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CommercializatioCommercialization Challengesn Challenges
Eli Fathi, Sorin Cohn & Andrew Maxwell
The Federal Partners in Technology Transfer The Federal Partners in Technology Transfer Conference in Ottawa Conference in Ottawa
June 17, 2009June 17, 2009
Table of Content
Innovation & CanadaInnovation & Canada
Impact of GlobalizationImpact of Globalization - Flat WorldFlat World
Commercialization ChallengesCommercialization Challenges
Gaps to Commercial Success
Technology Transfer Offices’ Technology Transfer Offices’ ChallengesChallenges
Canada & Innovation in the Flat Canada & Innovation in the Flat WorldWorld
3
Innovation - Definitions
An invention is the creation of a new device or process for the purpose of solving a specific problem and/or need
Not all inventions turn into a viable commercial success:
Technological barriers - not feasible with current technology
Lack of acceptance by the population
Financial - too expensive
Not practical
Innovation takes an invention and overcome these obstacles to generate a viable commercial product/service/process
4April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Innovation - DimensionsInnovation - Dimensions
Technology Innovation What How (R&D Process, including outsourcing)
Manufacturing & Operations Innovation Operations & Scalability
Internal Processes External Processes: supply & sales chains
Commercialization Innovation Marketing
IngressIngress = get meaningful info from the market EgressEgress = convince market of company info
Sales Execution
Customer Satisfaction
Globalization has changed the competitive landscapeGlobalization has changed the competitive landscape
5April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Universal access to information makes competition global
Sales and marketing costs are dominant
The BRIC factor: Transfer jobs to where the market is. Brazil, India, Russia, China, etc. are becoming significant in market size, manufacturing costs and innovation prowess
Net transfer of jobs to developing countries: off-shoring
Complex Relationship: Customers, Competitive, Cooperative
Ownership is associated with the strongest player in the market chain
Industry transition: from Integrated Product paradigm to Specialized Services Industry
Impact of Globalization – Flat Impact of Globalization – Flat WorldWorld
6April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Integrated Productoduct Economy
DesignDevelopment
ManufacturingManufacturingMarketing
SalesSupportH
um
an R
esou
rces
IT &
Su
ppor
t
It is all about product control &product control &direct cost minimization
7April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Specialized Services EconomySpecialized Services Economy
ManufacturingServices
DevelopmentServices
MarketingServices
HRServices
InvestmentServices Support
Services
SalesServices
ITServices
DesignServices
“Office”Services
LegalServices
It is all aboutCollaboration &Collaboration &Value creationValue creationin Companies in Companies Network
Services
8April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Playing in a Flat WorldPlaying in a Flat World
Thomas Friedman success guidelines for global markets:
Do not build walls around your company
Small companies must act big companies
Big companies must act small companies
Collaborate and cooperate with other companies
Continuously examine your operations with the view to improve it
Outsource non-core value operations with the view to grow the company and not to shrink it
Thomas Friedman, The World is Flat, 2005
9April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Elements of CommercializationElements of Commercialization
IdeaIdea TechnologyTechnology ProductProductMarket Market ChannelChannel
Satisfied Satisfied CustomerCustomer
Viable BusinessViable Business
IdeaIdea “Commercialization”from Idea to Technology to Prototype...
ProductProduct Commercializationfrom Product to Channel to Customer to repeat Business...
“Commercialization is the exchange of product/service for money”
(According to Dr. Doug Barber from McMaster )
10April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
The Complete Company The Complete Company
e.g. Telecom – service, h/w, product, etc e.g. Devices – Si design, Optoelectronics,
Fabs, etc e.g. BioTech - ...
Industry & Domain Industry & Domain Expertise Expertise
(Technical & (Technical & Market)Market)
Management & Management & Leadership SkillsLeadership Skills
AccessAccess
e.g. Vision e.g. Corporate & Product
management e.g. Project delivery e.g. Marketing e.g. Sales execution e.g. Customer support
e.g. Customers – globally e.g. Capital - globally e.g. Business influencers -
globally
11April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Commercialization - Problem Analysis Commercialization - Problem Analysis
$RevenuesEmployment level$Earnings
Time
$?? M /yr$?? M /yr
$?? M /yr$?? M /yr
$?? M /yr$?? M /yr
““Failed”Failed”
““Stalled”Stalled”
““Target”Target”
Too many technology companies can not pass certain thresholds
There appear to be barriers other than demand (e.g., access to capital, global channels to market, business savvy) that are insurmountable for most companies
Thresholds and barriers may differ by sector (cluster)
12April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Commercialization & Community ImpactsCommercialization & Community Impacts
Balanced Growth Balanced Growth CommunityCommunity
Early Startups (Technology Stage)
Maturing Startups (Product Stage)
Small Businesses
Medium
LargeG
Early Startups (Technology Stage)
Startups (Product)
Small businesses
Medium
LargeG
$0.5M$0.5M
$5.0M$5.0M
$50M$50M
$500M$500M
$5B$5B
Market Throttled Market Throttled CommunityCommunity
RevenuesRevenues
$0.0M$0.0M
Commercialization Loss & Company Size DistributionCommercialization Loss & Company Size Distribution
13April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Gaps to Commercial Success Gaps to Commercial Success
IdeaIdea
Trench to Product•Skills•Investment•Business Culture
Chasm to Market •Marketing & Sales•Global Culture•Investment•Access & Connectivity•Customer Support•Innovation Centres
•University Labs•Government Labs
IdeaIdea
IdeaIdea
IdeaIdea
IdeaIdea
IdeaIdea
IdeaIdea
IdeaIdea
Start-upStart-up
Start-upStart-up
Start-upStart-up
ViableViableCompanyCompany
Innovation Gap
Commercialization Gap
14April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Gaps to Full Success & Their SolutionsGaps to Full Success & Their Solutions
Innovation Gap - moving from an idea stage to developing first prototype
Solution: Create and support a culture for Solution: Create and support a culture for entrepreneurshipentrepreneurship
Business Commercialization Gap - turn a prototype into a market-demanded product/service
Solution: Create a culture of commerce Solution: Create a culture of commerce
Conference Board of Canada 2007 ranked Conference Board of Canada 2007 ranked Canada in the 14Canada in the 14thth palace out of 17 countries palace out of 17 countries in Innovationin Innovation
15April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Gaps to Commercial SuccessGaps to Commercial Success
IdeaIdea TechnologyTechnology ProductProductMarket Market ChannelChannel
Satisfied Satisfied CustomerCustomer
Viable BusinessViable Business
Idea “Commercialization”from Idea to Technology to Prototype...
Product Commercializationfrom Product to Channel to Customer to repeat Business...
Commercialization SupportCommercialization Support
16April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Innovation in CanadaInnovation in Canada
Canada’s prosperity in a global economy is dependent on:
Be innovative and create Intellectual Property (IP)
Commercialize inventions = Successful conversion of inventions into thriving businesses
Be timely to market - Rapid implementation of new innovations
Identify new market opportunities
Expand market reach outside of Canada
Canada must rely of innovation to maintain its competitive edgeTechnology Transfer Offices play a major role in Technology Transfer Offices play a major role in implementing Canada’s commercialization effortsimplementing Canada’s commercialization efforts
17April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Challenges for Technology Transfer OfficesChallenges for Technology Transfer Offices
Over 80% of TTOs do not make money from their licensing activities (Bostrom, 2005)
Excluding technologies licensed to inventor, more than 90% of innovations patented by TTOs do not recover costs (Blake,1993)
TTOs rarely have required financial or human resources to optimize commercialization potential (Litan et al. 2007)
TTOs operate under the same as their institution. This limits with decision-making speed and risk tolerance (Lockett & Wright, 2005)
Less than 17% of opportunities commercialized are taken to market through a new venture (Markman et al. 2005a)
18April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
New Ventures RisksNew Ventures Risks
Competitive riskMacro-economic risk
Performance riskDevelopment risk
Financial riskImplementation risk
Commercial risk assessment, management and mitigation Commercial risk assessment, management and mitigation are skills not easily available in a government or academic are skills not easily available in a government or academic institutioninstitution
(Rothaermel et al., 2007)
19
The Federal Government & the TTOs The Federal Government & the TTOs
Focus on knowledge transfer (preferably to Canadian entities) - not license revenue
Commercialization should occur in the private sector: Streamline transfer processes to accelerate innovations’ emergence from
technology labs into actual business undertakings Mitigate risks for industrial partners to encourage increased industry
interactions with TTOs Nurture collaborative relationships with and within industry:
bidirectional knowledge flows , contract research, internships and industrial exchanges
Empower TTOs Provide adequate Mission, Staff and Program Resources Staffed by individuals with substantial private sector experience in
business development and technology commercialization
20April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
What Can TTOs Do to Accelerate Success?What Can TTOs Do to Accelerate Success?
Reduce focus on license income and focus on facilitating new venture creation as a viable option to licensing
Increase collaboration with similar institutions and with industry - knowledge flows, contract research, internships and industrial exchanges
De-risk technology commercialization by encouraging industrial deployment and/or filing patents
Find early adopters and/or foster new technology ventures
Support partnerships/collaborations aimed at commercializing innovation
Forge relationships with large organizations more capable to access market
Minimize effort spent until a real market opportunity is validated
21April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
Summary: Canada in Global Summary: Canada in Global MarketsMarkets
Investments in R&D innovative ideas are necessary but not sufficient to secure business success
Greatest risk factors involve market development and business leadership
Developing channels to market is costly and time consuming
RecommendationsRecommendations
Foster culture of innovation in academic institutionsFoster culture of innovation in academic institutions Become a feeder system/farm team to businessesBecome a feeder system/farm team to businesses Encourage support of Colleges to SMEsEncourage support of Colleges to SMEs
Accelerate the build up of SMEsAccelerate the build up of SMEs Typically idea rich and resource poorTypically idea rich and resource poor Require significant support to get innovation to product to marketRequire significant support to get innovation to product to market
Outsource effectively and efficiently non-core value Outsource effectively and efficiently non-core value operations operations
Develop global connectivityDevelop global connectivity
22April 20, 2023 Proprietary & Confidential to OrbitIQ Inc.
The Future is Bright
After all one must remember that you are: Braver than you believeBraver than you believe
Stronger than you seem, and Stronger than you seem, and
Smarter than you thinkSmarter than you think
as Christopher Robin Told Winnie the Pooh in Pooh’s Grand Adventure
Canada has all the ingredients to Canada has all the ingredients to create global companies and be create global companies and be successful on the global markets successful on the global markets (such as RIM)! (such as RIM)!
Thank You
Eli Fathi, CEO
OrbitIQ
Dr. Sorin Cohn, President Global Operations
OrbitIQ
Andrew Maxwell
Canadian Innovation Centre
www.orbitiq.com
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