended to steer the project towards another target. Be prepared for such changes by keeping a technology-watch and market-watch brief at all times. Just as in the case of advanced ceramics mentioned previously, a great deal of effort and resources can be wasted if you are so engrossed by your research that you miss the fact that the train is gone. Keeping an eye on developments, especially societal twists and turns that can happen very rapidly as well as shifts in market perceptions (whether you agree with them or not), will ensure success later on the road to innovation. The above also includes identifying weaknesses and moot points of your technology that may later become obstacles and reduce its value. Here again you have to be objective and strict in your assessment. Do not assume that some weak points can be skimmed over because your technology is new and fresh and exciting. Competitors will soon find out and go out of their way to reveal such problems. Markets will also make sure that weaknesses are not forgiven easily (unless no other alternative exists, but as soon as one is offered, they might turn away). Last but not least, users may not forgive weaknesses in a technology which was rushed out to the market. It is not unusual for a product to be judged not on its main functionality but on some minor problems. I remember the case of an otherwise excellent and well-priced

10.5

Relative Value

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laptop which was plagued with very minor problems with its casing material. It soon fell out of the market. Technology Replacement The majority of new ideas and technologies under development aim at replacing existing solutions, even well entrenched ones. The reasons for this usually have to do with the apparent identification of strong dissatisfaction with the existing situation or a perceived need to change. If only it were that simple. A well entrenched technology (i.e. one that has delivered good value for many years and is the basis of heavy investment) will not be changed easily, no matter how dissatisfied the potential implementing company appears or how much higher the performance of a new technology is. There are many reasons for this apparent procrastination on the part of industry: • • • • •

the older investment has not yet been amortised skill levels in the industry are inadequate (or perceived to be so) the performance or productivity increase is not yet required any replacement will require many other changes in the production line the new technology may require changes in the operations of the customers of the implementer • there is resistance from the workers • previous bad experience with other attempts at replacements • and others.

It helps a lot to hold discussions with all interested parties and explain the new technology carefully. With careful negotiations, a potential roadmap and timetable can be decided upon which would include a pilot-scale test, industrial tests etc., as we shall see later. If your technology is aiming at displacing or replacing an existing technology (see box), you need to develop your technology and aim for significantly higher benefit-cost ratio (effective value) over any existing technology in order to break into that market. Unless you are lucky and a new regulation specifically supports it (e.g. all existing competing products or materials are no longer allowed), it is not sufficient for a new technology just to offer enhanced performance. Nett cost of a new technology needs to be taken into account for its valuation, but other factors also play a major role in determining the effective value of the technology. For example, if your technology requires major changes in production or use, it will struggle to be accepted. If, on the other hand, it can easily fit into the production line or be retrofitted onto an existing system, it has much better chances of being accepted. Many other factors play a role such as collateral costs, knock-on costs, entrenched industry-supplier relationships, end-user arrangements and so on. The point on the investment cycle of a factory to which you might decide to

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offer your innovation can also dictate its effective value, since the factory needs to recover its investment before it decides to invest in any new technology.

10.6

Regulations and Standards

Changing regulations and standards have the capacity to affect whole industries but they can be the catalyst for the development of new ones too. As a result, companies make sure they are always abreast of all developments that affect them and even try to influence them by lobbying. It is imperative that you also keep in touch with all relevant technological regulations and standards and make necessary changes well ahead of time. In this way, you can make sure that if any change in regulations has the potential to affect your technology, you can respond effectively and in good time. When a ban on benzene-based glues was announced in the European Union a few years ago, the companies that survived were the ones that quickly developed and now produce and use aqueous ones. The REACH1 regulation in the EU requires that all materials embedded or included in all products, systems, machines, etc. sold or used in the EU are disclosed and be safe. By the time REACH becomes fully enforced during the next years, it’ll mean that thousands of products made elsewhere in the world will not be saleable in the EU. Similar legislation also exists in the USA, Japan and elsewhere. This regulation has of course resulted in the closure of many production lines globally but it has also spurred on the development of many substitute materials for the same application; while some of these do not yet have fully satisfactory properties, at least they are abiding by the regulations. Examples of materials banned under the new legislation include lead in paints, glasses and toys, trace heavy elements in most consumer products, mercury in lamps, certain organic phthalates, and many others. HORIZON includes calls with topics devoted to the substitution of such materials. Standards can have similar effects on the development of products, materials and services. While a company that makes lower quality products is restricted to selling them (presumably cheaply) in markets where standards are not fully enforced, they need to be developed to a much higher standard in order to reach markets in the EU, the USA and other similar regions. But in these more regulated markets, the additional development costs can be recouped by demanding a higher price, since these markets restrict entry to sub-standard goods (at least in theory). Standards arising from safety, health or environmental concerns are particularly beneficial to new technologies. Restrictions on polluting industries has encouraged the development of whole new industries making, on the one hand, less dangerous substances as substitutes to their polluting predecessors and, on the other, a whole range of remote sensors, monitoring systems, earth-observation technologies, health monitors, antidotes, measurement devices, measuring services, security equipment, wireless

1

“Registration, Evaluation, Authorisation and Restriction of Chemicals,” since 1 June 2007.

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Regulations and Standards

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devices and so on, each accompanied by a variety of accessories and supporting systems. Standards and regulations can act as catalysts for new developments even when not expected, but they can also be guided by technological developments. About 10 years ago, when dioxins suddenly became a major health issue in Europe, there was no method to measure them at levels of a few parts per billion. As soon as an EC-funded project managed to develop exactly such a sensing method, the standards were soon made stricter which gave an additional spur to further optimisation of the new technique as well as to the provision of associated services. Finally, some words on the influence of quasi-political developments on potentially valuable RD directions. Over the past one or two decades, certain Asian and African countries have gradually managed to monopolise the production of a number of critical raw materials, such as some rare earth metals (crucial for microelectronics), platinum-group metals (thermal, catalytic and electrical applications), and many others. This has happened mainly as a result of low production costs and low selling prices. These could not be matched by most other global producers and as a result many of them eventually stopped operations. However, when restrictions on the availability of many of these materials were recently imposed by the producing countries, the EC decided that these restrictions present serious dangers for the future economic development of the European Union: as a result, substitution technologies for these “critical raw materials” is now the subject of specific calls for project proposals under HORIZON. Keeping an eye open for such quasi-political developments will allow you to recognise important opportunities for RD as well as new targeted applications for your developed technologies. It will also allow you to get the most benefit from adjusting your RD activities in this stage. The moral of the story is to keep a watchful eye on all developments—technological, regulatory, standardisation-related, societal, political, etc. By keeping ahead of developments, you can be assured not only of a better chance for success but also of an excellent source of new ideas for technologies and possible innovations. Even the financial or health advice pages of newspapers can be a great source of ideas. In the former, the imminent demise of a company may indicate either the loss of market or a potential new gap for a new technology. In the latter case, emergent diseases or societal problems may indicate an opportunity for new ideas or new applications for technologies under development or already industrialised. All of the above, I think, illustrate that this RD stage is the time to focus on the further development and clarification of the capabilities and functionalities of your technology, by considering all possible opportunities that may arise as a result of extraneous developments. Keep your options open regarding possible applicability areas of your technology and only take a decision once you have all the information. Indeed, you never know when new opportunities might turn up. Another example will help to clarify this further. Some years ago, a company making non-contact touchscreen displays in the Far East was trying to find a way to avoid the restrictions imposed by a patent of one of its competitors for a particular functional part of its new displays. Independently, a group of researchers in Europe were investigating the processing and behaviour of some fine nanofibres which they could grow on a glass substrate. They were originally planning to use them in a

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chemical application, but when the opportunity for new displays arose, they branched out and are currently carrying out industrial validation tests with the nanofibres for the new displays. Simultaneously, the chemical application is still under development with good prospects for a second industrial breakthrough. By the end of the RD developments during this stage, you should be in a situation where you are able to judge much more realistically the prospects of your technology as well as to have come to some conclusions regarding its most promising fields of application. By now, your technology’s capabilities and functionality should be clear and quantifiable vis-à-vis any identified applications and markets in comparison to other competitive technologies. Weaknesses and points to improve on should have been attended to over many RD iterations. In other words, you should be in a much clearer position to assess the real value of your technology as a potential innovation. The ownership aspects should be clarified and accepted by all and every player’s contribution to the project should be clearly identified and accepted by the others. At the same time, confidentiality and contractual matters should be well managed and there should be no leaks of valuable information. You should now be ready to decide on your protection strategy during Stage 4 and thereafter to make the first public announcements of your technology.

10.7

In Summary

Once you have proven the scientific and technological basis of your concept in Stage 2, you will embark on the long effort of the research and development of your technology in Stage 3. There are fortunately many opportunities for funding your research at this point and the funds available to promising technologies are of sufficiently high value to allow full development. Stage 3 is where you will optimise your technology and find ways to achieve its maximum technological potential. Keep an eye open for new opportunities which can arise from many directions. At the same time, you should keep in mind all possible applications before you settle on any one (or more) that offer the greatest potential. This is the application that you will concentrate on from now on and include in your patent filing in the next stage. Tips • Many opportunities exist for RD funding of any technology that has proven its concept and shows strong promise, that is, at TRL 3–4. In almost all cases, you will be required to elucidate potential application areas in your proposal; you should not put all your eggs in one basket but discuss as many potential applications as possible with fallback positions. • The latest trend of the EC’s HORIZON funding programme at this level (TRL 3–4) is to announce calls on specific topics, probably based on (continued)

10.7

•

• •

•

In Summary

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foresight studies and market needs identified at a supranational level. You should therefore focus your efforts only on those calls that your technology is well suited to. To have any chance of success, your consortium should be vertically integrated as fully as possible. For a successful evaluation, you should have at least one implementer (user of the technology) and at least one end-user for each end application at a minimum. You can find more details in the proposal guides of HORIZON. Your proposal for RD funding should always include a dissemination and exploitation manager (or expert), as well as an expert partner who will deal with life-cycle analysis and related issues. While you will probably not need to decide on any joint venture during this stage, your partners in the RD consortium in a project would probably be the first choices for your later decision in Stage 5, when you will decide either to form a joint venture or to set up a start-up (regardless of whether they provide financial support or not). If at any time during this stage you discover a valuable sideline for your technology (perhaps even during the execution of a project), make the most of it. There have been many projects which actually gained more from such spillover sidelines than from their main focus.

Chapter 11

Strategy for Protection and Freedom for Use

Completion of the main Research and Development phase of the transformation in Stage 3 means that your technology has reached TRL 3 and is now at an advanced enough level to consider protecting it, thereby giving you the freedom to use it openly. You are now entering Stage 4 on the road to innovation, the successful culmination of which will place you at TRL 4. This is one step before the activities in Stage 5 which will lead you to Critical Milestone 2, that is, the validation of the technical feasibility for one or more applications. At this stage, your technological concept has been proven successfully and extensive RD has shown that the technology is not only promising but also potentially competitive for at least one application in at least one market. Your confidence is increasing and you are ready to leave the deeper recesses of your lab and carry out the necessary feasibility studies with specific applications in mind. This will necessitate a limited contact with the “outside world,” so before you make your first disclosure, you need to effectively protect your technology. The decision to disclose your technology, even in a patent, is a very serious one which has ramifications for its value and your own rights, especially as regards later commercialisation. You are now required to make a crucial strategic decision and you should take time in deciding how you want to proceed. There are a number of routes you can take, as shown in the flow chart in Fig. 11.1. The main decision you need to take is whether to formally protect by patenting or to keep the technology secret, but there are some “fine-tuning” approaches that you could consider. For example, your decision might depend on how easy it is to reverse-engineer your technology. The rule of thumb here is that, “if it is easy for a skilled person to understand the method of production or operation, you should patent it.” If it isn’t easy to understand the method of production or operation, then it might pay you to keep some, or all, of its details secret. In any case, I would recommend that you patent or otherwise protect the method for producing the innovation and openly announce only its existence, functionality and performance.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_11

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Fig. 11.1 Decision flow chart showing the different protection strategies

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Is Every Original Technology Patentable? The short answer is yes, but this depends on the fulfillment of other criteria too. The three main criteria for the granting of a patent are those of originality, utility and non-obviousness. These should be demonstrable and, briefly, may be elucidated as follows: • The claimed novelty of the technology must be shown for all or part of the technology, such as a new application or some incremental enhancement. Its fulfillment is subject to proving that no “prior art” (previously published work or background IPR) exists anywhere. • The utility of the technology must be demonstrable, although not necessarily demonstrated. It may also be an enhancement of an existing method of application. • The technology must not be obvious to any person skilled in the field. This means that the result of any application of the technology will not be predictable or expected beforehand. All of the above criteria are subject to interpretation which, in some cases, is not straightforward. In any situation where they have to be applied (e.g. in case of a patent defence) their interpretation may actually depend on the knowledge of the person trying to understand your technology’s adherence. Since the claims of any patent are the legally binding statements, this is where you’ll have to put most effort in demonstrating the above criteria. Because of the above challenges, it is generally advisable always to work with a patent expert to prepare your patent submission. If your technology continues to be highly original (remember, you should always be watching developments in case they overtake you!) and has strong utilisation potential (obviously, if it doesn’t then its commercialisation potential is very limited, if any), then patenting immediately comes to mind. But what exactly is “patent protection”? Many people make the mistake to believe that a patent automatically gives them some sort of power to commercialise their invention. It does not. As mentioned several times above, an invention has potential, not actual value, which it only acquires when it is fully transformed into an innovation. Holding a patent for your technology only gives you recognition of its ownership and a legal basis for protecting it from potential usurpers. In other words, a patent gives you the legal right to stop others from commercialising the invention. The exact wording from the US Patent Office is, “Rights, granted to inventors by the federal government, pursuant to its power under Article I, Section 8, Clause 8, of the U.S. Constitution, that permit them to exclude others from making, using, or selling an invention for a definite, or restricted, period of time [as long as the patent remains valid by payment of the annual fees]”. The European and various National patent offices use very similar definitions. Note, by the way, that a patent has to be awarded to confer these

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rights, not when it is simply filed. However, a filing does offer recognition of ownership and priority date. A patent therefore identifies you as the (first) owner of the technology and grants you the legal rights to stop others from making anything based on it (while the patent remains valid by paying the annual fees). But the onus is on you to stop others from using it. If you don’t exercise this right by declaring your ownership of the patent and keeping up with annual payments, others can—and often do—use the technology to make products for sale. You can still fight them but it can be very expensive, as we’ll see in a moment. In other words, holding a patent declares that you are the first owner of the idea because you thought of it first (as long as it is original, has utility, is non-obvious to a skilled person and is non-ambiguous) and therefore, as long as you exercise your rights, you have the monopoly on its use and commercialisation. The rights granted by the patent (i.e. recognition of ownership and monopoly rights for a period) are very valuable, especially to companies working in that area. It is therefore to be expected that large companies, especially in any field or sector which depends on modern technologies (e.g. microelectronics and associated materials), try to build up a large portfolio of patents and trademarks. These are particularly valuable if they allow some important added value (e.g. touchscreen control in mobiles, special antennas, some clever interfacing software and special acceleration sensors) which allows them to capture a larger part of the market. But why grant a monopoly right to the patent owner? The reason of course has to do with encouraging inventors to disclose their invention, thereby reducing instances of having to “reinvent the wheel.” Inventors are given this incentive and an official and legally binding protection so that they can develop the technology into a valuable innovation and benefit from its commercialisation, in return for disclosing the invention so that others can use it a springboard for further inventions and developments. Imagine if such a legal backing could not be assured of official protection. All inventors who develop a valuable technology would be faced with the dilemma of either disclosing it and possibly losing it to more powerful developers or keeping it secret and therefore not having any way of proving that it was their original idea. Anyone coming across it independently or clever enough to copy it (e.g. by reverse-engineering the final innovative product) could go ahead and make it with impunity. There would be no incentive and no guarantee of benefit for the original inventor. Unfortunately, even if you do have the official legal protection offered by a patent, you still have to find the means to protect it from usurpers that may lay claim to it, for example, on the basis of dubious “obviousness” or “prior public knowledge” or some other basis. However, since the onus is on you, the inventor, to stop anyone else using your (now disclosed in a patent) invention, there emerges a potentially serious problem. Unless you have a powerful backer, you would have to have fairly large financial, legal and management support and patience to be able to fight any usurper of a patented invention successfully. Is there any way out of this conundrum? Is there any way both to take advantage of the official protection offered by a patent and to avoid having to fight in the courts against any potential infringers?

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I think there is. The secret is to determine carefully which part of your technology needs patenting and which part can be effectively protected by keeping it secret, and then build a strategy around this. It is not difficult but it requires decisions to be made early on, right after your proof of concept activities and your decision to embark on the transformation journey to an innovation. This effectively means that it is crucial to keep your main idea and your invention completely under wraps at the beginning. If the core technology (i.e. the part which gives you the edge over the competition) is disclosed, this strategy will not work and your innovation’s value will be compromised. How does such a strategy work in practice? As I mentioned earlier, the main criterion is whether your technology (material, device, process, etc.) can be “reverseengineered” by a skilled person. In other words, can someone knowledgeable in this field understand how it’s done, repeat it and copy it? If this is the case, then a patent application (covering all core technologies) is necessary to protect your technology. If, however, it is very difficult to copy your technology and you can hide the critical aspects of the production process or some intermediate steps, you may want to consider keeping it secret, at least the critical parts. This is not as difficult or rare as it sounds. To take an example: if a material such as a pharmaceutical or a chemical requires a crucial non-obvious intermediate process to be produced (for instance, a non-obvious catalytic process), I would recommend that you patent the composition of the final material without disclosing the secret intermediate process. This type of “hybrid” protection (combing patent and secrecy) is often an excellent strategy and increases the value of the technology substantially. This is not always possible, but try it if you can. If, however, the material or device can be reverse-engineered easily or the process can be guessed, then it is wise to patent both the process and the material. Software is, by its nature, easier to protect, as you only need to patent its functionality and keep the source code secret. Nevertheless, if it depends on some crucial aspect (e.g. it is a new, powerful search or analysis tool based on some new equation) which may be arrived at by some process of elimination, it would be a good idea to patent the algorithm or “process” underlying the code as well. This is a good idea if there is a possibility that your source code can be hacked or broken into as well. A related situation arises when the invention can be produced or applied generically but requires the implementation of a non-obvious “key” aspect to make it competitive. For example, if a new material (medicine, catalyst, etc.) or process is competitive (i.e. valuable) only when some special ingredient is added or some special intermediate stage is used, then you can patent the generic aspects of the new material or process but keep the specific key aspects (which offer the added value) secret. In this way, even if someone attempts to copy the new material or process, they will not be able to find the optimum, competitive composition or condition. If the key aspect is some quantitative information you may be able to “secure” it within the ranges mentioned in the patent claims (e.g. process temperature or duration and composition), which would offer you added protection.

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A word of caution: if anything you keep secret and which is not disclosed in a patent is independently discovered or developed by someone else, or if you or one of your employees or students, etc. inadvertently discloses it, you lose any rights you have on it since you have no way of proving that it was originally your idea. A possible way out of this is to write it down on a piece of paper and have it notarised and kept in a safe place by a notary public or a lawyer. If at some point you need to prove your ownership (and original date) of your idea, you probably would be able to use this as proof. This is acceptable in some countries (e.g. France) but the onus is still on you to prove ownership and it can be an expensive undertaking. From the above, it should be clear that a product and the process for making it should be considered separately when deciding on a protection strategy. For example, a pharmaceutical or chemical product is a separate Intellectual Property from the process utilised in making it. Both should be protected, but differently, if possible. If the product is new, it could be patented (and trademarked if it will be made available directly to the market) but the process, if novel, should be kept confidential, at least the key points. If the product is not new but the process for making it is new, then the process should be protected, along the hybrid route if necessary. It is not an exaggeration to say that the strategy and the decision on what and how to patent are probably the most important choices you will have to make during your journey towards innovation. A well thought of and well-balanced protection strategy will increase value and strengthen the probability for market success. A weak or non-existing protection strategy (e.g. premature disclosure in a publication by an over-enthusiastic inventor, as happens so frequently) is almost a guarantee for market failure. Incidentally—to clarify a frequent misconception—“open access,” as so often mentioned nowadays, does not mean allowing uncontrolled access to all of your intellectual property (IP) and know-how. Rather, it means that you facilitate leveraging of your own (internal) know-how and IP with externally sourced IP, under specific conditions. In other words, an entity may estimate that by allowing access to some of its IP to outsiders and getting equivalent access to theirs, it will benefit in the long run. This is another aspect of innovation strategy and may give significant benefits, since you can obtain already developed know-how to aid your own developments. A well-known, albeit inadvertent, industrial example of this strategy is the way in which the operating system (OS) that is used nowadays in the vast majority of personal computers managed to capture the market. Originally it was installed in the first personal computer (PC) manufactured by the largest computer manufacturer at the time and the combination was very successful and became very well known. At the same time, for various reasons, this operating system was not fully protected and, combined with the developer’s willingness to license it out easily (and cheaply) to whichever manufacturer asked for it, it was soon used almost exclusively in all personal computers cloned by various manufacturers on the basis of that original PC. This continued with the next generations of, now better protected, operating systems for this type of PCs. This strategy (probably inadvertent at first) has resulted in the PC type of computers capturing more than 90% of the market whereas the main competitor, which made sure to patent and protect everything right from the

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beginning, only has around 5%. This very large difference in market share is probably also due to the fact that an operating system is a platform technology which is designed to host the useful software applications. By allowing easier access to the OS, the company created a “captive market” for its main products, the applications which could only run directly on its own OS. Innovation Strategy The main aim of any innovation strategy is to achieve the optimum protection for the invention while ensuring freedom for use (and development) and maximum benefits for the inventor once it has been converted to an innovation. The innovation strategy that suits each technology and each situation (or application) varies. A platform technology (e.g. an operating system) may benefit if disseminated openly but with IP protection based on contracts in order to attract users, whereas an enabling technology should rather be patented in order to enable maximisation of exposure, freedom for use and benefits for the inventor. The strategy also varies between entities. An industrial concern may be interested in maintaining maximum secrecy for its core technology, while a research entity might decide that advertising its inventive prowess is a better route to success. In addition, innovation strategy often goes hand in hand with marketing strategy. You might, for example, decide to make a product freely available in order to create or increase the potential market for an associated protected technology, giving greater added value. Identification and management of exploitable spill-overs or spin-offs is an important aspect of innovation management strategy. Regular assessment of activities and results is necessary to make sure you don’t accidentally miss out on opportunities. Innovation strategy does not only cover protection or dissemination, but also future development focus, market focus expansion, skills development, risk management, funding, ownership and licensing, strategic partnerships, etc. It is a rather involved process and better handled in collaboration with an expert. Another example of easier access leading to market capture happened with the two types of video cassettes that came out in the 70s. Initially, the high quality Betamax format was developed and released by a major company and soon afterwards the VHS format followed by a major competitor. Whereas the latter was soon licensed out to other big manufacturers of video recorders, the former decided to go it alone. Coupled with the fact that VHS machines were offered (initially at least) at lower price and longer duration, the result is that within a few years the VHS had all but captured the market.

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Remember that applying for a patent does not guarantee that you will be awarded one. This may take years, especially in the case of a European or US patent, but you don’t need to wait for the patent to be awarded to push ahead with your transformation. You are protected to some extent as soon as you make the application, since by doing so you have secured the date of creation. Of course, it is definitely safer to wait a while before you announce its existence. For instance, your strategy may involve the submission of a patent application and in parallel the continuation of the development and feasibility tests. This will allow you to think of some fallback positions and adjustments in case the patent report suggests changes. Furthermore, your patent strategy may also involve anchoring (protecting) your main patent with new patents covering new applications, modifications, functionalities, etc. This increases the effective value of your technology as it makes it difficult for others to impinge upon your specific area. For increased benefit in the long run, your protection strategy for your intellectual property may be combined with a controlled open access policy of some of your IP. This is a type of hybrid innovation strategy and works well for enabling technologies such as generic processes and advanced materials. In this case, you publish a series of articles in scientific and industrial journals detailing the performance and functionality of your technology and explaining how it can be used and adapted in specific applications. Once the market is interested you make available advanced versions of the technology or optimised adaptations for specific applications, but under protection this time. This kind of strategy works well for industrial and scientific collaborations as well as for building consortia for project proposals. A protection strategy as described here is only part of the complete innovation strategy necessary for success. There are many other aspects (see box) that need to be considered for an effective innovation strategy, the main ones being confidentiality and secrecy, balance between dissemination (announcement, identification, time stamping) and confidentiality, strategic partnerships, market focusing and diversification, funding strategy (seed, development, industrial) and so on. All of these require decisions to be taken and suitable response to feedback. Moreover, if your technology is generic, each application may need its own innovation strategy. If you personally do not feel capable of making the decisions needed for an innovation strategy, by all means find an expert who can guide you. Regarding patents, the local patent offices can of course offer advice on patenting, but an expert in innovation strategy development would be an invaluable ally and can even help you later when you look for market partners.

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11.1

In Summary

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In Summary

Once you have attained TRL 3, your technology has been developed to a level where you need to decide on the most appropriate protection strategy. This is part of your total innovation strategy which will influence and guide all your later developments and activities. The protection strategy that you select (i.e. which parts to patent and which to keep secret) will be based on the nature of the technology but also on your own long-term plans, for example, whether the technology will stand alone or be part of a group of technologies. Tips • When deciding on your patenting strategy, it is important to check what your competitors are doing and how they deal with their core knowledge. It might give you important leads on your own plans. • If your technology is part of a group of technologies that make up a full system, decide first which part is the core of the system (which most other parts report to) and keep that secret. This strategy works well if the core is not easy to reverse-engineer or guess and the other parts don’t give the game away. • Remember that your competitors are also monitoring what you are doing and the contents of your patents and publications. Do not disclose anything more than absolutely necessary! • When you have filed your patent, you can submit a manuscript for publication, but in the description of your methodology give only what is absolutely essential and certainly disclose your patent filing and reference number. • A hybrid protection strategy is considered to be the most valuable by the market since it combines both sufficient security and valuable exposure.

Chapter 12

Critical Milestone 2: Validation of Technical Feasibility for Applications

After successfully protecting your invention and reaching TRL 4, you are now entering Stage 5. Most of the development activities required to elucidate your technology’s functionalities and capabilities for a range of applications have been completed and you are now in a position to start focusing the development effort towards validating your technology for specific applications. The successful culmination of this stage will allow you to achieve Critical Milestone 2 (TRL 5). This is a major milestone, as it proves that the technology is not only technically promising but relevant and feasible for real world applications and it can be safely considered for pilot and industrial testing. What exactly needs to be done during Stage 5? In a word: technical focus. During the previous stages, you have been developing the new technology in the laboratory, mainly in a generic way. This means that you have been developing it mostly without exact focus or any particular application in mind. In most cases, you might have a general idea of the use it can be put to. For example, a catalyst may be useful for certain gaseous reactions but it can also be used for liquids, mixtures, molten materials, solutions, etc. A new type of heating process may have many uses in many fields, as does a new surface self-cleaning method. A new satellite navigation system may be useful in many areas, as does a new app for vehicle positioning support. In Stage 5 you will focus your technology’s development towards its first, market-opening application. You will, of course, have included in your patent as many of the potential applications as possible, but your technology’s technical feasibility now needs to be validated for use in each of these in turn. Things are easier if your technology was actually focused from the outset on addressing a specific need or problem, but even in that case things may have moved on, out of reach. For example, if a considerable period elapses by the time you reach this stage, the original market need may have been diluted or is not pressing anymore. Or perhaps another technology has appeared in the meantime which makes your technology less competitive or even irrelevant for that application. In most cases, this doesn’t necessarily mean that your invention © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_12

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is useless—it may just mean that you need to make appropriate adaptations or look around for alternative applications or spin-out or spillover opportunities. In any case, because of need to focus, all activities during Stage 5 need to be carried out for each specific target application independently. Each application will therefore, in general, have its own specific lab prototype. Because this is expensive, careful focusing is crucial. You can of course try to address every one of the possible applications you can think of. Yet, is this necessary or even desirable? On the whole, it is not. You don’t want to dilute your funds and your efforts. Some of these applications may already be well catered for by competitive technologies, some may be serviced by a large player with strong vested interests (even if their technology may not be as “good” as yours), some may need an exorbitant amount of funds for industrial tests, etc. You must narrow down the list of possible applications, at least in the beginning. Later on, when your technology is well known and accepted, you can start considering new applications, for which you will need to repeat the activities in Stage 5. In practical terms, then, what are the most important tasks you need to do at this stage? As explained, the first job is to carry out a careful evaluation and decide which application is the most favourable for success and return on investment (RoI) at this stage. This is the one you are going to concentrate on at this stage and according to which you will build your prototype. Obviously, this is one of the most crucial and long-reaching decisions you are going to make during this transformation as it will have an impact on all later stages. This doesn’t mean you can’t revisit it and even change your mind at a later stage. Such a change may turn out to be desirable, perhaps even necessary. Once you decide on which application to concentrate on, all your efforts from now on should be directed there and all your funds should be focused on achieving the best result. How do you go about making this decision? Documentary research again, as well as by speaking to as many stakeholders as you can, especially potential implementers and end users. There are two main directions for your research. First, carry out a detailed search for all similar technologies (competitors, also-runs, etc.), with the main criterion being the functionality of your technology, that is, what does it do well, ideally better than others? You should then consider each function of your technology in turn and identify application areas and sectors where this functionality is crucial or enabling. Some of these areas might not be obvious or developed yet, so this exercise needs to be done periodically as markets and industries develop. Good generic technologies can find their way into an ever increasing number of application areas. To illustrate this, we can consider some examples. Advanced (“fine”) ceramics such as alumina (aluminium oxide) or zirconia (zirconium oxide) are mainly used for high-temperature applications under very demanding conditions. They are also invaluable in microelectronics, mobile telephony antennas, chemical engineering, space applications and many other areas. They have also become widespread in everyday applications such as permanently sharp knives or modern water tap valves. But they also have another interesting characteristic: they do not catalyse most oxidation reactions as most metals do. As a result, ceramic knives have become

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popular among health-conscious people for cutting vegetables, fruit and other foods as they apparently tend to preserve the nutrients longer. In informatics and microelectronics, the number of examples of technologies with a plethora of spillover or spin-out applications (see box) is huge. Global positioning systems based on satellites (GPS or Galileo, etc.) are very useful in helping you find your way around a city, but they are also crucial for global timing and for finding the position of airplanes, ships, goods crates and your car if it is stolen. Spin-Outs and Spill-Overs During the development of your technology in response to a need, it might transpire that it is suited better or at least equally well to an alternative application, perhaps in a completely different field or sector. Your technology can thus be spun-out to address this new opportunity, perhaps by suitable adaptation. Or it can passively spill-over to another sector where it can become successful almost by accident. Examples abound in nearly every field. Ultra low density foam materials (aerogels and the like) were originally curiosities in a lab without any specific application in mind. They then became successful for thermal insulation and are now bound for space applications. Magnetic resonance imaging (MRI) was used for years in physics labs to examine the structure of materials until someone realised that hydrogen atoms (which exist as part of water in every tissue) can also be imaged to give us a fantastic look inside the body. Microbubbles and nanobubbles were initially little more than curiosities but are now being developed to deliver medicines even past the blood-brain barrier. Many medicines that were originally developed for one ailment are sometimes found to be active elsewhere (e.g. aspirin). Personally, one of my own technologies (a method to ensure good thermal distribution in large, variable cavity, continuous flow microwave furnaces) became more successful when I recognised an application in mineral processing which was completely different to my originally intended area of application (drying of ceramics). The eventual commercial success of a new technology depends on your continuous awareness of new opportunities and new situations. Micro-electromechanical systems (MEMs) are minute devices already used as sensors in many fields. Recently they have also become excellent actuators in fields as diverse as space exploration, vehicle health monitoring, body health monitoring and automatic medicine dosage delivery (placed under the skin). Finally, artificial nanostructured surfaces mimicking the surface of the leaf of the water lily are used to repel water and are now being developed to make free-flow micro capillaries in lab-on-chip systems for environmental monitoring as well as for delivering drugs in tiny body implants.

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All the above are examples of technologies with some generic characteristic which, once developed successfully for one application, found use in many other applications. Interestingly, in all of the above examples, the initial application was not where the technology was most successful commercially! Nevertheless, each and every application required all the efforts in Stage 5 and subsequent stages before it could become a valuable innovation.

12.1

Action Plan

Once you decide on which application you will concentrate from Stage 5 onwards, you need to prepare your action plan. Your aims here are to finally design, develop, test and eventually validate your technological lab prototype for this particular application. Sufficient funds and lots of effort will be needed. Unfortunately, securing funding for this stage’s activities is generally difficult. The new HORIZON programme does consider proposals at this level, but investment funding is generally difficult to come by—most funds are interested in supporting technologies that are at least at TRL 5 with proven technical feasibility. This is one of the reasons why I consider TRL 5 to be Critical Milestone 2. To start the process, first make a detailed analysis of the minimum requirements (technical specifications) for the application that your technology should aim for in order to be accepted. Such specifications may include (but are not limited to): • Specific functionality (what should your technology be able to do in this application) • Cost (what is the acceptable cost to make it) • Design and durability (external, internal, quality, planned obsolescence) • Usability (user-friendliness, service friendliness, skill level) • Materials (quality for each level, REACH regulation, availability, sourcing) • Processing and manufacturability (any special processes, restrictions, regulations) • Life cycle and recyclability (reusing, recycling, environmental impact) • And others, depending on the specific application Once this preliminary analysis is completed and you have suitably fleshed it out, you should compare the detailed requirements first with the properties of any existing technology serving this particular application and second with those of your own technology. This evaluation will show which function or property of your technology requires further development and where it stands vis-à-vis any existing technology that serves the same need. These activities will in fact form the backbone of your work at this stage and the above requirements will help you steer and focus any further development activities towards attaining Critical Milestone 2 and reaching TRL 5. On rare occasions, your proof of concept development work during Stage 3 will be enough to allow you to answer many of the above questions directly and easily evaluate your technology vis-à-vis the requirements. Most probably, however, there

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will be several gaps in your knowledge and many technical aspects related to the specific targeted application will have to be tested afresh. Therefore, a second (or more) round of development work will probably be needed to complete this stage. Every iteration will focus the functionality of your technology a little more until it is fully validated for the specific application. The overall aim of the work in this stage is to demonstrate conclusively the technical feasibility of your technology, something which must be accepted satisfactorily by any potential implementers or customers (see box). The underlying proviso in all this is that the technical feasibility of a technology at TRL 5 is always directly associated with and related to the (semi-generic or specific) application that it will eventually fulfil. If during these development activities you realise that your technology cannot address satisfactorily the specifications for the particular application you chose, you may decide to turn your attention to a different application. You would then most probably have to start a new cycle of technical feasibility activities with new specifications and requirements and build a new lab prototype to satisfy them. Optimum Target Application Selection Deciding on the optimum initial application for your (still generic) technology is a complicated decision. Numerous non-performance-related parameters need to be taken into account, many of which present technology acceptance risks and require technical adjustments to your technology. The main ones (the list is by no means exhaustive—every situation has its own specifics) that need to be considered at this technical feasibility stage (Stage 5) are: • How does the new technology affect current industrial operations? • Is the new material or device or process compatible with others in the production or usage chain? • To install the new technology, does the factory need to stop operations? • Can the new technology be validated without modifying the whole production process? • Are parts made with the new technology compatible with other parts in an assembly? • Do any regulations which may restrict usage or regulations to make your technology compulsory exist yet? • Will the new technology require certification for use? • Does the new technology have too narrow an application? i.e. is it worth the effort? • Is the time window of opportunity perhaps too short? • Is the required re-skilling of staff perhaps too expensive or too complicated? • Are any existing competing technologies too well entrenched? • Is there any negative public perception or worries due to previous failures? • Is the lab feasibility validation not reliable due to insufficient scale?—etc.

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I think it should be clear by now why this is a major decision point and the second Critical Milestone. If your technology cannot realistically reach these applicationdependent requirements and attain TRL 5, then you cannot hope to be successful in commercialising your technology. This is especially the case when the target application is already serviced by an existing technology. Here, your job becomes a lot tougher because it isn’t enough simply to be better. You need to be much better in nearly everything, especially in the cost/benefit ratio, to have any hope of replacing the existing technology. Existing technologies are very often so entrenched in an industry’s way of thinking that it is extremely difficult to dislodge them. In fact, aiming at replacing an entrenched technology is the single major reason for the failure of new technologies which reach the market. Very often, it is not the performance (or even the cost/benefit ratio) that decides whether or not a new material, device or process will be accepted as the replacement of an existing one. The unknown factor in all this is that it is very difficult to know beforehand how exactly a new technology will actually be used in practice. Many new technologies developed to replace existing ones need a different way of operating and operators need training. For example, a new nanostructured photocatalytic material with bactericidal properties developed for use in surfaces in hospitals, kitchens, etc. soon lost its capability, not because there was anything wrong with it, but first because the strong lights used in such environments slowly degraded its functionality and second, because cleaning materials used by (well-intentioned) cleaners quickly damaged the nanostructured surface! Since then, the first problem has been corrected but not the second. Any new technology needs to take such events into account when it is still under development. This is one reason why robotics has been developed in industry; it is an attempt to reduce the natural tendency of humans to resist or be confused by change and it is much easier to train them! Even though they require re-programming for their interaction with or use of a new technology, it is a lot easier than reskilling humans to use new machines. What this shows is that when deciding on the functionality and specific operationality of a new technology, many non-technical aspects need to be taken into account. Therefore, at this stage you must examine in detail the way an existing technology is used in practice (a type of operational analysis), and take the lessons derived from this analysis into account when deciding how your technology should be developed. The easiest way for any new technology to attempt to enter the market (although without guarantee of success) is to be developed and used or produced by an existing or start-up company independently of any other existing product or operation. If this is not the case, you must consider how your technology could fit within existing operations and processes or within a family of products (even if your technology is completely new and not aimed at replacing an existing one), so that it is more easily acceptable by the implementer or user. For example, is it compatible with existing operations or processes in a production or use environment? Will its installation or use mean disruption in operations? Can it be applied or produced as a separate, parallel line which would not affect the rest of the operations? And if it is applied or

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used in production or made available in the market, is there any aspect of the technology which could present any incompatibility issues later on? These questions are all crucial for later acceptance of your technology—you may therefore need to make adjustments here before any industrial testing. However impressive your technology’s performance may be, its eventual acceptance will depend on many other factors quite unrelated to how good or how cheap it is. The side box on page 121 lists a number of questions that will help you to determine your optimum application, to identify the acceptance risks as well as any corrective actions that would need to be carried out at this stage when some scope for technical changes still exists. A more detailed discussion on risk management is provided in the chapter on Business Planning. A problem is that many of these risks cannot be identified at this point and you have to rely on existing knowledge and experience to try to address all of the potential problems listed. This may result in compromises without guarantee that some risk will not remain. Some of the parameters involved in getting your technology to “fit” in existing operations or market demands are purely technical in nature; others are mixed and may not easily be mitigated by technical changes in your technology. For example, incompatibility and certification issues related to your prototype can be considered at this stage and measures can be taken early. But public acceptance, regulatory measures and other issues that are not directly related to the nature of the technology are difficult to deal with and you need to work round them as much as possible. In this case, awareness and proactivity will save you a lot of trouble. Proactivity is indeed very important. If you can learn about or prepare the ground at various levels, your technology may find easier acceptance or at least you will avoid pitfalls. Taking part in, or at least being aware of, the activities of regulatory committees or public discourse committees, for instance, will help you to understand the general direction and perceptions of both the regulators and the public. Also, if the market changes to become more or less favourable for your technology, knowledge of this will allow you to take appropriate measures early on. Be that as it may, knowledge is not always readily available—especially in the case of totally new technologies—and some decisions will have to be made by relying on previous experience and extrapolating from there. This can be successful—as has happened previously with the advent of social media which built upon the recognised need of people for fast and flexible communication—or it can be disastrous. A few years ago, some suntan lotions and cosmetics appeared that offered better protection or performance due to their inclusion of nanoparticles. Unfortunately, these were apparently implicated in certain skin irritations and other side effects and the negative attention which followed has resulted in negative public perceptions. As a result, the EC and bodies in the USA and Canada have made their continued use a subject of health hazard investigations. The nett result is that this new, highperformance technology has hit major acceptance snags and its future is, at best, unknown. This is certainly not what you want for your own technology as it can affect everything related to its eventual utilisation and market acceptance. It is far

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better to be prepared and to make any necessary changes at this level (Stage 5) based on as much knowledge as you can get your hands on. Interestingly, the above negative results notwithstanding, similar ceramic nanoparticles included in hard surface coatings have proven very successful in improving the surface’s durability, wear resistance as well as its reactivity and self-cleaning capability. The producers of these new technologies have succeeded in spinning them off successfully.

12.2

Continue Alone or in a Joint Venture?

At this point it is important to discuss the question of whether you will (or can) continue development on your own, for example, by setting up a start-up company. This is a complex issue and very often does not have a definitive answer (see box), but I’ve noticed that many very keen researchers and inventors jump headlong into a start-up venture without weighing all the pros and cons carefully. It seems that the attractiveness of the idea of being one’s “own boss” overshadows the many arguments against setting up a start-up company. Unfortunately, it is well known that very few start-ups succeed in bringing their technologies to the market (or getting them used in industry) and even fewer remain solvent 10 years down the road. While entrepreneurship is the wish of many researchers and inventors, it can often be a huge gamble. On the other hand, well-run joint ventures are more often than not successful. Start-Up or Joint Venture? In most cases, there are two main routes that one can follow for carrying out the technical feasibility studies and later the industrial viability tests and commercialisation. Either the researcher sets up a start-up company (ideally, with a business partner) or teams up with an existing company experienced in the area. There are many differences between the two routes and each has its pros and cons. The final decision may rest on individual opinion, but some aspects are clear. First of all, compared with a joint venture, a start-up offers independence, simpler strategic planning, freedom from the risk of disclosures (and leaks), and the capability for rapid decision-making. If all goes well, profits are not shared and you have freedom over any future moves. All of these advantages are balanced by the cons: you have to raise your own capital, shoulder all risks (legal, technical, financial, etc.) yourself, and make your name in the market alone, sometimes against strong competitors who certainly do not want another “kid on the block” and who will fight you tooth and nail if they think you present a danger to their market position. All of (continued)

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these challenges are generally better handled by an existing business entity. Because of their track record, they can generally raise cash easier, absorb risks and losses during the development period and, as long as they are trustworthy and recognised, they can offer clear identification in the market. Some of the weaknesses of a start-up may be moderated by strategic support from a venture capital or other financial fund which will offer cash as well as business and legal support, albeit with some sacrifice of independence and profit from your side. However, when you get to the later stages (of industrialisation and commercialisation), they generally cannot offer as much help as a company which is active in the sector. Independently of these provisos, the decision whether to go alone or seek partnership is amenable to some rationalisation, based on the nature and attributes of your technology. Figure 12.1 shows a decision flow chart indicating the main decisions you need to take. Note that most of the choices shown are not conclusive. Even if you do have the answers to these questions, it is still up to you to make the final decision, always taking into account extraneous parameters such as the availability of funding as well. It is certainly not an easy or clear choice to make. My first piece of advice, therefore, is to try as much as possible to find an existing company with which you can work together and develop your technology further as part of a joint venture. Only if this search for a partner proves fruitless should you attempt to set up a start-up company and try to go it alone. There are many directions you could take to find a partner. First of all, consider all of your business contacts, partners from projects, customers and suppliers. This is where a strong scientific and business network (see Fig. 12.2) is so useful. Remember that to be able to form a joint venture, your new partner must know you and trust you and you must know them and trust them. Ideally, you might have worked together in the past, or at least you would have a long-standing successful business relationship, even if only a customer-supplier one. The international collaborations that form the backbone of the RD consortia formed to carry out multi-year projects funded by the European Commission are often the birthplace of many such joint ventures, sometimes even before the project is completed. If none of your direct contacts are suitable, you can try your second-order contacts, that is, the contacts of your contacts or partners. Finally, if this also proves unsuccessful, you could get the support of a technology broker (facilitator) who might be able to use their own contacts to find a suitable partner for your technology’s development, as illustrated schematically in Fig. 12.2. The whole search is time consuming and may entail risks (especially confidentiality risks for which you should prepare by always insisting on a signed non-disclosure agreement, see box), but if carried out properly will give you a great many benefits and a better chance of success.

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Fig. 12.1 Decision flow chart for your exploitation strategy in Stage 5

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Fig. 12.2 Schematic of the various levels of network contacts you might develop

Implementer vs. End-User There is often confusion between the roles of the implementer and the end-user of a new technology. They can be the same, but often are not. An implementer is the entity—usually industry—whom you will partner with to take the development further and, with your collaboration, will carry out the industrial validation tests and everything else needed before the technology becomes an innovation. The implementer always has its own long-term direct interest in the technology and will invest in its industrial development. It may be a spin-off start-up company of a research entity. In this regard, it may adapt and use the new technology in its own operations or use it to replace or substitute existing technologies. Its incentive may be to solve a production problem, produce something competitive or break into a new market. An end-user, on the other hand, will want to use the new innovation in its operations or in a product after it has been fully developed. It will not in general be directly interested in investing in the technology’s development, but only when it is already transformed. Technical adaptations, if any, will be minimal and mainly aimed at retrofitting the innovation in its operations or products. It may also just brand the technology for marketing. (continued)

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An implementing company, then, takes on the risk of investing in the development of a new material, process or device, either for its own use or for re-selling it to an integrator. In contrast, an end-user will buy the ready innovation and either use it to enhance its own operations or products or bring it to the market directly. Let’s now consider some of the criteria upon which you should base your selection for a partner. The first priority is to find actual potential implementers of your technology, that is, to start examining potential strategic implementing partnerships already at this stage. A word of warning here: an implementer is not necessarily the final end user of your technology (see box). An end user might not be too interested in collaboration at this stage if your technology is still in the lab, as you still need to validate your technology’s technical feasibility here as well as its industrial viability in Stage 8. Therefore, it is an implementer you need to contact to join your efforts and invest in your technology. By joining forces with an implementer at this stage, you will save yourself a great amount of effort and complications later on. If all goes well, they will also derive benefits from it by collaborating with an experienced researcher. It is very important to be careful at this stage: don’t make the common mistake of going off to a direct competitor and expect them to invest in your technology. This rarely brings benefits unless you know well that their existing technology (with the same applications and similar functionality) is no longer satisfactory in the market or in their production operations. If they do not have urgent need, they will most probably be interested in your idea only with a view to obtaining valuable information about a potential future competitor (you!) or even to try to copy it or delay it. Do your homework well in advance and only when you are sure that they are not happy anymore with what they have or use and that they have no replacement at hand and are ready to reinvest, contact them with a view to suggesting investing in your technology. Your best bet is to find an implementing company that wants to break into the field but has no technology to do so at present. They will thus see you as a partner, not as a competitor, and they’ll have all the incentive to succeed with the new technology. In fact, this common incentive can, to a great extent, be a guarantee of fair business. As long as you keep your cards close to your chest (inasmuch as possible), the implementing company that you select will need you during this technical development stage as much as you need them. A word of warning from my own experience: do not assume that a large company will improve your chances of reaching commercialisation. There are a number of problems with large companies as development partners for a technology. One is the fact that they are very hierarchical and decisions for any collaboration (let alone anything involving funding!) are taken at a much higher level than the persons you’ll most probably make contact with. Unless you have direct contact with one of the big

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bosses (who has access to the company’s managing council), your request will take months before it gets any attention. It’s not completely their fault. Managers in industrial companies are always under stress and they have to prioritise all their jobs. If your technology does not solve some hugely pressing problem that they have, it will most probably be placed at the bottom of the “to-do” pile. But even if your technology is tested and found promising by a large company’s research group, the chances that it might eventually be used in their production are slim. Again, unless it solves some extremely serious problem, or its market potential is already proven (catch-22!), very few will want to take the (expensive) decision to invest in it. Investment decisions in large companies are taken many years in advance. Can you afford to wait so long? And finally, more often than not, a large company has the means and the personnel to fund their own technologies and they may already have been developing their own version of your technology, if they have a similar problem to solve. Do you think they’ll risk that over yours, even if yours is indeed better? Hardly! In the best case, they might buy it off you to keep for later. Don’t get me wrong. Many large companies are looking around for opportunities and promising new technologies and many do collaborate towards developing new technologies. But these are the exceptions. I think you get the point. Your implementing partner should ideally be a healthy, dynamic, mid-size company where you’ll have a good chance of being seen and heard by the production manager or even one of the executives. Such companies tend to be ambitious and driven and they might be very excited to be given the opportunity to beat their rivals. If they are also ambitious, they are often the best collaborators. If joining forces with an industrial company is not possible (or in any case desirable, possibly due to confidentiality issues), you might consider a Contract Research Organisation (CRO) experienced in your sector and field. In Germany, the semi-public Fraunhofer Institutes do this job well and can offer valuable advice at this stage or during the scaling up at Stage 6. Similar CROs exist in many other countries. The advantage of partnering (or simply contracting) with such an organisation is that they offer objective advice and support and it also frees you from having to worry about joint ventures at this early stage. The disadvantage is that you’ll have to find the funds to cover their costs, which can be substantial.

12.3

Confidentiality During Discussions with Potential Partners

As we discussed previously, confidentiality is crucial at all stages on your road to developing the final innovation. In particular, you should be careful not to disclose more than is absolutely necessary when talking to potential competitors before you have both signed a Non-Disclosure Agreement (NDA, see box below and Appendix

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A for a sample). This is the case even if they do eventually become your implementers. This consideration is absolutely essential, as it allows you to talk openly about your technology during the negotiations without fear of compromising your core knowledge. Disclosures of course will be needed from both sides (the implementer may need to disclose aspects of their operations and strategy) but you probably have more to lose. After a first successful exploratory meeting between you and the potential implementer, a more detailed document is usually signed, the Memorandum of Understanding (MoU, see box below and sample in the Appendix), in order to go further. This describes the aims and objectives of the prospective collaboration in some detail while maintaining the protection provided by the NDA. If you feel confident with the potential offered by an implementer, you might decide to agree directly to sign a MoU, but always make sure it contains a complete NDA. This should be done even if you are dealing with previous collaborators whom you know well. Better to be safe than sorry! Finally, a SWOT analysis can be carried out for every potential implementing partner you wish to evaluate. By weighing the strengths, weaknesses, opportunities and threats presented by all of the potential partners, your decision may become easier to make. The difficulty again lies in finding all the information to enable you to carry out a reliable SWOT analysis.

12.4

More on Implementation Strategy

The decision on what type of implementation strategy you should decide on will generally depend on the type of technology you are developing. As discussed before and shown in the decision flow chart in Fig. 12.1, the first question you need to ask is whether your technology aims at replacing an existing technology, whether it is complementary to an existing technology, or whether it is based on a completely novel idea. The implementation strategy for each of these kinds of technology is different and generally has a different optimum implementation route. A start-up company (possibly spun-off from your research centre) is always a potential solution, but it may not be the optimum solution. The next question you should consider deals with the potential “added value” that may be offered by your innovation. In practice, this means: is your innovation going to offer a serious benefit to the end user’s operations and products? If, after weighing all the variables (comparative analysis), you realise that any added value offered will be marginal at best, then commercialisation is probably not worth it and you might as well save yourself the effort. Naturally, this is a difficult question to answer and requires input from various sources, especially from other businesses and colleagues. This is where your information network becomes indispensable since through it you can get reliable answers. Remember to ask the right questions in order to get the right answers!

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More on Implementation Strategy

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Non-disclosure Agreements and Memoranda of Understanding Non-disclosure agreements (NDA, often called Confidentiality Agreements) offer a way out of the conundrum wherein you need to disclose enough information to attract an implementer, but are scared to lose your hard-earned know-how. An NDA is a legal agreement, best drawn up by an experienced commercial lawyer between the parties. It is the first line of defence against any unpermitted use of disclosed know-how or technology. In addition to clearly identifying the parties and their specific status vis-à-vis the technological discussions, it should be written as explicitly as possible to avoid any misconceptions. At a minimum, it should refer to the parties’ current level of knowledge of the technology, a full list of all possible forms of know-how and technological knowledge that may be disclosed, and any penalties that could be incurred in case of inadvertent or illegal disclosures. An NDA is always part of the Memorandum of Understanding (MoU) which is a more complete agreement and describes the technological status of both parties in more detail and the specific objectives and aims of the discussions explicitly. There are no obligations to agree to a contract, but it may contain specific qualitative or quantitative milestones and criteria that need to be reached to allow for a contractual agreement to be drawn up at a later stage. Samples of an NDA and an MoU can be found in the Appendices. In the case of a completely novel technology, the decision comes down to whether it addresses a pressing need or demand. If it does, then it obviously offers good value and investing in it is probably a good proposition. If it doesn’t, however, its chances of commercialisation success are very low indeed. That’s the main reason why remarkable technologies such as the transistor took decades before they became hugely successful. At the time that it was invented most people thought that there was no pressing need for it as the “vacuum tubes” were quite adequate, thank you very much. Even apparent “blockbuster” new technologies (e.g. devices, software and games), which appear to create a whole new market when first released, do not actually have such a powerful effect in and of themselves. Such markets are never completely new. They are, in general, carefully nurtured nascent markets where the new technology fills a gap left by a previous technology. For example, software games tend to fill gaps in the market for personal entertainment as a result of the greater amount of leisure time available to people nowadays. Recent innovations in social media address a pre-existing need for communication by offering the tools and platforms with which to communicate in a new way: instantly in a virtual mode. The underlying need in all of these cases is not created out of thin air but always prefigures the innovation that claims to fulfil it. The sequence of questions shown in Fig. 12.1 is certainly not complete. These are the main questions you need to consider, but many other considerations will need to

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be taken into account before you are sure of your decision. For example, if the new technology requires a large investment and you don’t see any clear way of raising the money on your own (as a start-up), then there is no point in pushing ahead on your own. You need to compromise on your expectations in order to attract an implementing partner who will invest at this stage (but do not show this during negotiations). Looking again at Fig. 12.1 and the decision regarding what route to follow for the development activities during Stage 5, it should be emphasised that the final question that needs to be answered during this decision-making process is different for each type of technology. In the case of a replacement or substitution of an existing technology, the final question is whether the end users are ready to invest in a new technology. If their investment cycle is nearing its completion, they may consider it. In this case, therefore, you would have a good chance of success if you go it alone with a start-up company, as you would be able to avoid competing entities and move fast to offer the technology to the market. We’ll look into this in more detail later. Figure 12.1 highlights another important question. What about a technology which is complementary to an existing one and offers major added value, in tandem with the main one installed? For instance, you may have invented a process which enhances the properties of a material or product by operating in between existing processes in a production chain. Or perhaps your process offers a better finishing quality on the final product, thereby adding to the properties or the quality of the product, etc. This could be a special process on a coating, for example. In this case, a question to ask to enable you to decide on the optimum industrialisation route is whether there is any competing technology to yours for the same job. That is, is there any technology that has the same nett functionality in tandem with the main technology already installed? If no such technology exists, there are a number of options open to you. You can either set up a start-up company to develop your technology on your own (and market it either on its own or via licensing) or contact the owner (implementer) of the main technology who might be willing to invest with the purpose of combining the two technologies. If, however, there is a strong competing technology to yours, the risk is higher. I believe that the most promising route in this case would be to develop the technology yourself (by setting up a startup company). It would be unusual for the main technology provider to want to invest in a technology that has a strong competitor.

12.5

A Brief Primer on Entrepreneurship

If after all your attempts you have not been able to find a suitable implementing partner, then you should consider going the rest of the way alone as a new entrepreneur. As detailed in the box on page 124, setting up a start-up company (independently or as a spin-off company of your company, university or research centre) is a rather complicated task. To some extent, it depends on which country you are going to establish your company in and the legal nature of your company, but the

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general aspects are all similar. I can’t go into all the details in this book (in any case, there are many books as well as online advice available which go into the themes of entrepreneurship and setting up a start-up company at length), so I propose instead to give a brief run-through of some of the main aspects of entrepreneurship, as they pertain to technology transfer. First of all, do not attempt to set up and run a company on your own if you don’t have business experience. The world of business is completely different to that of research or academia—in particular, its main objectives are entirely different. Whereas in research we want to understand a phenomenon, business is almost always interested if a phenomenon can be applied somewhere and turned to a profit. If you have business experience, then by all means go it alone. If not, employ (or partner with) a skilled business person who will run your company for you, that is, as your Managing or Executive Director. You should still maintain decisionmaking power, possibly by becoming the company President and keeping the technological responsibilities as well. This arrangement has worked quite well for me. Although it is difficult to achieve, good preparation and well-balanced responsibility sharing in your company will allow you to continue pursuing your research work in parallel, if this is what you want. This is quite important since the risk of failure of a new company is high and you don’t want to find yourself without income. Of course, this is not necessarily the case if you managed to secure a good amount of start-up funding at the outset. Make sure you have the best legal advice you can afford. In dealing with the setting up of the company, drawing up agreements and negotiating with potential customers or business partners, a good legal advisor is indispensable. You can even consider offering him or her company shares. Good accounting and tax advisors are also very important, although you may manage without bringing them into the company payroll, at least not at the beginning. In the initial stages, an experienced business advisor or technology transfer broker (facilitator) would be invaluable in guiding you to find an industrial partner further down the road, to win funding and to help you prepare for negotiations by obtaining and analysing all the relevant information in good time as well as to help you develop your negotiating strategy. Funding is probably going to be your main focal point (and main source of concern) in the early years. Although some very keen inventors believe so deeply in their work that they are prepared to go to extremes and use all their savings, mortgage their homes, or borrow heavily in order to make their invention a reality, I would not recommend this at all. The risk is too high at this stage and it would be far better to keep these funds for emergencies further down the line when the technology has started to get traction and the odds are turning in your favour. To start with, I would recommend leveraging funds from other sources.

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In some countries (notably the USA and lately any of the BRICS1 countries, less so in a few others such as Turkey and Indonesia), there are many private capital funds that are willing to take risks with promising new technologies at TRL 4 or 5. They offer good levels of unsecured seed capital together with valuable advice and market support (as well as excellent contacts with implementers) and their success rate is therefore quite significant (about 10–15% on average with higher rates in certain market trending areas). Unfortunately, in the European Union (and most other countries) there is a dearth of such private funds (due to an apparent risk aversion for most technologies except for those in trending areas) and you will need to turn to institutional competitive funding. After the serious economic problems since 2008, however, there are signs that the situation is now (2014) improving. As I mentioned before, the HORIZON programme of the EC includes two new instruments that may help you. The first is the SME instrument, available at two levels: an exploratory award at TRL 5–6 and a larger grant at TRL 6–7. Both are targeted at new or existing SMEs and aim to bridge the perceived gap between lab and industry. The problem is that they are both extremely competitive and only about 10% of the applicants should expect funding. Coupling this with at least a 50% margin of error (my estimate) made at the proposal evaluation stage, I would expect about 1 technology in 20 applications to have some chance of developing into a (however shaky) innovation. The second instrument of HORIZON is aimed at technologies further down the road, at TRL 7–8, and it is supposed to help SMEs to get their technologies to reach TRL 9 by offering loan guarantees. The idea is that if a technology has managed to get viability validation at TRL 8 (see later), then the chances for eventual success are greater and the company can therefore take on some of the financial risk. My personal opinion is that while these measures will offer some valuable support to inventors, they do not address the main underlying problem which is the general risk-aversion of implementing companies in the European Union. The notable exceptions are perhaps Germany and a few other industrialised states where companies are prepared to validate new technologies with their own money. Various tax breaks instituted by many EU states (and elsewhere) over the last couple of decades have not, unfortunately, made much difference. Turning now to some details for your implementing strategy in your start-up, the important elements are preparation, proactivity, recognition and reliability. These refer both to your technology and to yourself. First of all, be prepared and be proactive. Don’t expect that because you have published some impressive paper on your technology’s prowess users will beat a path to your door. This can happen, but it is very rare and hardly reliable. You have to prepare everything very well and get out and meet as many implementers (or end users depending on your technology) as you can (never forgetting, of course, the NDA and later the MoU), offer them well-made samples to test (as many as they need and as often as they need), demonstrate the main advantages of your

1

Brazil, Russia, India, China and South Africa.

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In Summary

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technology, convince them of its cost-benefit and even allow them to do their own cost-benefit testing (more on that later). In all cases, you’ll have to push, convince, build trust and be reliable. Remember, all the people you’ll be speaking to are busy and you’ll probably have a very limited number of chances to succeed in gaining their attention. Secondly, get your technology and yourself recognised, and develop a trusting relationship with your potential collaborators. Go to conferences, technology fairs, meet people, meet the suppliers and the customers of your targeted implementers or end users. If you can convince their suppliers and their customers, perhaps they can in turn introduce you to the implementers. Remember, the glue that binds businesses together is made of a mixture of trust and reliability. Without these two ingredients, nothing works in business. If you build trust with the suppliers and customers and they introduce you to your target, you’ll have a much better chance of being listened to. I mentioned reliability. This refers both to your technology and to yourself. Your technology must work each time, every time. That’s why Stages 5, 6 and 7 are so important. They are the stages where you’ll test and improve the reliability of your technology. In parallel, you need to build your own name as a reliable business partner. Don’t forget that a joint venture works both ways, but so does any business partnership. If you need an implementer whom you can trust in order to work with and ask them to run tests on your technology, chances are they’ll only do it if they can trust you and respect you. They’ll need to feel that this small start-up is led by a reliable and trustworthy researcher or inventor and that they will gain from this business collaboration, not just by your technology. They will also certainly need to be sure that they can trust you. After all, you are asking them to open their doors for you and you’ll learn a great deal about their secrets and problems during testing. In order for them to take this risk, they need to learn about you and to trust you completely. In the next chapters we’ll talk more about all of these aspects. From the foregoing, it is clear that Stage 5 and its Critical Milestone 2 is a very important turning point, but it is also fraught with risks, mainly related to the implementing strategy that you will use to go further. The technical feasibility activities depend on the application you decide to steer your technology towards and decisions need to be taken on whether you will continue the development on your own or seek a strategic partner to invest in it. The decisions you take here will follow you for the rest of the way until the final innovation. Examine all of the parameters carefully, take the right decisions, and the rest of the way should be plain sailing.

12.6

In Summary

Stage 5 is where your fully protected invention glimpses, probably for the first time, the real world outside the lab and needs to prove its technical feasibility for a real application. Apart from the technical tests needed to complete the validation, the

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main task in this stage is to take the decision on whether you should attempt to go it alone, that is, by setting up a start-up company, or to join forces with an implementer to continue the development under a joint venture. Once the tasks in this stage are completed, your technology will have successfully reached Critical Milestone 2 and be at TRL 5. It will then be ready for the industrial tests that will gradually help it to accrue value on the way to attaining the status of an innovation. Tips • The technical tasks that have to be carried out at this stage are only those needed to validate the technical feasibility for the particular application selected. Some adjustments to the technology may be necessary (adaptations, fine-tuning, etc.), but unless some major problem crops up the technical tasks are expected to be routine. • At this stage, you can start announcing your technology and its capabilities after suitable protection has been secured. Since it is still in the lab, announcements should still be made mainly at the scientific level. • The technical tests at this stage would be expected to be carried out according to internationally recognised standards (ASTM, ISO, BS, DE, etc.) so that they will be seen to be reliable when you announce the performance of the technology. • When selecting a partner for a joint venture, it is important to carry out an in-depth financial analysis to ascertain that its financial position is healthy and that it is able to support the development of your technology. Nowadays, this can be done online. The same should be carried out with its technological capabilities and market position and standing. Don’t take their word for it! • If you eventually decide to set up your own start-up, be very careful not to overstretch yourself. Work out the minimum funds you’ll need, add a bit more and work within that budget. It is not quantity you need to develop; it’s the quality of the technology. • Be very objective about your technology’s capabilities. If in Stage 5 you cannot get your technical feasibility fully validated for your targeted applications, try other applications. If those don’t work either, drop it and go back to the drawing board.

Part III

Maturing in the Real World

It takes a long time to bring excellence to maturity. Publilius Syrus Syrian slave, Roman writer (c. 100 BC)

Critical Milestone 2 that you have just reached is like the late teens: full of promise and excitement and confidence for the future. You have proven that your idea is a valid, technically feasible technology with good prospects for a particular application and you can’t wait to take the world by storm, sweep aside the competition and become rich and famous. If only it were so simple! Just like the young adult who discovers that the world “out there” is a very different and unforgiving place, all inventors soon discover that the real world keeps on throwing more and more challenges in their way. And the first one is the necessity for building and testing a scaled-up version of your technology which will help to bridge the way—a kind of technological “coming of age”. This is where your technology will be applied and tested—and hopefully prove its worth—under the controlled but stringent and high-pressure conditions of industry or the market. Scaling up during Stage 6 involves both technical and non-technical aspects. The challenge is to get your technology expanded to a state where it starts looking like the final industrial innovation, but is not yet so large (or integrated enough into the final system) that you cannot carry out tests on it. Essentially it will be a chimera with elements both from your lab prototype and from the final (envisaged) industrial machine, process or software, etc., upon which you will continue to carry out tests and make appropriate improvements. These will probably be less extensive than you could have done before, but now you will have an eye on the eventual industrial or market target of your technology. Sometimes, a scaled-up version is sufficient to get most of the industrial information you need. Software and some types of components and materials allow this. In the case that the technology can be tested satisfactorily on its own (without being integrated into a larger system, as would be the case for a new device, component material, or part of a process), you can probably go directly to industrial viability

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Fig. 1 The decision flow chart from TRL 5 to TRL 8 and then to commercialisation

testing (Stage 8) without building anything larger than the scale-up. However, in most cases, you will need to build a full industrial prototype during Stage 7 which you’ll use for validation of the economic viability in Stage 8. In any case, as shown in Fig. 1, once you succeed in optimising the scaled-up version of your technology and reach TRL 6, you will carry out the industrial technical validation either on this scaled-up version or on a full industrial prototype under industrially relevant conditions. Then comes the most important test of all:

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economic viability validation in Stage 8. This is where the economic reality of the market or industry will have to be faced and won and it is only by surmounting this obstacle that Critical Milestone 3 can be achieved. You will then be at TRL 7. Armed with that success, you will then be in a much stronger position to apply for industrial funding, which at this level is bound to be much easier to obtain. Once your scaled-up testing is successful and you reach TRL 6, you need to take time off from the lab and turn your attention to the business aspects of your work. This is where all the parts of the implementation strategy you have been putting together gradually need to be tied together, whether you are alone in a start-up or in a joint venture or collaborating with a specialist industrial research organisation. You need to get sufficient industrial funding and industrial backing for the demonstrator and for viability testing and you also need to prepare your risk mitigation plans, marketing plans, and many other tasks. In other words, you will finalise the preparation and put your Business Plan into action. Note how far we have had to come before I even mentioned a business plan. This is very important. I believe that unless you have a spectacularly useful new technology which is “as good as sold”, a capital funding body will not take you seriously unless all the previous milestones have been completed. Jumping into the fray as soon as you have filed a patent and going ahead and preparing a business plan before you are sure of the technical feasibility of the scaled-up version of your technology is a mistake made, unfortunately, by all too many inventors. All of these activities from Stage 6 to Stage 10 (taking your technology (from TRL 6 to TRL 9)) cost a lot of money and effort over a substantial period of time. Your resources—and confidence—will be sapped heavily and your perseverance, persistence, and patience will be tested to the extreme. But the end is near—there is light at the end of the tunnel. And the rewards to come will be well worth the effort.

Chapter 13

Out Into the Real World: Scaling Up

There are many crucial differences between the laboratory world and the real world where innovations need to prove their worth before they can be commercialised and marketed. Not all of the differences are predictable or fair but they are real and need to be accepted. Your lab prototype that is now at TRL 5 needs to prove that it can maintain its performance level when integrated with or used within an industrial environment, whether as a supporting technology (offering productivity or performance enhancements in tandem with existing installations) or integrated within a system. If the technology is aiming directly for the market, it needs to prove its adaptability for mass production and market acceptance. Considering the industrial implementation or mass production of your technology, the overriding challenge that has to be addressed at this point is that industry does not work under “strictly controlled conditions” as we are used to having in the lab. Further down the line, the market doesn’t play by the rules of the lab either. The real world is different and your own approach to it must be different. You have to be realistic and pragmatic. If your technology only performs well under very specific conditions which are difficult to reproduce and maintain in industry, you might find it difficult to scale up satisfactorily. Above all, during the scale-up testing you have to be very strict with the results and very objective with your technology’s capabilities. If it does not perform as well as is needed when scaled up and operated or used under industry-relevant conditions and you’ve tried everything to improve it but have been unsuccessful, you may need to take the difficult decision to cut your losses and go back to the drawing board. It would be better to do it now than spend much more on a full prototype and fail at the economic validation at Stage 8. But let’s look ahead a little. First of all, you must expect that for your technology to be accepted, it will need to perform not only well but to perform robustly, repeatedly and reproducibly under imperfect and often only partially controlled operating and use conditions. Even in the semiconductor industry where everything

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_13

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is automated in a controlled environment, all technologies have to go through very strict robustness and reliability tests because of the criticality of the slightest errors. This is what scaling up really means in practice. It is the baptism of fire of your technology in the heat of industrial application out of which it must come safe and still operating well. The test conditions during scaling up will still be controlled relatively carefully as in the lab but other operating conditions may be introduced which will test extraneous factors sometimes encountered in industry. In other words, scaling up serves to bridge the gap between the lab world and the industrial and market worlds. It is almost like entering adulthood. During this stage, you will gradually leave behind the security and certainty of the laboratory environment and start learning to survive under much less certain and less well-controlled conditions. Scaling Up Scaling up a technology can take a number of forms, but in all cases it means to “adapt the newly developed technology to the needs, and under the conditions, of the industrial environment it will eventually be used in”. The details in each application are different but some of the forms that the scaling-up process can take are: • adapting it to conform with usual industrial practices, e.g. adapting a new process or method to fit with existing operations • enlarging it to be used in an application, e.g. a new building or cladding material or process • adjusting it to achieve compatibility with existing materials, products or production processes • converting it to mass production, e.g. a new process in the production of a new electronic system • adapting it to work in tandem or in unison with other technologies of the same or different type • converting it to make it more user-friendly, or easier to service or to connect with something else • “beta” testing, i.e. getting the users to market-test the prototype • adapting its production method or process to enable its mass production • and others. Nearly all new technologies need to go through the scaling-up process, whether they are software, a material, device, process, method, standard, sub-system, etc. In all cases, it is much easier and safer (and cheaper) to start the scaling-up process at a pilot scale, rather than go directly to industrial scale. The challenges may come from sources that you wouldn’t expect. For example, a new, more advanced process that has been proven to be technically feasible in the lab may face resistance on the part of industrial workers who insist on carrying out their

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tasks as they did with its predecessor, expecting the same results. Or a new material that has been shown to be perfectly suitable and feasible for an application fails during scale-up tests because the supporting materials or subsystems are incompatible with it, or because the real world environmental conditions are not as well controlled as necessary in order for it to achieve optimum performance. All of these challenges are part of the scaling-up process. Note, by the way, that scaling up does not generally involve the construction and testing of an actual fullscale industrial prototype—this comes later, during Stages 7 and 8. Instead, it involves the use and testing of a pilot technology to help you obtain information about the parameters and functionality that a full-scale prototype should have. At the same time, this will give you information about any problems (“teething problems”) and challenges that may occur during the later industrial application and give you time to address and solve them. The criterion for the correct design of a pilot scale-up technology is that it should be “industrially relevant.” The decision, therefore, on how this should be achieved is generally taken together with a prospective implementer or an appropriate expert. The scaling-up process does allow for a measure of technological corrective actions, but these relate mainly to the way in which the technology is to be used, not to the actual technology as such. The technology is expected to be at TRL 5 (i.e. its technical feasibility has been validated) and during this current stage (Stage 6) it will be considered fully technically validated. Nevertheless, some enhancements of the technology are still possible and are usually carried out in such a way so as not to affect the way it is applied. The reason for this is that any significant changes to the technology may affect the way that the technology has been protected (patented) and they might also create uncertainty as to its performance. As mentioned before, it is important to accept that there will be little forgiveness of any serious failure or underperformance in industry. If something goes seriously wrong with your freshly proven technology during industrial testing later, it will be extremely difficult to change the negative impression that will have been created in the eyes of observers. Industry (and the market) has very little patience with failures or non-delivery on promises concerning a technology that is supposed to have been exhaustively tested. Even if there is little competition for your technology, industry will rather go back to its normal operating mode or try another technology than take on a high-risk technology with unreliable performance. This is why controlled scaling up of industrially relevant operations are so important—they allow you to discover and resolve potential application problems in a non-critical, industrially relevant environment before embarking on actual industrial testing. All of this means that this stage is another crucial phase of your journey. It is the time when you have to take your newly developed technology at TRL 5 and to transform it into something that is a substantial step closer to industry reaching TRL 6. In this regard, the overriding aim is to convince the target industry, market or society (whichever is appropriate) that your new technology can deliver on its promise! TRL 5 is only an indication of the potential usefulness and efficacy of your technology: with the scaled-up technology you need to convince the—often mistrustful and risk averse—industry, market or society that your technology can

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genuinely deliver on its promise at the expected cost-benefit level and under realistic, “actual-use” conditions. Towards this aim, the central technical objective of Stage 6 is therefore to design and build an industrial pilot of your technology which will allow you to repeat (and demonstrate) all of the functionality and performance proven during Stage 5, but at a level closer to industrial application. Once you have successfully passed these tests convincingly, you will be in a position to apply for financial and industrial support to build a full industrial prototype in order to carry out the technical validation tests and, finally, the cost-benefit analysis in Stage 8. Pilots and Bread-Boards The terms “pilot”, “bread-board” and “test bench” are often used to describe the scaling-up activities of a technology. They all mean approximately the same thing: the technology is being tested at a pre-industrial level after being technically validated in the lab. A “pilot” is generally a smaller than industrial scale instrumented prototype of a device, instrument or sub-system which is used to establish functionality and operational parameters at a pre-industrial level. If the technology is a process (e.g. chemical synthesis or production process, or even a management process, etc.), we talk of a “pilot plant” or “pilot operation”, which is a smallscale pre-industrial facility to test various properties, scenaria, functions or operations. A “bread-board” is similar to a pilot and refers to a pre-industrial or early prototype of a sub-system made of a number of parts which is used to check for any incompatibilities and also to study and optimise manufacturing processes. Examples may include a new electronic circuit board or chip, a new piece of software or a new automobile sub-system, such as a new brake system. A piece of software usually undergoes a “beta version” testing by many different users which helps to iron out problems and clarify weaknesses to be fixed. Finally, a “test-bench” is a more or less fully integrated system used to test operationality and compatibility of individual components. These could be new materials, sensors or sub-systems. It is worth repeating that TRL 5–6 is also the minimum level that you are expected to be able to demonstrate before you can apply for funding under the new SME Instrument of the HORIZON programme. As mentioned before, the normal cooperative RD funding instruments are aimed at the earlier proof-of-concept and technical feasibility stages and serve to cover the scientific and technological risk of new ideas, but the SME and loan-guarantee instruments are new and have ostensibly been designed to bridge the lab-to-industry (or market) gap. Be that as it may, there is still substantial financial risk because the investments needed are

13.1

Extent and Duration of Scaling-Up Activities

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higher at this stage. It may be that the EC decided that covering some of the risk would help to bring more technologies to the industry or market. Correct design of the scaled-up pilot is the first challenge and a critical aspect of the scaling-up activities. It may be a pilot plant for applying a mass production process, or a pilot prototype of a device, or a test application of a new material in a pilot-sized “breadboard,” or a “test bench” for testing sensors and other devices (see box). In all cases, it has to be designed and built in close collaboration with either an implementer from the target industry itself or at least with an experienced and knowledgeable industrial expert in this field. The reason for this is that the scalingup activities, especially the pilot, should be seen as being sufficiently representative of the eventual industrial application so that the results are considered reliable. This is essential since you want the pilot to be used for obtaining the pre-industrial parameters which will guide you in building a full (or nearly full) industrial prototype in Stage 7, which will subsequently enable you to carry out the industrial technical validation tests and the final economic viability tests in Stage 8.

13.1

Extent and Duration of Scaling-Up Activities

The depth and breadth (and cost and time) of scaling up that is necessary for each technology depends on a number of factors, but the main one is the proximity of the technology at TRL 5 to the final innovation. For example, it may be that a piece of industrial software only needs minor adjustments before it is ready to join the production line. This is represented by the upper curve in Fig. 1.1, where the technology shows a small dip and advances through the remaining stages rapidly with only minor problems. In this case, the risks and investments are lower. Other examples of fast-track industrialisation are for technologies which advance existing solutions incrementally and therefore need much less industrial testing. These could be small (though significant) changes in a material’s properties, upgrades and enhancements of existing technologies, a new application for a medicine that is already approved for use or some non-crucial technologies that have more of an entertainment or aesthetic appeal. More often than not, however, for any technology to eventually reach maturity successfully, it will require lengthy and generally costly scaling-up operations and will thus follow the middle line in Fig. 1.1. The process in this case is timeconsuming and you need to secure strong financial and industrial support to be able to get through it and achieve Critical Milestone 3. This is the reason why I strongly emphasised the desirability of finding and collaborating with a strategic implementing partner, already during Stage 5. They will also be your scaling-up partner. By going it alone in a start-up you will need additional funding and industrial advice for the scaling-up operations during this stage. In a joint venture, at least, the pilot costs and efforts can be shared. As I have already discussed, the real world is where the vast majority of new technologies unfortunately drop out. Even if they have passed Critical Milestone

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2, the real-world tests are stricter and unforgiving: the criteria for success are related less to the innate performance and capabilities of the technology and more to satisfying market expectations and economic factors. Even successfully going through the industrialisation tests, eventual non-acceptance at Stage 8 may be due to lower than expected benefit-cost ratio. Of course, a technology can (actually) fail even before Stage 8 if scaling up reduces its performance or industrialisation turns out to be too costly or not feasible. This happens frequently and is represented by the bottom line in Fig. 1.1. We’ll discuss this in more detail below. In addition to the proximity of the technology to the final product, other factors associated with the technology which determine the extent of the necessary scalingup operations may include (but are not limited to): • The criticality of the new technology as pertaining to the final application. This is a major factor in determining the duration (and extent) of the scaling-up activities. If the new technology’s application is a high-risk proposition, its development will be slow and under very stringent conditions. For example, a new material or process for an aeronautics application can take many years, even decades, before it is qualified and validated sufficiently before it is accepted for use. This is also true, sometimes to an even greater extent, in the case of medical, space or defence applications. In these cases, if a problem occurs during use it can have very serious repercussions and generally cannot be rectified easily. Only slightly less critical are applications in the automotive, ship or other land or sea transport sectors. • The dependence of the new technology on other technologies (or platforms) before it can be applied effectively or safely may delay or complicate the scaling-up process. If the application or use of the new technology requires the development of an enabling device or system beforehand, scaling up will be delayed accordingly. A good example is the development of global positioning application for mobiles which requires an operating system to function under, as well as methods for receiving data from and sending data to a satellite. Both of these latter technologies are enabling technologies for the software and their level of performance has a direct effect on the level of performance of the application and its success. Another example is the development of special high strength superalloys for the compression blades of high power turbine engines. The superalloys are enabling materials for the further development of the turbine engines and, by extension, for the enhanced efficiency of aircrafts or generators in which they are used. In fact, advanced materials are often the single most important enabling technology of a vast array of industrial technologies. The space shuttle’s development was delayed for years because of the delayed development of suitable protective (and other) materials. • Any health, safety or security concerns that are associated with the technology’s application or use may extend the breadth and duration of the necessary scalingup activities to a very significant degree. For example, a new medical substance may need many years of tests and at least three human clinical trials before it can be qualified and accepted for human use. Potential toxicity concerns for certain

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Extent and Duration of Scaling-Up Activities

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nanomaterials which have shown promise as carriers for medicines directly onto cancer cells has meant that their use in many medical applications has been delayed for additional extensive testing. In this particular case, many experts from different disciplines are now involved in carrying out further assessments. • Any potential collateral impact of the application of the new technology on other, interconnected procedures or processes in the industry. Such repercussions will necessitate extensive cross-checking and cross-testing during scaling up and will delay the application. This could happen for example in a case where a new process is added onto an existing production process and the two have to be adjusted to enable efficient operation. Another example is the adaptation of a software code onto a larger software system, as in the case of a retrofitting of a software controlling code for production robotic machines. These are the main factors that can significantly extend and complicate the scaling-up process of a new technology; other, less important, ones exist as well. It is interesting to note, however, that some of the above factors may have the opposite effect and actually speed up development as long as suitable and sufficient support is made available. Let me explain. In the first case above, where the criticality of an application generally slows down development, the sudden appearance of a problem (in the real world) may lead to an urgent effort for its rapid resolution, exactly because there is such a critical need. This was the case of the kit developed for in situ repairing of the heat-shield tiles on the space shuttles to avoid a repeat of the Columbia disaster. Other examples can be found in the military and aeronautics sectors. In the second case above, where a technology’s development is delayed due to the absence or delay in the development of an enabling technology, the space shuttle (one of the most complicated mechanical engineering systems ever built) also provides us with a good example. Near the end of its long development process, it was (belatedly) realised that some of the high-temperature materials needed for the front edges of the wings were not yet up to the level required. This led to a large, urgent effort (and lots of funding much to the delight of the materials scientists involved) to complete them in time. Strangely enough, something similar happened when the Soviet equivalent of the space shuttle, the “Buran,” was under development. This time, it was necessary to rush the development of the heat-shield tiles cladding the underbody. In the third case above, where medicines need to be developed gradually, a medical emergency (e.g. a threatening pandemic) may speed up the development of new medicines to address it and, under extreme conditions, even bypass some of the usually stringent clinical tests. Finally, the same rapid response may be necessary when the gradual and careful integration of complicated systems is suddenly obstructed by an unforeseen parameter which has to be addressed as a matter of urgency. An example of this are the frequent “patches” applied to all software operating systems to close an identified “security” weakness that could allow a software virus attack.

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Many other extraneous parameters can spur on the scaling up and rapid development of a new technology. A well-known major example was of course the Second World War which accelerated the development of the atomic bomb (when it became clear that the war effort was dragging on and may have forced a stalemate), as well as the development of the radar, new types of fighter and bomber planes, antibiotics, anti-malaria medicines, weapons and many others. The Korean and Vietnam wars also brought forward many other technologies such as low mass composite armouring (for the seat of helicopter pilots), new emergency medical procedures and medicines, new communication systems, etc. In all of these cases, such technologies would have taken much longer to be developed for use if the pressure of the war efforts had not been present. Commercial and industrial competition as well as overinflated consumer demand very often encourages rapid scaling up and industrial development. This is evidenced by the continuing headlong push to develop the large number of technologies accompanying and supporting (the now widespread) smart phones. In fact, smart phones, as devices that combine communication with analytical capabilities, have become the largest single engine stimulating the development of new technologies in the IT sector. There is extreme competition by a small number of huge global players but at the same time they support the creation and development of a very large number of new technologies. Interestingly, smart phones’ surge is pulling forward many other fields, some highly focused, such as micro-sensor technologies and software applications and games, and some generic, such as surface nanotechnology (for touchscreens but which are also usable in many other fields), low-power consumption microelectronics, new thermal sinks for heat dissipation and, of course, advanced battery systems. This last one in fact is where a lot of investment is being made available currently, the basic form of which is the same as that used for electric cars. Although extending the energy life of batteries (of all types) is probably the largest single technological challenge in so many applications, from storage of excess energy to smart phone batteries that last longer than a few hours, it has proved to be an incredibly intractable problem. It is many years since a really big breakthrough occurred in this area; the first Li-ion batteries were introduced, followed by the Nickel-metal hydride ones, some two decades ago. A number of technologies are currently under development (some apparently have reached technical feasibility validation level TRL 6 by 2013) but serious obstacles have been encountered during scaling up. Interestingly, intractable problems that are suddenly encountered during scaling up sometimes beget very innovative alternative solutions in order to get around them. For example, excess electrical energy from many uncontrolled generating methods such as solar panels, wind mills, waves, etc. can be “stored” by converting it back to some form of mechanical or thermal energy, to be re-converted back to electricity when needed. Examples include the pumping of water to a reservoir at a higher-level, storage heaters and others. Although the losses between every conversion can be high, a good fraction of the electricity generated is reclaimed and

13.2

Scaling Up in Practice

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therefore these solutions make a lot of sense. Interestingly, many of these solutions are not completely new ideas but different applications of existing solutions. Finally, in many high criticality sectors, such as aerospace, medicine, defence and security, the scaling-up procedures for all critical technologies (those that have a direct bearing on health and safety) are often regulated by standardised procedures and processes so as to ensure optimum conformity with the standards in each sector. These procedures are strictly monitored and milestones are planned where progress is assessed and decisions are made for the next stages, if the process is to be allowed to proceed. This means that any changes in direction or corrections to the technology are generally difficult to realise.

13.2

Scaling Up in Practice

How exactly do you go about preparing the scaling up of your technology? As usual, it depends on the type and nature of your technology and the level of development it has reached. Note that even after passing Critical Milestone 2 (TRL 5), not all technologies are at exactly the same level of development. For example, a new material may have reached TRL 5 but it would probably still need modifications to enable it to be scaled up effectively. On the other hand, a device, subsystem or piece of software that has attained TRL 5 is generally already quite well developed and will probably require only small changes to enable scaling-up activities. So what do you need to do? Remember that by attaining Critical Milestone 2, you have demonstrated the technical feasibility of your technology to be used in a specific application. This is the application on which you should concentrate your scaling-up efforts. Note that scaling up a technology such as a stand-alone product, device, or system is different from scaling up a technology which will be used as a component of a system and different from scaling up a production protocol, method or process as well (see box). Different Scaling-Up for Different Technologies Scaling-up operations vary depending on the type of technology being developed with different criteria of success. In every case, however, the actual technology needs to be tested on an industrially relevant scale on its own as well as in conjunction with its producing or supporting technologies. Briefly, the scaling-up procedures needed in each case are: • For stand-alone technologies such as marketable products, devices, systems, etc., scaling-up proceeds along two routes: first, scaling-up of the product device or system itself (e.g. produce and test a prototype at the full (continued)

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size and full functionality of the product) and second, scaling-up of the process to produce the product, device or system. • For a component or sub-system, scaling-up involves mainly the second procedure, i.e. installation and testing in an industrial (or scaled-up) system. • For a new process, method or protocol, etc., scaling up might involve a physical increase in the process (e.g. larger capacity) or it might involve application of the process, method or protocol in a full size (or scaled-up) system. • Finally, for a new material, scaling up may involve a mixture of the above procedures: new or adapted process of production of the new material, production and testing of a larger amount of the material and application of the new material in an existing system or process. New materials are another class of technologies which require different scalingup procedures (see box). Keeping this in mind, the main activities you need to carry out for effective scaling up include (but are not limited to) the following, in approximate sequence: • Detailed study of the target industrial or market application and its operations • Study of your technology’s eventual use or position or adaptation in the target industry or market • Detailed design of the scaled-up technology taking into account compatibility with target industrial operations or market • Preparation and preliminary adaptation of the scaled-up technology in a controlled environment • Validation of technical functionality and performance of the scaled-up technology • Iterative optimisation of the scaled-up technology with respect to target industry or market • Identification and elucidation of the technical parameters of an industrial prototype • Evaluation of results and proposed design of industrial prototype It should have become obvious by now that the scaling up effort will require substantial funding and work on the part of the inventor whether you set up a new pilot facility or use an existing industrial facility. In the case of an industrial production technology (material, process, industrial software, subsystem, etc.), it will also require access to and knowledge of the industrial production which the technology is aiming to join or the market it is aiming to enter. Finally, you’ll need access to a real industrial installation for final validation. Do you have all this? If yes, you can proceed on your own; otherwise, you’ll need expert support.

13.3

Collaboration for Effective Scaling Up

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Scaling Up Alone or with a Partner? If a strategic partnership for development has not already been agreed upon at Stage 5, a decision on whether to go it alone (with a start-up or spin-off) or join forces with a strategic partner (industry or CRO) may still be necessary at Stage 6 for carrying out the scaling-up activities. Although the choice is never clear-cut or infallible, there are a number of criteria that may help you decide which is preferable for your technology. Go it alone if: • you don’t need large investments or large facilities for scaling up in order to prove your technology’s industrial or market validity, e.g. stand-alone software, etc. • your technology (system, device, etc.) is only needed in small numbers or to be custom-made, e.g. specialist devices, one-off constructions, etc. • your technology is unique and there is no suitable partner to join you for the scaling-up activities • you have secured sufficient funding to build your own pilot plant or industrial demonstrator • the scale-up of your technology presents relatively low risk, i.e. it is already approximately at market level. On the other hand, you should try to find a strategic partner if: • the technology requires large investments or extensive scaling-up facilities or activities • scaling-up involves compatibility or interoperability tests with other technologies • scaling-up involves optimising the mass production processes of the technology • there is considerable scaling-up risk which you cannot carry alone.

13.3

Collaboration for Effective Scaling Up

The challenge in ensuring that you have all of the above knowledge and capabilities is the main reason why you should already have considered during the previous stage (Stage 5) to establish a strategic partnership with an industrial implementer (e.g. to enter a joint venture). This implementer, as discussed previously, should ideally be interested in investing in your technology and prepared to support the scaling-up activities. This doesn’t totally preclude the possibility of you going it alone—but it would be much less risky and much less costly for you and it will certainly speed up the process as well. Even small stand-alone devices, such as appliances, sensors and the like, all need access to pilot or industrial facilities to test their scale-up interoperability,

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compatibility and so on. In addition, pilot or industrial level tests to check the mass production capability of the technology are also needed. It is almost certain that, in most cases, even if you decide to go it alone for Stages 5 to 8, you will eventually need to collaborate with an implementing company either to have them produce the technology or to have it incorporated into their production process. If, however, you cannot find an industrial partner, there is a compromise solution. As I mentioned before, you might consider a co-development agreement with a contract research organisation (CRO) that specialises in carrying out industrial development under contract as well as scaling-up work, in lieu of an industrial partner. In most countries these are generally private institutions (USA, UK, etc.), but in Germany there are the semi-public Fraunhofer Institutes which carry out such work as well as a number of private ones, all specialised in particular industrial sectors. Over the past decade, China and India have developed both public and private institutions to carry out this bridging work. Surprisingly, not all countries have developed such bridging institutions which have proved to be so beneficial in aiding technology transfer. In fact, I believe that this is one of the reasons for the technological success of the above countries that have supported their development early on. These institutions don’t only provide support for technology transfer activities beyond the laboratory, but they also help to develop a kind of “technology transfer mindset” in the research community as well as a sense of trust and reliability in the industrial community and society. They are the actual bridge between the research and the business worlds. There a number of distinct advantages in going along the CRO route for scaling up, the main ones being the general objectivity and trustworthiness of these bodies, their experience and knowledge of many industries and markets in each sector (leveraging spillover applications), their scientific and technological expertise and the fact that they are usually able to offer important corrective enhancements or adjustments to your scaled-up technology as well as suggest alternative solutions and applications. In addition, once the scaling-up process is successful they may be able to suggest more than one potential industrial implementer to work with during the industrialisation stages later. Of course, an additional advantage is also the fact that by contracting a CRO to do the scaling-up work you’ll have more free time to continue with your other research projects. A disadvantage with working with a CRO is that you may have to share some of the IPR related to your scaling up with them, although you would probably have to do that with an industrial partner anyway. The other obstacle is the cost involved, since the work they do must be paid for, although it might be possible to come to an IPR sharing agreement with them in lieu of payment. Negotiating for a Win-Win Agreement Effective negotiating to achieve the best possible result for both sides has been called a balancing act (or art) and for good reason. It necessitates not only (continued)

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excellent understanding of both sides’ needs and expectations on the part of the negotiator but also an innate ability for finding solutions to what often appear to be intractable problems. Negotiations are part and parcel of life and an essential tool of business. In technology transfer you will be involved in negotiations at various stages, but this is especially the case when you are partnering with an implementer and negotiating a licence. The end result of a negotiation is always a compromise, by consensus if possible. For a long-lasting and satisfactory agreement, the compromise must be such that both sides feel that they have won a victory. This win-win result is the yardstick that decides the success of a negotiation. Although negotiating is generally a very complicated topic, with strong input from psychology and legal practices, the most important aspects are: • Prepare as well as possible by learning as much as possible about the other side’s technological and business position, as well as its needs and its expectations vis-à-vis your technology. Prepare a draft list of aspects to discuss. • Before starting, decide (by yourself, confidentially) on a red line beyond which you cannot go (costs, IPR shares, rights and obligations, etc.). Your actual starting position should be quite a bit further than this. Also establish your optimum finishing positions. Finally, prepare a strategy and keep some aces (offers) up your sleeve. These will be used only if you need to break a deadlock. Do not mention these offers until you are really stuck and need to find a way out of an impasse. • At the start of the negotiations, ask each member of the other side to introduce themselves and ascertain their decision-taking status. Secondly, discuss and clarify exactly what the objectives of the discussions are and ensure that both sides accept them. This is Milestone 1. • During the negotiations, listen to the other side carefully and patiently and show flexibility and willingness to compromise. Be creative if necessary but keep in mind your optimum position and red line. • Start discussions about the aspects which appear easier to reach a consensus on. These may be the situation in the industry or market and current challenges, needs or demands. Continue with all aspects in your list. Once you reach consensus in any aspect, summarise it and record it clearly. These are intermediate Milestones. • Manage every situation pro-actively, not reactively. This requires good preparation (and some initiative) and will give you the capability to put your position across in an optimum way without you feeling coerced. • As soon as you reach final consensus, stop, summarise and record. You’ve reached your final Milestone!

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Contractual Matters

As we discussed earlier, if you do decide that you need to join forces with an industrial entity or a CRO for the scaling-up activities (or earlier, during Stage 5), you’ll have to be very careful in your contractual relationship. At the start, you’ll have to sign a detailed memorandum of understanding (MoU, see sample in Appendix B) where the objectives of the potential joint venture are carefully laid out and, more importantly, where the starting position of both sides is detailed. In other words, the agreement should explicitly state the level of technological background (“prior art”) claimed by each side at the time of signing the agreement. This is important as it will form the basis of any IPR claims later on. The MoU should be protected by a detailed non-disclosure agreement (NDA, see sample in the Appendix), as you’ll be required to disclose some aspects of your technology in order for the other side to decide whether they are interested or not. As mentioned before, the MoU is not a collaborative contract but only an agreement to discuss about collaborating, but it is nevertheless important to conclude it at the outset as it allows you to talk more or less openly to try to convince the other side to join you. Finally, make sure that all the agreements are signed only by the legal representative of your industrial or CRO partner. Once the MoU is signed, discussions on how to collaborate for the scaling-up activities and eventual industrial development can commence. These are expected to culminate in the signing of a Technology Development (or technology transfer) Agreement or a Licensing Agreement between the two parties (see sample in the Appendix). At this stage you may proceed on your own or engage an experienced negotiator (e.g. a specialist lawyer or broker) who would make sure that there is a fair division of efforts and benefits to enable a satisfactory agreement during the negotiations (see box). When the negotiations are concluded satisfactorily, you can then proceed to sign a full collaboration agreement, a “joint venture” agreement, or a technology transfer agreement. Be particularly careful during the negotiations, especially as regards the content of the contract under discussion and exactly what has been agreed. In particular, the contract should detail clearly the ownership of the eventual IPR at the outset as well as any prior knowledge of this or any similar technology that both sides claim at the time of signing. The financial responsibilities, payments and royalties should also be clearly stated. By way of clarification, although the appended samples give you an idea of what these agreements should look like, they should not be used as they are given for every situation. I strongly recommend that you contact a lawyer with expertise in commercial law in your own country (ideally with experience in international commerce or technology transfer) who will be able to adapt them or prepare new ones specific to your own needs. The final technology collaboration or technology transfer agreement should include at a minimum: • Identification, background, names of authorised signatories and objectives of the parties

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• Purpose of the agreement, eventual aim with explicit details of the technology and the scaling-up process envisaged (sometimes placed in a technical annex) • Common objectives and aims and detailed description of roles and responsibilities • Specific details of the background knowledge (also called “pre-existing knowhow” or “prior art”) claimed by each partner vis-à-vis the technology and associated access rights to it • Duties and responsibilities of the parties • Non-disclosure clauses (with or without penalty clauses) • Ownership of the IPR that will be developed, patenting, trademark and copyright • Criteria of acceptance and criteria for putting into production • Arrangements regarding future technical developments (from both sides) • If exclusivity is demanded, the agreement must include performance limits which, if not met, the agreement will automatically revert to a non-exclusive contract • Financial arrangements, duration and termination clauses • Persons involved and any special arrangements regarding personnel, skills and training, etc. • Any other clauses This agreement will form the basis of the collaboration between you, as the inventor and owner of the know-how and patent (if any), and the collaborator (implementing partner, CRO, etc.) who will carry out the scaling-up activities. Generally, it does not include any specific arrangements for later industrialisation, but it may contain a clause that the parties are prepared to undertake discussions towards a later industrialisation agreement under favourable conditions. Regarding smaller technologies such as stand-alone software (games, apps, special applications) and small batch, high-value items such as specialist sensors, scientific instruments and components and similar technologies, these can generally go through the scaling-up stage rapidly as they rely only partially on the availability of industrial facilities and rarely do they require large mass production facilities. In this case, going it alone is often the best choice for the scale-up process. You’ll have full control of the scaling-up and any beta testing and you can thus determine your own validation strategy, but you’ll also take on all responsibility for the scaling up. If at a later stage you decide to expand to larger-scale production of the technology, then you can come to an agreement with an industrial entity.

13.5

More on the Nature and Extent of Scaling Up

After deciding whether you should proceed alone or join forces with an entity for scaling up, the next aspect you need to decide on is the nature and the extent of these scaling-up activities. In fact, these aspects may already have been included in your strategy. Essentially, you need to work out what are the minimum scaling-up

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operations that will allow you to carry out industrially relevant tests reliably, which will give you the parameters needed for the industrial prototype. Other information that a scaled-up system will provide is validation of the performance predicted and a provisional cost-benefit analysis. It may also offer valuable information regarding compatibility and adaptation aspects. But the most important objective is to demonstrate to potential users that your technology can indeed be applied industrially. At this stage you don’t want to spend more time and money than necessary to convince implementers and users of the industrial feasibility of your technology and that it is indeed at TRL 6. You should allow some leeway for any further tests you might need to carry out. The ideal extent of scaling up depends on the specific technology and type; it would be helpful to get advice directly from the targeted industry, if possible, of what they would expect. The danger here is that if the scaledup pilot is judged to be insufficient to determine reliably and definitively the industrial parameters needed to work out the provisional cost-benefit ratio and to design the industrial prototype, you might find yourself in a position where you will have to pay more to extend and repeat at least some of the scaling-up activities. Some examples may help to explain this aspect of scaling up better: • If your technology is a new industrial process which aims to improve the productivity or quality of production of a device or material in a factory, then the scaling-up activities will centre around the design and building of a pilotsized, but still industrially relevant, processing line. If the technology is only a part of the processing line, then the pilot plant will be built as a test bench as close as possible in operation to the eventual industrial plant. It could also be an actual industrial plant at a small scale. The pilot facility should be designed to operate with functionality and operability as close as possible to the eventual industrial application, but it will be extensively instrumented in order to determine all of the necessary parameters that are needed in order to build the industrial prototype in Stage 7, which will be used for the determination of the definitive cost-benefit in Stage 8. Using the pilot plant, you will probably carry out tests under various scenario of industrial use. To give you a sense of scale, for one of my own technologies for continuous thermal processing of minerals using microwaves, the scaled-up instrumented pilot plant is 5 m long, the industrial prototype close to 50 m long and the final design for an industrial processing plant over 100 m long. • Scaling-up activities for a new non-stand-alone device such as a sensor, sensing material, protective material or a process-controlling software will generally require, besides a production pilot plant, a test bench wherein it will be tested as part of a system, as well as a simulated (or actual) environment where such testing will take place. These demands might necessitate specialist knowledge and access to, or collaboration with, industrial experts in that field who will be able to design and guide the scaling-up processes and operations. Most devices and subsystems will probably require similar arrangements, at various levels. • If, on the other hand, the new technology is a new material for direct utilisation (say, a new industrial catalyst for chemical engineering or some new pigments or

13.5

More on the Nature and Extent of Scaling Up

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new magnetic materials), then scaling up will probably involve both a pilot plant for production of the materials at an industrially relevant scale as well as a full test bench so that they can be tested in the corresponding industrial process, also at an industrially relevant scale. This is also true for small components incorporating the new materials. As you can imagine, these two scaling-up operations are distinct and therefore may need to be designed and built as consecutive stages. This could be done in collaboration with different industrial entities, one for the production of the materials and one for the test bench. For example, for the purpose of preserving secrecy, you might consider setting up a start-up company to test the production process of (and eventually produce) a catalyst which is then fed into the separate test bench for testing. • If the technology is a new piece of software (game, app, etc.), the scaling-up activities are much simpler and mainly pertain to improving its user-friendliness, functionality, interactivity, interoperability, accuracy and so on. This could be accomplished by running various usage scenario repeatedly, but mainly by getting users to try a “beta version” as they would normally and report complaints and failings as well as suggestions for improvements. • Finally, if you are developing a new protocol or standard, then its scaling-up activities would usually involve either a test bench or, more reliably, its direct application in a real industrial process or method and extensive testing under a number of possible operating scenario. In the case of a standard, the scaling up must be developed extremely carefully to ensure appropriate agreement with regulations but it should also reflect reasonable expectations and current capabilities of the industry. While you are designing and building the pilot plant, etc., keep in mind that you should use the same supporting technologies, such as sensors and computerised controls, that are used in industry and which you might not have used during the development stages. This might present some problems since you might find it difficult (and expensive) to get all of the skills (and skilled personnel) necessary for this, but it is important. In all cases, this pilot development stage always proceeds in close collaboration with your original technology development laboratory. Any—relatively minor at this stage—technological enhancements and corrections proceed by interactive iterations. The main improvements should refer only to the adaptation of the technology to industrial needs. This might sound obvious, but its non-observance by companies that buy the IPR outright from the owner at TRL 5 to develop the associated technology independently has resulted in many failures or delays to industrialise in the past. Isolating a new technology from its natural “habitat” (i.e. the lab where it was developed or even an actual habitat as in the case of natural substances for pharmaceuticals) can result in lost information or dead-end developments.

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Evaluation of Scaling-Up Operations

It is not at all guaranteed that scaling-up activities will be successful and that the new technology will be evaluated positively in order to achieve TRL 6 in readiness for the next step, that of building a full industrial prototype in Stage 7. As the scaling-up process is the first-level entry into the real world of industrial production and use, all operations and test results of the scaled-up technology must be scrutinised carefully to ensure that the performance level is as predicted and that the cost-benefit is reasonable. In particular, all test results need to be compared to current industry standards and conclusions (and lessons) drawn in comparison to competing technologies. But apart from your own scrutiny, it is to be expected that potential industrial implementers and users will be interested in how the technology has scaled up and especially on how the technology fairs with regard either to their current technology (in the case of potential replacement or substitution) or with regard to any technology that may present competition for the same application. Although the details vary depending on the type of technology, you and the potential interested implementers and users should be looking for evidence of at least: • Industrial relevance of the scaled-up pilot, breadboard, test bench, etc. This includes not only the size of the scale up but also its functionality, operationality, general adherence to main specifications and regulations (such as REACH), serviceability, availability of parts and components, availability of skilled technical support, etc. • Technical feasibility of the scale up and agreement of characteristics, properties, performance and operating parameters with the promises of the lab prototype technology at TRL 5. • Capability and capacity of the scale up to determine the industrial parameters that are needed for evaluating efficacy, efficiency and effectiveness. This includes all of the parameters necessary to design and produce a full working prototype at an industrial scale, to be built during Stage 7 and used for the techno-economic viability tests during Stage 8. • Capability of scale up to offer preliminary cost-benefit evaluation especially vis-à-vis its performance (and added value). In the cases where this is the industrial prototype, such evaluation will also give the starting point for the final cost-benefit assessment during Stage 8. • Evidence from the scale up of the capability of the technology for mass production (if the technology is a device, component, material or process, etc.). Pre-evaluation will be very helpful and it might point out problems that may not be obvious at first. Ideally, pre-evaluation should be carried out by an independent expert with knowledge of the industry or at least the industrial operations in this application. This is another reason why CROs as joint venture partners are very useful—they can offer independent suggestions based on their experience with

13.7

From the Implementer’s or User’s Viewpoint

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previous attempts to transform ideas into innovations in this field. In any case, you should attempt to critically evaluate all of the scaling-up operations exactly as an industrial user would if they were about to make a decision to invest in your technology. For an effective evaluation you need to compare the results with what’s already in production or the market, be it a competing device, material, process or method, etc. This means that you need information on what’s available, what’s being used, and what the operational parameters and functionality are. For devices and most materials, this is fairly clear: you buy some of the competing products, components, etc. and carry out careful comparative tests. Processes, methods and protocols, in contrast, are usually well hidden—often they are not mentioned anywhere and sometimes not even patented. They are generally the jewels of an industrial entity, the core technologies that are protected at all costs and it is very difficult to find information or details about their operating specifications, parameters, etc. This difficulty notwithstanding, it is still possible to find information by searching, listening, reading, or simply asking around, and you should try to get as much information as you can. Conferences are often the most fertile places for such searches and their usefulness in this regard should not be underestimated.

13.7

From the Implementer’s or User’s Viewpoint

So, you have completed your scaled-up version of the technology and have carried out as many checks and tests as you can and you are satisfied. Are you ready to demonstrate it? Do you know what a potential user expects? This isn’t always obvious. What you might think is important may only be a small part of the whole picture. Imagine that you are the implementer or user and you are about to make a decision on whether or not to invest in this technology. What will you be looking for? In other words, what aspects of the scaled-up technology need to stand out as markers which promise the most apparent value for an implementer? Each type of technology would of course offer different value, but in general an implementer would ask (in no specific sequence): • Will the technology help its track-record (standing) in the market? • What is the experience from previous technology adoptions in the past? • How big is the market share of the company in this field? Will investing in this technology make much difference? • How diversified are the company’s operations? Will the new technology encourage spillovers or spin-ins? • Can the company carry out the necessary industrial viability tests without endangering its production? • What is the potential added value (financial, or in terms of competitiveness or reputation) to be gained by the company if it adopts the new technology?

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• Will it help its standing vis-à-vis competing companies? • How close is the new technology to the “technological core” of the company’s operations? • Will there be any internal staff resistance to the new technology? • Are there enough expertise and skills in the company to be able to utilise the new technology’s benefits fully? If not, is there enough skilled labour in the labour market? • Does the company have access to the raw materials and supporting technologies necessary? • Are there enough safeguards for the invention to ensure non-disclosure and confidentiality in production? Is the technology well protected? • How much further investment 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? Do any universities or research centres work in this field? • If the technology is the result of a common effort (e.g. a joint project), is there a consortium agreement for IPR and commercialisation rights? Are all of the owners in agreement for the transfer? Does the negotiating partner represent all owners? • Are there any outstanding ownership issues (prior-art IPR, etc.) that need to be resolved? • What is the IPR owner’s reputation (standing) in the market? Furthermore, a potential implementer who is considering investing in the technology will also take into account the extent of the value of the networking offered by the inventor as well as other important associated benefits. The more extensive the inventor’s network, the greater the potential exploitation value of their technology as it may help the implementer to connect with additional potential sources of new technologies for addressing other needs. In terms of business value, an extensive network also offers new potential contacts to the implementer. This, then, is the most important message that can be taken from this chapter: while you are building the scale up and carrying out the tests and checks, remember that your efforts should now be aimed at satisfying the implementers and end users and not your own scientific and technological curiosity!

13.8

In Summary

By taking the decision to scale up your technology, you have taken a big step towards the real world and the eventual conversion of your technology to an innovation. Your scaling-up operations will build the bridge between the lab and industrial application and they can, in general, be rather complex. In many cases, it

13.8

In Summary

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may be to your advantage to seek a partnership either with a potential implementer or a contract research entity specialising in technology transfer and industrial development. Although every technology requires a different approach to scaling up, the decisive evaluation at the end of the day will be the one made by the potential implementer or end user. Tips • The design of the scaling-up operations will be much easier if it is based on existing technologies used for this application. In this case, it will also be easier to draw comparisons between the new technology and older ones. • During scaling up, be careful that you keep within the constraints set by your patent, otherwise the final scaled-up technology will not be suitably protected. • During scaling up, you might come across shortcuts or new insights regarding your technology. Evaluate them and decide whether or not they should be added to the patent or kept as proprietary secrets. • Keep all scaling-up operations secret and only release information connected to performance, none to procedures. • Although it is not necessary, you may want to demonstrate your scaled-up technology after due testing and assessment. Be very careful of what you disclose during such demonstrations. • Although scheduling is difficult to maintain during scaling up, it would help a lot if you keep your potential implementers or users informed of an approximate date of demonstration and evaluation. • In your collaboration agreement, make sure that you include clear technical criteria upon which the final technical assessment will be based. Although people can and do change their minds, this will help against shifting or unreasonable expectations.

Chapter 14

Business Planning for New Entrepreneurs

During the scaling-up activities (but also during the discussions in Stage 5), we discussed the development of your exploitation strategy at some length. As mentioned, this refers to the decisions you should take on how to take your technology further and especially on whether to attempt to go it alone—with a start-up or spinoff company—or to join forces with an implementing company or CRO. These are important decisions which will certainly shape the remainder of your transformation journey. They even impinge on the technological development aspects. For instance, your technology will be more focused if you partner with an implementer (towards their own interests and aims) but potentially less focused with a CRO or in a start-up. If you decided in Stage 5 to team up in a joint venture with an implementer, then most probably your route from now on will be dictated by this company’s own objectives and aims. Your role will probably be that of the technology provider and adviser of the joint venture with a share of the ownership of the final innovation. Most probably, you’ll also have time to develop other technologies in parallel, although to be sure of success a lot of your time will be taken up by the industrial development of your technology. If, however, you decided to contract a CRO to carry out the scaling up or to continue alone with a start-up, either immediately or after you complete a collaborative development programme with a CRO or an implementer, then now is the time you need to start thinking of business planning. In other words, you need to start preparing for all of the aspects that are needed in order to set up an functioning business, including financial and operational aspects. In this section, we’ll look briefly at how you can plan and run a good business and what needs to be done at the outset. By necessity our discussion will be brief and deal only with the most important aspects of business planning, mainly as it relates to start-up enterprises and applications for funding. For more complete treatments, I recommend you consider one of the many excellent books on the subject of entrepreneurship. My own book “The Researcher Entrepreneur”, 2nd Ed. is just published and probably a good place to start. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_14

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14 Business Planning for New Entrepreneurs

A Convincing Opportunity and Your Promising Solution

The most important aspect of any business plan is the description and your arguments in relation to the “excellent business opportunity,” that is, the commercialisation of the technology. This is the subject of the business plan—the “what” aspect—and it is where your reader will have to be totally convinced before they proceed further with the details of the “how.” First of all, the description of the subject matter should include a full description of the problem or challenge, the current state of the art, any previous attempts to solve the problem and their level of success or failure. If the subject refers to a market or industry need or demand, you should also include a good market or industry survey and an analysis of where this demand or need is shown clearly and elucidated in terms of “obstacle to production,” market or industry “bottleneck,” strong identified trend, societal need or demand, etc. A market “gap” or “vacuum” is a good opportunity, as is a regulatory need or demand or an identified enabling technology which is missing. This first part of the business plan constitutes the “opportunity,” that is, why it would be beneficial and profitable to find and commercialise a (better) solution to the challenge. The whole discussion on the opportunity should be placed in the correct contextual framework. In other words, you should develop your argument with respect to the relevant economic, societal, legal, environmental, industrial, political, etc. context. This will help to set the “scene” and clarify how the opportunity fits in with current economic priorities. Following this, you should describe your suggested solution to the above challenge in detail. This should again start from a basic level scientific and technological background and build up to the current level of your technology which should be at least at TRL 6 (rarely TRL 5), preferably at TRL 7. You should describe as much of your development process as possible (to an appropriate level) with an emphasis on all of the relative advantages of your solution with respect to all other solutions for the same challenge. Any outstanding technological obstacles or risks to your technology’s completion should be described as well, paying particular attention to the duration of the activities and the funding necessary for these. Finally, you should elaborate on what exactly is still needed to get the solution to TRL 9, that is, commercialisation. Here you should discuss in detail the technological challenges that need to be solved and the financial support you need (with all necessary details—this is the core of your business plan) for all aspects of your business. This should include a 5-year projection for technological RD, personnel, travelling, networking, marketing, etc. At this point you should also include a breakeven financial projection, that is, when do you expect the income (from sales, services, etc.) to be equal to the outlay (funding, etc.). Be very careful with these projections—in fact, it may be a good idea to give three versions: conservative, balanced and optimistic, explaining your assumptions carefully in each.

14.2

Clarity of Objectives and Aims

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It is imperative that the above descriptions are as concise and convincing as possible, without being verbose or long-winded. The executive summary in particular must be focused and concise with emphasis placed squarely on the solution and its potential. In your descriptions, avoid any vague theories or arguments that assume an overly high level of scientific knowledge on the part of your reader. Concentrate on the problem and the opportunity and show exactly how your technology can solve it and what you need to make it happen. The prospective investor (or evaluator, if it is a business plan within a project proposal) wants to be convinced of four main things: • • • •

The reality and potential profitability of the opportunity The technical feasibility of your solution The economic viability of your solution That you and your team and this business plan are able to reach that solution within the time you claim and within the budget asked for

The economic viability of the eventual solution in particular has to be very convincing, especially in cases of technology replacement. As mentioned before, it is not enough for your technology to be cost-effective; it has to be significantly more cost-effective than the technology it is hoping to replace (i.e. the added value must be very high). At the end, stand back and look at your business plan with an objective eye (or ask someone else to read it critically) and ask yourself: if you were evaluating it, would you be convinced of the business proposition? If yes, go ahead—if not, then it’s back to the drawing board. Don’t be discouraged if you need to rewrite it—a business plan is an intricate document and very different from a publication or research report or even a proposal. Now let’s look in further detail at the main parts of a business plan and which aspects you need to pay particular attention to. These are the aspects which refer to how you propose to form and run your company, carry out all necessary activities and reach your final aim successfully.

14.2

Clarity of Objectives and Aims

The most fundamental aspect of any business planning—beyond presenting a very convincing argument for the opportunity and your proposed solution—is to ensure the clarity of your objectives and eventual aims right from the start. To convince others, you first have to be convinced yourself. Your first task should therefore be to answer the following questions: Why am I setting up this company? What do I want to achieve? Where do I want to be in 3 or 5 or 10 years’ time? What should I do to get there? How will I get there? Your answers to these questions will set the direction that your company will follow but also act as a constraint within which your decisions need to be made. Remember the difference between aims and objectives. While the former indicate

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the target and final destination, the latter give the method and route you intend to follow. Each will be identified by answering different questions. In the case of setting up a start-up company, your answer to the questions above will probably be, “I aim to commercialise my technology and make profit from it. In a few years’ time I want to see my company taking off!.” On the other hand, the answers to the questions relating to your objectives are going to be more complex and require more detailed answers. The questions will refer to all aspects of forming and running a company and would include, but are not limited to: • What will be my role in the company? Can I run the company? Do I need a professional manager? • What kind of company would serve my purpose best? What legal foundation should the company be based on? • What finance do we need and what financial arrangements should we aim for? What financial opportunities exist? • Which persons (and expertise) should I include in my team? What aspects should I watch out for when selecting them? • Which aspect of the technology would offer the best chances for success? Can we develop everything we need together or can we concentrate on specific aspects preferentially? • Do we need to spin in any supporting IPR? Do we need any specialist expertise? Are they available? • Are there any technical areas we need to develop in parallel to avoid too much dependence on external IPR? Have we identified all enabling technologies we would need? • Which sectors and applications should we target and work on first? • Which markets should we target first and prepare accordingly? Geographical focus? Type of market? • Who are we going to be competing against? What competing technologies are there? Do we have sufficient fallback solutions in case of conflicts or infringements? • Can we forecast market trends and associated directions? How can we influence the trends? Are there any regulations under preparation that may be beneficial to our technology’s acceptance? Can we influence them? • Are there any regulations or standards that we should abide by? • Do we need now or in the future any strategic partnerships—technological, market, production, etc.? • What management procedures need to be in place as soon as possible to maximise effectiveness (e.g. as related to confidentiality and external contacts)? • When should we plan for a possible flotation (i.e. initial public offering, IPO)? • Do we have a future plan? How soon do we diversify or focus? • What are the non-technical risks involved in running the company and developing the technology? • And others, as appropriate.

14.3

You, the Team and the Company

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All of these questions need to be answered carefully and all of them together form the body of the Business Plan that you need to develop and argue carefully to be able to apply for funding. This is a major document and the blueprint of your company. You can try to write it on your own, but you can also get assistance from specialist experts. It is also the main deliverable of the small, exploratory-type Phase 1 projects funded under the SME Instrument of Horizon of the EC (as well as a number of national funding programmes) and forms the main part of the proposal under Phase 2 of the same SME instrument.

14.3

You, the Team and the Company

Clearly, forming and running a company is a very major proposition. Accordingly, the very first question you should ask yourself is: “Do I have the capability to form and lead this company on my own?”; “can I run it on my own?.” These are crucial questions and need to be answered in all sincerity. You need to consider your own abilities, knowledge and experience in managing your staff and your operations as well as in dealing with external customers, suppliers, other managers, etc. Can you, as a researcher or inventor, “switch over” your mind to these tasks efficiently and effectively, while retaining your inventiveness? And if you do, can you devote 100% of your time to this task? Personally, although I felt that I could try my hand at managing my own start-up companies, I decided at the outset to leave their day-to-day running to an experienced managing director. In this way, I would be involved as president and chief technology officer. I did this for two main reasons: First, I felt that being the day-today manager would impact on my own capability for inventiveness and second, I enjoyed my research job in the lab too much to leave it completely. Of course, at the back of my mind was also the possibility that since a start-up is always a risky proposition, I would feel more secure in being able to return to my job in case of disaster. The final decision is yours, but it may help to keep these aspects in mind. Now, let’s consider each of the above questions in turn, briefly discussing the most salient aspects. First, regarding your role in the company, some clarification is required as to your specific responsibilities. Irrespective of your particular management role, the overall responsibility for the direction and development of the company should still be in your hands. Since you are the only (or main) person who knows all the background and development history of the technology, you are probably also the only person who has a clear idea of where you want to go. But this requires clarification and a proviso. Even though you are the originator and developer of the technology, you are probably not the best person to be able to see how your technology will be developed for industry and eventually reach the market. This is the job of the professional manager or managers in your company and you should allow them to do their best in that direction while you maintain a close watch.

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Furthermore, although you are the scientific and technological brain of the invention, you would do well to allow professional engineers to gradually take over the responsibilities of its industrial technological development. Your task will mainly be to oversee the general direction and offer suggestions for any improvements, for example, during the scaling-up or prototyping process. Next is a very important aspect of management, one which you have to address on your own. This is the selection of your team. First, if you decide not to take the dayto-day management upon yourself, you have to select a professional manager who should have experience and, in particular, be totally reliable and a person you can trust. This is not as simple as it sounds because you may know and trust some individuals, but do they have the experience and expertise they need to succeed? On the other hand, you may be able to find and interview some experienced managers (by advertising, proposed by others, etc.), but can you trust them? It is certainly the main challenge that you will face at the outset and the difficulty in finding the right person is probably the main reason why many inventors eventually decide to try to manage their company themselves. It is advisable that management style and procedures are decided and instituted in your company as soon as possible. These may be related to confidentiality safeguards and acceptance of the need for secrecy by staff, or the procedures to be followed for contacting outsiders, marketing and dissemination of information relating to the technology and your operations, specific duties and responsibilities of each member of staff, etc. The rest of your core team is also important and your new managing director (or general manager) will be able to help you to select them, if necessary. I am referring to the legal adviser, the financial director (accountant), the marketing manager and the production manager. You will retain the scientific and technological management and guidance. All of the above persons have to be selected carefully according to the most exacting criteria to enable your company to commence under the best possible conditions. Initially, of course, you might want to delay some of the above roles and assume joint responsibility for these together with your managing director, but this depends on the financial standing of the company and the proximity of the technology to the market. A brief word about the legal adviser. This is an important role at this period because they need to have enough experience to draw up reliable NDAs, MoUs and collaboration agreements that need to be signed with your prospective strategic partners. Thereafter, this role assumes a lower profile, but it should remain at the forefront of your efforts for ensuring the legal validity and security of your operations and collaborations. An important question to answer is the type of legal company you need to form. This will depend on the type of technology you are developing and the size of the projected income. Generally, you should try to form a company with the highest market status (i.e. a Société Anonyme or Limited or Societas Europaea or equivalent) which will offer some sort of security to your customers and collaborators. However, these types of companies are expensive to form (the minimum amount of starting capital is generally high and they require at least three members for the

14.4

Funding and Development

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managing council), so you might want to go for something smaller and less costly, at least in the beginning. In parallel to this you’ll have to decide on the domicile of your company—the logical one would be the country where you expect most of your work to take place, but this is your call. In all of these decisions, a SWOT analysis might help to clarify the situation in your mind by showing clear distinctions between pros and cons. In fact, some of the criteria may be assigned “critical” status which would indicate that they have to be satisfied.

14.4

Funding and Development

Once you have decided on the legal status of your company, you should start thinking (if you haven’t already) of sources of funding for your company and how to apply. As mentioned elsewhere in this book, during this period of economic downturn sources of funding have all but dried up in Europe, in most fields. Some venture capital funds still exist but they are interested only in very specific sub-sectors. To fill this financial void, the EC/Horizon Framework Programme is now offering support for SMEs via its specially focused programmes, as discussed before. Failing this, funding may be found privately or from one of the national programmes supporting technology transfer activities. A tricky decision you need to take for the business planning is how to prioritise your technology development, in case this consists of more than one aspect. In the case of a new material made by a new process, for instance, will you concentrate first on the development of the material itself or on developing the process by which the material is made? Ideally, you should work on all aspects at the same time, but you may need to prioritise some of the effort. Related to these questions are those concerning any enabling or supporting technologies that you may need to spin in and license from the owners in order to supplement your technology. Such supporting or enabling technologies are needed in many cases: for example, when you are developing a subsystem which requires other subsystems to work with (and be marketed with), or aspects of a process or method that require other accompanying and complementary aspects, etc. An example of the former includes the subsystems or components developed for mobile telephones which require IPR licensing-in from the corresponding owners of other subsystems; an example of the latter include new processing technologies used in mining which need to be integrated with other processes used in the same sector. In some cases, you might be able to buy the subsystems needed, but in others you will need to contact the licence owners and arrange for a licensing-in agreement.

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14 Business Planning for New Entrepreneurs

Target Markets, Competitors and Collaborators

A further set of questions that needs to be addressed convincingly in the business plan is that which deals with the target sectors and markets, at least in the initial period. The simple answer to these is that you should concentrate on the sector that offers the highest chance of success in a short time, not the one that may show larger potential but has a lower chance of success. You might have to decide between a high-performance technology for a niche market with a high-profit margin, or a lower-performance technology for a large market with a low-profit margin. The selection of initial markets should also follow a similar rationale. The reason for this is that, as a new company, your most important aim should be to develop a name for yourself as soon as possible. Once you become known as a deliverer of a valuable innovation to the market, the next steps will become a lot easier, especially your ability to raise funds and draw up new business collaborations. In this regard, your strategy might even involve entering the market at a loss initially until your name becomes known. Regarding the market, you also need to identify and analyse carefully all possible existing and projected competing products or technologies to yours, especially with regard to the functionality expected by industry and the market. In this case, the competition consists of all technologies of all types that can deliver the same result and same functionality to yours. Do not concentrate only on your particular field or sector but try to consider all potential competitors. In the particular case that your technology is based on an existing technology but you have now adapted it for a new application, you need to consider the competitors present in the new applications sector, which may be completely different technologies to yours. A good case in point is the group of technologies used for computer memories. While for years magnetic memories were the norm for high-density hard discs (and magnetic tapes), the advent of photonic memories using lasers, as well as very fast solid state memories and spintronic memories, has revolutionised the field. The latest technologies promise magnetic memories based on vertical nanostructures with densities over 10 TByte (trillion Bytes) per square inch. All of these technologies were developed in different fields but now address the same application. Forecasting market trends is an extremely important aspect of managing a business. This is of course done more or less routinely in scientific research, but it is also a matter of long-term survival for all businesses—those that forget this are doomed to failure. In the initial stages, you need to keep an eye open for all developments and trends in your field, sector or market to make sure that your technology is still focused correctly and still relevant. Along the same lines, you need to develop your own predictions and projections for the expected market penetration of your technology. In some cases, forecasting may not be able to give clear answers, or the answers you get may not be satisfactory or reliable. In that case, can you embark on a foresight exercise in the hope of convincing or steering the market? It is a difficult job, but it can be done.

14.5

Target Markets, Competitors and Collaborators

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As mentioned before, technology watching is crucial and should be practiced routinely. But it is also important to keep an eye open for regulatory developments so you can get ready for changes before they occur. This is especially important in the environmental, energy, health and safety sectors where new regulations and standards are being enacted frequently. Regarding regulations and standards, it is worth taking note of important developments in the news which may result in new regulations or fresh demands for new technologies. The recent exposure of the mass surveillance of emails, telephone calls, text messages, etc., has resulted not only in a greater interest in many types of technologies to protect privacy (hardware as well as software), but also in new prospective regulations which will probably impact various processes used by Internet servers carrying international traffic. At the moment of writing (In March 2014), a missing passenger airplane was the subject of an exhaustive ongoing international search and rescue operation. I am sure that this event, in the way it exposed huge gaps in satellite and radar surveillance capabilities, will served as a source of large scale changes both in hardware and software for tracking aircraft. These in turn will result in a large number of new technologies to be used on aircraft as well as in ground stations. If your company is already developing such technologies, you should already be preparing for such demand. A similar avalanche of technological changes has been initiated and is still under development by the strict REACH regulations being rolled out in the EU. As mentioned before, these regulations set strict limits (or outright bans) on a huge number of materials used in products made or sold in the EU. Companies offering replacement or substitute materials (and their processes) for many of the restricted ones are riding a wave of success. Companies offering services for evaluating or assessing products’ adherence to the REACH regulations are also successful. On the other hand, those companies that are unable or unwilling to make the necessary changes are closing or will soon close down. While it would be a lot easier to be able to run a company independently of others around it, no company is an island. You will always have contacts with other businesses, industries, customers, suppliers and so on. A number of these will be recognised early on as crucial for the development and survival of your start-up. These may be potential implementers of your component, process or software, etc., they may be direct customers, or they may be critical suppliers. It is highly recommended to form strategic partnerships with all of these as well as any research groups that you identify and which can potentially offer critical scientific or technological support services for all future eventualities. In this regard, your job as the scientific and technological driving force and “brains” of the company will be very important and you should cultivate a good network of contacts.

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A Balancing Act

During the development of your business plan, keep in mind the expectations of the investor or evaluator who will be reading it. In particular, make sure that your plan is well balanced in all aspects and reflects this in, for example, the following ways: • The starting TRL of your technology is neither too low (too risky) nor too high (refocusing may be necessary and investment already made may be too high to recover) • Your team (or partnership) is neither too small (missing important expertise) nor too large (difficult decision making, dilution of profits, difficult management) • Proposed funding must be neither too low (risk of running out if sales are delayed) nor too high (risk of waste, difficult to pay off, management more difficult) • Marketing costs must be neither too low (nobody knows you) nor too high (waste of funds) • Protection must be neither too restrictive (nobody knows of it) nor too lax • Performance target should be “fit for purpose” in each market and application

14.7

Identification and Analysis of Commercialisation Risks

Finally, it is very important to identify (and keep an eye on) all potential risk factors that could affect the commercialisation of the technology and the operations and future survival of the company. These are not just the technical risks we considered before but the large number of non-technical risks that, should they come to pass, will have a serious impact on the company’s future. What are the risks in this context? A simple and concise definition of risk is “the uncertainty of an event occurring that may have an impact on the achievement of the objectives.” This means that anything that could happen that may cause a negative impact on your operations is a risk and should be addressed in some way, if serious. The way we describe risks is by considering scenario of possible events or situations that may occur which, if they do, will have an impact on the acceptance or successful industrialisation and commercialisation of the technology. In this regard, every risk identified for each technology under development can be quantified by assigning two values: • A “probability that the risk will occur” • A “level of impact that it could have on the commercialisation of the technology if it were to occur” By using an arbitrary scale (say 1 to 5) and multiplying the two values, one can obtain a relative Risk Index and therefore arrive at a simple priority ranking of the

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Identification and Analysis of Commercialisation Risks

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Table 14.1 The Risk Index calculated by the product of probability × impact. It can range from low risk to intolerable risk Probability → Impact # Very low (1) Low (2) Moderate (3) High (4) Very high (5)

Very low (1) 1 2 3 4 5

Low (2) 2 4 6 8 10

Moderate (3) 3 6 9 12 15

High (4) 4 8 12 16 20

Very high (5) 5 10 15 20 25

Risk Index (RI): RI ≤6: Low risk; 6 < RI ≤ 10: Moderate risk; 1o < RI ≤ 16: High risk; RI > 16: Intolerable

most serious risks that one should address as soon as possible. This scheme (which is based on that suggested by the Royal Academy of Engineering1) is shown in Table 14.1. There are a large number of risks that one can identify for each technology (but also for any operation or task—the above risk analysis can be applied in a large number of situations and cases). Many of the non-technical risks that can affect a company’s success have been alluded to previously and many others are included in the six tables in Table 14.2. They are categorised in six categories: • Technological performance risks which refer to the performance level achieved (or possible to achieve) by the technology and its inherent value vis-à-vis the implementers and users. • Market acceptance risks which refer to the expectations, needs and demands of the market in comparison to what your technology is able to offer. This includes cost and cost-benefit ratio, especially in comparison to competing products or processes. • Legal and background IPR risks which concern the various legal aspects related to the danger of conflicts with patenting and background IPR owned by other persons as well as uncertainties about agreements and ownership of results in multi-partner projects. • Regulatory risks which concern the possibility that the technology or operations of the company are not in full compliance with current regulations. • Partnership risks which refer to possible inefficient relationships between the partners in a multi-partner consortium carrying out a project such as one funded by the EC. • Management risks which concern possible inefficient management of the development and commercialisation activities as well as the operation of the new company.

1 Available (accessed in March 2014) at: www.raeng.org.uk/news/publications/list/reports/ common_methodologies_for_risk_assessment.pdf

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Table 14.2 a–f The main non-technical risks to exploitation of a technology developed by a researcher or a consortium of partners Risk (a) Technological performance risks Development expenditures are increasing beyond cost/benefit break-even point

The project lasted too long and the technology may be reaching obsoleteness

Confidentiality risks: ill-timed disclosure

Inadequate technology checks/watch Earlier patent or publication exists

Better technology/methodology exists

Significant dependency on other technologies

Missing enabling technology The life cycle of the new technology is too short

Project aiming at replacing existing and wellentrenched technologies

(b) Market acceptance risks Performance lower than market needs or expects

Nobody needs it or feels the need for it Too expensive

Comments If a cost/benefit break-even point has been estimated, going beyond it could be dangerous as it might mean not being able to get any return on the investment. Market relevance is crucial if a new innovation is to be accepted by industry or the market. If a project takes too long to complete the technology may become obsolete. The new idea or technology must be kept confidential at all times until it is protected in Stage 4. Only after that point should the details be disclosed (but none of the core information). If any earlier patent or publication contains your core technology (the “key” for its competitiveness), the value of the resulting innovation is severely compromised. The level of the performance of the technology is found to be inferior to that of a competitor. This can happen during the development period. An unhealthy dependency of your technology on other technologies (which might require licensing-in) or the absence of an enabling technology might create difficulties in its application. May have to wait for availability (or price reduction) of enabling technology. If there is limited time over which the new technology can return the investment (due to fast-moving markets or short-lived trends, etc.) its value may be estimated to be too low, or the risk too high. If the technology is aimed at replacing or substituting very well-entrenched technologies, its acceptance and applicability may be questionable. Performance level expectation by the market (in order to be assured of acceptance) may depend on extraneous parameters and competing technologies. Technology may be developing in a “vacuum” and as a result does not have a clear application. Even if cost/benefit ratio is ok, the actual price may be a stumbling block. (continued)

14.7

Identification and Analysis of Commercialisation Risks

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Table 14.2 (continued) Risk Unsuitable or not knowledgeable sales personnel The project hits against a monopoly

Problems at the time of the first sales Rejected by end users Market not ready for the new technology

Economy too weak

Market too volatile Market fades away Negative market perception Market dominated by a well-entrenched product

Market territory wrong (c) Legal and IPR risks Legal proceeding against the licensor or user

Patent infringement risks

It is easy to counterfeit the patent A counterfeit cannot be proved

The patent application is rejected

Patent claims too narrow

Comments The persons making contact with the implementers or customers need to be very well trained, both in technical and business aspects. A technology competing against a monopoly would have tremendous difficulties in becoming accepted. Think of “if you can’t beat them, join them.” Teething problems, low performance, low reliability and other problems at the first market sale would have very negative repercussions. Technology may be “too far ahead of its time.” May need to prepare the market with suitable actions. Wider economic problems may reduce incentive to buy or use the new technology. Better wait for opportune time. Risk increases if market is unstable in this field. For example, trends and fads may dominate for a time but could soon fade away. May have to correct or re-establish positive market perception over time. Even if the new technology offers more benefits, it is extremely difficult to move an entrenched product since users may have vested interests in staying with it. Market focusing needs to take into account territory in addition to application and sector. Usage or co-opting of any supporting technologies must be based on proper licensing agreements. Technology should only be used if a full prior art check has been carried out, including all similar patents. The onus is on you to prove that you are not infringing on others’ IPR. Patent should not disclose the core technologies (which offer optimisation). If a counterfeit cannot be proved easily, consider including a microscopic signature on the product in a specific position. Rejection would decrease the value of the technology unless some core technology has been kept confidential. If the patent claims are too narrow then some potential applications may not be secured. (continued)

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Table 14.2 (continued) Risk No IPR ownership agreement between partners

Legal, financial or technological uncertainties about the prospective joint venture partner

Legal uncertainties about cross-border agreements Legal responsibilities on licensing are not clear Collaboration or licensing agreement has no security clauses

IPR are not secure or challenged (d) Regulatory risks Technology does not comply with the standards Standards to make it compulsory don’t yet exist

Research is socially or ethically unacceptable Negative influence of laws and regulations Regulations too vague (too old) and technology’s compliance not clear or unverifiable

Unknown underlying health/safety effects

Incompatible cross-border regulations Unknown extent of conformity to new regulations by all partners Unfair competition by non-conforming imports Looming regulations cannot be complied to because of missing technology Cross-border regulations and/or standards are inconsistent

Comments In partnerships (such as EC-funded projects), IPR ownership agreement is crucial to ensure clarity of ownership. If any uncertainties remain after a thorough check of the prospective partners, either ask them directly to clarify with a legal certificate or drop them. Cross-border agreements are better prepared by local experts and legal teams. Licensing agreements should be drawn up by experts to avoid ambiguity and mistakes. Security clauses (performance criteria and agreement tripping points) need to be included in all agreements with potential implementers or licensees. There are challenges to the ownership of the IPR of the technology. Either make sure that product complies with the standards or find a market with lower standards. Technology perhaps is only viable if environmental, safety or health regulations are tightened. Ethical safeguards need to be in place for any experiments and must be clearly demonstrated. If the technology is “overtaken” by new developments, it will not be acceptable. Regulatory bodies need to be approached to clarify and/or rewrite regulations according to current needs and standards. Regulations may also be ambiguous due to mixture of old and new. Need to keep a watch on new findings on toxicity or safety effects of the use or application of the technology. Cross-border agreements are better prepared by local experts and legal teams. All partners need to collaborate on ensuring conformity. Involve regulators to ensure proper control of imports that may present unfair competition. New regulations (e.g. REACH) may be very difficult to meet due to non-existence (or delay in development) of suitable technologies. Regulations between countries and/or regions may not be consistent or compatible leading to compliance problems. (continued)

14.7

Identification and Analysis of Commercialisation Risks

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Table 14.2 (continued) Risk Cross-border units and standards lead to application incompatibilities

Comments Issues between metric and imperial units and between 220 V and 110 V power supplies may cause problems with applicability and/or maintenance. (e) Partnership risks (during development or production) Partners with divergent exploitation interests Divergence may reduce critical mass for exploitation but may also enhance exploitation in different areas. No manufacturer for the prototype An implementing partner needs to be found as soon as possible, ideally during Stage 5. Serious delays—need to find alternative or try The main implementing industrial partner going it alone. leaves the market/declares bankruptcy Opportunistic behaviour by partner If partner is trying to usurp confidential information, they will have to be restricted. Common objectives in a consortium have Need to ensure that all partners pull together, or changed at least that the directions are not mutually exclusive. Free riding by a partner Drop partner and find another if possible or redistribute their responsibilities. Tighten up management and coordination to Different time horizons of partners Severe cultural differences and mode of oper- avoid different work ethics, rate of work and ating between partners level of performance. Disagreement over IPR ownership rules IPR ownership agreement needs to be fully negotiated and agreed by all partners. If anyone refuses, they can be bought out. EC-funded projects allow for individual exploitation without prior approval by all partner owners. Partners on the same market Regulate exploitation sharing across different fields, geographic regions, application sectors, etc. to reduce potential clashes. Critical partners stop support of technology or This could cause serious problems with prochange focus duction and a new source of the critical component or operation needs to be found. Supplier goes bankrupt New supplier needs to be found. Too much dependency on imports New local sources need to be developed or Supply not secure due to strategic restrictions found to reduce dependency. The EU has (e.g. US ITAR restrictions, export restrictions identified such restrictions and obstacles as of Rare Earths by China) critical and HORIZON includes project calls for reducing dependencies by finding alternative sources and developing substitutions for critical raw materials in critical technologies. (f) Innovation management risks (including in a partnership) Licensee is not exploiting their exclusive Exclusive licences should always have a time license limit, usually 12 months, beyond which they become ordinary licences if they do not deliver a pre-decided level of performance. (continued)

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Table 14.2 (continued) Risk Leaks of confidential information Multiple changes to original objectives Lack of awareness of risk management Inadequate or unreliable technical support

Inadequate communication among partners

Inadequate reporting procedures No on-time supply of financial means Unsatisfactory financial management Unclear implementation strategy

Inadequate business plan Partners can’t decide on business strategy Negotiations for collaborative or other agreements are not conclusive

Comments Management of disclosures should be very strictly enforced. Only essential refocusing of objectives and aims should be allowed. Risk management should be a continuous activity. Technical support (maintenance, repairs, upgrading, spares, etc.) should be strong and reliable. Communication channels should be clear and readjusted as necessary. Cross-checking and feedback should be encouraged. Confused or inadequate reporting can cause severe delays or breakdown in development. Funding applications should be made in advance to ensure continuous supply. Establish stricter controls and procedures to avoid wastage. Early development and decisions on implementation strategy will help to keep all partners focused. Business planning depends on implementation strategy and should be developed in tandem. Early commencement of negotiations will ensure enough time to reach consensus. Consider employing professional negotiators. Consider adjustments in red lines or negotiation offers.

Obviously, these are not the only possible risks since every situation and every technology usually presents specific risks to commercialisation. You may very well identify others and add them to this list while others may make themselves known during various activities.

14.8

Risk Management

Once the various risks to development and commercialisation have been identified, plans have to be drawn up to manage these risks. According to the UK Royal Academy of Engineering, the possible risk control actions that one can take are as follows:

14.9

In Summary

179

Table 14.3 Risk Control Matrix that may be used for identified risks (sample answers) #

Risk description

Risk probability

Risk impact

Risk Index

Possible risk control action Avoid Reduce Mitigate

1 2 n

Risk 1 Risk 2 Risk n

P1 P2 Pn

I1 I2 In

P1 × I1 P1 × I1 P1 × I1

X

Transfer

Nothing

X X

X X

X

• Avoid—that is, make a fundamental change so the risk is no longer an issue. • Reduce— that is, reduce the chances that the potential event will happen (e.g. manage the probability dimension by using a more reliable technology). • Mitigate— that is, reduce the consequences of the risk, if it should happen (e.g. manage the impact dimension; install a safety barrier). • Transfer— that is, transfer the effects of the risk to another organisation more capable of handling it. • Do nothing— that is, accept that the risk may be realised and therefore accept the consequences. In selecting the most appropriate strategic risk management option from the above list, for each risk you should consider at least the following criteria: • The probability of occurrence and impact of the risk—you may use the results of the analysis you carried out using Table 14.1. • The relative effectiveness of each strategy in meeting its objectives. • Other consequences, desirable and undesirable, of each of the above strategies on the issues. • The cost of implementing the strategy and expected benefits from it (i.e. a costbenefit analysis). The above risk management analysis should be carried out for each and every risk identified. The results and decisions can be summarised in a Risk Control Matrix as shown in Table 14.3. This matrix will thus form the basis of your Risk Management. Do take this analysis seriously. By identifying all possible risks and deciding on the most beneficial option as early as possible, you’ll reduce the chances of problems later on.

14.9

In Summary

Your business plan is the blueprint of your business venture. It has to include all aspects relating to the business opportunity, your proposed solution, the team and your methods, the financial proposals and projections, the target market and the risk

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analysis, complete with suggested solutions for reducing commercialisation risks and other aspects. Above all else, it has to be truthful, sincere and convincing to the investors who will be reading it. Carry out your preparatory studies as well as possible and ask yourself continuously, as if you were the investor, “is my plan complete and convincing?.” Everything depends on it. Tips • Before you start preparing (let alone writing) the business plan, search for previously written plans with similar objectives (the web is an excellent source) and read them thoroughly and critically. Note any omissions or unconvincing parts and think of how you would improve on them. • The business plan is mainly written to convince an investor to fund the industrial development and commercialisation of the technology. You need to explain all aspects of the plan in financial terms—this includes the impact of not resolving the challenge. • By monetising the cost of not resolving the challenge you would be able to work out a relative cost-benefit index and be more persuasive. To do this you’ll have to rely a lot on industrial knowledge and information. • The analysis of market size and trends (and needs and demands) needs to be realistic and balanced. It would be helpful to split it into different territories, sectors and applications. This will also help you to decide on priorities. • An important aspect is to convince of the pedigree of the technology—both past and future. An investor needs to know that there is a plan for the shortor mid-term future of the business. • Whenever you base an analysis on an assumption (or anything you are not sure of), extend the analysis by repeating the results using reasonable alternatives.

Chapter 15

Critical Milestone 3: The Industrial Prototype and Validation of Economic Viability

By validating the technical feasibility of your technology, having successfully completed the testing of the scaled-up prototype in Stage 6, you are now effectively off the starting block for industrialisation of the technology. Nearly all of the technical development has been completed and the remainder of the way will be dominated first by building the industrial prototype and carrying out the economic validation of the technology in Stage 8 and then by concentrating on the industrial and market business aspects. If you are proceeding alone (or with the support of a CRO), you should by now have prepared the necessary entrepreneurial business plan where the remainder of your work is more or less carefully prescribed until commercialisation. In fact, even if you have completed an agreement to proceed in collaboration with an implementer (e.g. in a joint venture), a business plan may also have been prepared since investment will be needed to continue the work if your new partner cannot cover the additional costs. In most cases, the additional costs from now on can be very substantial. Unless you can use the scaled-up prototype as your industrial prototype for the economic studies, you’ll have to design and build an industrial prototype for the final industrial validation. This can come at a very substantial cost and, coupled with the later costs of industrialisation, you’ll definitely need good financial support. In all cases, the overriding consideration relating to the construction of an industrial prototype is whether or not the scaled-up prototype you built in Stage 6 can give you all of the parameters needed for building the actual industrial production machine in Stage 9, and whether it can also give you a reliable analysis of the economic viability of the industrial application. The parameters needed include both technical and non-technical aspects, including (but not limited to):

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_15

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• technological design parameters dealing with mechanical and electrical engineering such as optimum size, connections, power, controls and sensors, monitoring instrumentation and many others • dependencies on enabling and operational technologies and their intercompatibility • material suppliers and supplies, taking into account restrictions such as availability and cost • provisional economic investment and operational parameters • skills level and training that may be required for installation and operation • restrictions regarding compliance with regulations and standards • special adaptations or restrictions needed for applying your technology in an existing production environment • design or operational parameters or functionalities to emphasise distinctiveness from any potential competing technologies • design parameters to ensure no infringements of existing technologies both in terms of technological design and functionality • and many others If you feel that you can ensure all of the above without building an industrial prototype, then you are fortunate in that you will be able to save a lot of effort and money. The above should be assessed during Stage 6, when the scaling-up of the technology takes place, but it isn’t always possible to design with all of these parameters in mind. First, adherence to all of the above may be very costly and may not even be the overriding objective, if all that is required is to demonstrate the technical feasibility of the scaled-up technology. Second, it is quite possible that many of the above parameters cannot be thought of beforehand. It isn’t at all unusual for many of the above parameters to only become apparent after you build and start testing your scaled-up prototype. It is even possible that certain aspects become apparent only after you build and test your industrial prototype! An example that comes to mind is from my own experience when a large and expensive industrial prototype had to be adjusted after installing it because of a minor snag involving intermittent power drain by another machine in the factory (a large electric motor working intermittently)—this was an obstacle that no one could have foreseen. Remember that not only will you have to ensure that the scaled-up prototype can indeed give you all of the above information, but that it does so convincingly. When the time comes to build the industrial application in Stage 9 (based on the information you obtain in Stages 7 and 8), you cannot (and should not have to) make any major changes—otherwise there is the danger of the whole exercise unravelling. Taking all of the above into account, in many cases a full industrial prototype may be judged not to be necessary because: • The scaled-up prototype is able to fulfil all of the above parameters and is found to be able to give a reliable economic viability analysis, perhaps by using some appropriate scaling-up factors.

15.1

Funding and Building the Industrial Prototype

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• The scaled-up prototype is close in size and functionality to the envisaged industrial application. This often happens in the case of technologies such as stand-alone software and electronic components, as well as many integrated electronic systems which are already more or less full size in their scaled-up form. It is also the case for various medicines, consumer plastics and many consumer products. However, this does not include manufacturing of such electronics, components or products. New technologies dealing with such production operations would usually require a full industrial prototype to test feasibility and viability. • The final industrial installation can be built in such a way that it is suitably adaptable and can be easily adjusted to the needs of the production. For example, if you can make the industrial application modular, it may help in making adjustments in size and operability easier. • Or simply, you feel sure enough of the adjustability of the industrial application that you can skip the construction of the industrial prototype altogether! If any of the above is found to be valid, you can probably skip Stage 7 and go directly to Stage 8. To reverse the above question, we can ask, “which types of technologies would normally require a full industrial prototype in order to get reliable technical feasibility answers?.” This is not very easy to answer but there are some clues: • All technologies that rely on size for their optimum functionality, operationality and especially their techno-economic viability. These include chemical processes (catalytic or otherwise), mass production processes (or some new operation in a mass production process that is designed to fit in between other operations) and other similar situations. • All technologies that depend on others or on complete systems for their operation or function. This includes new components, new materials, new control software (or sub-routines) for systems, all types of enabling technologies and others. • All production technologies which require detailed confirmation of their actual positioning and compatibility with the remainder of the production environment. • All other types of add-on technologies, whether to be added to a production line or to a system. The list is long, but in general the question to ask is the same: “can the scaled-up technology be used as the final installation?.” If the answer is no, you probably need to build an industrial prototype.

15.1

Funding and Building the Industrial Prototype

So, you have looked at all the information you have obtained (or can obtain) from the scaled-up prototype and realised that it’s not enough to go straight to the industrial application. Too many parameters are still unknown, and/or it is not possible to get a

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reliable techno-economic viability validation from the scaled-up prototype by itself, hence the risk of building a full industrial application becomes too great. You therefore have to start designing and building the industrial prototype. This is expensive and you have to find funding for it. Ideally, your Business Plan should have included this, by detailing the steps leading from TRL 5 to TRL 9. Let’s look at some of the main details involved. The first decision to take concerns the nature, size and functionality of the industrial prototype you need. This will depend on the technology, but the simple answer here is that these characteristics should be “as close as possible to those of the final industrial application.” As always, examples can provide the best illustration of this: • A new chemical process with or without catalysts for the production of chemicals or a chemical treatment. Whereas the scaled-up prototype might have involved large-scale laboratory-type parts with careful monitoring and controls, the industrial prototype must use industrial piping, containers, stirrers, mixers, industrial controls, sensors and so on. Everything must be (almost) exactly as it would be in industry, albeit for a smaller production capacity. • In the case of a new catalyst for a chemical treatment or process, the above is valid as well. Whereas the scaled-up prototype would have concentrated on determining the properties of the catalyst in a larger-than-lab-sized facility, the industrial prototype would have to consider, for example, the crushing behaviour of the catalyst in a vertical column and compatibility with other materials. • A technology which aids or alters any chemical process (e.g. a new parameter that would enhance the process) would need to be tested on a full industrial prototype. If you are collaborating with an implementing partner, they may be willing to let you use one of their existing production lines for this purpose. But if the process results in a significant change, you would have to build a full industrial line for the testing to avoid affecting any of the production lines. I am reminded at this point of a new material that was supposed to aid the extraction of plastic items after their extrusion, but which unfortunately reacted at the high temperatures encountered with another lubricant used in the process and caused the production line to get stuck! While no one could have foreseen this outcome, it does illustrate the need for a full industrial prototype operating under identical conditions. Needless to say that in the scaled-up prototype (i.e. a larger-than-lab-sized facility working under controlled conditions) the new materials had worked impeccably. Another similar example concerns a chemical that was meant to enhance the adhesive properties of a special protective coating for parts of a large industrial press used in making car components. While it worked perfectly under the controlled conditions of the lab and those of a scaled-up facility, it wasn’t possible to foresee that the workers in the factory had been using a simple soap-water mixture to clean the surfaces, which changed the properties of the surfaces sufficiently to make the new chemical much less effective. It took some time and expense to solve that particular problem, but the first response on the part of the implementer was that the chemical didn’t work!

15.1

Funding and Building the Industrial Prototype

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• A material or component that is subjected to a much fuller spectrum of conditions under actual use than it is possible to reproduce in the lab or in a scaled-up facility. For example, the very hard stone-crushing WC-Co bits (actually small spheres or other shapes based on “hard metals”) in the front “business end” of a large boring machine (such as those used in digging rail tunnels) need to be tested in situ on such a machine; this is because the conditions are almost impossible to reproduce exactly in a lab environment, thus their effectiveness cannot be assessed fully in any other way. Another case involved bits that I was examining years ago from a heavy-duty drill operating in a gold mine. These bits contained some isolated phases but their performance was adequate under extreme testing conditions in the lab but not under the real conditions in the gold mine. A full industrial prototype, such as a smaller machine operating under the same conditions, could have highlighted the difference. Another similar example concerns a new special ceramic-polymer hybrid coating used for lining the inside of tubes carrying chemicals containing hydrofluoric acid in a process plant. Whereas the new coating worked fine in the scaled-up prototype, under even more extreme conditions than could have been encountered in the factory, it did not do so well in industry because of vibrations in the tubes. These were produced by operations upstream on the tube, thereby quickly affecting its integrity and causing microcracks which led to peeling off. The developers had to go back to the lab to solve that problem. A full industrial prototype would have exposed this weakness before being installed in the factory. • In the final application, a sensor for monitoring a chemical process might be exposed to a diverse range of conditions that cannot be replicated in the lab. For example, a “lab-on-a-chip” monitor checking the presence of a range of gases in a chemical production line needs to be tested under actual conditions because of the possibility of the presence of humidity and other gas or liquid species that could diminish its effectiveness. • A new biological treatment process for civic waste can be affected by heavy metals and other waste accumulated in filters. This and similar treatment processes can only be assessed by a full prototype working under industrial conditions. Technical Feasibility and Economic Viability Under Industrial Conditions For most people, the meaning of the terms “technical feasibility” and “economic viability” of a technology are more or less obvious. Whereas the former is generally accepted to mean “the capability of the technology to achieve the technical aims”, the latter extends the meaning to achieving this “. . . at an economically acceptable and competitive cost.” This means that whereas the former may exist without the latter, the latter cannot exist without the former. (continued)

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In the case of feasibility or viability under industrial or industrially relevant conditions, there are some interesting nuances to the terms: • Technical feasibility analysis needs to take into account not only the performance and effectiveness of the technology, but also the effect and interrelationships of all the other operations of the production processes. In other words, the analysis of the technology’s feasibility for an application must always take into account the enabling and supporting technologies around it. • The economic competitiveness and acceptability of the technology, on the other hand, may in most instances be defined and determined independently, i.e. without being necessarily dependent on any enabling or supporting technologies. Many other examples exist and they all point to the need for a full industrial prototype to test the new technology’s industrially relevant technical feasibility. The main sticking point then is the funding (and organising) of the industrial prototype. As I mentioned before, it would of course be much easier if you were in a joint venture with an implementing company or at least collaborating with one, but even if you are working alone (or with a CRO), it is still possible. For example, grants and loan guarantees for SMEs are now offered under the Horizon programme for this purpose.

15.2

Economic Viability

There is another, very important reason why a scaled-up prototype can only rarely give us conclusive information regarding industrial applicability and, in fact, it might even give unnecessarily conservative information. I am referring of course to the estimation of the economic viability of the technology, either by extrapolating from the scaled-up version or, more accurately, by estimating it from the industrial prototype. In most cases, the estimate from the industrial prototype would be expected to be closer to the actual value during industrial use or in the market than that provided by a scaled-up prototype. It is well known that the economic viability of a technology increases with production capacity. This is of course the main advantage of mass production. If we then extrapolate the viability we obtain using a smaller prototype rather than a full-sized industrial prototype, we should expect to find less-than-optimum economic viability. In fact, not even a full industrial prototype can be expected to be able to give us the real economic cost of the technology. As mentioned in the box above, both the technical feasibility and the economic viability are influenced by the supporting or

15.2

Economic Viability

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enabling technologies that your technology is expected to work with in an industrial setting. It follows that one can only work out a reliable economic viability value if one has all the details to hand, something which is, unfortunately, entirely unrealistic. Furthermore, economic viability is always a relative measure. This means that unless you know the economic cost of the existing technology and that of other, competing technologies, you cannot work out the competitiveness of your technology. This is an important consideration and it forms part of your original documentary search that needs to be carried out near the beginning of the industrialisation journey, if not during Stage 3, then definitely during Stage 5. Let’s get down to details. When we talk about determining the economic viability in Stage 8, what kinds of cost information are we looking for? As always, it depends on the technology, but in general, we would be looking for cost information at four levels: development costs, production costs, running costs and withdrawing costs at the end of the technology’s life cycle. In parallel, we need to estimate the reasonable price that the technology could be expected to command in the market. Note that we do not connect the price to the cost, but we estimate it according to the needs and demand of the industry and the market. First and foremost, the economic viability of any technology is connected to the investment costs required to bring the technology to TRL 9. These must be taken into account first because if these costs are too high, it would probably not be worth purchasing or using the technology, no matter how cheap it promises to be during operation. This is the reason why technology-push types of technologies encounter so many difficulties in being accepted in industry or the market. Since they are “unknown” and novel, industry has to, by definition, invest huge amounts in order to get them to a condition where even a first-order cost-analysis can be carried out. In more detail, the first set of costs is connected with: 1. The total investment needed to take the technology from TRL 5 to TRL 9, that is, the industrialisation costs. This is made up of (a) the capital associated with the materials and devices used for the scaled-up prototype and industrial prototype manufacturing (b) the costs involved in testing the prototypes (c) the costs involved in adapting a production line to carry out the tests (d) the costs associated with any disturbance of production during installation of the industrial prototype (e) other supporting development costs such as reskilling, adaptations, power, etc. The next level of costs refers to those related to the production costs. It is almost entirely connected to products, materials, devices, systems, etc. In the case of the technology being a new process, method or protocol, this set of costs is minimal or none. In more detail we thus have:

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2. The cost of producing the technology, which should take into account: (a) (b) (c) (d) (e)

costs of the raw materials used the indirect costs involved in ensuring availability of these raw materials the costs of adapting or developing a production line the costs of iterative optimisation of the product the cost of developing and installing any necessary supporting and enabling technologies for production (f) the cost of training or reskilling employees to carry out the production (g) the cost of refurbishment or construction of new buildings to create an expanded work area, etc.

Next, the day-to-day costs involved in using the technology as well as maintenance and repairs, which can be manifested as: 3. The cost of using the technology over a period of time. These would include (a) the running costs, including labour, power, transport, etc. (b) the cost of maintaining the technology, replacing worn parts Finally, it is important to consider the end-of life costs such as 4. The cost of tracing, monitoring, withdrawing and recycling (if necessary) the technology at the end of its useful life. Most of the above parameters are, to some extent, amenable to enhancement and optimisation during Stage 6 but to a very limited extent during Stage 7. Be that as it may, certain operational parameters can still be adjusted during Stage 7 using the industrial prototype to bring the overall costs down. For example, the production of a device, material or market product may be optimised by adjusting production parameters while maintaining the characteristics of the industrial prototype. In the case of a process, the performance of the industrial prototype can also be optimised by adjusting operational details. In addition to the four main categories of cost described above, there are other indirect costs related to the effect the new technology might have on (and be affected by) associated operations in the factory, personnel acceptance, long-term plans, etc. In fact, these extraneous cost factors sometimes prove to have a stronger influence on the final decision than the costs detailed above. The above costs must then be compared with the price that the technology could potentially demand and get in the market or industry. The difference between the two (cost and price) is the gross profit which will then be compared with that of the competitors. But how do we estimate a fair price that one could expect to get for such a technology? This is another challenging aspect which needs to be estimated reliably in order to ascertain a good value for the economic viability. The parameters that determine the price are, as always, dependent on the technology, but in general they would also depend on aspects such as

15.2

Economic Viability

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• the real and perceived level of the technology’s performance and capabilities— this is where early marketing plays a huge role • the level of need and level of urgency by industry or demand by the market • availability of technical and other support • previous experience with the manufacturer and their reputation in the market • comparison with other, similar technologies or those that offer similar functionality • strength of branding of the technology and design aspects, in an attempt to set it apart from other technologies—early marketing is also important here The difference between the price and the total costs for the technology is what determines its economic viability, the estimation of which is the central aim of the activities in Stage 8. However, because of the potential flexibility of the price, the nett competitiveness of the technology is actually only related to the total estimated costs of the technology as compared to the total effective cost of other competing technologies. Even if you are not able to do this accurately, the investors and the industrial adopter will certainly expect a good estimate of it in your Business Plan. What they will be looking for is the RoI, that is, the “Return on Investment” that they can expect if they invest in the technology, and they will also be particularly interested in the amount of time that it would take to get their investment recouped. The expected unit selling price minus all the costs in all of the above categories are taken into account in the calculation. It is, however, rarely as simple as that. From the above, it is probably clear that there are large sources of potential errors in the estimation of the costs and therefore the competitiveness (and eventual acceptance) of the technology are never clear-cut. An example might help to clarify at least some of the points above. One of my own technologies dealt with a new treatment process which was able to offer major reductions in the time taken for conditioning a bulk material. Whereas the existing labour-intensive process took more than 10 days, the continuous processing technology that I was able to offer took two hours at most to achieve the same result. The initial capital cost outlay was high, but the running costs were much lower and the RoI period was no more than 1 year. In view of this, it looked as though transferring the technology to production would be a walkover, and accordingly I offered a detailed calculation to the main implementer (a mining company) showing the major benefits they would be able to receive. Unfortunately, the transferral turned out not to be a walkover at all, and the reasons for this had less to do with the main categories of cost above and more to do with the extraneous factors mentioned and their economic repercussions. These included aspects such as an inability to absorb or sell the increased productivity giving rise to organisational confusion and need for extra storage facilities (perhaps even leading to oversupply and reduction in unit price), resistance from personnel who feared for their jobs, need for reskilling and training, etc. I am still waiting for a final decision on the part of the implementer, which may never materialise. The above should serve to clarify, I hope, that arriving at a reliable economic cost estimate for your technology is a very challenging task. Apart from the extensive

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information that you will need, you will also have to have backup plans for reducing costs wherever possible in order to increase the competitiveness of your technology. If you also have to work out extrapolation factors to convert numbers obtained with a scaled-up prototype, then the task becomes even more daunting. Be that as it may, the economic viability needs to be estimated as reliably and as convincingly as possible in your Business Plan. It is the basis of determining whether you achieve Critical Milestone 3 which is certainly the most important. If you are able to convince the investors (and implementers and/or market) of the economic viability of your technology (which, as discussed in the box, includes the technical feasibility), then you are probably very close to reaching your goal.

15.3

In Summary

Stages 7 and 8 are where the real industrialisation preparations and assessments take place, after the scaling-up operations and final technical optimisations have been completed. The first question to be answered is whether or not the scaled-up prototype (produced and tested in Stage 6) is able to provide reliable industrialisation and the cost parameters needed to be able to achieve Critical Milestone 3 and also for the design and building of the final industrial technology in Stage 9. This depends on the type of technology under development but may be decided by reference to a range of conditions. If, however, the scaled-up prototype is too far removed from the actual industrial application (e.g. because of size, operation and capacity) and therefore cannot provide reliable industrialisation parameters, then a full industrial prototype needs to be designed, built and tested under industrial conditions in Stage 7. The technical feasibility can thus be ascertained conclusively and reliably. At this stage, enhancements to the technical feasibility will probably only be possible in terms of the operationality of the prototype. Following this, the economic viability of the technology will finally be assessed with regard to the finally adjusted and optimised industrial prototype. The assessment will take into account all sources of costs as well as the reasonable price that can be safely expected from the market or industry. The Return on Investment over a period of time can thus be calculated and, in comparison with industrial and market competing technologies, form the basis for deciding achievement of the Third Critical Milestone and TRL 7. Tips • When designing the size and functionality of the scaled-up prototype in Stage 6, consider whether you can produce it in a modular format. In other words, try to design it in such a way as to make it easy to expand to a full industrial prototype. This will save you a lot of cost and effort. (continued)

15.3

In Summary

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• In some cases, it may be possible to work out reliable scaling-up factors which may allow you to carry out the industrially relevant technical feasibility and economic viability tests in Stages 7 and 8 using the scaledup prototype only. This will have to be carried out convincingly and explained carefully in the Business Plan. • The tests to be carried out during Stages 7 and 8 should be expected to take an appreciable amount of time and your business plan should take this into account. • During the time that you are carrying out the assessments and adjustments during Stages 7 and 8, competing technologies may also be under further development—your technology watch, then, should be an ongoing process.

Chapter 16

A Researcher’s Strategy for Successful Technology Transfer

Before we look at a few case studies in the next chapter, it’d be useful to recap and summarise all the recommended steps towards effective technology transfer. In other words to bring all the strands together and look at what a successful strategy should look like. In doing so we’ll again follow the time line and stages given in Fig. 1.1 and in Table 5.1. Because of the specific interest by the research community, I’ll be concentrating the discussion on what a researcher and their institution can do to ensure effective technology transfer.1 At the outset we again distinguish between two types of technology. On the one hand we have a promising technology developed in the lab in search of an application, what we termed “technology push” and is considered the more difficult of the two to achieve successful commercialisation. It most often happens in public research centres where researchers are encouraged to study unusual phenomena, more often than not upstream of focused (or applied) research. Research results are generally published and peer-reviewed and form the basis of further investigations, sometimes begetting technologies with specific applications. On the other hand, we have the “market-pull” type of technology which is developed and optimised in response to a market need, problem or demand. This is by far the most usual in industrial research environments and generally the type that is “easier” to reach fulfilment as far as eventual commercialisation is concerned, as the technology is especially geared and developed to fulfil the specific need or problem or demand. Each of these two types need a different technology transfer strategy and we’ll thus deal with them separately.

1

For more extensive information and discussions on best practices please have a look at the accompanying volume “The Researcher Entrepreneur,” by George Vekinis, second Edition, Springer, 2023. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_16

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Fig. 16.1 A technology transfer strategy for a new technology-push invention

16.1

A New Technology Searching for an Application and a Partner

Let’s first consider the former case, which has actually been the main focal point of this book. A researcher discovers a phenomenon or a new function or a new material in the lab, proof-of-concept tests it successfully, develops it as a specific technology and protects with the aim of developing it further as an innovative product or service. In this case, following the curve in Fig. 1.1 and starting after Milestone 1 (proof of concept), a potentially effective strategy for TT is shown schematically in Fig. 16.1.

16.1

A New Technology Searching for an Application and a Partner

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Let’s consider the strategy of Fig. 16.1 in some detail. There are a number of sub-steps missing but we’ll get a good idea of the strategy. Once the concept of the technology has been proven successfully, the first step is to start identifying and comparing potential applications for it. These may be in a variety of fields, sectors or even territories, sometimes removed from the specific expertise of the researcher and which may necessitate involving specialist information brokers or other external advisors. It is important to consider all possibilities since an optimum application may exist in an unusual field where there is unsatisfied need. Some examples include valves for medical heart bypass which evolved from fluid mechanics and ultralight space structures which evolved from natural materials (biomimetic). The main criteria for selecting potential applications are the specific competitive properties and functions offered by the new technology. These could include better mechanical strength or wear resistance or thermal properties of a new material or structure, higher sensitivity of a new sensor, higher processing speed of a new software, better compatibility or adaptability, etc. An effective method of finding alternative application areas is “functional convergence analysis” where the specific functions of the new technology are used as a guide.2 Once a substantial list of potential applications has been put together, a trade-off analysis is carried out taking into account a small set of criteria such as level of perceived need, economic buoyancy and prospects of the field or sector or territory, trends and fads, etc. This will necessitate some compromises but it should result in a shortlist of possible applications where we can now focus on. Ideally, there should be at least one application where the new technology is able to answer or solve a particular intractable problem with substantial benefits for relevant entities. Once the most promising applications are arrived at a protection strategy should be put into place where these applications are specifically identified. As discussed at length before, the best strategy will allow freedom of use while ensuring maximum exposure of the technology, both to potential partners and to the market. The main question thus becomes: how much formal protection should we aim for? This has been answered at length previously but essentially it means deciding how much of the core technology should be kept secret and how to write a patent without disclosing any sensitive optimisation information. As discussed before, if reverse engineering is very unlikely or impossible (e.g. in the case of a chemical process where a transformation has taken place) then the exact processing parameters should not be disclosed and only general ranges should be suggested in the patent application. Other forms of protection combinations are also possible but it should be borne in mind that successful negotiations with a possible partner (adopter of the technology) will almost certainly require you to offer some form of formal protection for the technology. Having applied for a patent you now have just over a year to try to reach the market, before the patent is published, a shorter period than it looks. In some cases, when the technology is complicated and requires a long technical validation process

2

More information can be found in “The Researcher Entrepreneur,” Chapter 25.

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(the next step) it is actually beneficial to delay the patent application until the pilot tests have been completed, if confidentiality can be assured. Technical feasibility validation should be carried out on a form of the technology which is as close as possible to the final device or product envisaged for any particular application. It isn’t surprising to find that technical validation is repeated again and again every time the device is redesigned or new materials or subsystems are tested. Such changes may occur right up to the end and for this reason many companies delay the patent application of a technology developed internally even after the viability tests have been completed to make sure they protect the latest, optimum iteration. While preparing the new technology for the next stage, the pilot tests (and scaling up when necessary), this is the correct time to decide on the actual commercialisation strategy, that is, whether to co-develop the technology with a partner, to offer a licence or go-it alone with a start-up. It is of course a major decision and we have discussed it at length in the previous chapters. Of course, a combination of the two is also possible: found a start-up company first and then seek a co-development or joint venture with a partner. There are a pros and cons for each commercialisation route but the general direction should be to first seek to partner with an experienced adopting entity which will bring market experience and business networks and help develop the technology faster and only if this turns out to be impossible or unfeasible to attempt commercialisation by founding a start-up company.3 The question thus arises, how do you actually go about selecting an adopting company of the technology from a list of possible entities? The selection of an adopting partner for co-development, licensing or even as a start-up partner is a crucial decision and should be taken with all due diligence. It will weigh heavily on all later technology transfer stages. That’s why many developers feel the need at this stage to ask for the services of a technology broker or an information broker with experience in the field and with a strong business network. There are many non-technical criteria one should consider, the main ones being: • What is the track-record (standing) of the company in the market? • What is the financial state of the company? Solvency? Prospects? A full due diligence report would be ideal. • Has the company adopted any other new technologies in the past? What was the result? • How big is the market share of the company? • How diversified are the company’s operations? Do they work in various sectors and territories? • Can the company carry out the necessary pilot and industrial viability tests without endangering its own production? • What would be the potential added value (financial or competitiveness) gained by the company if it adopts the new technology? How much benefit would it derive?

In this last case, the book “The Researcher Entrepreneur” offers many leads and best practices to attempt to make your venture work.

3

16.2

A Need or a Problem Searching for a Technology

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• How close is the new technology to the “technological core” of the company’s current operations? • Does the company market any similar technologies at present? Could the new technology be seen as competing? • How willing/needful is the company to adopt the new technology? • Is there enough expertise and skills in the company to be able to fully understand and utilise the new technology’s benefits? • Does the company have access to any supporting or enabling technologies or raw materials necessary? • Are there enough confidentiality safeguards to ensure non-disclosure?, etc. Once the commercialisation route has been decided, the pilot and scaling up tests must now be carried out, ideally in the actual field or at least as close as possible under the eventual conditions of use. An experienced adopting partner would be able to rapidly carry out such tests and arrive at reliable techno-economic viability assessment at Milestone 3. If the viability assessment is not as positive as needed to enter the market, it may even be necessary to redesign the device or product based on the technology. This could be expensive and will probably require revalidation of technical feasibility as well, but it cannot be avoided. And here you have it. The new technology in the form of a device, a subsystem, a programme or a service should now be marketed to all the fields and sectors aimed for at step 2.

16.2

A Need or a Problem Searching for a Technology

Let’s now consider the second case for technology transfer, where a need (usually urgent and pressing) has been recognised and a technology needs to be found (or developed) to solve it, that is, a “market-pull” situation. Here the roles are reversed, since the searching is carried out by the user (i.e. the adopter) who needs a solution. The solution sometimes already exists or, quite often, needs to be developed. In fact, this is by far the most usual type of completed industrial technology transfer since a technology that satisfies the industrial need will almost certainly be adopted. The strategy in this case is reversed and can be represented as shown in Fig. 16.2. Let’s consider some of the details of each stage. First of all the identification of the need or problem (in industry, or the market or in a societal context) is not always straight forward. Some problems are complex and arise from hidden parameters which need to be carefully clarified. For example, failure analysis of a structural member may indicate either a problem with the material itself or the design of the member. But, during failure analysis it transpired that the problem was actually due to inadequate thermal processing of the material which needed to be developed further. In another example, excessive corrosion of a pipeline was found to have been due to weak corrosion protection as the internal

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Fig. 16.2 A flow chart for a “market-pull” technology transfer strategy

coating had peeled off at high temperatures, an unexpected result. To solve these (real) examples the companies involved reached out to experts and eventually developed new material processes which resolved the problems. Many problems in production remain unresolved because it is often considered very expensive to replace materials or subsystems in production. This is not always clear so proactive liaison offices in research centres may invite local industries to confidential meetings where the production or quality control managers can expand on their various production problems and specialist researchers can analyse the problem and eventually suggest potential solutions. Alternatively, industries may approach technology brokers who, via their networks, may be able to find various potential solutions and thereby bring the industry and specialist researchers together.

16.2

A Need or a Problem Searching for a Technology

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In any case, it is important to bring the two sides together so that problem analysis and suggested solutions can be offered by various scientists or engineering experts in the specific or related fields. Once a definite solution has been identified then the technology is adapted or transferred to the industry, something which will usually require further research effort. On the other hand, if a range of possible solutions is identified, then a trade-off analysis is carried out to try to obtain the most promising candidate for further development for the particular need. The criteria for this analysis depend on the specific case and can include at least the following: • How close is each technology’s proven application field to the specific industrial problem? • How much further cost (including scale-up or pilot tests) will be necessary to bring the technology to the level necessary for industrial application? • Will production be affected during the adoption process? • Is there enough expertise (scientific and technical, in the developer’s and the industry’s sites) available for effective adoption and adaptation? • Is the technology well protected and the owners all in agreement for the transfer? • Have there been any disclosures, for example, publications, which could reduce the competitiveness of the solution? • If the technology is the result of a common effort (e.g. carried out by a consortium), is there a consortium agreement for IPR and Exploitation Rights? Is the negotiating partner accepted by all? • Are there any outstanding ownership issues (e.g. prior-art IPR) that need to be resolved before the technology can be used? • What is the provider’s (i.e. the developer’s) standing and reputation in the relevant community? • Are there enough confidentiality safeguards in the provider’s laboratory?, etc. The result of the trade-off analysis would be to arrive at a small shortlist which would then form the subject of further discussions and negotiations until a firm decision on the most promising solution is taken. However, it is not uncommon that no potential solution is identified at this stage so the only way forward is to contract a research group to carry out a “focused” research project to develop a solution. Such industrially oriented research projects are generally carried out as co-development projects by the two sides where the scientific and technological expertise of the researchers are leveraged by the production engineers who have identified the problem which saves a lot of time during the adaptation (pilot) phase. The type of research expertise required in such cases is quite different from that of researchers working on pure (or almost pure) science topics, as one needs to continuously focus on the problem at hand within the constraints (and need for confidentiality) of the actual application. Some countries recognise this and make a point of establishing and supporting research centres with industrial focus, such as the over 40 Fraunhofer institutes in Germany (as distinct from the, also public, Max Planck institutes which carry out more upstream research) whose main funding comes from industry. Other countries, such as the UK,

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Australia, Canada and the USA generally encourage privately run “contract research organisations” (CRO), with the same industrial research focus. Following either the identification of an existing promising solution or the development of one, the next step is its adaptation and further development by carrying out scale-up or pilot tests in an environment as close as possible to the actual eventual use. The results of these activities will then be examined to determine the techno-economic viability (if necessary) and if this Milestone 3 is successfully met than the solution is gradually transferred into production. As mentioned, technology transfer of market-pull type technologies is generally completed successfully, but is not often requested due to confidentiality and reputational reasons. Be that as it may, an industrial research contract very often results in much closer collaboration between the institutions concerned which builds trust which can lead to much larger projects. Testing and measurement services offered by a lab are also market-pull activities and more often than not, from my own personal experience, result in closer collaborations and contract research.

16.3

In Summary

Strategy for technology transfer from a research laboratory differs depending on whether it is for a “technology-push” technology looking for an application or to satisfy a “market-pull” problem or demand of a company searching for a solution. In every case, laboratory-proven technologies require further development and technoeconomic viability validation before they can be accepted by the adopting entity.

Chapter 17

Industrialisation

Congratulations! If you have reached this point, it means you have achieved Critical Milestone 3 and reached TRL 7! Well done! You have persevered and kept going and are now ready to see your technology in industry or production and eventually marketed. Your implementing collaborators, if any, should also be satisfied and you are making plans about how and when to implement your technology in production. Your transformation journey is almost complete. You are now entering Stage 9 and the final stretch to your Innovation. At the end of this stage you’ll have a fully demonstrated and industrialised technology and attained TRL 8. “Industrialisation,” of course, means different things to different people. If your technology is a process to be used during the production or treatment of some material or product (e.g. a chemical process), then Stage 9 would involve you taking all of the information and lessons you acquired during the previous Stages 6, 7 and 8 and applying them in production in a factory. In the case of a product, device, component or system, the process might already exist (e.g. extrusion to shape a product) and industrialisation would mean the adaptation of the process to your needs and (possibly) an integration step to produce the complete device or system. A combination of the above is also possible. Industrialisation is a major step by any measure. At this point the implementer has the responsibility for implementing the technology in production and demonstrating the Innovation. Your own main responsibility will be to ensure that the implementation and any adaptations necessary are carried out according to the parameters obtained in Stage 6, 7 and 8. If you have been collaborating with a CRO until TRL 7, you are probably going to part company at this point and continue alone. If you are carrying out the industrial development within your start-up company and also planning to do the industrial implementation yourself, production could be quite modest at first, or at least as modest as necessary to enter the market with an economically competitive technology or product. In any case, don’t expect to make much profit in the beginning—most profits at the start will go towards covering the investments made, that is, the RoI. It is a case © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_17

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of strategic planning. If your technology is going to be marketed to industry (e.g. it is a component, system or process), then industrialisation may be carried out gradually and iteratively, checking and correcting the implementation every step of the way. If, however, your technology is a consumer product (or an enhancement or new function of a consumer product) then your strategy may be to “go all out.” It isn’t surprising for very promising technologies, especially in strongly trending sectors such as mobile entertainment, health and genetics, etc., to be able to raise a lot of money at this point and thus start production on an appreciable scale right from the word go. This is an important strategic decision and one that needs a lot of preparation. Most implementing partners that have invested in a very promising technology in a strongly trending sector would prefer to maximise production right at the start and drum out their innovation as loudly as they can. If “time waits for no man,” it certainly does not wait for a good technology. If the market is new (or the new technology is sufficiently novel and riding a market wave), you would want to capture it as soon as possible and a large production capability will allow you to do so. In the case of fast moving technologies (e.g. in the IT or mobile telephony sectors), you might only have a few months before competing technologies start appearing and, having learnt various lessons based on your own market offerings, even beat you to it. Examples of this abound. When the first mobile music player appeared, crude copies appeared within a few weeks and within a few months they could boast higher-quality competing products. When the first real smart phone appeared it had the market to itself for only a few months before some very competitive answers appeared. In the IT sector, the competition is extremely intense for high-power graphic cards which have now grown to be computers in themselves to cope with the extreme demands of many computer games. Actually, this is a good example of a push-pull technological development wherein hardware is developed to cope better with software advances and then the software is in turn developed further to take advances of the capabilities of the new hardware, and so on. Smart phones and laptop computers have been developing like this for at least the last two decades. It is not too dissimilar to the arms race during the cold war of the 60s and 70s, or even to the evolutionary “arms race” between hunted and hunting animals. The amounts involved in industrialisation of innovative consumer products can be immense and run into many millions of Euro for completely new products and major technologies. To be able to capture a market for, say, a new smart phone, a whole new factory may need to be designed and built. In such cases, funds are usually raised by leveraging loans and obtaining investments from large specialist funds. Interestingly, the subsequent versions of many major consumer (and other) products tend to be only incrementally different (e.g. with some enhancements in specifications) with the result that investments for the new versions are much smaller. This means that RoI may be covered within the first phase and nearly all sales of the next versions are pure profits. It is the “early adopter” consumers who generally cover much of the RoI of many famous brands. If the preparation for industrialisation of your technology (as described in this book) has been carried out diligently and completely, such investments would

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actually be considered low risk, exactly because all of the steps in the business plan have been carried out successfully and conclusively and the technology has been shown to be economically viable and competitive. The minimisation of risk is one of the most important targets of any venture capital fund and evidence of this needs to be included in the business plan. This is why risk amelioration strategy for the exploitation risks is so important. Now, let’s consider various cases of industrialisation of an innovative technology by a start-up company, working alone—generally the most challenging situation. In the case of a collaboration with an implementer (or even end user), the industrialisation and commercialisation will follow their internal procedures and processes. There is not much we can add in this case. You are alone then, in your start-up, planning industrialisation of your validated technology. We’ll assume that the technology has already achieved TRL 7 and its economic viability is validated. This implies that the industrialisation and commercialisation of your technology will now depend on non-technical aspects. What do you need to do to be sure of maximum probability for success at the industrialisation and commercialisation stages? As always, the details depend on the type of technology, but also on your own efforts and capabilities. The first and foremost of these is your capability for raising additional funds. Your business plan would have included a detailed plan for building the industrial prototype and carrying out the economic validation tests, but, generally, it would not cover the funds needed for the industrial application. The reason for this is that a funding body would generally want to be assured of the economic viability of your technology first before risking any more funds. This of course does not preclude situations where the Business Plan covers the whole period to commercialisation, but I think you could be more persuasive by specifically excluding the period after TRL 7, since then you would need much less funding. The same is true with the SME support offered by the Horizon framework programme. Whereas the “SME instrument” (Phase 2) is aimed at supporting you up to TRL 7 (see Fig. 1.1), you cannot use it for the actual industrialisation. For this you can apply for loan guarantees under HORIZON which will generally cover only part of the costs for industrialisation. You’ll probably have to find the remainder elsewhere. Under normal economic conditions this should not be too difficult. By achieving the Third Critical Milestone and TRL 7, you have already demonstrated the viability of your technology and therefore the nett investment risk is much lower than at any previous stage. In view of this, your next important step is to prepare a new Business Plan (if necessary) which will lay out the details for industrialisation and commercialisation, building on your success in achieving TRL 7. This Business Plan will be drawn up with a view to achieving TRL 9. In addition to the technical and financial aspects, it should contain a detailed updated commercialisation risk analysis demonstrating how the risks you identified in the previous period have now

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been reduced or eliminated. In addition, you’ll now need to include all necessary departments of all operations including sales, marketing, purchasing, production, management, etc. Most good books on entrepreneurship will give you all the general information you need. Specific details of course will depend on the technology and unfortunately fall beyond the scope of this book.

17.1

Refinements Possible During Industrialisation

If your technology is a stand-alone product or device, industrialisation will probably mean production of your product using existing production lines followed by market tests. Some iterative minor refinements to aid optimisation may still be possible, probably as a result of market and customer surveys and the results of quality control tests. In fact, many of these could have been carried out during Stage 7 during the testing of the industrial prototype, but a final assessment in all cases would only be reliably obtained after TRL 7 has been achieved. If, however, your technology is a component or device, its industrialisation would entail production followed by integration with other components into a system. Iterative refinements would still be possible but at a much more minor scale, since compatibility with the remainder of the components of the system needs to be maintained. It is therefore more probable that, for such types of technologies, all refinements would have to be completed by Stage 8. If finally your technology is a process, method or protocol, its industrialisation would probably entail its implementation or integration into an existing or new production line. In this case, some further optimising refinements are certainly possible, while still maintaining the basic elements of the new technology, although they will probably be minor as most of the main adjustments will have been completed during stage 7 or 8. In any case, you should not expect or plan for any critical refinements during this stage. Your job here is to demonstrate potential for industrialisation of the technology, thereby adding value to it, not to carry out development. Keeping in mind the previous discussion on the size of production, the most useful advice I can give you at this point in time is that during this stage you should aim for the highest possible quality of product or performance of the process, not quantity. The reputation you build now will follow you throughout the remainder of your company’s life. And this reputation is one of the main aspects of the newly developed value of your innovation.

17.2

17.2

Ripe for the Taking?

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Ripe for the Taking?

It is indeed this reputation that will also decide how bright the future of your company will be. The real achievement of attaining TRL 8, at the successful culmination of this industrialisation stage, is the knowledge that you have breathed demonstrable value into your technology. All the, often hard and strenuous, activities during the previous stages have transformed an idea for a technology first into an invention and then into a valuable innovation. At this point, by ensuring a high reputation for high quality and performance for your technology, you are increasing its value to such an extent that you might even find yourself the—mostly welcome— target of a buyout or takeover bid! As I mentioned before, it is very unusual (but not impossible) for larger companies to be interested in making a bid for a start-up company at any stage earlier than TRL 7. It is simply a matter of them understanding that your technology before this stage is still only potentially valuable (and therefore still risky) while at TRL 7 (and even more so at TRL 8) it has acquired real value and is now a fully developed, innovation in waiting. All the work you have done means that the overall investment risk is now substantially reduced, although not fully eliminated since the market has not yet delivered its final verdict on your technology. But by attaining TRL 8 and thereby validating your technology’s potential for industrialisation, your company has achieved actual, real value for its innovation. Therefore, by making a takeover bid at TRL 7 or even 8, a larger company with a serious interest (or need) for your technology will probably save a lot of money than attempting to bid later when your start-up might already be financially successful and therefore more expensive. All of the above is of course valid in the case where an implementer or end user would prefer to license your technology. It would be cheaper to license at TRL 7— albeit riskier—than at TRL 8 or 9. Assuming that a buyout bid is made at this stage, the decision of how to respond is all yours. If you sell your IPR to your technology before full industrialisation, that is, at the beginning of Stage 9, then your job is completed successfully, although not fully completed. Your technology has acquired a great deal of value and it has become a fairly valuable innovation in waiting and this might indeed be enough if you don’t want to continue into developing a commercial business. Hopefully you have earned a serious profit and it’s now time for new pastures. If, however, you decide to push ahead into the next stage, that of commercialisation of your innovation, then you will enter into the world of commercial business with all that that entails. This is the subject of Stage 10.

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In Summary

Your successful achievement of Critical Milestone 3 and attainment of TRL 7 has conclusively demonstrated the viability of your technology, immediately enhancing its value and its status as an innovation in waiting. You are at the point where your development efforts are about to be put to their final test in industry in the last proof of your technology’s potential for industrialisation and achieving TRL 8. High performance and quality in this stage will immediately enhance your technology’s reputation and thrust it forward as a valuable innovation. In addition, this stage is also where your technology will suddenly be considered as a low risk investment and your company ripe for a lucrative takeover bid. Tips • Industrialisation means that your technology will be used or produced and compared with any other competing technology. Because of the entrenched nature of existing technologies, the comparison may be seen to be a bit biased against the new technology at first. This is natural and you’ll need to take it into account when developing your industrialisation strategy and response to the comparison. • Any optimisation refinements you carry out at this stage must be kept within the confines of the functionalities and characteristics of the technology as you have developed and validated it during Stage 8, otherwise you run the risk of invalidating its economic viability. • If you decide to refuse a bid for your start-up or for the IPR of your innovation in order to build even more value into the innovation by commercialising it, be aware that you are running the risk of your innovation losing some of its novelty (and therefore its value) since, once it is successful, it is bound to become the target of many attempts to imitate it.

Chapter 18

On to the Market!

You’ve made it! After a long and often hard transformation journey, you are ready to take the step out into the market and learn finally if you have succeeded in building real value into your technology. You are in Stage 10—the stage where your innovation in waiting will be tested in the commercial world and you’ll finally know if all your efforts have paid off. But what is “the market”? Right at the beginning of this book I mentioned that the market referred to throughout is not just the normal economic market but any field or sector in which your technology may be usable. The market can thus be defined as “any unsatisfied need or demand for a product or service or a social or environmental solution to a problem.” A market may be latent or prospective for the absorption of a specific product or service; the underlying meaning here is that even if the market is not actively served at present, it may be activated if the conditions are right. This is particularly important in the case of a new technology that does not fit easily in any current market sector or in the case of any technology that is not yet known to the potential users. It should be emphasised here that, irrespective of whether the market is latent or activated, any considerations should always take into account the economic context, whether directly or indirectly. Even the adoption of a social innovation can be quantified in terms of the economic benefit it may bring. That is why the term “economic viability” we used in Stage 8 is valid for any type of innovation under development.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_18

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On to the Market!

Entering the Market

By reaching the market, your technology has proved its technical feasibility in Stages 5 to 7, its economic viability in Stage 8 and its potential for industrialisation in Stage 9. All that remains is the proof that it is able to activate the market that may or may not be waiting for it. And to do this you have to somehow enter the market and then get end users to use and adopt your technology, thereby valorising it. Entering the market is the easier part; it is the second part, where you have to get users to try your technology and adopt it, that is the most difficult. In fact, this second part of the process also consists of two stages: trying a new technology and, once satisfied with its capabilities, adopting it. It is this final stage that will make your technology a valuable innovation! How can this be done successfully? As Peter Drucker has said, “Business has only two basic functions: marketing and innovation.” We have been dealing with the second with only casual reference to the first. Now is the time to beat your drums and make your technology known to the outside world, that is, to all your potential markets, whether it is for selling, to utilise in industry or to address a social or environmental problem. Marketing is the subject of hundreds of books in as many sectors. It is not my intention to discuss it in any detail here—we would need a whole new book. But in the context of getting a new, promising and proven technology exposed to and accepted by the market, you should remember that any new technology will be tried on its promise and adopted on its merits, that is, capabilities, functionalities and performance. So marketing will have to focus firstly on the promise that the technology offers and thereafter, if it proves satisfactory for the application, it will sell itself. At least that is the theory. In practice, you’ll have to continue to provide exposure and disseminate information regularly. A very good way to keep the technology uppermost in people’s minds is by providing updated, new versions, new editions, etc. Remember that any successful technology will soon be imitated and therefore your own technology needs to remain pertinent and updated. To prepare the ground for the successful market entry of a technology with a wide range of potential applications, your information dissemination strategy needs to be developed very early on. During our discussions on Stage 5, I mentioned that you can start presenting your technology to the outside world even as early as Stage 4, right after due protection has been secured. Initially, this can of course be done in conferences, meetings, etc. But as time goes on and you move through the stages, your information campaign needs both to be expanded and focused more on various prospective sectors and markets, even specific end users. This will depend on the type and nature of the technology, but during Stages 6 and 7, for instance, you may already decide to start presenting it in industrial fairs and industry-focused publications while, during Stage 8, when the economic viability tests have identified specific sectors with greater promise than others, you’ll probably start focusing on them.

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Entering the Market

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The web is also a fertile way of improving dissemination of information regarding your technology, especially if you can combine it with the professional versions of social media. Depending on the technology, a good way to keep people’s attention focused may be to offer regular updates on the progress of your invention to innovation transformation in a blog or dedicated site. Your own publications—scientific as well as industrial—are an excellent way to disseminate information on your technology to a range of readers from many fields. Personally, I frequently offer a glimpse of our new technologies and objectives during review talks at conferences and I make a point of taking a long-term view of our technological projects and eventual potential applications. A thorough and exhaustive market research is a very important tool. Using it, you should try to find out not only if the market is ready to accept and pay for your new technology, but whether any competing technologies before yours are being adopted, if they have encountered any problems and if there are any lessons you could learn. Finally, market research is of course used to determine a reasonable price level for your technology, although ideally this should have been completed during your economic viability tests in Stage 8. The Military and Space Sectors These two major sectors present the greatest challenges for any prospective technology, but they are worth entering if you can. Together they command hundreds of billions of Euro worth of technologies and represent a very large percentage of the global market. In fact, they probably leverage at least twice as much again. A well prepared and developed high-tech technology could do worse than to consider either of these two sectors for market entry. Although the technological challenges are formidable, the benefits can be huge as the prices that can be commanded by unique technologies are proportional. While market information on the military sector is rather difficult to obtain, that of the space sector is much easier. In fact, all space agencies (NASA, ESA, JAXA, etc.) now have open calls for projects and technologies and support the spinning in of technologies from other sectors. The procedures followed for transforming your invention to the final innovative application are very close to the ones described in this book, but you must keep in mind that: – MIL and Space specifications are very strict and at a higher level than those of other sectors. – Economic viability in Stage 8 is usually carried out comparatively. – Stage 9 is usually the “fire test” or “flight test,” respectively. – Devoting your work to one sector only can make or break and thus dangerous from a business point of view.

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This brings me to the important aspect of focusing your industrialisation and market entry efforts. During the discussion of Stage 8, I alluded to the fact that, more often than not, you’ll find that the economic viability of many technologies is much more promising in certain sectors than others. This is why it is important to determine its relative economic viability with respect to all the possible applications you can think of. This is particularly true for high-tech technologies which are usually expensive to develop and produce and whose functionality and properties are way too high for most ordinary applications. In such cases, there is no point in aiming for sectors which can be satisfactorily serviced by ordinary technologies, but you must aim for sectors with particularly high specifications. Good examples can be found in the military and space sectors which share many challenges. As a case in point, electronic devices in both sectors need to be suitably protected from radiation, mechanical vibrations, heat loads, etc. In some cases, the specifications are so extreme that satisfactory devices can only be made using technologies that would be economically non-viable everywhere else. For instance, new SiC-based electronic devices are under development as they can be used under much higher temperatures than Si-based electronics. SiC-electronics demand such high development costs that they would be completely uneconomical to develop for any other market. Be that as it may, some new extreme uses for robotic exploration of high-temperature environments on earth may be a possible spillover application. Further examples of hightech technologies that have been developed for extreme environments encountered nearly exclusively in space and the military are the special thermal protective systems for ensuring survival during the fiery high-velocity re-entry through the earth’s atmosphere. The military sector in particular poses so many technological challenges that it is a very fertile ground for many high-performance-focused applications. In fact, I would be very hard pressed to think of a high-tech technology which is not used or utilised in the military sector. In one of the fields I work in, we developed new low mass multi-layered armour with capabilities way beyond what is generally possible with other technologies. It is still at around TRL 6 but its promise is very high. Interestingly, in the present insecure global climate, it appears that it will have very good applicability in the civilian sector too. As a result, because of the various restrictions on the use of military technologies, we are in the process of refocusing our efforts on dual-use technologies in the civilian sector, where the technical competition is bound to be much less. The space sector may not be as diverse, but the specifications associated with it are often extreme and there are many areas where technologies need to be specially developed for it or heavily adapted from other applications. In fact, because of the renewed interest in space exploration as well as earth observation and monitoring by satellites, it is at present a hugely fertile field for spinning in technologies from sectors as diverse as control and analysis and other software, communication systems, robotics, ultrahigh temperature materials, light and strong structures and many others. These in turn give rise to many ground-based applications that use data and information sent from space to provide services such as accurate global

18.2

Rapid Market Adoption

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positioning, agricultural and climate monitoring and analysis, transport services, weather forecasting and many others.

18.2

Rapid Market Adoption

If your technology is focused and aimed at a specific application (i.e. it was developed to address a specific challenge), then as long as another solution has not been produced faster, your technology is bound to enter that sector and be adopted rapidly to address the challenge (if tested for efficacy and found to be satisfactory). Your innovation will thus be completely successful. The problem is that this will not generally be enough to produce sufficient RoI to make all your development effort worthwhile (and your investors happy). Even the best technologies need to spill over into new markets and new sectors to provide sufficient return. Ideally this should be done by leveraging as much of previous development efforts (and marketing) as possible. This is not as rare as it sounds. Above, I mentioned the spill-overs one encounters in the space sector where many terrestrial technologies have found use, and how high energy armour used in the military can be adapted for use in civilian applications. Recently, I read about a medicinal preparation that has been approved for human use against certain cancers and is now being tested for efficacy against other major diseases. In all of these cases, the data and results of some of the development stages (especially the scaling-up and prototyping operations in Stages 6, 7 and 8) can be easily adapted and focused on the new applications. For an early market entry, a very early marketing strategy is crucial. Even the most capable and technologically superior technology will need a good deal of information dissemination, exposure and marketing in order to become known. The whole marketing strategy has now developed into a science, but the main aspects are fairly obvious: As I mentioned before, easy and rapid adoption of your technology is only guaranteed if it addresses an urgent industry or market need and has no competitors, currently or in the pipeline. I remember an interesting case of an EC-funded consortium developing a new system and method for detecting very small concentrations of dioxin in foods. During our discussions they were wondering if there would be any market for such a system since the then EC standard allowed appreciably higher concentrations. Near the end of the project, when it was clear that the technology under development was going to be successful and had good potential for industrialisation, a potentially serious case of dioxins in chickens was revealed in the EU. Very soon after the appropriate EC standards committee decided to make the dioxin limits in food hundreds of times stricter! This had the direct effect that the project’s technology was very rapidly scaled up and industrialised and commercialised very soon after. On the other hand, even a well proven technology which is highly focused on an urgent challenge and which has gone through all the development stages and

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conclusively shown that it has strong potential for industrialisation, might still find it difficult to break into the respective market because of a number of extraneous factors. For years, a holy grail of catalysts was one that would successfully and cheaply convert natural gas to liquid fuel. However, although such catalysts have now been successfully developed right up to industrialisation, they are still not well utilised for producing liquid fuel. The reason? The market has moved on! The need for developing secure sources of liquid fuel was considered so urgent that it led to the development of alternative but previously unacceptable methods for extracting oil from hitherto uneconomic sources (e.g. fracking and deep-sea wells). This, in conjunction with increased energy production from renewable sources, has reduced the urgency for gas-to-oil conversion. This field might take off in the future, but at present it is still mostly latent. This example contrasts interestingly with the very rapid development and market adoption of the coal-to-liquid fuel conversion catalytic technology developed in the 70 s and 80 s in South Africa, as a result of the then apartheid government’s decision to become self-sufficient in energy, itself a necessary result of the then international boycott. If the need is there and money is no object, then the technology will be immediately adopted. This technology is actually still used today, but at a much lower scale as it is not fully competitive, similarly to that of gas-to-liquid fuel conversion. Rapid adoption of any new technology is the exception rather than the rule in all fields. The general approach of most adopters (i.e. your customers) is to be conservative and insist on many exhaustive tests at TRL 7 or 8 before they accept it for market tests. To counteract this natural tendency on the part of the adopters, you should prepare extremely well and offer the highest possible quality of technology at a level much higher than any competing or entrenched technology. Be prepared at all stages for questions and challenges and have the appropriate answers ready.

18.3

In Summary

Having successfully proven the potential of your technology for industrialisation in Stage 9, you are now finally face to face with the market and the final test of your efforts. Keep in mind that a new technology might enter a market easily, but its adoption by the market will depend crucially on its quality and technological and economic competitiveness. While marketing and your own dissemination efforts will help to open the doors, the technology should be thoroughly prepared and tested through all the stages we have discussed in this book. Under the right (but rare) conditions, rapid adoption might be possible, but in general, successful market takeup is no easy feat.

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In Summary

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Tips • Unless you are collaborating with an end user who might have insisted on exclusivity, you and your implementing company should start early on (Stage 8) to search for potential end users of your technology in as many fields as possible. • The economic viability of your newly developed technology will not be the same in all of the market fields and sectors you try to enter and you should try to prioritise these. Further, keep in mind that the level of competition in some fields will be different than in others. You’ll have much better chance of adoption in fields with lower levels of competition, even if it means that you need to enhance the specifications of your technology. • Select markets that are young and vibrant and avoid markets that are very mature or even on the way out. • Sign exclusivity agreements with resellers when you need to, but always insist on performance clauses and limited duration.

Chapter 19

What Can Go Wrong?

In a nutshell, everything. As we’ve seen, the transformation of an idea to an invention and then to an innovative product or service can be risky and quite complicated, even if one plans and manages all stages carefully. It can fail due to many reasons and at any stage, especially when extraneous factors come into play. The risk analyses we considered earlier include some of these but others do not actually constitute foreseeable risks but occur because of erroneous actions or weak management, etc. In what follows here we’ll see some of the most salient actual reasons that led to failure in real situations and consider what possible mitigation or corrective actions one could have taken in each case to prevent failure. In actual fact, it is not easy to determine the exact reasons for a project failing to reach its aims but we can get useful information from various published evaluations and “impact assessments” of funded research and development projects, not least of which by the European Commission. I will also include some of my own experiences with monitoring various attempts at industrialisation of technologies. As we discussed before, in the European Union RD projects are mostly funded under the umbrella of centrally coordinated EC funding programmes. These were previously called “Framework” programmes (FPs) but nowadays are given the titles “Horizon2020” or “Horizon Europa” and are large, worth close to 100 billion Euro every 7 years. Projects are nearly always multi-national and are funded by such programmes after peer evaluations after competitive calls for proposals. The competition is quite fierce and the success rate is anything between 1% and 5% of submitted proposals. The calls are sometimes open (any area or field is acceptable) but mostly they address specific areas which have been identified by previous foresight studies, and are designed to strengthen specific technological areas or solve major societal or economic problems or challenges, e.g. the climate disturbance, environmental damage, space exploration, etc. Although there are exceptions, the consortia generally include industrial as well as research partners since the main objective is to enable the development and then the transfer of the technology to industry to enable production and commercialisation. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_19

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How successful are these programmes in developing innovative products and especially in supporting their commercialisation? This is a big question and one that seems to go unanswered, at least lately. In the past (up to the end of FP6), the EC used to undertake regular large-scale “Impact Assessment” evaluations of thousands of completed RD projects under the various sub-programmes (e.g. “EVIMP-2: Evaluation and long-term impact assessment of industrial research under FP6”1), with the aim of ascertaining the level of success and even clarifying the reasons that a project was successful and if not, why not. Unfortunately, since FP7 (which ended in 2013 when Horizon2020 started), only programme-level evaluations appear to be carried out during and after the conclusion of these programmes, the main aim being to ascertain whether the general objectives of the programme were achieved and provide some advice for adjustments in future programmes. It is not clear why impact assessments are not carried out anymore and this seems to be a lost opportunity to evaluate actual projects’ execution and results and obtain information and pointers on how to improve their execution and procedures. So, what are the main reasons that projects fail to achieve their aims or even to reach their objectives? Looking at the details of the past impact assessments, it seems that, while a large number of them held at least a moderate promise at the end of their EC funding, having reached TRL 5 or TRL6, many subsequently failed not due to financial reasons but because of sometimes preventable causes. Let’s consider some them in detail.

19.1

Overambitious Technical Objectives and Claims

Many inventors have irrational or unjustified expectations of their technology, sometimes based on incomplete knowledge and other times driven by the need to impress potential funding bodies. The fact that a new material has passed the proof of concept and is promising in some way (e.g. by indicating that it can be made to have superior properties to other comparable materials) does not necessarily mean that it will satisfy the third milestone of techno-economic viability. There are many considerations that need to be satisfied before it even gets to be tested at that level, not least of which are the large obstacles during scaling up or testing in the field. There are many examples that spring to mind. When carbon nanotube (CNT) fibres were first developed, their mechanical properties were measured to be many times greater than any existing material at the single fibre level. This led to utterly exuberant claims that they could be used to build space elevators, replace steel cables and other extreme uses which attracted quite substantial funding. All such claims are still to be realised, if they will ever be, probably because useful mechanical properties do not scale up with dimensional scaling up and such brittle materials suffer from

1 https://op.europa.eu/en/publication-detail/-/publication/3f619db4-440d-4895-932b-3544b2 df96cf/language-en

19.2

Higher Than Anticipated Costs for Introduction/Production

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low reliability (just like ceramics) when enlarged. Composite materials made with polymers strengthened using short CNTs are still being developed but with only minor benefits, considering the cost and difficulty in producing such materials. A major current area of technological development is of course the development of machine (re-enforcement) learning programmes, especially the ones called “natural language models” (NLM). They are very successful in reacting to a prompt and creating complete essays or reports based on the very large amount of text (and figures) they have “digested” from many sources, especially the internet. But they are anything but infallible. Because they do not understand what they create (they only regurgitate text via statistical associations and cannot distinguish between real text and nonsense text), their results are sometimes nonsensical or irrational. Such systems are also very easy to expose by mixing-in random words in capital letters when prompting. The exuberance (and worry) relating to their capabilities are probably exaggerated, unless of course the users attach too much importance to their creations which leads to a self-fulfilling prophecy. Another major technology whose eventual potential applicability has been completely overblown is self-driving cars. Although the technology is continuously improving (mainly by reinforcement learning) their eventual application will most probably be restricted to military and space exploration uses. The reasons are not technological, but inability to interact safely with human car users and the difficulty in deciding who is responsible during an accident. Other major examples of failures due to overambitious objectives could include many medical treatments which appear promising during animal studies, but fail during human trials. A particularly stubborn disease which has seen many false starts is dementia and in particular, Alzheimer’s disease. Many promising attempts at reducing the ubiquitous amyloid plaques that appear to surround many brain neurons have failed.

19.2

Higher Than Anticipated Costs for Introduction/Production

This is a very frequent reason for failure of a technology reaching eventual commercialisation. Essentially it means that Milestone 3 could not be achieved and viability of the technology could not be demonstrated. In many cases, feasibility (Milestone 2) has been demonstrated successfully which allowed scaling up activities to continue but scaling up has proved more difficult and costly than originally estimated. In those cases where the new technology is aiming to replace an existing technology (e.g. a new material), the onus is on the new technology to demonstrate a highly competitive cost before it can be allowed in the market. Very often, it is a Catch-22 situation. The new technology needs to demonstrate competitive cost-benefit ratio but can only do that by mass production. If the

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technology has competition, the decision to mass-produce is highly risky resulting in a conundrum.

19.3

Overlong Duration of the Project and Weak Time Management

Successful commercialisation depends crucially on being on time. It’s not enough to be at the right place, but it is critical to your success to be on time too, otherwise a window of opportunity may just disappear. Because of very rapid turnover of many technologies, most start-ups have only a limited amount of time in which to develop a product, enter the market, make a profit and then diversify or exit the market. Catering to fads and trends may not be the healthiest business model, but the supremacy of social media and the resulting shrinkage of attention spans means that many businesses are forced to develop products and services which rely on riding a trend wave for successful commercialisation. The problem is that such trends tend to be short lasting and unreliable so exact timing is critical for success. Most online computer games and most electronic gadgets tend to have a lifetime measured in months rather than years, exacerbating the pressure on technology commercialisation. Time management is not only connected with technology development, but also with financial management. If funding and other critical decisions are not made within the right time frame, the chances of success diminish significantly and management is forced to become reactive rather than proactive.

19.4

Inadequate or Erroneous Knowledge of Markets and Mistaken Expectations

It is unfortunately the case that many technologies are developed and aimed at applications and markets that are non-optimal or plain wrong. Such strategies do not encourage or allow market penetration of a new innovation. A number of major errors can be recognised. Technologies that are aimed erroneously directly at the consumer market as a product instead of towards industrial companies that can use it to produce a final product. Examples are specialist materials or sensors that will ideally be used by industries to embed in and improve an existing system or which will enable the development of a new system. The second mistake is aiming a new technology to try to displace an existing and accepted technology which—however inadequately—is well-embedded in the market and will be extremely difficult to replace as it might cause dissatisfaction to the end users. Examples are attempts at introducing new cutting tools or industrial pigments which have lower cost and marginally improved performance. Such

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Wrong Choice of Co-Developer

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technologies have very little chance of being accepted since the difficulties of managing the change is much larger than the potential benefits.

19.5

Poor Project Management Skills

Management of technology transfer involves an array of management skills which are rarely, if ever, possessed by a scientist or a technologist. Being well organised and a good planner is the minimum required but a good manager needs excellent decision making and taking skills, rapid assessment of situations, good networking capabilities, people-assessment skills, funding experience and an objective mind. Many of these are “soft skills” are rarely found in a person with a technological and scientific background. As a result, it is always recommended that management of the technology transfer process and especially management of a start-up company to enable TT should be left to an experienced professional manager, specially trained and experienced for this job. Many attempts at commercialisation fail because the developer technologist thought he or she could manage the process on their own. A crucial part of successful management is liaising and communication with stake holders and potential customers. As mentioned during the discussion on negotiations, it is critical that the different ways of thinking (and divergent priorities) between the developer and the adopter be bridged effectively. This is even more important during the commercialisation phase as contact with industry and market representatives is frequent and critical. Finally, I have witnessed failures due to unwillingness and inflexibility from the developer’s side (as the owner of the company) to allow necessary changes in management and other operating approaches, in view of clear signals that things were not going well. This led to a destructive spiral culminating in legal and financial exposures.

19.6

Wrong Choice of Co-Developer

If the technology transfer process is to be carried out as a joint venture with a commercial partner entity (e.g. a manufacturer) they should have a clear interest in the eventual commercialisation of the innovative product or service. In addition, they should not have any competing interests, for example, their own version of a technological solution for the same problem. It is not rare to discover that a partner appears interested in a new technology only to “bury” it or delay its development until their own technology has reached the end of its market life. Failures have also been observed when a co-developer is not financially able to support the co-development or unwilling to do so.

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What Can Go Wrong?

Problems also occur with a co-developing company that is willing to help but is in fact unable to aid in the development of the innovation because of inadequate capabilities or missing skills. Finally, it is not unusual to encounter situations where a co-developer or an adopter is misrepresented and turns out to be much weaker than expected and therefore unable to fully support the industrial or commercial development.

19.7

Over-Optimistic Business Plan and Inadequate Resources (Manpower, Budget and Equipment)

Very often the business plan is built on technological and market wishful thinking and weakly supported assumptions, in order to get a favourable assessment by potential funding bodies. This comes back to bite when a start-up cannot find the right people or the market requirements are more stringent than assumed or funding is offered against results and cannot cover the needs of the project as it progresses.

19.8

Extraneous Reasons for Commercialisation Failures

There is a whole range of extraneous factors that very often contribute to commercialisation failure. These include, but not limited to • Changed or unstable markets due to changed technological environment Some markets or even whole sectors can change suddenly with hardly any warning. Good examples are dedicated cameras overtaken by mobile phone cameras, films replaced by digital memory, vinyl records replaced by CDs and then by MP3 music and video players. Even digital music and video hardware is now disappearing as streaming services take over. The emergence of new, improved enabling technologies may force manufacturers to drop older technologies and seek new ones. • Changed economic conditions Business collapse and social disturbances (wars, riots, etc.) almost always lead to changed economic conditions. The global economic crisis of 2007–2008 precipitated a huge number of company failures. • Changed regulatory environment If regulations change many markets can be affected in short order. For example, in order to protect the environment or mitigate climate disturbances, governments may legislate specific restrictions or force societies to make drastic changes. This may affect new technologies betting on the old order but may also help new technologies addressing the changes.

19.9

In Summary

221

• Unforeseen competition (fair or unfair) Failures can also occur when a new innovation is seen as a threat by rival or competing technologies or entities. Larger companies are able to undercut any perceived technological threat or even blackmail customers by threatening to withdraw supplies of other products if a customer accepts a new technology, even on a trial basis. A small company I was advising that had developed a new and very promising beauty product based on natural raw materials could not convince distribution companies to stock it as larger competitors threated to withhold supplies of other products to them. The company folded after substantial expenses and 2 years of development costs. • Unforeseen effects Over the years many technologies have been developed with much promise until it was discovered that they had unforeseen effects, sometimes on health. Very fine fibres of carbon or silicon carbide Asbestos fibres Cancer by asbestos or whiskers.

19.9

In Summary

In a nutshell, everything can go wrong. From an inadequate proof of concept, to unsuccessful protection to inability to scale up, there is a plethora of stages that the technology transfer process can fail. Planning and proactivity is crucial and so is continual feedback and course corrections. But extraneous influences can also cause havoc with your preparations and activities. You just have to your best and be as flexible and accommodating as possible to minimise the risks and their consequences.

Part IV

Case Studies in Technology Transfer

The path of precept is long, that of example short and effectual. Seneca (5 BC–65 AD) Stoic philosopher and statesman Many of life’s failures are people who did not realize how close they were to success when they gave up. Thomas A. Edison (1847–1931) Innovator and entrepreneur

Throughout this book, I have tried to offer as many examples of successful technologies as possible, thinking along the lines of “a picture is worth a thousand words”. Yet, it is also true that one cannot actually appreciate the amount of effort that went into getting an innovative product onto the market just by seeing the end-result—its successful acceptance in the market and industry. In this final part of the book, I attempt to go one step further by presenting eight real-world case studies of technologies that have undertaken the journey from invention to innovation during the past few years. Most of them (Nos. 1, 2, 3, 4, 6) have completed the journey and succeeded in bringing the technology to industrial implementation or all the way to the market as a product. No. 5 is the case study of a medical product that is still under development with good prospects and Nos. 7 and 8 are case studies of two technologies that could have succeeded but, for various reasons, were abandoned or failed. In all cases, I have preserved total confidentiality and have taken all possible steps to ensure that no secrets have been disclosed. My aim has been to show the thinking involved and the strategy that was developed in each case. All of the case studies start at about TRL 4 or 5, i.e. they all deal with the industrial “real-world” development beyond the research stages. The case studies presented can be thought of as “representative” of most technology transfer processes that are carried out routinely. They are also “typical” in the sense that a researcher or inventor will probably recognise most of the challenges faced by the researcher or inventor in each case.

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Part IV

Case Studies in Technology Transfer

Each case study starts with a table of the main characteristics of each Technology Transfer process. These include the sector, the driving force, the originator (i.e. the developer) of the technology, and various details of the strategy followed. Next, the background and the need are described, where the reason for undertaking the technology transfer becomes apparent. Based on that, a “Technological Proposal” (i.e. the Business Plan) is described briefly. A SWOT analysis of the attributes of the proposed project is then given as well as a description of the actual project carried out to realise the business plan. Each case study concludes with a description of the results, the prospects, and lessons learnt, some of which are quite unexpected. Some of the salient points of all the case studies presented here (which reflect, I believe, the majority of TT cases) are: • Nearly all of them deal with market-pull driving forces. This reflects the fact that the vast majority of inventions are geared towards solving problems and addressing challenges. • Nearly all of them involve a broker (or facilitator) who brings the developer and the adopter together and helps with negotiations. Again, a general observation is that most TT processes involve a commonly trusted broker. • Nearly all case studies involve collaboration or at least a contract with an implementing entity. • Nearly all case studies have involved some form of contractual relationship between partners. • Finally, all of the innovations are based on technologies developed to at least TRL 4 or 5 in the lab, before attempting industrialisation. • All of the TT processes take at least a few years to reach maturity and TRL 9. Think of each case study as the encapsulation of a long and challenging process. I hope they help you to appreciate the large variety of approaches possible in Technology Transfer and go some way towards clarifying the many issues we discussed in this book.

Chapter 20

Case Study 1: Microwave Heating Process for Bulk Ceramics

Industrial Sector Driving force Technology developer Technology adopter Technology transfer facilitator Target market Strategy Financial backing Starting TRL at commencement of TT Final TRL Duration of TT process Prospects

20.1

Electro-mechanical machinery Market-pull (market need) Researcher in a Research Centre in SE Europe Spin-off manufacturing for installation direct to end users Broker, liaising both with developer and end users European bulk ceramic manufacturers (bricks, tiles) Spin-off company for production 50:50 private and national TT programme TRL 4 TRL 9 in this sector About 3 years Very good in this sector Diversification of technology to other applications has commenced with current TRL of 7–8

Description

Background: Bulk ceramic (bricks and roof tiles) manufacturing is a time and energy-intensive process requiring 4–7 days for a production cycle. Of the three main processes—forming, drying and firing—drying is the most time consuming and plays a crucial role in determining the overall productivity. It also requires most floor space and capital investment. The Market Need: Reduction of drying time (and energy use) can increase productivity, capacity and reduce environmental pollution. Many attempts to reduce

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_20

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Case Study 1: Microwave Heating Process for Bulk Ceramics

drying time using conventional or other advanced technologies have not been successful.

20.2

The Technological Proposal

The Developer was a researcher in a European RC who developed a process to heat clay ceramics uniformly without cracking in large chambers (up to 100 m3). The process was patented (EP) in this application as well as others. The Broker suggested focusing on high value roof tiles and applying process in tandem with existing dryers to reduce production disturbance and increase take-up acceptance.

20.3

SWOT Analysis

STRENGTHS Rapid drying Ease of integration No production stoppages Environmental + energy + cost benefits Higher productivity and production Rapid return of investment OPPORTUNITIES Buoyant market Strong market need and demand Expandable to high strength ceramics Spillover to other sectors possible

20.4

WEAKNESSES Must reskill staff of end user Expensive capital investment Perceived dangers by staff Shortage of skilled staff Mass production not easy THREATS Vested interests of other driers Market inertia conservatism of end users Improved conventional dryers appearing in the market

The Project

Broker helped in arranging for a large end user to accept, under agreement, a large industrial prototype to be built in the premises for economic viability testing. The Developer obtained 50:50 co-funding from a national TT programme and a private investor and spun off a manufacturing company. To work in the company the Developer took 50% off from his research job for 2 years. Scaled-up prototype built, instrumented and tested. Industrial prototype built and tested.

20.6

20.5

Lessons

227

Results

Industrial testing confirmed that drying time could be reduced by up to 75% for roof tiles. Further tests showed that the method could be also applied in continuous feed production. New patent filed. Memorandum of Understanding followed by Collaboration Agreement concluded with large European manufacturer for installing two large prototypes in production.

20.6

Lessons

• Serious production bottleneck causing productivity problem: clear opportunity. • Technology was based on previous expertise, adapted to focus on problem and offered large improvement. • Industrial prototype built and tested in factory without affecting production. • Crucial contribution by TT Broker in arranging for industrial tests. • Good organisation and planning, clear focus and large efforts.

Chapter 21

Case Study 2: High-Hardness, High-Toughness, Nanostructured Coatings for Gears and Axles

Industrial sector Driving force Technology developer Technology adopter Technology transfer facilitator Target market Strategy Financial backing Starting TRL at commencement of TT Final TRL Duration of TT process Prospects

21.1

Mechanical machinery Market-pull (market need) North European Research Centre Large European manufacturing company in Europe (implementer) Broker—Networking both with developer and adopter Manufacturers of heavy truck gear boxes Technology supply under licence By the implementer TRL 4 TRL 9 About 4–5 years Excellent, used in manufacturing of specialist gears for large trucks

Description

Background: Truck gears require very high hardness coatings without sacrificing toughness. Ordinary plasma spray coating or nitriding enhances the surface but often reduces toughness, leading to microcracking and failure during extreme loading. The Market Need: Current coatings are generally acceptable for most applications, but the heavy truck niche market often encounters failures of gears under extreme loading conditions. The development of new, stronger and tougher coatings would increase gear reliability and allow for more extreme applications.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_21

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21

Case Study 2: High-Hardness, High-Toughness, Nanostructured Coatings. . .

The Technological Proposal

An enhanced method of applying nanostructured coatings was developed by a North European research institution. The method was developed and feasibility proven in the laboratory (TRL 4). The enhanced process relied on a non-obvious change in a standard method and so a decision was taken not to patent the technology as much of the basis of the process was already covered by patents. An incremental but significant development of an existing method.

21.3

SWOT Analysis

STRENGTHS Enhanced mechanical and physical properties Easy application in-line Higher reliability OPPORTUNITIES Good niche market Need for enhanced reliability Opportunities for expanded market Spillovers possible

21.4

WEAKNESSES More expensive Need specialist skills Sensitive to starting materials Need new application machinery THREATS Unknown health hazards of nano-powders Existing methods also developing in parallel

The Project

The Provider carried out (paid) market research to identify the potential market need. Truck gear manufacturing was identified and a search found three manufacturers within 500 km. All three were contacted and visits were arranged where the technology, its benefits and advantages were presented. Of the two manufacturers that indicated interest, one decided to fund further development and consider licensing under favourable conditions. An MoU was initially signed and controlled tests were carried out to the satisfaction of the Adopter, leading to the signing of a Licence Agreement.

21.5

Result

With the support of the Provider, an industrial in-line coating application machine was adapted for the new coating method and industrial pilot studies were completed. Field trials followed over a period of 6 months, leading to final acceptance of the

21.6

Lessons

231

enhanced method for industrial production. No health problems were found but production staff are being protected and monitored. No problems reported.

21.6 • • • •

Lessons

Moderate market-pull technology based on previously developed technology. Good added value and cost-effectiveness. Slow acceptance and exhaustive tests before final acceptance. Patience and perseverance!

Chapter 22

Case Study 3: Advanced Energy Cells for Portable Power Tools and Other Devices

Industrial sector Driving force Technology developer Technology adopter Technology transfer facilitator Target market Strategy Financial backing Starting TRL at commencement of TT Final TRL Duration of TT process Prospects

22.1

Energy storage Moderate market-pull European SME None—own manufacturing and selling—some by licensing TT broker networking with provider and end users Manufacturers of power tools Now spilled over into power-consuming device markets Technology supply under licence Own funds with bank loans TRL 5 TRL 9 3 + 4 years Tested successfully by many end users, marketed

Description

Background: A small SME (originally a spin-off from a university working on a new energy principle) developed over a number of years and patented a series of innovative power cells which are light and portable. After satisfactory tests at TRL 5, they contacted end-users for industrial tests. The Market Need: Power tools consume a lot of power and most existing batteries run out very quickly or get weakened by frequent chargings. The market demand is aided by customer dissatisfaction. Important niche markets, such as standalone security lights, isolated lighthouses, etc. also create specialised market need. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_22

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Case Study 3: Advanced Energy Cells for Portable Power Tools and Other Devices

22.2

The Technological Proposal

A new, lighter power cell with much longer lifetime, greater power density and resistance to multiple chargings, better than the competition, had been developed to TRL 5. It had flexible size and relative ease of manufacture, although more expensive at the time. Main principle was patented and then anchored by a number of secondary patents. Some manufacturing know-how kept secret.

22.3

SWOT Analysis

STRENGTHS Higher performance Lighter Resistant to many chargings OPPORTUNITIES Good major markets Opportunities for expansion into niche, high value markets (e.g. space) May open up new markets

22.4

WEAKNESSES More expensive Special skills needed for manufacturing THREATS Unknown hazards of long-term use Need lengthy testing and standardisation Existing power cells also developing in parallel Rare materials needed

The Project

The Developer obtained venture capital funding and carried out market research to identify the potential market need. They concentrated on power tools but other devices were also considered. Once specifications were established, a 6-month period of further development resulted in a good performance margin in comparison to known power cells. A Japanese power tool manufacturer was approached and an MoU was signed, followed soon after by a Licence Agreement with performance clauses. Standardisation and safety tests were carried out.

22.5

Result

Industrial field tests have been successful and the new cells are gradually being introduced into the high-end range of power tools for sale. Cost has been brought down but it is still higher than that of competitors. This seems to be acceptable in the market because of the added performance.

22.6

Lessons

235

In parallel, further development is proceeding apace.

22.6 • • • • •

Lessons

Moderate market-pull technology based on previous extensive RD. Slow overall TT process (6 years) under difficult competitive conditions. Exhaustive and expensive tests before final acceptance due to safety regulations. Costly. Patience and perseverance!

Chapter 23

Case Study 4: Advanced Nanostructured Coatings for High-Precision Turning of Very Hard Materials

Industrial sector Driving force Technology developer Technology adopter Technology transfer facilitator Target market Strategy Financial backing Starting TRL at commencement of TT Final TRL Duration of TT process Prospects

23.1

Machining and turning Market need from adopter Research Centre in North Europe Manufacturers of precision dies, etc. in Europe Initiated by adopter with the help of a broker who found the developer Precision dies for manufacturing high-precision components in electronics Joint venture of three companies + research specialists Own finance with bank loan TRL 3 TRL 9 3–4 years Used in production, further RD for further development

Description

Background: An SME manufacturing very hard dies for precision components (electronics, etc.) identifies the need for improvement of the process to increase productivity and reduce cost. It recognises that if they can finish-turn the dies they could eliminate the expensive and time-consuming diamond-grinding step. With the help of a Broker, the SME locates research specialists working on nanostructured hard coatings, forms a consortium of researchers and SMEs to address the problem and obtains EC funding for a three-year project.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_23

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Case Study 4: Advanced Nanostructured Coatings for High-Precision. . .

The Market Need: Performance of dies depends on their internal finishing. Diamond grinding is usually used to enhance internal finishing but it is expensive and time consuming, thereby compressing profits and reducing market penetration.

23.2

The Technological Proposal

New nanostructured coatings for materials and tooling for finish-turning of very hard materials have been developed as a result of a 3-year EC-funded project. Feasibility studies have demonstrated superior performance vis-à-vis competition. Technology basis is patented by RD institutions but some processing aspects are kept secret by SMEs.

23.3

SWOT Analysis

STRENGTHS Higher performance Quicker finish Lower overall costs Rapid production OPPORTUNITIES Good niche markets Opportunities for expansion into very high value markets (e.g. space)

23.4

WEAKNESSES More expensive Special skills for manufacturing

THREATS Vested interests Existing producers also developing in parallel Strategic materials used

The Project

Promising results were already apparent during the EC-funded project, so the Adopter decided to form an Exploitation group (joint venture) with machine manufacturers whence the exploitation rights of the consortium were transferred to the new group. IPR was decided from the EC project and the researchers kept the rights to continue generic research. Some SMEs continue collaboration with researchers on other projects.

23.6

23.5

Lessons

239

Result

Challenging problem, but eventually solved by innovative spillover from a completely different sector. Being used in production and at least one SME has since expanded into related sector for surface finishing. Patented technologies have added to income from licensing.

23.6

Lessons

• Strong market-pull technology (cost-benefit) based on previous extensive RD carried out first by researchers and then by the EC-funded consortium. • Joint venture was ideal vehicle as it combined materials expertise with machine manufacturing. • Some complications with IPR issues were solved by common agreement to share.

Chapter 24

Case Study 5: Nanostructured Medical Preparation

Industrial sector Driving force Technology developer Technology adopter Technology transfer facilitator Target market Strategy Financial backing Starting TRL at commencement of TT Final TRL Duration of TT process Prospects

24.1

Medicines (for brain treatment) Serious disease which is difficult to treat Researcher in university Large pharmaceutical company (implementer) Common initiation by academic researcher and pharmaceutical company Pharmaceuticals for the brain EC-funded project followed by in-house development by company EC-funding followed by in-house company funding Partly TRL 2, partly TRL 5 Currently at TRL 6–7 Already 6 years, expected total of about 10 years Clinical trials Stage I completed, Stages II and III planned

Description

Background: A researcher at a university lab who had been working for some years with a pharmaceutical company developed independently a novel nanostructured carrier for targeted medicines that can be used for brain treatments. The Market Need: Brain disease treatments are notoriously difficult because of the blood-brain barrier (BBB, a protective evolutionary trait), which does not allow passage of large molecules. If this problem could be solved, many new medical treatments may be developed for brain diseases, including cancer.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_24

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Case Study 5: Nanostructured Medical Preparation

The Technological Proposal

Nanocarriers have the advantage of small size to penetrate the BBB. By adjusting some surface bonds, it is possible to attach various medical compounds to the nanocarrier so that the medicine is delivered to the brain tissues. Over a number of years, the researcher’s group developed a suitable method for developing this approach and, within the EC project, the idea developed to TRL 4 and then further in the lab until close to TRL 5.

24.3

SWOT Analysis

STRENGTHS Unique nanostructured carrier Can penetrate BBB Carrier usable with various medicines OPPORTUNITIES A number of brain diseases almost untreatable Possibility to use in other diseases

24.4

WEAKNESSES Many aspects of mechanism not fully understood Difficult to manufacture carriers reliably THREATS Unknown long-term toxicity of nanostructured carriers Other medicines also under development

The Project

With the support of the pharmaceutical company that worked with him, the researcher decided to develop the nanostructured carriers further in two stages: firstly as a generic technology funded by the EC, and later as an industrial technology funded by the company. For the first stage a consortium was formed together with other companies (some of them normally competitors) and the EC-funded project proceeded mostly successfully. Afterwards, the development continued in the lab while the companies decided whether to proceed or not. Finally, one large company decided to attempt to take it further and is now at the end of the first clinical trials. The others agreed and they all signed an IPR sharing agreement where the main exploitation rights were to be retained by the large company and the rest were to receive licence fees or reciprocal benefits. The researcher still collaborates with the implementing company.

24.6

24.5

Lessons

243

Result

The end result is not yet known but the industrial development appears promising. The results of the clinical trials will decide the final result but this will still take some years.

24.6

Lessons

• A research result taken forward by a consortium and then one of the industrial partners proceeds to take it further. • Very strong market need with very little competition. • Consortium agreement for commercialisation after research project. • Very long process due to health and safety safeguards.

Chapter 25

Case Study 6: Specialist Cross-Platform Interface Software

Industrial sector Driving force Technology developer Technology adopter Technology transfer facilitator Target market Strategy Financial backing Starting TRL at commencement of TT Final TRL Duration of TT process Prospects

25.1

Informatics Market-pull SME in Asia Large multinational hardware manufacturer None—SME contacted adopter directly Software interface for graphics Licensing Mainly own (by SME), but later provided by joint venture TRL 5 TRL 9 About 24 months Already commercialised

Description

Background: Cross-platform communications for graphics is a challenging area. In many cases, interfacing is a slow process with a number of intermediate steps. Research on improving the software controlling such interfaces is a specialist area. The Market Need: Need for speeding up and simplifying interfacing and communications between different computer platforms. This would simplify many systems and aid business and economic development.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_25

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25

Case Study 6: Specialist Cross-Platform Interface Software

The Technological Proposal

A small SME developed a clever and elegant software solution in-house for interfacing graphics across platforms. The solution was much more direct than existing methods and it realised that the software had strong commercialisation prospects. It continued generic development and in parallel approached a number of companies and one large multinational—this last company eventually expressed interest. Further development followed, this time focused on a specific application. The SME decided not to patent (“too risky and expensive”) but to industrialise and keep the source code secret.

25.3

SWOT Analysis

STRENGTHS Rapid and accurate interfacing Can handle nearly all SW platforms Modular and easily updated Generic version easily adapted for specialised applications OPPORTUNITIES May be adaptable to many types of interfacing

25.4

WEAKNESSES Crashes under certain conditions

THREATS Other competitive software under development

The Project

The SME continued development up to TRL 5 when it could demonstrate technical feasibility on nearly all available platforms as well as good reliability. It started to advertise online and to contact software developers. Contacted by a number of potential implementers and eventually decided to form joint venture with hardware manufacturer to develop a specialised version for consumer hardware for high power applications.

25.5

Result

After a few months of industrial development, the manufacturer, supported by the SME, developed it to a beta level and a few months later incorporated it into its hardware. It has been available in the market as embedded software since.

25.6

Lessons

247

SME has kept the generic rights and is able to develop specialised versions for different applications, except the one already applied for which the manufacturer has kept the exclusive global rights.

25.6 • • • • • •

Lessons

A generic software developed as a spill-over from a different application. Good market-pull. Large market for high power applications. SME and specialist implementer formed joint venture. SME kept generic rights for other specialist applications. Implementer kept exclusive rights for the particular application.

Chapter 26

Case Study 7: Low-Cost Inorganic Pigments

26.1

Summary

Industrial sector Driving force Technology developer Technology adopter Technology transfer facilitator Target market Strategy Financial backing Starting TRL at commencement of TT Final TRL Duration of TT process Prospects

26.2

Inorganic pigments for ceramics, plastics, etc. Low strength market-pull Researcher in RC Industrial producer of ceramics Broker liaising with both sides Ceramic tiles Joint venture or licensing Industrial TRL 5 TRL 5—stalled 2 years, negotiations stalled Low, stability unproven, problems with negotiations

Description

Background: Inorganic pigments are used in many industries including ceramics, paper, plastics, etc. for colouring clay body or surface glazing. They are usually made by a slow heating process wherein special compounds (usually oxide ceramics) are allowed to react to form the stable coloured compound. This is mixed in small amounts with the basic material during production. The Market Need: Spreadability and stability are the most important properties of pigments. Generally, black and dark blue pigments are expensive and reds are very difficult to obtain due to banned cadmium. New pigments are needed. Costbenefit is smaller than it appears because industry uses only small amounts. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_26

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26

Case Study 7: Low-Cost Inorganic Pigments

The Technological Proposal

A materials expert in a RC develops a low-cost method for producing inorganic pigments, including blacks, blues, reds, etc. for the ceramic, paper, plastic and other industries. There is a wide range of colours and hues. Production cost is a fraction of competitive processes. Patents are awarded for many of the pigments.

26.4

SWOT Analysis

STRENGTHS Great range of colours Very low production cost Ease of production Very rapid production Red and black colours possible OPPORTUNITIES Good large market Some specialist applications Expanding markets

26.5

WEAKNESSES Some colours less stable Compounds not fully vetted for safety Process not fully reproducible Cost-benefit small because of small amounts of pigments needed in use THREATS Unknown health hazards Vested interests for traditional pigments Difficult to break into markets Market inertia

The Project

With the help of a broker, the researcher approached a large ceramics industry and offered the new pigments. Because of the low cost, the industry agreed to carry out some feasibility tests to test use in the body of bulk ceramics. Promising results were obtained but the need remains for further RD for scaling up and economic validation. The industry offered to form a joint venture with a common production co-management. However, negotiations stalled as the Developer did not agree to take part in co-management, preferring a licence agreement instead. Impasse is still unresolved.

26.6

Result

Negotiations have stalled due to divergent strategy and unwillingness of researcher to take on management responsibility.

26.7

Lessons

251

Prospects: Prospects are not good as the impasse remains with no resolution in sight. In addition, some technological questions remain to be resolved, especially regarding the stability of the pigments in the case of large-scale production.

26.7

Lessons

• Technology-push projects or those with low market-pull are very difficult to get to the market if the market need is not clear or very strong. In this case, the use of pigments in the body of ceramics was not a well-developed market. • Joint venture was offered to ensure that the RD Provider remains in the project. This was not acceptable as a licence was preferred. • Impasse may be resolvable if a Technologist-Manager could be found.

Chapter 27

Case Study 8: Low-Cost Contact Brushes for High-Power Electric Motors

27.1

Summary

Industrial sector Driving force Technology developer Technology adopter Technology transfer facilitator Target market Strategy Financial backing Starting TRL at commencement of TT Final TRL Duration of TT process Prospects

27.2

Electro-mechanical equipment Market-pull (graphite is a “critical raw material” in EU) Researcher at university in Europe Large producer of electric motors (end user) None, direct contact by developer High-power electric motors Spin-off company Private funds + national SME support funds TRL 4 TRL 5–6, TT attempt abandoned 2.5 years Low—cost-benefit too low, problems with wearing down of armature

Description

Background: A researcher at a university developed a new, low-cost material that could be used instead of the carbon brushes used in electrical motors. The material was developed to TRL 4 (laboratory tests) and was shown to be “at least as good as carbon brushes” for contacts in electrical motors (at least as far as wear resistance was concerned). The Market Need: High-power electric motors still mostly use carbon-based contact brushes which wear down after a period, leading to expensive refurbishment © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_27

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Case Study 8: Low-Cost Contact Brushes for High-Power Electric Motors

and factory downtime. Market would be very keen to find new materials for this application.

27.3

The Technological Proposal

The researcher decided to set up a spin-off company to manufacture and industrially develop the new materials. A business plan was prepared, a patent was filed and scaling-up plans were prepared. Some funding was secured from private and national funds. The strategy was to produce and directly supply producers of electric motors. This was helped by the recent identification of graphite as one of the critical raw materials in Europe.

27.4

SWOT Analysis

STRENGTHS Higher wear resistance of brushes “At least as good performance as carbon brushes” Lower cost than carbon brushes OPPORTUNITIES Graphite is one of the “critical raw materials” for EU May be usable for other similar applications, for example, in brake pads

27.5

WEAKNESSES Faster wear of armature

THREATS Carbon brushes are entrenched technology Electric motor manufacturers need guarantees of supply High-power brushless motors appearing

The Project

The Developer’s spin-off continued development of the new brushes and started to scale up production (Stage 6). He also signed agreement with large motor manufacturer to carry out tests directly on industrial motors in parallel to scaling up. Problems with too high wear of armature were addressed by reducing the hardness of the brushes, but this led to a compromise where the brushes would then wear down. Industrial tests were inconclusive.

27.7

27.6

Lessons

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Result

TT attempt abandoned after two and a half years. Cost-benefit has not been assessed, but the industrial company says that “if the performance is only a little improved, there is no point in continuing because the cost of the brushes is too small compared with the whole motor. The biggest cost-benefit would be reduction of downtime at the factory.” Prospects: Unless the wear of the armature can be reduced then the overall performance will be assessed to be low.

27.7

Lessons

• When the technology refers to a component, performance must be assessed in the integrated system—isolated assessment is not sufficient. • Cost-benefit in such cases is mainly unrelated to the cost of the component, since it is generally a very small fraction of the total. However, the operational costs may be severely affected by the performance. This means that in critical components, overall performance is the deciding factor. • A spin-off company should only be considered if the technology is well developed—at least at TRL 7.

Part V

Glory Years, Natural Decline and Renewal

Success in business requires training and discipline and hard work. But if you’re not frightened by these things, the opportunities are just as great today as they ever were. David Rockefeller (1915–) Banker and philanthropist I’m convinced that about half of what separates the successful entrepreneurs from the nonsuccessful ones is pure perseverance. Steve Jobs (1955–2011) Innovator and entrepreneur

Your technology’s entry into the market and its successful adoption by end-users signals the completion of your journey of transformation from a great idea to a promising invention and finally to a valuable innovation. It is a huge success for any inventor and has been a major turning point in the life of many. If they are in a collaboration agreement with an implementing company or in a partnership with a professional manager, many of these inventors are able to balance their responsibilities in the new company with their research efforts and to continue producing new ideas and inventions, some of which may be transformed into fresh innovations. They are the scientist-entrepreneurs, active in both worlds. They tend to be full of energy and full of ideas. Many of the huge global industries in Information Technology, for example, were built by such people and grew to huge sizes thanks to their efforts.

Chapter 28

Glory Years

The first years of any company built on a bright new innovation are indeed the glory years. The new company is respected, feared, even emulated. Its every move and decision is watched and commented upon. The way you went about transforming your idea to a successful, valuable innovation will be dissected and analysed from every angle. Other inventors, in contrast to the scientist entrepreneurs above, are so buoyed by their strong feelings of achievement in having developed their innovation that they take the major decision to leave their research and devote all their energies to building their new business. This is a completely different strategy which offers many benefits but which also carries with it many associated risks. Let’s say you are one of these new entrepreneurs. Your entry into the world of business is the start of a whole new adventure for you and it may be the beginning of a new transformation: that of yourself from a researcher and inventor into a businessman or businesswoman. If all goes well, the glory years will all be due to your own efforts. A word of warning, however, is called for here. Although such a transformation is not rare, it isn’t always successful. As we discussed previously, running your own company as a new entrepreneur requires a completely different set of skills and attitudes. Most recognise this early on and partner with a professional manager to run their company. But it is possible that with time and the right support, you can also learn the ropes. It is extremely challenging but possible. In any case, one thing you should never do—even as a business person—is to forget to nurture and strengthen your inventiveness. Your innovation, the foundation stone of your company, will not remain unchallenged forever. New ideas and new technologies will start pushing against it to displace it. If you successfully managed to replace an entrenched technology, it stands to reason that others will attempt to do exactly the same to yours. The greater the success that your innovation and company enjoys, the greater will be the thirst of competing innovations to dethrone you.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_28

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In the meantime, enjoy the glory years and the triumph of the successful transformation of your idea to a great innovation.

28.1

Going Public

Many entrepreneurs continue working in and leading their companies for years, gradually building them up and strengthening them. They love what they do and make a point of keeping their hand in the company’s operations and steering its course. Other entrepreneurs, once their company is healthy and strong enough to stand on its own, decide to open it up to the world and offer it to the public in an Initial Public Offering (IPO). This means that, after suitable preparations, evaluations and very strict checks by the relevant authorities, the company’s shares are offered on the stock exchange to anyone interested in a piece of the pie. An IPO is of course only carried out for very healthy companies with strong prospects, which often raises large amounts of money for the company. It isn’t rare to see companies becoming overnight financial sensations after their IPO with their market capitalisation increasing many-fold overnight. Of course, the other direction is possible. For example, sometimes a company is so overvalued at the time of the IPO that it immediately loses part of its value. The reason for this is that the evaluation has factored in the future value of the company, after a certain period has elapsed. To make money from such an IPO, you probably need to hold onto your shares for a long time. In any case, entrepreneurs in such cases can become very rich overnight if they are lucky and if the public agrees with their own and the valuators’ opinions. They can then either rest on their laurels or go back to the lab and begin another transformation!

28.2

Under Siege

Every successful company, especially a start-up, will be the target of other companies in the same field and market. A new start-up with a good technology will be seen as the “new kid on the block”, or as an “upstart”. Especially in a market that is limited and niche, any good, competitive technology will be seen as a problem and as a threat. Such problems—the thinking goes—need to be nipped in the bud. Expect attacks and sieges as soon as you start operating. There are many ways in which competitors can try to push you out of the market. If your company is small but with a particularly competitive technology, existing companies in the field might feel threatened enough to start attacking you directly via a price war or even through negative advertising, thinking that you might not be able to remain standing for a long time. Your defence should be to hold on to your markets and continue to advertise and rely on your innovative technology’s high

28.3

In Summary

261

quality and efficacy. But if such an indirect attack does not work, a large competitor might even try to buy you out in an effort to silence or co-opt you. Many other methods of attack are possible and often used. If you are quick off the mark (with good proactivity and preparation even before you launch your company) and your innovation has already become well entrenched in the market (perhaps because of its enabling capabilities or uniqueness in addressing a problem), the siege on your company might become more sustained and insidious. For example, your competitors might try to strong-arm your customers into not dealing with you or use other under-the-belt tactics. In all cases, stick to your high quality and your market openness. No matter what happens, honest businesses always appreciate high-quality products and service. The siege on your company (and on nearly all successful start-ups) will come sooner or later and you need to prepare for it accordingly. You can strengthen your technology’s appeal and relevance in the market. You can offer a wider spectrum of functionalities, better service, custom design and other special features. You need to stand up and be counted because the result of a successful siege on your company can be disastrous. In the software game sector, for instance, companies rise and fall at an incredible rate, reflecting the excitement and novelty that users expect of such products but also the difficulties that new companies have in facing up against an extremely competitive environment. There is, however, one enemy who you will probably never be able to beat, no matter how hard you try: time. No matter how outstanding an innovation, every technology, together with the company built around it, eventually declines unless it is continually supported and renewed. In the next chapter we’ll see how this can be done effectively.

28.3

In Summary

The proof of the pudding is in the eating. And the proof of a successful technology transfer process is in the bottom line. Having succeeded in reaching the market and increasing your income to break-even and beyond is music in a technologist’s ears and an entrepreneur’s bank account. Make the most of it as a successful technology will soon be emulated and may even be the object of a siege by rivals. The quicker you strengthen and consolidate your territory the stronger you’ll become to be able to fight off competition.

Chapter 29

Decline and Renewal

Even without any siege by competitors, technological decline is a natural phenomenon, especially in our modern high-tech society. No matter how successful you become and how much investment you put in your company, the appeal and excitement of your innovation will gradually fade away. This occurs much faster of course in the case of consumer products (hence the need for continual marketing) than in the case of industrial technologies, but to paraphrase Benjamin Franklin: “Nothing in this world is certain, except death, taxes. . . and the decline of a new technology’s appeal.”. So the question arises: how can you ensure that your core technology or your innovative product or service remains pertinent and competitive in the market as your company matures? The simple answer is that you must always ensure that you are one step ahead of the decline. If your innovative technology is threatened by other new ideas and new innovations, it must be strong enough not to be displaced from its core position in your company and from the eyes of the market. In other words, you need to continuously reinvent and renew yourself and your company. The basis of such renewal is to keep your core innovation vibrant and pertinent and always in touch with market needs and wishes. To do this you need to be proactive and learn to follow, to anticipate and to predict your market’s wishes and directions. There are a number of steps you can take to accomplish this: • Maintain a continuous technology and market watch for new technologies and new products, etc. that could pose a threat to your company’s market position. • Monitor the market trends in your particular area and always ensure that your technology addresses associated market demands and needs. • Maintain a strong technological research activity, either in-house or in collaboration with your research group.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_29

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• Ensure that new technologies to support or replace your core technology in your company are continuously in the pipeline either in-house or with the support of your laboratory or your scientific and technological collaborators. • Make sure that the skills of your company’s employees are always up to date. • Diversify—with great care—into other market niches that you can handle and in which you can offer real value. In all cases, keep in close contact with all of the technical and scientific aspects of your company and wider developments. The best way to ensure this will be to retain the technological leadership in your own company—even if the management is in the hands of your manager—and maintain strong collaborations for the scientific aspects with a university or research laboratory. In your company’s own laboratory, you will initially probably be alone or with one or two assistants, but gradually, as your company grows, you will develop a technical team around you covering all the necessary disciplines to keep your core technology well up to date. This team will be your guarantee of technological acumen, sustained competitiveness and continuity and it will always aim for the further development of your core technology. Confidentiality of all developments will have to be preserved at all times, so the more competitive aspects of your new developments will have to be handled in-house. Only general or generic aspects should be left to the university or research laboratories, unless you have complete trust in their ability to preserve confidentiality. Further developments in your company’s core technology may be sourced from all possible fields and be directed towards new applications in new areas, fields or sectors. Be careful not to expand or diversify too far from your core knowledge and area of expertise. As long as you keep within your sphere of technological expertise, you’ll be fine. But remember that even large companies that attempted in the past to diversify or branch out too far from the markets and the users that trusted them found it very hard going and even had losses. Even different territories may be a challenge to succeed in because of significant variations in attitudes and cultures and the impact that these can have on the acceptance of your technology. The simplest advice I can give you is to stick with what you know and do best and concentrate on improving it and enhancing your client base by offering better and better functionality and quality. Keep in close contact with your customers and listen very carefully to their needs. By offering fast and responsive service and reacting promptly and appropriately to their needs and demands, you’ll be sure to build a loyal client base and then grow from there. I would strongly advise against climbing or riding temporary waves built on transient fads. You might make money in the short term but the long-term prospects are always bad. You can of course successfully jump from one wave to another— many software developers are adept at doing this—but this can never really form the basis for a good long-term strategy. Watch carefully how long-term trends build up and prepare for them well in advance. In this way you’ll be able to exploit them for a long time, all the while building the two most crucial hallmarks of business, reputation and quality.

29.1

In Summary

265

Running a business is a hard and strenuous job. But having survived the arduous transformation of your idea to a valuable innovation, you are in all probability very well placed to go far. Prepare and manage everything well and you will stand a very good chance of succeeding. Good luck!

29.1

In Summary

To remain vibrant and healthy, you need to continuously reinvent and renew your company. The basis of such renewal is to keep your core innovation vibrant and pertinent and always in touch with market needs and wishes. To do this you need to be pro-active and learn to follow, to anticipate and to predict your market’s wishes and directions. New products, new directions, diversification, etc. are all healthy methods to remain relevant and economically healthy. As always, proactivity and planning are the main secrets.

Chapter 30

Closing Remarks

The best way to predict the future is to invent it. Alan Curtis Kay (1940–) Computer pioneer, Turing Prize winner

Considering the vast accumulation of technological research results worldwide over the past decades, it is clear that the huge majority of developed technologies has never reached the stage of industrialisation and use. In fact, the almost exponential acceleration of research publications over the past years does not seem to be reflected by any similar increase in technological innovations. A large number of very promising technologies never leave the laboratory. This is obviously a waste of money and effort and a significant brake on economic development. In the European Union, the European Parliament and its executive arm, the European Commission, have recognised this and are now supplementing the large increase in research funding in the Horizon Framework programmes with some measures for supporting the transformation of inventions to innovations. These, in combination with the stronger foresight element in determining topics for funding support and the greater global dimension of the new programme, seem to be the main policies towards helping the Union to return to strong economic growth. It is to be hoped that this time it will be a real growth, less dependent on financial and other services. Will these policies be enough to lead to an economy based on innovations and the application of the knowledge developed? Time will tell, but the fact is that no matter how much support is on offer, it has to be matched with appropriate changes in priorities and attitudes by all stakeholders. Judging from the results of previous attempts at coercing, on the one hand, European researchers to take steps to exploit their inventions and, on the other, European implementers to accept them and put them to use, I am not entirely optimistic. There seems to be a fundamental obstacle at play. Comparing the situation in Europe over the past years with what exists elsewhere, I have come to a simple conclusion that seems to explain the conundrum. It can be © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5_30

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Closing Remarks

summarised in a single phrase: “European risk-aversion.” It certainly is not an exclusively European phenomenon, but it does seem to be prevalent: • Researchers tend to be risk-averse to taking bold steps out of their lab towards industrial development. • Research managers tend to be risk-averse to supporting researchers who think and act along unorthodox lines of enquiry. • Research institutions and research evaluation committees tend to be risk-averse to rewarding researchers who do not publish in scientific journals, as though publications are the correct way to support an economy. • Academic evaluation committees tend to be risk-averse to accepting that the number of academic publications is not the best way to judge a researcher’s real output. • Educated young people tend to be risk-averse to attempting tough industrial placements during their studies and are also risk-averse to going it alone in attempting to make their dreams a reality. • Public funding bodies tend to be risk-averse to offering funding to proposals judged to be less than “scientifically excellent,” at the expense of focusing on the proposed technology’s potential impact. • Private funding bodies tend to be risk-averse to funding any technology that will return anything less than many times their investment in a very short time. • Industrial companies tend to be risk-averse to adopting new technologies, however promising they are. They also seem risk-averse to approaching researchers with their problems and to taking on young apprentices. And yet, without accepting (and duly managing) risk, no technology will ever be transformed to an innovation. Nearly all of the stages we met during our transformation journey involve some measure of risk, the latter stages considerably more so than the earlier ones. By supporting later stage industrial development of technologies, the European Commission is attempting in its new framework programme to mitigate some of the perceived risk during the latter stages. By doing so, however, they run the risk of tempting a possible increase in risk-aversive attitudes in Europe by encouraging an over-reliance on public funds—the very problem that they are trying to counter in the first place. It is the private sector that should shoulder the greater share of industrial funding, not the public sector, especially during the latter stages of the transformation process. Can industry rise to the challenge to take upon itself the mantle of innovation-based growth? Be that as it may, it is the researchers and inventors who have within them the seeds of economic growth. It is in their hands to transform the huge successes of the research they produce into valuable innovations, and risk-aversive attitudes can only be an obstacle to this. The answer to the impasse must always begin with education, from the earliest age. If pupils and students learn to appreciate the value of the adage “nothing

30.1

In Summary

269

ventured, nothing gained,” perhaps they will remember it one day when, as researchers and inventors themselves, they arrive at a crossroads with a very promising technology in their hands. It is at that crucial junction that they will have to decide between life in the lab and the challenging but risky journey from invention to innovation.

30.1

In Summary

The vast majority of technologies developed in the millions of laboratories worldwide never reaches the stage of industrialisation and use. This is a great loss to the global economy and society in general. The solution must be connected to the education and training of all stakeholders involved, from as early as possible. By accepting already at the university teaching stages that technological research must have an impact on society more ideas and inventions will end up becoming valuable innovations. On the flip side, manufacturers will also benefit hugely when they recognise that the solutions to most of the challenges they face probably already exist in a laboratory near them.

Appendices

Appendix A Sample of a Non-Disclosure Agreement (NDA) This must be signed by both parties before any disclosure or demonstration of the technology or negotiations takes place. Also called a “Confidentiality Agreement”. NON-DISCLOSURE AGREEMENT BETWEEN THE UNDERSIGNED: COMPANY A A company, duly formed under the Laws of XXX, whose headquarters are located at-----------, registered under the number, duly represented by its Chief Executive Officer, --------------Hereinafter called as “Company A” AND Company B A company, duly formed under the Laws of XXX, whose headquarters are located at-----------, registered under the number, duly represented by its Chief Executive Officer, --------------Hereinafter called as “Company B” Hereinafter collectively referred to as “the Parties”. WHEREAS: 1. COMPANY A is an industrial company manufacturing high-technology machinery and equipment such as ---------------– using a technology based on -----------(hereinafter called as “the Technology”). COMPANY A declares to own a patent pertaining to the Technology. The Technology has already been installed and is successfully operating at ---------- factory, which manufactures --------- (hereinafter called as “the Factory”).

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5

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2. COMPANY B is an industrial company manufacturing ------– and is willing to visit the aforementioned Factory on December 5th and 6th 2007 (hereinafter called as “The Visit”) 3. COMPANY A declares to possess information, technical knowledge and data of confidential nature relating to the Technology. • COMPANY A wishes to establish business cooperation with industrial companies globally with the aim of marketing, licensing and/or selling the Technology. • COMPANY B has expressed its interest in business cooperation with COMPANY A, wherein COMPANY A may be contracted to install and license to use one or more industrial units based on the Technology in one or more factories owned by COMPANY B its subsidiaries or affiliates. 4. COMPANY A is willing to disclose specific and limited parts of such information (as set below) to COMPANY B during the said Visit on the condition that COMPANY B does not disclose the same to any Third Party nor make use thereof in any manner except as set out below. More specifically COMPANY B will be granted to the following parts of information • External Visual inspection of the facility at the Factory • Taking of sample clay products in order to conduct its own tests • Industrial results of using the facility in production, such as materials quality, reduction in drying time and running costs IN CONSIDERATION OF SUCH DISCLOSURE, IT IS AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS: 1. During the Visit of the Factory, COMPANY B undertakes that any oral or written information relating to the Technology which may come to its knowledge as a result of the Visit such as the form, materials and design of various elements of any relevant equipment which may be seen at the Factory, the methods of operation thereof and the various applications thereof shall be kept confidential. 2. COMPANY B undertakes not to divulge to any Third Party any of the information disclosed by COMPANY A during the Visit of the Factory and not to use any of the information without COMPANY A’s prior written consent. “Third Party” shall mean all persons but employees who have an interest to the aforesaid information. 3. COMPANY B shall take all reasonable measures to protect the confidential nature of this information in order to prevent it from falling into the public domain or possession of a Third Party. 4. The above undertaking shall not apply to: a) information which, at the time of disclosure, is published or otherwise generally available to the public,

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b) information which, after disclosure by COMPANY A, is published or becomes generally available to the public, otherwise than through any act or omission on the part of COMPANY B, c) information which COMPANY B can show was in its possession at the time of disclosure and which was not acquired directly from COMPANY A, d) information rightfully acquired from others who did not obtain it under the pledge of secrecy to COMPANY A. 5. The disclosure of any confidential information herein shall not be construed as granting, either expressly or by implication, any rights or any license, copyright or other intellectual property right owned or controlled by COMPANY A. 6. COMPANY A and COMPANY B are independent contractors and nothing contained in this Agreement shall be construed in any manner as a partnership, joint venture, co-ownership or participation in ventures or an obligation to enter into further contract between the Parties. 7. The Parties agree that after 2 (two) years from the date of the Visit, COMPANY B shall be relieved from all obligations under this agreement. 8. All disputes arising in connection with this agreement which cannot be resolved amicably shall be finally settled according to the relevant provisions of the European Union legislation and the Courts of --------- shall be competent with regard to any conflicts or claims that may rise from this NDA. 9. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorised representatives, effective as of the date hereof. Signed and stamped at ---------, on---------------COMPANY A Signed and stamped at ---------, on---------------COMPANY B

Appendix B Sample of a Memorandum of Understanding (MoU) This must be signed by both parties before any meeting is held to discuss possible collaboration for Technology Transfer or a business transaction or any negotiations. MEMORANDUM OF UNDERSTANDING between, on the one hand: ---------------------– hereinafter referred to as “The Provider” and on the other: XXXXXXXXXXXXXXXXXXXXXXX hereinafter referred to as “The Adopter” 1. Declarations a) The Provider is an industrial company manufacturing high-technology machinery and equipment based in -----------b) The Adopter is an industrial company producing and marketing------------products via a number of operating units globally, either directly or under its subsidiaries and affiliate companies. c) The Provider has developed and owns the Intellectual Property Rights worldwide of the technology and know-how pertaining to---------------(hereinafter referred to as “The Technology”). d) The Provider states that ------------– 2. Purpose a) The Provider is interested in establishing business collaborations with industrial companies globally with the aim of marketing and selling The Technology. b) The Adopter has expressed its interest in a potential business collaboration with The Provider wherein The Provider may be contracted to install and sell one or more industrial units based on The Technology in one or more factories owned by The Adopter, its subsidiaries or affiliates. Both these purposes are hereinafter referred to as the “Purpose”. 3. Aims and objectives a) This Memorandum of Understanding (MoU) aims at establishing a commonly acceptable general agreement under which The Provider and The Adopter will cooperate to fulfil the above stated Purpose. This agreement is intended to establish the necessary framework towards that aim. b) Specifically, this MoU aims at encouraging and enabling open discussions between the two Parties in order to fulfil the Purpose. c) The specific objectives of this MoU are: © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5

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• To assure compatibility of efforts of both parties with specific regard to fulfilling the “Purpose” in a mutually beneficial way • To lay out specific confidentiality safeguards to protect both parties in their efforts in fulfilling the Purpose 4. Mechanisms of Interaction To facilitate the above mentioned objectives between both parties the following mechanisms of interaction may be utilised: • Written or telephonic or live discussions between legally appointed representatives of The Provider and The Adopter which will: • Discuss the actual status of collaboration • Define or re-define the detailed purposes of the collaboration and any needs for improvements • Define common future strategies • Plan common visits and meetings • Define and re-define any confidential aspects of The Technology, The Adopter’s operations and the collaboration in general • Prepare common statements to their organisations • Prepare any necessary agreements and/or contracts towards fulfilling the Purpose • Activate any other mechanism necessary to fulfil the Purpose • Visit to one of the operating installations of The Technology in order for: • The Provider to demonstrate the industrial operability and parameters of operation of The Technology • The Adopter to carry out on-site inspection of The Technology, its operability and parameters of operation. 5. Confidentiality a) It is hereby specifically declared by The Provider and explicitly agreed to by The Adopter that, with the objective of fulfilling the Purpose, it will be necessary to disclose and divulge a number of confidential aspects of The Technology, its scientific basis and its operating parameters. The actual extent of disclosure and specific aspects thereof, may be in writing, orally or visually during any on-site visit to any installation of The Technology or any meeting between the parties. b) The Adopter specifically agrees that any confidential information that may come to its attention must never be communicated, disclosed or otherwise made known to any other third person or party, without the written approval of The Provider. c) The Adopter specifically agrees that it will not at any time use or utilise any or all of the confidential information pertaining to The Technology and any operations of The Provider to any person or other party, for its own or any other party’s interests or benefit, without the written approval of The Provider. d) The Adopter agrees that it will not initiate, aid or undertake any manufacturing, installing or operating any machinery or equipment for pre-drying or thermally

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conditioning earthenware ceramics using Microwaves and/or Resonance Frequency irradiation in any of its plants or those of its subsidiaries or affiliates or those of any third party, without the written approval of The Provider. e) The Adopter agrees that it will never help or aid any third party in manufacturing or building or operating any such machinery, without the written approval of The Provider. f) In case any equipment or machinery for pre-drying or thermally conditioning earthenware products using Microwaves and/or Resonance Frequency irradiation is installed and is operable and/or operated in any of The Adopter’s plants and those of its subsidiaries and/or affiliates, the Adopter specifically agrees that such equipment or machinery is based on The Technology and therefore The Provider owns all rights thereof. g) The Adopter agrees to notify The Provider in writing immediately as soon as any information comes to its attention that any equipment or machinery that uses Microwaves or Resonance Frequency irradiation is used or operated anywhere for pre-drying or thermally conditioning earthenware ceramics. 6. Administrative Policy The cooperation based on this MoU will be encouraged and followed up by the two parties. It is understood and agreed by both parties that this MoU will in no way supersede or obviate the necessity for complying with any and all requirements of applicable laws or regulations to which the activities and parties, either separately or collectively, would otherwise be subject and all agreements should be constructed on this basis. In a spirit of cooperation and on behalf of the above mentioned parties the undersigned hereby approve this Memorandum of Understanding and indicate their commitment to execute the spirit of this agreement. The Provider’s Managing Director The Adopter’s Managing Director

Appendix C Sample of a Technology Transfer (Licensing) Agreement (Pilot or Industrial Testing Installation) LICENCE AGREEMENT In ------------– today the [●] amongst the contracting parties: 1. the Société Anonyme ---------------- with registered offices in -------------, with VAT No. -------, legally represented by its Managing Director ------------ (herewith called THE ASSIGNOR’), and 2. The Société Anonyme ---------------– [●] with the trade name [●] and the brand name [●], with registered offices (according to articles of association) [●], (full address), VAT [●], legally represented by Mr. [●] (legal representative / administrator / managing Director ) (herewith called the ASSIGNEE) Having considered that: I. The ASSIGNOR engages in the development and the industrial application of advanced technologies in connection with the processing of materials ---------– with applications in the ---------– industries, in ---------– and other areas as well as in the commercial exploitation of those technologies. More specifically the ASSIGNOR a. has developed a ------------ technology for ----------by the use of electromagnetic irradiation, has legally submitted to the ---–Industrial Property Organisation the PATENT applications bearing the Numbers ---------- for acquiring Patent protection for these technologies covering Greece and the other European Union Countries and all the countries under the world Patent Cooperation Treaty (herewith called the PATENT), which constitutes an integral part of the present Agreement. b. The protected intellectual property includes i. The electromagnetic irradiation ---------- Technology for ---------- products (herewith called the Technology) and ii. the specific mechanical devices for the production and supply of said electromagnetic radiation for the Technology, incorporating licensed proprietary third party technologies (herewith called the UNITS) which shall be considered additionally to the Technology as confidential and secret technology and know-how of the ASSIGNOR and are being designed, merchandised and installed by the ASSIGNOR and may be manufactured by third party contractors under the close supervision of the ASSIGNOR. iii. The specific metallic construction for the safe application of the Electromagnetic radiation on the ------– products or other materials, © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5

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incorporating licensed proprietary third party technologies (herewith called the CAGE) which shall be considered additionally to the Technology as confidential and secret technology and know-how of the ASSIGNOR and are being designed, merchandised and installed by the ASSIGNOR and may be manufactured by third party contractors under the close supervision of the ASSIGNOR. For reference reasons the Units and the Cage together will be called PRODUCTS. iv. The Technology the Units and the Cage, together, constitute the Electromagnetic ---------- System (THE TECHNOLOGY & PRODUCT/ S) which are being designed, produced and merchandised by the ASSIGNOR and are being described in ANNEX 1 of the present Agreement. c. The ASSIGNOR has invested significant amounts for the research, development and production of the Products and has developed and possesses a system of methods of organizing and of conducting procedures for production & quality control and provision of installation services, maintenance, support and development (herewith called the KNOW-HOW) for the PRODUCTS d. The ASSIGNOR has secured the cooperation, the usage license of additional and any supportive technology, and the know-how of foreign natural or legal entities that may be used with the Technology or the Units or the Cage. -----Ceramic Industry, being one of its leading Groups [description of activities] and wishes to use the knowledge, the expertise and the experience of the ASSIGNOR and to acquire a License to use the Technology and the Products in its installations, under the terms of the present Agreement. II. The ASSIGNOR accepts the proposal of the ASSIGNEE, under the terms and the conditions of the present Agreement. THE CONTRACTING PARTIES HEREWITH AGREE AND MUTUALLY ACCEPT THE FOLLOWING: 1. SCOPE OF THE AGREEMENT: 1.1. The ASSIGNOR hereby grants to the ASSIGNEE for the whole duration of this Agreement, the License to Use the Technology and the Products, (according to the provisions of ---– and relevant European Union legislation) of which the ASSIGNOR is the sole legal beneficiary, as well as of any lawful deriving rights. The ASSIGNEE, by signing this Agreement, has the right to use only by industrially applying the Technology in its factories and installations Worldwide. 1.2. The Patents and the Know-how of the Technology and the Products, as well as their commercialising rights remain in every case the sole property of the ASSIGNOR. 1.3. Moreover, the ASSIGNOR reserves all its exclusive rights concerning the methods and the procedures of production, installation, maintenance and support of the mechanical devices for the application of the technology

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(UNITS) and the CAGE (see above I.b.ii & iii). The above rights shall be exercised by the ASSIGNOR, according to the provisions of this Agreement (and of any amendments thereof), according to the principles of Bona Fide and transaction ethics. 2. LEGAL CHARACTERISTICS OF THE LICENSE 2.1. The license to use the Patent and the know-how, pursuant to this Agreement is non-exclusive, concerns only use and not commercialisation, is non transferable and cannot be inherited. 2.2. Therefore: 2.2.1. The ASSIGNOR, during the whole duration of the present, reserves the right to enter into agreements, either license agreements or agreements for commercialisation with third parties in connection with the Patent and the Know-how over the Technology and the Products, as well as to use and exploit for itself in any ways the Patent and the Know-how of the Technology and the Products, that constitute the scope of this Agreement. 2.2.2. The ASSIGNEE is prohibited to further transfer or to appoint any substitutes in this license or to sub-license to any third parties, without the prior written consent of the ASSIGNOR. 3. EXTENT OF THE LICENSE ASSIGNOR grants the ASSIGNEE the simple non-exclusive License to use its patent and know-how in all its factories and installations in all other countries and territories. 4. LEGALITIES The parties declare that they are independent companies acting exclusively in their own risk and profit; and this agreement does not constitute or implies any inclination of the parties in forming a common company or trust or adopt a coordinated price or sale policy with regard of the PRODUCTS. 5. DURATION The total duration of the License is agreed by the contracting parties to be twenty five (25) years from signing of this agreement. 6. MAIN OBLIGATIONS OF THE ASSIGNOR 6.1. License of improvements or amendments The ASSIGNOR has the obligation to notify the ASSIGNEE and to further grant License to the latter for any modifications or improvements or new applications effected by the ASSIGNOR to the Products throughout the duration of this Agreement. 6.2. Instructions 6.2.1. The ASSIGNOR shall provide instructions to the ASSIGNEE (and its authorised personnel) at the ASSIGNEE’s premises or installations (the related travel and accommodation costs to be undertaken

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by the ASSIGNEE) on the use of the PATENT and the KNOWHOW of the TECHNOLOGY and the PRODUCTS. 6.2.2. The instructions contain information, which constitutes intellectual property of the ASSIGNOR. The ASSIGNEE agrees to keep all such information confidential throughout the duration of this Agreement and after termination in general, or expiration or termination after renewal, or termination after prolongation, and to include similar obligation in any contracts with any clients, or third contractors, of the ASSIGNEE. 6.2.3. The ASSIGNEE has the obligation to return the instructions (when written) to the ASSIGNOR upon termination or expiration of this Agreement, or to provide written proof that all instructions are totally destroyed. 6.3. Validity of PATENT and KNOW-HOW 6.3.1. The ASSIGNOR expressly declares that the PATENT and KNOWHOW over the TECHNOLOGY and the PRODUCTS do not violate any legal rights of third persons and that no litigation, legal proceedings, law means and suits are instituted against the License of the PATENT and KNOW-HOW over the TECHNOLOGY and the PRODUCTS. 6.3.2. The ASSIGNOR has the right and obligation to take all adequate measures to protect the PATENT and the Know-How, especially to avoid any infringements of the intellectual property rights of the Patent and the Know-How; At the same time it maintains its right to unilaterally terminate the agreement in case the ASSIGNEE jeopardises the validity and commercialisation of the License and any rights thereof, which remain with the absolute acting and decision of the ASSIGNOR and any of its affiliates. 6.4. Ordering Of The PRODUCTS And Collaboration Procedure 6.4.1. When the ASSIGNEE wishes to have The Electromagnetic ------------- System installed in one of its factories, the following procedure will be followed 6.4.1.2. the ASSIGNEE will notify the ASSIGNOR on the technical parameters of the order so that the ASSIGNOR can rightly appreciate the order’s requirements and set the time and the way of fulfilment of its own obligations (e.g. manufacture and installation of PRODUCTS). 6.4.1.2. The PRODUCTS are manufactured according to the qualitative criteria, directives and controls of the ASSIGNOR. The total number of the specific mechanical devices for the production and supply of electromagnetic irradiation (the UNITS), the serial number, the drawings and

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technical characteristics of the metal construction (the CAGE) and other relative information will be mentioned in the Mechanical Design of Installation and Operational Function of the Electromagnetic ------ Systems (DESIGN) in the productive process of each Factory or Installation of the ASSIGNEE. 6.4.2. The DESIGN will be drafted with responsibility and diligence by the ASSIGNOR (with the collaboration of the ASSIGNEE) within four (4) months (from receipt of a notification for an order from the ASSIGNEE). Both sides will make their best efforts and they will contribute with their technicians and with their special knowledge in order to draw the DESIGN in the most adequate way for the successful operation of the ASSIGNEE’s installation or factory and of the PRODUCTS. 6.4.3. The ASSIGNEE shall have the right (unless agreed otherwise) of manufacturing and installing all metal, electrical and other relevant parts of the CAGES (with the exception of Units and their controlling sub-systems), pursuant to the DESIGN. 6.4.4. The ASSIGNEE also retains the sole responsibility for securing (with the full support and involvement – when and where requested – of the ASSIGNOR) that all the legal requirements for the permitted use of the PRODUCTS into the ASSIGNEE’s installation or Factory are satisfied and also for establishing proper foundations, housing and electricity supply for the PRODUCTS, installing cables, and such other matters as are necessary (according to the DESIGN) to prepare the area for installation consistent with applicable laws, regulations, building codes and any real property lease(s) of ASSIGNEE. 6.4.5. The ASSIGNEE must take into consideration the instructions and advice of the ASSIGNOR. The ASSIGNOR shall be released from any relevant liabilities or obligations in case the ASSIGNEE chooses to proceed without taking into consideration the advice and instructions of the ASSIGNOR. 6.4.6. The ASSIGNOR will install the PRODUCTS at ASSIGNEE’s location, following ASSIGNEE’s preparation of the installation area at ASSIGNEE’s expense according to the DESIGN and all instructions provided by the ASSIGNOR. 6.5. Mechanical Devises For The Application Of The Patent And The Know-How ("Units") 6.5.1. The ASSIGNOR has the exclusive right and the exclusive responsibility to manufacture, to install and apply the UNITS, and the various controlling sub-systems, according to the DESIGN.

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6.5.2. The ASSIGNOR shall retain title to and ownership of the UNITS, and the same shall be returned to the ASSIGNOR (shipping prepaid by ASSIGNOR), at the termination of this Agreement in their current condition. ASSIGNEE agrees to use the UNITS for the purposes of this Agreement only at ASSIGNEE’s location identified into the relevant DESIGN. It is duly noted again that the UNITS are hereby being leased to ASSIGNEE for as long as they operate properly and anyway for the whole duration of this agreement (see article 4 above). 6.5.3. The study, the designing, the manufacture, the installation or reinstallation or uninstallation, the maintenance, the replacement and most importantly, the environmentally friendly recycling of the UNITS will be always a responsibility of the ASSIGNOR and is not further transferred. The ASSIGNOR maintains the right to add and to modify in any manner the designing and the manufacture of the UNITS and the CAGE, taking always into account the operational needs of the ASSIGNEE. 6.5.4. Repair of damage (Service) / Guarantee of good operation: The UNITS are guaranteed for 4,000 hours of operation (which corresponds to about 10 years of service life, depending on operational schedule) under the following conditions: (a) that no exterior intervention will have occurred in any of the parts of the UNITS and (b) that maintenance will be effected exclusively by the experts of the ASSIGNOR. Any defective UNITS will be replaced free of charge within the 4,000 hours of operation of the guarantee by the ASSIGNOR’s experts and with the ASSIGNOR’s responsibility. The ASSIGNEE undertakes full responsibility for any damages that will occur to the UNITS during installation and operation of the Electromagnetic Dehumidifier System, and are attributed to the ASSIGNEE’s negligence. 6.5.5. The ASSIGNOR and its experts or its service representatives will provide repair and maintenance services for the UNITS during the ASSIGNEE’s normal repair service hours, which are ([●]:00 a.m. through [●]:00 p.m. local time, Monday through Friday), excluding any holidays. 6.5.6. ASSIGNEE’s expert personnel, properly trained and authorised by the ASSIGNOR may be allowed to replace defective UNITS from an adequate stock always available at the factory’s stores. Defective units will have to remain sealed at all times and shipped back to the ASSIGNOR within a week after removal from the SYSTEM. Any and all damages due to harm or personal injury caused to anybody violating the sealing of the UNITS, is solely the ASSIGNEE’s responsibility and will give to the ASSIGNOR the right to unilaterally terminate this agreement.

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6.5.7. ASSIGNEE shall bear the cost for repair services or replacement if any UNIT’s malfunction is caused after the expiration of the guarantee period or by negligence, misuse, accident, fire, variation or interruption of electricity, or any attempt to service the Equipment other than by ASSIGNOR’s experts or service representatives (including the addition or removal of any third party hardware, peripherals or software). 7. MAIN OBLIGATIONS OF THE ASSIGNEE 7.1. The ASSIGNEE has the obligation to use the granted know-how in the best possible way, acting with prudence, taking into consideration the concepts of bona fide and transaction ethics. 7.2. The ASSIGNEE should make visible and explicitly state that the ASSIGNOR is the owner/ beneficiary of the know-how as well as of the method applied, which constitutes the Patent. 7.3. The ASSIGNEE shall also have the obligation to safeguard all rights of the ASSIGNOR in connection with the Patent and the know-how, and also their operation methods (guarantee, service, replacements, etc.) as specified in this Agreement, 7.4. Quality and Safety Specifications 7.4.1. The ASSIGNEE has the obligation to observe the minimum quality specifications, including the technical specifications, concerning the application of the Patent and of the know-how for which the license has been granted. More specifically 7.4.1.2. The ASSIGNOR retains a supervision right for the proper application of those regulations by the ASSIGNEE. 7.4.1.2. Any infringement of these specifications shall cause unilateral termination of the Agreement by the ASSIGNOR, the ASSIGNEE being the defaulting party. In case of no conformation with such responsibility, the ASSIGNOR shall be immediately released by any liabilities due to malfunction of the technology of the Patent and its know-how. 7.4.1.2. The ASSIGNEE shall supply itself with the mechanical devices for the application of the technology (UNITS) exclusively from the ASSIGNOR or from the third party providers which the ASSIGNOR will designate and which will conform with all specifications of quality and safety. 7.4.2. Only the ASSIGNOR or third party authorised providers are competent to make audits for the conformation with the safety rules according to the internationally applied rules. The ASSIGNOR will conduct such audits, using its own personnel which shall be suitably accredited by the competent certification authorities, or it can use accredited authorities of its own choice.

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7.5. License Fees – Maintenance 7.5.1. LICENSE FEE: The ASSIGNEE has the obligation to pay to the ASSIGNOR a License Fee, according to ANNEX 2 of this Agreement, for the granting of the License to use of the patent and the know-how of the Technology and the Products. The ASSIGNEE has the obligation to pay the Fees to the ASSIGNOR on the dates and in the exact amount as stated in ANNEX 2. 7.5.2. MAINTENANCE FEE: The ASSIGNOR’s will be entitled to a Maintenance Fee for the follow-up of the good operation and maintenance of each UNIT of the PRODUCTS, which will be remitted on a yearly basis and is specified in ANNEX 2 of this Agreement. 7.5.3. All amounts mentioned in this agreement are exclusive of VAT and thus may be encumbered with VAT when and where is required. 7.5.4. In case that during the term of this Agreement, the know-how comes to a public usage for reasons other than those connected with the ASSIGNOR, it is explicitly agreed that the ASSIGNEE shall continue to pay the Fees to the ASSIGNOR up to the expiry of this Agreement. 7.5.5. Deferred interests: All the amounts that have to be paid from the ASSIGNEE to the ASSIGNOR according to this agreement, in case of delay more than 15 days, shall be encumbered with the current EURIBOR interest rate plus 3 units. The ASSIGNEE further acknowledges that the present article does not constitute an agreement for the ASSIGNOR to accept such payments after the defined payment date or the commitment of the ASSIGNOR to provide credit or funding in any way towards the company of the ASSIGNEE. The ASSIGNEE recognises that delayed payments shall constitute a significant reason for unilateral termination of this Agreement by the ASSIGNOR, according to the provisions of article 8 of this Agreement. 7.5.6. Any payments to the ASSIGNOR shall be paid to the bank account of the ASSIGNOR specified in Annex 2. 7.6. Information – Reports – Audits 7.6.1. The ASSIGNEE shall immediately report to the ASSIGNOR any actions or events that might have negative consequences to the proper use of the Patent and its know-how over the Products by the ASSIGNEE. 7.6.2. The ASSIGNOR has the right at any time to inspect the premises, where the Products are installed. 7.7. Industrial and Intellectual Property Rights. Ownership On The Industrial and Intellectual Rights (and Reputation Arising From Them). Any illegal use or use against the terms of this

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Agreement of any of the Industrial and Intellectual Property Rights by the ASSIGNEE will constitute breach of contract. 7.8. Restrictions In The Use Of The Industrial And Intellectual Property Rights By The ASSIGNEE 7.8.1. The ASSIGNEE shall not use the Industrial and Intellectual Property Rights in any way that it has not been allowed and approved in writing by the ASSIGNOR. 7.8.2. The ASSIGNEE (either itself or its subsidiaries and affiliates, or any surrogate natural or legal person) specifically promises not to register or apply for registration for the PATENT and the KNOW-HOW for the TECHNOLOGY & THE PRODUCTS or any other confidential items belonging to the ASSIGNOR. In the event of the ASSIGNEE being defaulting in this specific provision, the ASSIGNOR may unilaterally terminate the Agreement and a penalty of ------– (--------) Euros shall be forfeited against the ASSIGNEE without prejudice to any further rights and damage claims of the ASSIGNOR. 7.8.3. Indemnification. 7.8.3.2. Each party shall indemnify, defend and hold harmless the other party, its past and present directors, affiliates, partners, officers, employees and agents, from and against all liabilities, damages and expenses, and claims for damages, suits, proceedings, recoveries, judgments or executions (including but not limited to litigation costs, expenses, and reasonable attorneys’ fees) arising out of or in connection with any claim that the use of the indemnifying party’s system or data (including, without limitation, hardware, software, peripherals, technical specifications, configurations or addresses) by the other party infringes any third party patent, copyright, trademark or other property right. 7.8.3.2. Each party shall indemnify, defend and hold harmless the other party, its past and present directors, affiliates, partners, officers, employees and agents from and against all liabilities, damages and expenses, claims for damages, suits, proceedings, recoveries, judgments or executions (including but not limited to litigation costs, expenses, and reasonable attorneys’ fees) which may be suffered by, accrued against, charged to or recoverable from the other party, its past and present directors, affiliates, partners, officers, employees or agents by reason of or in connection with the other party’s performance or failure to perform, or improper performance of any of the other party’s obligations under this Agreement.

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7.8.4. The ASSIGNEE will immediately inform the ASSIGNOR on any infringements or claims by third parties on the Industrial and Intellectual Property Rights of the ASSIGNOR that by any chance come to its attention, so that the ASSIGNOR will be able to defend its legal interests. 7.8.5. The ASSIGNOR, at its absolute judgement, has the right to take any measures that may deem proper against any infringement, violation, offence, challenge or claim and has the exclusive right to set and decide upon any compromise, litigation, arbitration or any other act either out of court or in front of any judicial or administrative authorities in connection with the above. Any action will be carried out by the ASSIGNOR, who will pay all the legal expenses and expenditure that may occur. 7.9. CONFIDENTIALITY 7.9.1. Confidential information supplied by one party to another pursuant to this Agreement is for the exclusive use of the receiving party and shall not be disclosed or made available to any other person, firm, corporation or governmental entity in any form or manner whatsoever; provided, however, that in the event Confidential Information is subpoenaed or otherwise requested or demanded by any court or governmental authority, the receiving party shall give written notice to the disclosing party prior to furnishing the same and shall, at the request of the disclosing party, exercise reasonable business efforts in cooperation and at the sole expense of the disclosing party, to quash or limit such request, demand and/or subpoena. The receiving party’s obligations include treating Confidential Information with at least the concern and protective measures accorded any trade secrets, proprietary or confidential information and materials of the receiving party. Nothing herein shall be construed to require the disclosure of Confidential Information to the receiving party, or to require the receiving party to accept Confidential Information. 7.9.2. The ASSIGNOR possess and maintains the ownership (as well as all the rights that arise from it) of the information that constitutes the content of the technology, that are not widely known and constitute commercial/industrial confidential assets of the ASSIGNOR’s and of third persons who granted License to the ASSIGNOR for the use of their intellectual and industrial property. 7.9.3. The ASSIGNEE acknowledges that the Confidential Information constitutes the exclusive property of the ASSIGNOR, contains professional secrets of the ASSIGNOR, is not widely known or easily accessible, is important for the ASSIGNOR and provides commercial and industrial advantages to the ASSIGNOR with regard to the research, growth, production, exploitation of the

Appendices

7.9.4.

7.9.5.

7.9.6.

7.9.7.

7.9.8.

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PRODUCTS and the provision of services that is the subject of this Agreement. The ASSIGNEE explicitly undertakes the obligation to keep and preserve as strictly confidential any of the above Confidential Information and NOT to copy them, reveal, use, publish, channel or with any other way announce to third persons, in whole or in part, at any time, without the previous written consent of the ASSIGNOR. Independently of the above obligation, the ASSIGNEE will make use of Confidential Information exclusively for the fulfilment of its rights and obligations as set forth in this Agreement. The ASSIGNOR also acknowledges that the information it has access to through the right of access to ASSIGNEE’s facilities is of a confidential and proprietary nature, and ASSIGNOR may hereinafter have access to other information of ASSIGNEE (especially the specific results of tests that the ASSIGNEE’s experts may obtain when using the PRODUCTS into the ASSIGNEE’s industrial process) which is of a confidential and proprietary nature, and could result in great harm to ASSIGNEE if any such confidential or proprietary information is directly or indirectly (i) used by ASSIGNOR for any purpose other than as specifically set forth herein, or (ii) disclosed to any third party. Accordingly, ASSIGNOR agrees not to disclose or allow access to such information to any third party. ASSIGNOR agrees that a breach of these conditions shall be grounds sufficient for immediate termination of this Agreement, and legal as well as injunctive relief. Upon termination of this Agreement for any cause or reason, ASSIGNOR agrees to deliver to ASSIGNEE all materials or information (especially plant plans or designs and production and cost related data) supplied pertaining to ASSIGNEE and shall also confirm that all copies of such material have been returned to ASSIGNEE or destroyed. The communication in any way of the Confidential Information of any of the Parties by any directors, personnel, collaborators of the other party to third persons shall be considered as breach of contract from the defaulting party pursuant to the terms and stipulations of this Agreement. Confidentiality obligations shall be binding for the ASSIGNEE for an additional five-year term after the termination or expiry of this Agreement unless the Confidential Information devolves to public use for reasons that cannot be attributed in wilful omission or negligence misconduct of the ASSIGNEE. The ASSIGNOR and the ASSIGNEE agree that, in the case of breach of this art. 6.9. of this Agreement by any one of the contracting parties, the offending party will make reparations of value equal to the contract affected at the time for each infringement of the present article.

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8. EXPIRATION - TERMINATION OF THE AGREEMENT 8.1. This is fixed-term Agreement, as stipulated in article 4; Expiration occurs according to article 4. 8.2. The present agreement however may be terminated at any time without any compensation and unilaterally with immediate effect in case of bankruptcy, or insolvency, or if the ASSIGNEE fails to pay, or admits in writing its inability to pay debts as they become due; or the ASSIGNEE applies for, consents to, or acquiesces in the appointment of, a trustee or other custodian, or makes a general assignment for the benefit of creditors; or any bankruptcy, reorganisation, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law in respect of the parties; or any dissolution or liquidation proceeding in respect of the ASSIGNEE; the aforementioned apply if the parties proceed with the foregoing voluntarily or involuntarily; or any of Creditors of any of the parties take any action against such party in connection with the foregoing. 8.3. The present agreement may also be terminated at any time unilaterally with immediate effect if the ASSIGNEE decides, 8.3.1. during the first 12 months of the duration of this agreement and 8.3.2. after gaining in depth confidential knowledge of the ASSIGNOR’s technology through the use of a specially designed Electromagnetic Desiccation and Drying System (see ANNEX 3) which will be installed into its Research Centre in [●] 8.3.3. that it has no interest in further using the desiccating and drying technology for clay and clay products by the use of electromagnetic irradiation. In this case 8.3.3.7.1. The ASSIGNEE will only pay the first instalment of the agreed License Fee as stipulated in ANNEX 2. 8.3.3.7.2. The ASSIGNOR will bear the cost of the specially designed Electromagnetic ---– System (see ANNEX 3), will return to ASSIGNEE the amount received (--- Euro) minus the costs of dismantling and shipping of the System to ASSIGNOR’s premises. 8.3.3.7.3. THE ASSIGNEE further promises that it will abstain from using the Electromagnetic ------- technology or conducting any research and development and industrial application work on this field for a period of ten (10) years after the lapse of this twelve (12) month period. 8.4. The unilateral termination of this Agreement will be acceptable, upon prior written notification received by the other party. In all cases unilateral termination effects start after the lapse of a 30-day period after reception of the aforementioned notification by the other party. Important reason for unilaterally and without any compensation terminating the agreement, may

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be considered any breach of contract, as herein and only indicatively mentioned, i.e.: in case of 8.4.1. payments in arrears for more than 30 days owed by the ASSIGNEE to the ASSIGNOR originated by this License Agreement 8.4.2. disclosure of Confidential Information to third persons, 8.4.3. Infringement in any way by the ASSIGNEE of the intellectual and commercial rights of the ASSIGNOR on the PATENT and KNOWHOW and, especially breach of any terms that concern the mechanical devices for the application of the technology ("UNITS"). It is noted that similar confidentiality obligation has being undertaken by the ASSIGNOR on its turn against third parties that have licensed their know-how to the ASSIGNOR. In case of breach of this term, the ASSIGNOR maintains its right to claim either directly indemnity and damage claims for itself, or – in the event of infringement against any rights of its third contractors – to cede any of its rights for indemnity and damage claims to them; or even to claim and institute proceedings against the ASSIGNEE for the indemnity and damage claims that the ASSIGNOR will be forced to pay to its third contractors. 9. RIGHTS AND OBLIGATIONS AFTER THE TERMINATION OF THE CONTRACT - COMPLAINT - INTERRUPTION OF USE OF PATENT 9.1. With the termination or expiration, for any reason, of this Agreement, the ASSIGNEE must interrupt immediately the use of the licensed technology. 9.2. INDUSTRIAL AND INTELLECTUAL PROPERTY RIGHTS AND OTHER RIGHTS 9.3. Immediately after the termination/expiration of the present contract, the ASSIGNEE has the obligation to: 9.3.1. immediately return to the ASSIGNOR, the UNITS, copies of any directives and all the reserves in literature, data, information, samples, brochures, advertising material and other material that was given to the ASSIGNEE throughout the duration of the agreement or to declare officially and in writing that such material was destroyed. 9.3.2. To cease presenting themselves in any way as ASSIGNEE, holder of the licence or in any other way related to the ASSIGNOR, to interrupt the use of any Industrial and Intellectual Property Rights, in any way and for any purpose as well as NOT to use henceforth any professional and commercial secrets, forms, trade marks, inventions, methods, procedures, models or other materials of the ASSIGNOR or anything of the above that might imply the existence of any relation between the ex-parties.

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10. WAIVER 10.1. Each contracting party may waive in writing unilaterally any claims against the counterparty. The above waiver enters in effect upon receipt of the relative written notice. 10.2. The contracting parties will not be released of or considered to have waived their rights, powers or their obligations arising from this Agreement due to violation of the terms of this Agreement or due to omission or negligence on behalf of them to exercise any rights according to this Agreement or to pressure the counterparty to abide by the stipulations of this Agreements. The long-term acceptance of infringements from the counterparty cannot be considered as waiver or concession. 11. APPLICABLE LAW - JURISDICTION Applicable Law for any dispute arising in connection with the validity, implementation and interpretation of the present agreement is the ---- Law and the relevant legislation of the European Union and exclusively competent Court, by prior mutual agreement of the parties, is set the Court of ------. The applicable law covers also the legal procedural issues, the special proceedings regarding negotiable instruments, the provisional remedies, etc. 12. COMPLETE AGREEMENT It is explicitly agreed that this Agreement, as well as all the ANNEXES attached, constitute the integral Agreement and prevail to any previous agreement, additional or coexisting, written or oral, or statement written or orally agreed by the parties. All rights and obligations generated between the contracting parties by virtue of any previous agreements remain in effect. 13. MODIFICATIONS The present agreement can only be modified by written agreement between the ASSIGNEE and the ASSIGNOR. Each modification agreement can be evidenced only in writing, not even under oath, even in the case of loss of the document. 14. NOTIFICATIONS All written notices and reports allowed and required to be sent according to this Agreement and the directives, will be considered received (a) during the delivery time by hand, (b) two (2) working days after they have been sent by a delivery service (courier) or electronic means and (c) five (5) working days after they have been sent by registered post, letters of prepaid rates or letters with proof of delivery, and should be addressed to the central offices of the contracting part to be notified. In witness whereof the present agreement is executed in two (2) similar prototypes, one for the ASSIGNOR and one for the ASSIGNEE, which are validated by the competent Tax Offices. The present is to be registered in the Ο.Β.I. in a month’s time from the date of signature.

Appendices

THE CONTRACTING PARTIES FOR THE ASSIGNOR FOR THE ASSIGNEE ANNEX A: Technical Description of the Technology ANNEX B: The Patent ANNEX C: Financial Terms and Payment Conditions ANNEX D: Installation agreement (Article 7.3)

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Suggestions for Further Reading

Cambridge University Entrepreneurs, accessed at: http://www.cue.org.uk/ Drucker, Peter F., “Innovation and Entrepreneurship” Elsevier, 3rd edition, 2007 Enterprise Europe Network, European Commission Service, accessed at: http://een.ec.europa.eu/ services/technology-transfer Entrepreneurship at Harvard Business School, accessed at: http://www.hbs.edu/entrepreneurship/ Fraunhofer Institute Venture, accessed at http://www.fraunhoferventure.de/en.html Horizon Framework Programme, European Commission, accessed at: http://ec.europa.eu/ programmes/horizon2020/ MIT Inventor’s Guide to Technology Transfer, accessed at: http://web.mit.edu/tlo/www/ downloads/pdf/inventors_guide.pdf North Carolina State University “Inventor’s Guide to Technology Transfer”, accessed at: http:// research.ncsu.edu/ott/files/2011/12/Inventors-Guide-1.pdf Oxford University “Starting a spin-out company”, accessed at http://www.isis-innovation.com/ researchers/spinout.pdf Stanford University Inventor’s Guide, accessed at: http://otl.stanford.edu/documents/ OTLinventorsguide.pdf

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 G. Vekinis, Mastering Technology Transfer: From Invention to Innovation, Studies on Entrepreneurship, Structural Change and Industrial Dynamics, https://doi.org/10.1007/978-3-031-44369-5

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