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Market Assessment Overview,Domestic/International R&D Funding Trends
and Future Technology Development Forecast
William ChardNational Technology Transfer Center (NTTC)
September 19, 2006
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America’s Investment In The Future “America’s sustained economic prosperity is based on technological
innovation made possible, in large part, by fundamental science and engineering research. Innovation and technology are the engine of the American economy and advances in science and engineering provide the fuel. They have generated new knowledge and new industries, created new jobs, ensured economic and national security, reduced pollution and increased energy efficiency, provided better and safer transportation, improved medical care and increased living standards for the American people. These investments builds intellectual capital, integrates research and education and promotes partnerships.”
Dr. Arden Bement
Director, National Science Foundation
March 29, 2006
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The Bottom LineGovernment:Fund basic and applied research to create new discoveries & technologies as a catalyst for national growth.
Perform targeted basic and applied research related to an agency’s mission & goals.
The Constitution of the United States:…”form a perfect Union, establish Justice, insure domestic Tranquility, provide for the common Defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity…”
Industry:To develop technologies that satisfies corporate objectives.
To bring new products to market.
Create wealth, contribute to the country’s economic well being and satisfystockholders and investors
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The Bottom Line
Academia:
Perform basic and applied research that benefits society
Educate & train the citizens of the world
Expand human knowledge
“Sharing ideas and innovations in the service of society’s well-being”
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Major Federal Agency’s TT ActivitiesFederal Agency
R&D
Appropriation
2005
$B
Invention Disclosures
2003
Patent
Application
2003
Patents
Issued
2003
Total
Active
Licenses
1999-2003
Total
License
Income
1999-2003
$M
Earned
Royalty
Income
1999-2003
$M
USDA 2.22 121 60 64 270 2.3 1.6
DOC 1.14 21 5 9 101 0.1 0.1
DOD 70.92 1,332 810 619 364 10.0 ---
DOE 8.61 1,469 866 627 3,687 25.8 6.6
EPA 0.66 14 23 8 32 0.9 ---
HHS 29.08 472 279 136 1,380 55.2 38.3
DOI 0.63 --- --- --- --- --- ---
NASA 10.19 736 163 136 521 2.8 0.8
DOT 0.67 --- --- --- --- --- ---
VA 0.87 183 36 8 88 0.1 ---
TOTAL 124.99 4,348 2,242 1,607 6,443 97.2 47.4
Average License Income = $15,086 (about ¾ are non-exclusive licenses)
Average license execution time = 1.4 to 10.1 months
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Federal R&D and TT Initiatives• Legislation that authorized & supported TT functions at all federal
laboratories• R&D Funding• Federal Funded R&D Centers (FFRDC)• Contract Research• CRADAs & SAAs• Facility & Software Usage Agreements• Material Transfer Agreements• Guest Scientists & Engineers• SBIR/STTR Programs• ATP Program• Consortia & Alliance Programs• R&D Tax Credits• R&D Incentive Prizes• FLC
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Importance of Market Assessment
FACT: TT requires Skill, Patience, Resources & some Luck
FACT: TT is an extremely dynamic environment
FACT: TT is not a high percentage business
FACT: TT requires good communication & marketing skills
FACT: Difficult to measure success (metrics)
FACT: Revenue generation should not be primary goal
FACT: TT is driven by the market place
Role of Market Assessment
Decrease the Risk & Maximize Chances of Success
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Key Market Assessment Goals
Identify Outside Drivers:
• Market Need & Potential
• Technology & Product Competition
• Market Barriers
• Market Size, Profile & Trends
• Qualify Candidate Commercial Partners
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U.S. Industry R&D Spending (2006)$B
• Pharmaceuticals 76,875• Motor Vehicles & Car Bodies 47,487• Semiconductor 26,966• Prepackaged Software 23,009• Radio, TV Broadcast, Communications 17,518• Computer & Office Equipment 11,689• Conglomerate 10,489• Radiotelephone Communications 9,419• Electrical, Electrical Equipment 9,274• CMP Programming, Data Processing 8,492
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R&D Expenditures at Universities and Colleges, by Source of Funds and Science and Engineering Field: FY 2004 (Millions of current dollars)
Field Federal R&D
USDA DOD DOE HHS NASA NSF Other*
All R&D
expenditures27,379 761 2,478 940 14,083 1,098 3,232 3,145
Computer sciences
1,028 2 303 32 27 39 411 119
Environmental sciences
1,596 44 140 68 31 232 521 474
Life sciences 15,744 618 390 129 12,062 105 484 1,261
Agricultural sciences
868 430 12 19 81 15 97 188
Biological sciences
5,504 461 121 66 4,247 45 347 308
Medical sciences
9,372 27 257 44 7,734 45 40 765
Mathematical sciences
319 2 31 7 50 5 154 25
Physical sciences
2,567 7 307 365 431 337 720 208
Psychology 587 0 27 0 435 10 46 56
Social Sciences 695 35 24 5 249 15 97 233
Engineering 3,902 34 1,205 306 225 346 720 613
SOURCE: National Science Foundation/Division of Science Resources Statistics, Survey of Research and Development Expenditures at Universities and Colleges, FY 2004
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Global R&D SpendingCountry R&D as % GDP
2004
R&D 2005*
Billions $Australia 1.54 9.75
Brazil 1.60 28.22
Canada 1.90 19.77
China (Mainland) 1.5 125.49
Taiwan 2.20 12.42
France 2.20 44.46
Germany 2.20 52.84
India 1.40 52.88
Israel 3.60 4.82
Italy 1.10 17.93
*Forecast
Sources: R&D Magazine, Battelle, OECD, World Bank
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Global R&D SpendingCountry R&D as % GDP
2004
R&D 2005*
Billions $Japan 3.20 123.33
Korea (South) 2.90 28.06
Mexico 0.50 5.28
Russia 1.24 18.66
Singapore 2.80 3.79
South Africa 0.90 5.09
Spain 1.10 10.58
Sweden 3.90 10.32
UK 2.00 36.78
U.S. 2.70 312.20*Forecast
Source: R&D Magazine, Battelle, OECD, World Bank
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Source of R&D Funds
Country Industry Government Academia Other
Funds from
abroadAustralia 46.3% 45.7% 4.8% 3.3%
Brazil 32.2% 60.2% 1.6% ---
Canada 46.2% 25.4% 21.0% 7.9%
China (Mainland) 57.6% 33.4% 6.3% 2.7%
France 52.1% 38.4% 1.5% 8.0%
Germany 65.4% 31.9% 0.4% 2.3%
India 23.0% 74.7% 2.3% ---
Israel 69.6% 24.7% 2.9% 2.8%
Italy 43.0% 50.8% --- 6.2%
SOURCE: R&D Magazine, Battelle, UNESCO
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Source of R&D Funds
Country Industry Government Academia Other
Funds from abroad
Korea (S) 74.0% 23.9% 1.7% 0.4%
Mexico 30.6% 61.0% 7.4% 1.0%
Russia 30.8% 59.6% 0.6% 9.0%
Singapore 49.9% 41.8% 1.1% 7.2%
South Africa 49.4% 33.0% 10.0% 7.0%
Spain 48.9% 39.1% 5.2% 6.8%
UK 46.7% 26.9% 5.9% 20.5%
U.S. 61.2% 31.3% 7.3% ---
SOURCE: R&D Magazine, Battelle, UNESCO
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Top Corporations Patenting in the U.S.
• Over the past six years only 2 to 3 U.S. corporations
are in the annual top ten U.S. patent list.
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International PatentsBased on original country of application (priority filling country)
Country 2004 2005* 2006*
Australia 4,262 4,130 4,000
Brazil 3,768 3,980 4,280
Canada 3,181 3,075 2,910
China (Mainland) 43,455 46,500 48,000
Taiwan 10,148 11,100 12,000
France 13,270 14,000 14,600
Germany 55,487 56,500 57,800
India 668 800 900
Israel 654 650 700
Italy 4,877 4,900 4,400
Japan 342,808 346,000 350,000
Korea (South) 79,558 82,000 86,500
*Forecast
SOURCE: Thomson Scientific, Derwent World Patents Index, R&D Magazine, Battelle.
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International PatentsBased on original country of application (priority filing country)
Country 2004 2005* 2006*Mexico 326 380 370
Russia 19,297 20,300 21,200
Singapore 315 320 320
South Africa 1,090 1,040 990
Spain 2,279 2,320 2,400
Sweden 2,334 2,150 2,000
UK 12,290 12,350 13,000
U.S. 167,414 168,900 169,100
*Forecast
SOURCE: Thomson Scientific, Derwent World Patents Index, R&D Magazine, Battelle.
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Top 10 Most-emphasized U.S. Patent Classes for Corporations from United States (2003)
1. Business practice, data processing2. Surgery: light, thermal, and electrical applications3. Computers and digital processing systems4. Data processing, file management5. Surgery instruments6. Data-processing software7. Wells8. Prosthesis9. Processing architectures10. Input/output digital processing systems
NOTES: Rank based on patenting activity index for nongovernmental U.S. or foreign organizations, which areprimarily corporations. Patenting by individuals and governments excluded.
SOURCE: U.S. Patent and Trademark Office, Office of Electronic Information Products, Patent TechnologyMonitoring Division, special tabulations (December 2004).
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Top 10 Most-emphasized U.S. Patent Classes for Corporations from Germany (2003)
1. Printing2. Clutches and power-stop control3. Land vehicles, bodies, and tops4. Machine element or mechanism5. Brake systems6. Power delivery controls, engines7. Internal combustion engines8. Metal forming9. Valves10. Joints and connections
NOTES: Rank based on patenting activity index for nongovernmental U.S. or foreign organizations, which areprimarily corporations. Patenting by individuals and governments excluded.
SOURCE: U.S. Patent and Trademark Office, Office of Electronic Information Products, Patent TechnologyMonitoring Division, special tabulations (December 2004).
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Top 10 Most-emphasized Patent Classes for Corporations from Japan (2003)
1. Electrophotography2. Television signal processing3. Computer storage and retrieval4. Photography5. Photocopying6. Liquid crystal cells7. Ceramic compositions8. Facsimile9. Power delivery controls, engines10. Optical image projector
NOTES: Rank based on patenting activity index for nongovernmental U.S. or foreign organizations, which areprimarily corporations. Patenting by individuals and governments excluded.
SOURCE: U.S. Patent and Trademark Office, Office of Electronic Information Products, Patent TechnologyMonitoring Division, special tabulations (December 2004).
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Top 10 Most-emphasized U.S. Patent Classes for Corporations from South Korea (2003)
1. Liquid crystal cells, elements, and systems2. Electric lamp and discharge devices3. Semiconductor device manufacturing process4. Dynamic magnetic information storage or retrieval5. Electric lamp and discharge systems6. Static information storage and retrieval7. Brushing, scrubbing, and general cleaning8. Television9. Refrigeration10. Active solid-state devices
NOTES: Rank based on patenting activity index for nongovernmental organizations, which are primarilycorporations. Patenting by individuals and governments excluded.
SOURCE: U.S. Patent and Trademark Office, Office of Electronic Information Products, Patent TechnologyMonitoring Division (2004).
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Top 10 Most-emphasized U.S. Patent Classes for Corporations from Taiwan: 2003
1. Semiconductor device manufacturing process2. Electrical connectors3. Electrical systems and devices4. Circuit makers and breakers5. Electric power conversion systems6. Active solid-state devices7. Typewriting machines8. Substrate etching process9. Sheet-feeding machines10. Illumination
NOTES: Rank based on patenting activity index for nongovernmental organizations which are primarilycorporations. Patenting by individuals and governments excluded.
SOURCE: U.S. Patent and Trademark Office, Office of Electronic Information Products, Patent TechnologyMonitoring Division (2004).
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Number of Graduates in STEM and Non-STEM Fields1994-1995 through 2003-2004 Academic Years
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Estimated Numbers of Employees in STEM Fieldsfrom Calendar Years 1994 through 2003
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Major Technology Development Issues & Trends
Science and technology are key drivers in economic growth, Improved health and quality of life. Over half of U.S. economicgrowth over the past 50 years relate to advances in technology ofwhich major funding was provided by federal governmentsupporting about 65% of the U.S. basic research and 58% of academic research. U.S. political & world impacts will occurWhich disrupt long term continuity of existing programs.
R&D programs are typically not ends in themselves but the means to the end of agency missions (short term). A majorconcern is the long term health of the overall enterprise.
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Major Technology Development Issues & Trends
• Current administrative priorities are:Defense DevelopmentSpace ExplorationPhysical Sciences ResearchHome Land Security
• Reduction in U.S. rate of growth for industry and federal R&D
• Federal R&D funding expanding slightly, dominated by defenserelated programs & war on terrorism, but decreasing based onpercent of GDP.
• Major focus has been on large development programs (DOD,Space, DOE).
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Major Technology Development Issues & Trends
• Basic research continues to be primarily performed by academiaand funded by the federal government.
DOE up 14.4%NSF up 8.3%NIST up 21%
• Tough allocation choices by all agencies in setting priorities andsustaining programs continuity.
• Federal agencies are being motivated to collaborate on R&Dbecause of budget cuts.
• The development of new & improved goods, services &processes continues to be performed by industry (90%).
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Major Technology Development Issues & Trends
• U.S. industry spends more on tort litigation than R&D
• Major R&D investment is geographically concentrated in the U.S. as well as globally.
• U.S. continues to increase Consortia, Contract R&D, CRADAsand Collaborations & Partnerships, domestic as well as global.
• U.S. Trade Balance continues to worsen. The $500B/year is 80% of world’s net savings.
• The savings rate in U.S. is 3%, Asia is 30%.
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Major Technology Development Issues & Trends
• Product manufacturing & technology services will continue to move off-shore.
• About half of IBM’s 190,000 S&T staff reside overseas
• Rapid industrialization, technology IP development and growth in Asia, Europe, Taiwan & South Korea.
• Israel & China increasing prominence as technology exporter.
• U.S. export of Hi Tech goods & services high althoughdecreasing and passing conventional manufacturing. Imports of High Tech exceeds exports.
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Major Technology Development Issues & Trends
• U.S. continues as net exporter of manufacturing technologies as IP.
• VC investments targeted the formation & expansion of small
Hi-tech companies in software, medical/health, Internet and
biotech. Over the past 25 years the average seed-stage
investment increased from $700K to $1.4M.
• Biotech IP remains high but not as active.
• Of the 120 major chemical plants under construction, 1 is in the U.S. and 50 in China.
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2006 Presidential R&D Priorities
• Climate Change
• Combating Terrorism
• Hydrogen Fuel
• Nanotechnology
• Networking & Information Technology
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Strategic Technologies for 2020• Genetic based medical & healthcare products• High-power energy packages• Green Integrated Technology (GIT)• Omnipresent computing• Nanomachines• Personalized public transportation• Designer foods & crops• Intelligent goods & appliances• Worldwide inexpensive & safe water• Super sensors
Battelle Technology Forecasts
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Primary Areas of Human Needs
• Clothing• Communications• Education/Training• Employment/Income• Energy• Food/Water• Healthcare/Medicine• Housing• Information• Personal/National Security• Transportation
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New Product/Technology Trends• Compact/Miniaturization
• Environmentally Friendly
• Global In Scope
• Highly Efficient
• Highly Secure
• High Speed
• Intelligent
• Less Expensive
• Long Life
• Multifunctional
• Nutritional
• High Reliability
• User Friendly
• Low cost/High profit
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Major Market Areas for Future Technological Development
• Autonomous Devices, Machines & Manufacturing Systems• Advanced Detection, Monitoring & Tracking Systems• Biometric Security & Identification Systems• Biological organic-inorganic hybrid systems• Environmental Friendly Materials and Processing Systems• Fuel Efficient Transportation Systems• Genetically Designed Agriculture Plants & Food• Genetic Based Medical & Healthcare Products• High Performance Computing• Intelligent & Secure Information Management Systems• Multifunctional, Imbedded, Wireless Sensors• Non-invasive & Non-destructive Imaging• Renewable Energy Sources• Smart Materials & Systems
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The National Technology Transfer Center
316 Washington Ave
Wheeling, WV 26003
1-800-243-NTTC (6882)
www.nttc.edu
William Chard
(304) 243-2039
