National Science Council, TaiwanNational Science Council, TaiwanDecember 2003December 2003

Technology Commercialization: Technology Commercialization: Bringing Innovations to Market Bringing Innovations to Market

in the Digital Economy in the Digital Economy Dr. David V. GibsonDr. David V. GibsonAssociate DirectorAssociate Director

IC² Institute, IC² Institute, The University of Texas at AustinThe University of Texas at Austin

U.S. TechnopoleisU.S. Technopoleis

Sillicon Sillicon ValleyValley

SeattlSeattlee

MinneapolMinneapolisis

Colorado Colorado SpringsSprings

Sall Lake Sall Lake CityCity

Los AngelesLos Angeles

San DiegoSan Diego

PhoeniPhoenixx

PortlanPortlandd

BostoBostonn

Troy-Troy-AlbanAlbanyy

DallasDallas

AustinAustin

San San AntonioAntonio

OrlandoOrlando

Raleigh-Raleigh-DurhamDurham

New New YorkYork

The Austin TechnopolisThe Austin Technopolis

In the 1980s Austin was known In the 1980s Austin was known for being the state capital and a for being the state capital and a university town with a university town with a oil/ranching/cowboy culture – oil/ranching/cowboy culture –

the city was NOT known for the city was NOT known for

entrepreneurship, start-ups, entrepreneurship, start-ups, venture capital, or High Tech. venture capital, or High Tech. Jobs were mostly in government Jobs were mostly in government and education and the area could and education and the area could not retain most of its educated not retain most of its educated talent.talent.

10 10 Years Later: Years Later: The Best U.S. Cities for Business – The Best U.S. Cities for Business –

Top Five Wealth CreatorsTop Five Wealth Creators

1. 1. AustinAustin

2. Las Vegas2. Las Vegas

3. Salt Lake City3. Salt Lake City

4. Phoenix4. Phoenix

5. San Jose5. San Jose

FortuneFortune, November 23, 1998, November 23, 1998

Top 15 U.S. Cities for Top 15 U.S. Cities for EntrepreneurshipEntrepreneurship

1. 1. AustinAustin 9. West Palm Beach9. West Palm Beach

2. Atlanta2. Atlanta 10. Colorado Springs10. Colorado Springs

3. Santa Rosa3. Santa Rosa 11. Fort Collins11. Fort Collins

4. Boulder4. Boulder 12. Oakland12. Oakland**

5. Boise City5. Boise City 12. Seattle12. Seattle**

6. San Diego6. San Diego 14. Charlotte14. Charlotte

7. Orange County7. Orange County 15. Fort Worth15. Fort Worth

8. San Antonio8. San Antonio * tied* tied

Forbes magazine, Vol 165, #13, May 29, 2000, p. 137

Top 10 U.S. Cities: Top 10 U.S. Cities: Creativity IndexCreativity Index

1. 1. San Francisco 6. Raleigh - Durham, NCSan Francisco 6. Raleigh - Durham, NC

2. Austin 2. Austin 7. Houston7. Houston

3. San Diego3. San Diego ** 8. Washington - Baltimore8. Washington - Baltimore

3. Boston3. Boston ** 9. Oakland9. Oakland

5. Seattle 5. Seattle 10. Dallas 10. Dallas **

6. San Diego6. San Diego 10. Minneapolis - St. Paul10. Minneapolis - St. Paul **

Richard Florida, Richard Florida, The Rise of the Creative Class,The Rise of the Creative Class, 2002 2002

* * tiedtied

Knowledge Knowledge Technology Technology

Transfer (K/TT)Transfer (K/TT)

CreativityCreativity

GovernmentGovernmentIndustryIndustry

InnovationInnovationInnovationInnovation

EducationEducationEducationEducation

A Global ChallengeA Global Challenge

MechanismsMechanisms

MetricsProcessProcess

T2

Two Basic Forms of KTT to Two Basic Forms of KTT to Commercial ApplicationsCommercial Applications

private sector

federal labs

universities

consortia

corporate labs

process application

R&D/Mfg.

Marketing/Sales

spin-out technologies

technologyincubator

private sector

federal labs

universities

consortia

ROI

2

1

start-upcompany

Four Levels of Four Levels of Knowledge/Technology TransferKnowledge/Technology Transfer

LEVEL I — Quality of R&DLEVEL I — Quality of R&D

Intra - and Inter -Intra - and Inter -OrganizationOrganizationComplexityComplexity

LEVEL II — AcceptanceLEVEL II — Acceptance

CollaborativeCollaborativeActivityActivity

LEVEL IIILEVEL IIIImplementationImplementation

LEVEL IVLEVEL IVCommercializationCommercialization

Level II -- AcceptanceLevel II -- Acceptance

An extremely difficult transition from An extremely difficult transition from

Level I to Level II Level I to Level II

For success to occur, users must have the For success to occur, users must have the knowledge and resources needed to knowledge and resources needed to overcome NOT Invented Here and to overcome NOT Invented Here and to champion the technology to at least building champion the technology to at least building a prototype or proof of a concept.a prototype or proof of a concept.

Level III — ImplementationLevel III — Implementation

Industry strength is required.Industry strength is required. Ability to ramp up.Ability to ramp up.

• Production.Production.• Sales.Sales.• Distribution.Distribution.• Customer support.Customer support.

Global Competition

Level II — No AcceptanceLevel II — No Acceptance

Spin-out and start-up - Type 2 K/TTSpin-out and start-up - Type 2 K/TT Know-how neededKnow-how needed

• Technology assessment/IP protectionTechnology assessment/IP protection• FinanceFinance• ManagementManagement• ManufacturingManufacturing• Sales/Distribution/SupportSales/Distribution/Support

1515

Valley of DeathValley of Death (AKA The Gap)(AKA The Gap)

Sweat Equity & Persona

l Savings

Seed Capital

Pre- Venture Capital

Venture CapitalConcept

WorkingModel

Engineering

Prototype

Production

Prototype

Product Introducti

on

Sales

Break-Break-eveneven

PositivePositiveCash FlowCash Flow

Family & Friends($0-25K)

Passive Informal Investors($25-100K)

Active Informal Investors($100-500K)

Institutional Venture Capitalists($1M+)

Spin-Outs andSpin-Outs andThe Technology Transfer GapThe Technology Transfer Gap

IP Assessment and ProtectionIP Assessment and Protection Market research Market research Access to Financial ResourcesAccess to Financial Resources Manufacturing SupportManufacturing Support Distribution, sales, and service Distribution, sales, and service Managerial Team BuildingManagerial Team Building Lessen Mistakes and Speed GrowthLessen Mistakes and Speed Growth

Application of R&D Application of R&D for firm:for firm:• DiversificationDiversification• ExpansionExpansion• New formationsNew formations

R&DR&D• FederalFederal• UniversityUniversity• CorporateCorporate

Incubator Know-How NetworksIncubator Know-How Networks

The Technology Adoption The Technology Adoption Life CycleLife Cycle

Innovators

Early Adopters

Early Majority

Late Majority

Laggards

Source: Inside the Tornado, by Geoffrey A. Moore, New York: Harper Business, 1995, p. 14.

The ChasmThe Chasm

Source: Inside the Tornado, by Geoffrey A. Moore, New York: Harper Business, 1995, p. 19.

Early Market

The Chasm

Mainstream MarketTech Enthusiasts

Visionaries

Pragmatists

Conservatives

Skeptics

Diffusion ProcessDiffusion Process

Time

% o

f A

dopt

ion

Role of the R&D & K/TT ?Role of the R&D & K/TT ? Level I – Technology development.Level I – Technology development.

• To do state-of-the-art research whether or not it is To do state-of-the-art research whether or not it is used.used.

Level II – Technology acceptance.Level II – Technology acceptance.• To see that the technology is accepted by a To see that the technology is accepted by a

targeted user.targeted user. Level III – Technology implementation.Level III – Technology implementation.

• To see that the technology is implemented.To see that the technology is implemented. Level IV – Technology commercialization.Level IV – Technology commercialization.

• To see that the technology is used - ROI.To see that the technology is used - ROI. Level V – Market penetration and diffusion.Level V – Market penetration and diffusion.

• To see that the technology is widely used and To see that the technology is widely used and applied.applied.

Criteria for JudgingCriteria for JudgingTechnology Transfer SuccessTechnology Transfer Success

Technical reportsTechnical reports Journal articlesJournal articles Technical/computer video tapesTechnical/computer video tapes Patents awardedPatents awarded Technologies licensedTechnologies licensed Technology adoptionsTechnology adoptions Technology/Idea “Successfully” Technology/Idea “Successfully”

commercializedcommercialized

Success metrics Success metrics are situation are situation specific but the specific but the bottom line is bottom line is increasingly ROI.increasingly ROI.

Process/Commercial Process/Commercial AdoptionAdoption

Diffusion within Firm National and Global

Market Diffusion

Diffusion Across Industry

Diffusion Across Regional and National Boundaries

Global NetworksGlobal Networks

AndAnd

Technology Technology Commercialization Commercialization

Scientific preeminence in technology-Scientific preeminence in technology-based researchbased research

Development of new technologies for Development of new technologies for emerging industriesemerging industries

Attraction and retention of major Attraction and retention of major technology companiestechnology companies

Creation and growth of home-grown Creation and growth of home-grown technology companiestechnology companies

Source: Kozmetsky, Smilor and Gibson, 1986

Austin Model: Critical Austin Model: Critical ComponentsComponents

The Technopolis Wheel: The Technopolis Wheel: Regionally BasedRegionally Based

networks

Large

Compan

ies

EmergentCompanies

Local

Government

SupportGroups

Ed

uca

tio

nS

tate

Go

vern

men

t Federal

Government

AcademicAcademicBusinessBusiness

GovernmentGovernment

TalentCapital

Know-How

Successful Value-AddedSuccessful Value-AddedTechnology CommercializationTechnology Commercialization

Technology

MARKET NEEDMARKET NEED

COMMUNITYCOMMUNITY

Established & New to the World

Knowledge/Technology Transfer and Knowledge/Technology Transfer and Application at the Regional LevelApplication at the Regional Level

Two key realities of the 21st Century change everything or a LOT?

The distance canceling power of internet and web-based communication

The possibility of global access to talent, technology, capital, and know-how

Technology continues to shrink the Technology continues to shrink the world. There is no choice other world. There is no choice other than to participate in the global than to participate in the global community. Science and community. Science and technology is too precious a technology is too precious a resource to be restricted from resource to be restricted from drawing the world together. That is drawing the world together. That is what the 21what the 21stst Century is all about Century is all about

Dr. George KozmetskyDr. George KozmetskyRemarks to company graduationat the Austin Technology Incubator,September 6, 1996

networks

Education

Larg

eC

om

panie

s

Emergent

Companies

Federal

Government

Sta

teG

overn

ment

Loca

lG

over

nmen

tSupport

Groups

The Technopolis Wheel: The Technopolis Wheel: Globally NetworkedGlobally Networked

Baseline Considerations for Baseline Considerations for Incubating and Sustaining Incubating and Sustaining

SMEs SMEs Technology intensiveTechnology intensive Regionally based and “successful”Regionally based and “successful” As firms are launched and growAs firms are launched and grow Globally linked Globally linked

• personal/informalpersonal/informal• information highwayinformation highway

Knowledge Transfer and Knowledge Transfer and ApplicationApplication

Through CollaborationThrough Collaboration

Individual

Organizational

Group/Team

Individual

Organizational

Group/Team

National context

National context

NetworksNetworks Individually-BasedIndividually-Based Personal and long lastingPersonal and long lasting The value of trusted championsThe value of trusted champions Issues to ConsiderIssues to Consider

• Black holeBlack hole• MoveableMoveable• Power, resources, cloutPower, resources, clout• OverloadOverload• ContextContext

For a Global Network to be ViableFor a Global Network to be Viable

• Task focused

• Lose-win, win-lose, win-win

• Short-term gains

• Long-term vision

• Personal chemistry

• On-site visits

• IT support

CODIFIEDCODIFIED

CODIFIEDCODIFIED

TACITTACIT

TACITTACIT

The Knowledge-Based The Knowledge-Based EconomyEconomy

KNOWLEDGE LINKAGES KNOWLEDGE LINKAGES KNOWLEDGE LINKAGES KNOWLEDGE LINKAGES

• • documentsdocuments •• digitaldigital

•• videovideo

•• talenttalent•• skillsskills•• know-howknow-how

To Foster Venture Success and To Foster Venture Success and Accelerated GrowthAccelerated Growth

Enhance Enhance Credibility and Trust of Global NetworksCredibility and Trust of Global Networks

Provide Access to Regional,

National, and International

Markets, Resources, and

Know-How

Shorten Learning Curves and

Lessen ErrorsSMEsSMEs

Experiential Learning

Laboratory

Emergent Technology Emergent Technology Intensive CompaniesIntensive Companies

The ChallengeThe ChallengeTo successfully go global as the To successfully go global as the company struggles to survive company struggles to survive and grow at home.and grow at home.

Metrics for SuccessMetrics for Success Global Technology Assessment & Global Technology Assessment &

IP ProtectionIP Protection Global Market Assessment and Global Market Assessment and

AccessAccess Global Access to Capital Global Access to Capital Global Access to TalentGlobal Access to Talent Accelerate Time to Market GloballyAccelerate Time to Market Globally Minimize Mistakes GloballyMinimize Mistakes Globally Global Management DevelopmentGlobal Management Development

ICIC22 Institute InstituteA A Catalyst Catalyst Organization Organization

Globally Linking Globally Linking

CREATIVITYINNO

VATIO

N

CAPITAL

IC2

ICIC22 INSTITUTE INSTITUTEThe University of Texas at AustinThe University of Texas at Austin

A “think and do tank” – A “think and do tank” – www.ic2.orgwww.ic2.org

WHO WE AREWHO WE ARE

25 25 years oldyears old

$3.5 million$3.5 million

20 staff20 staff

210 IC² 210 IC² FellowsFellows

2

Research ProgramsResearch Programs Masters (MSSTC) ProgramMasters (MSSTC) Program Non-degree Education & Non-degree Education &

Training ProgramsTraining Programs IncubatorsIncubators Visiting ScholarsVisiting Scholars Regional DevelopmentRegional Development ConferencesConferences PublicationsPublications

Dr. George KozmetskyDr. George Kozmetsky • Co-founder – TeledyneCo-founder – Teledyne• Dean - UT Austin Business School Dean - UT Austin Business School

(1966-1982)(1966-1982)• Founded ICFounded IC22 in 1977 in 1977• Winner of National MedalWinner of National Medal• of Technology (1993)of Technology (1993)• Educator, Entrepreneur,Educator, Entrepreneur,

Mentor, and VisionaryMentor, and Visionary

George KozmetskyFounder, IC2 Institute

““The challenge of technological innovation in the global The challenge of technological innovation in the global knowledge-based economy of the 21knowledge-based economy of the 21stst Century can be Century can be stated as follows: stated as follows:

How can each organization, region, and nation manage How can each organization, region, and nation manage technology creatively and innovatively to reap the technology creatively and innovatively to reap the benefits of sustained economic growth? benefits of sustained economic growth?

Those organizations and regions most able to accomplish Those organizations and regions most able to accomplish this objective will play key roles in accelerating wealth this objective will play key roles in accelerating wealth creation and shared prosperity.creation and shared prosperity.

The ICThe IC22 Institute is a global, Institute is a global, multidisciplinary, and virtual “think” multidisciplinary, and virtual “think” and “do” tank that contributes to and “do” tank that contributes to society by enhancing the society by enhancing the understanding and practice of understanding and practice of technology commercialization and technology commercialization and prosperity sharing.prosperity sharing.

Austin Technology Incubator (ATI)Austin Technology Incubator (ATI)

• 65 companies launched• 10,000 jobs created (2,850

direct, 7,150 indirect)• $1.2 billion in revenue

generated • $500 million+ in VC and other

investments secured• TCN [Thecapitalnetwork.com]

• ATC [Austintechnology council.org]

• Clean Energy Incubator

AUSTIN TECHNOLOGY AUSTIN TECHNOLOGY INCUBATOR Building CompaniesINCUBATOR Building Companies

Factory LogicFactory Logic BMC SoftwareBMC Software

Input/OutputInput/OutputSun XSun X

Adv. EnergyAdv. EnergyNew Work Ass.New Work Ass.

CompuSeisCompuSeisHaystack LabsHaystack Labs

EvityEvity4 State Tech4 State Tech

Ampersand Ampersand ArtArt

ClockworkClockwork

Evolutionary Evolutionary TechnologiesTechnologies Applied ScienceApplied Science

FictionFiction

Chisolm TechChisolm Tech

Encore MedicalEncore MedicalPolo Polo Int’lInt’l

Utility CompositesUtility Composites

Key Concepts Gp. 5Key Concepts Gp. 5

DTM CorporationDTM Corporation

Corporate MemoryCorporate MemoryPolyDyne PolyDyne

DevelopmentDevelopment

TexasTexasResearchResearchInst. 100Inst. 100

Silicon MetricsSilicon Metrics

SkipstoneSkipstone

CEDRA CorpCEDRA Corp

UTUTAustinAustin

ATI

19891989

1990199019911991 19921992

19931993

199419941995199519961996

19981998

19991999

20002000

MS in Science and Technology MS in Science and Technology Commercialization Commercialization makes ICmakes IC22 Different Different

12 12 MONTHSMONTHS AVE. AGE = 37AVE. AGE = 37 $42,000$42,000 FRIDAY/SATURDAY FRIDAY/SATURDAY Video-cast Partners IBM Video-cast Partners IBM

and Applied Materials and Applied Materials Select Classes and Select Classes and

Projects with the EU, Projects with the EU, Mexico, Russia, etc.Mexico, Russia, etc.

IN-CLASS & INTERNET IN-CLASS & INTERNET

The CoursesThe Courses

Technology assessment Technology assessment Marketing technical innovationsMarketing technical innovations Technology/Knowledge transfer & Technology/Knowledge transfer &

adoptionadoption Creative and innovative managementCreative and innovative management Opportunity assessment Opportunity assessment Legal issues of the commercialization Legal issues of the commercialization

process process

18

The CoursesThe Courses

Risk managementRisk management Commercialization strategy Commercialization strategy Rapid product and process Rapid product and process

developmentdevelopment Developing the new venture Developing the new venture Financing the new venture Financing the new venture Technology and trade policies Technology and trade policies

18

Team Project Technology AssessmentTeam Project Technology Assessment

Describe the technologyDescribe the technology Determine intellectual property rights Determine intellectual property rights Identify potential markets Identify potential markets Assess the impact of global government policiesAssess the impact of global government policies Assess human and organizational factors Assess human and organizational factors Assess environmental impactAssess environmental impact Develop a technology transfer modelDevelop a technology transfer model Draw conclusions about commercial potentialDraw conclusions about commercial potential Make recommendations regarding Make recommendations regarding

commercializationcommercialization

Technology continues to shrink the Technology continues to shrink the world. There is no choice other than to world. There is no choice other than to participate in the global community. participate in the global community. Science and technology is too precious Science and technology is too precious a resource to be restricted from drawing a resource to be restricted from drawing the world together. That is what the 21the world together. That is what the 21stst Century is all aboutCentury is all about

Dr. George KozmetskyDr. George KozmetskyRemarks to company graduationat the Austin Technology Incubator,September 6, 1996

Global and Multidisciplinary Global and Multidisciplinary Perspectives Perspectives Makes ICMakes IC22 different different

Collaborative Research Collaborative Research Collaborative TeachingCollaborative Teaching Visiting ScholarsVisiting Scholars IC2 Institute FellowsIC2 Institute Fellows Student & Faculty Exchange Student & Faculty Exchange ConferencesConferences Other ActivitiesOther Activities

30 Nations

ASIA

China

Taiwan

India

Japan

Korea

Singapore

Vietnam

EASTERN EUROPE

Rep. of Georgia

Russia

Ukraine

Poland

EUROPE

Belgium

France

Italy

Norway

Portugal

Spain

Sweden

The Netherlands

United Kingdom

LATIN AMERICA

Belize

Brazil

Chile

Colombia

Mexico

MIDEAST

Algeria

Armenia

IsraelOTHER

Australia

Canada

Select Worldwide IC² PartnersSelect Worldwide IC² Partners

Aoyama Gakuin University & SendaiAoyama Gakuin University & Sendai Brazil, Colombia Brazil, Colombia Galicia RegionGalicia Region CBIRDCBIRD Taejon Taejon MoscowMoscow Adelaide, Alice SpringsAdelaide, Alice Springs ShanghaiShanghai LodzLodz

JapanJapan

Latin Am.Latin Am.

SpainSpain

MexicoMexico

KoreaKorea

RussiaRussia

AustraliaAustralia

ChinaChina

PolandPoland

PolandPoland LodzChileChile SantiagoBrazilBrazil CuritibaMexico Mexico MonterreyPortugalPortugal LisbonSpainSpain GalciaRussiaRussia MoscowChinaChina ShanghaiJapanJapan SendaiAustraliaAustralia Adelaide

GLOBALGLOBALPARTNERPARTNER

Tal

ent

Tal

ent

Tec

h.

Tec

h.

Cap

ital

Cap

ital

• See

d

• V.C

.

• Est

bl.

• Oth

er

Kn

ow

-Ho

wK

no

w-H

ow

• Mar

ketin

g

• Sal

es/D

istr

.

• Leg

al

• Mgm

t.

• Pro

duct

ion

P

roto

type

M

ass

Know-How SupportKnow-How Support

ICIC22 Institute Affiliated Institute Affiliated ProgramsPrograms To Be LeveragedTo Be Leveraged

The (Award Winning) Austin Technology Incubator (ATI) - The (Award Winning) Austin Technology Incubator (ATI) -

www.ic2-ati.orgwww.ic2-ati.org

The Capital Network (TCN) - The Capital Network (TCN) - http://wwwthecapitalnetwork.com http://wwwthecapitalnetwork.com

    MS Degree Program in Science and Technology MS Degree Program in Science and Technology Commercialization - Commercialization - www.ic2.org/msdegreewww.ic2.org/msdegree

Visiting Scholars ProgramVisiting Scholars Program

  

ICIC22 Institute Affiliated Institute Affiliated ProjectsProjects To Be LeveragedTo Be Leveraged

The International Science and Technology Center, The International Science and Technology Center,

Moscow – Moscow – www.istc.ruwww.istc.ru

The Lockheed OFFSET Program with Poland The Lockheed OFFSET Program with Poland

Kozmetsky Global Collaboratory with Stanford Kozmetsky Global Collaboratory with Stanford University University

• Digital Media CollaboratoryDigital Media Collaboratory

• Cross Border Institute for Regional DevelopmentCross Border Institute for Regional Development(CBIRD-Global)(CBIRD-Global)

  

Diffusion of Research Diffusion of Research ResultsResults

MS S&TC ProgramMS S&TC Program Regional Ecc. Development StrategiesRegional Ecc. Development Strategies Symposia, Conferences, and SeminarsSymposia, Conferences, and Seminars

• International Conference on Integrated Design and ProcessInternational Conference on Integrated Design and Process TechnologyTechnology [www.sdpsnet.org/conferences.html] [www.sdpsnet.org/conferences.html]

• International Conference on Technology Policy and Innovation International Conference on Technology Policy and Innovation [http://in3.dem.ist.utl.pt/confpolicy][http://in3.dem.ist.utl.pt/confpolicy]

Technical Reports/MonographsTechnical Reports/Monographs Journal PublicationsJournal Publications Book SeriesBook Series WWW.ic2.orgWWW.ic2.org

Thank YouThank You

Questions?Questions?