Overview Of The Technology Transfer Process

Overview of the Technology Transfer Process RERC on Technology Transfer

[Slide 1 - 2]

A. What is Technology Transfer? [Slide 3]

Technology transfer is defined as a process for conceiving of a new application for an existing technology (Reisman, 1989). It is a complex process involving a wide range of participants in multiple inter-dependent activities (Jolly, 1997). This presentation describes the major element of this process as one unified process, two initiating forces, three critical events, four activities, and five stakeholder groups.

B. One Process for Technology Transfer [Slide 4-5]

shows that technology transfer starts with a technology and through some transformation results in a product. The sine wave represents the technology transfer process as it progresses from left to right, and the horizontal axis represents the environmental context in which the technology transfer process occurs.

B.1. Technology versus Product

The technology transfer process progresses from an idea for a technology application, through the development of a working prototype and then on to a commercial product. This progression raises the importance of distinguishing between a technology and a product. A technology is not a product, although one or more technologies are incorporated to provide a product's features and functions. For example, the manufacturer of a non-stick frying pan incorporates multiple materials' technologies including metals, ceramics, plastics and bonding agents, so the consumer can buy a frying pan with the non-stick feature. Slide 5

1 highlights the transition period, which is the primary focus of technology transfer activities. Technology-related activity is on left side of the model, and product activity is on the right side of the model. The technology-to-product transformation occurs around the mid-point (prototype event). The single process shows that the broader process of technology transfer involves both technology and products, along with the transformation from one to the other.

C. Two Forces Initiate Technology Transfer. [Slide 6] Technology transfer can be initiated from either end of the process. Slide 6. represents these two forces as arrows, labeled as "supply push" and "demand pull".

C.1. Supply Push - supply push means that the technology transfer process starts with an identified technology that is seeking an appropriate application (Paul,1987). In this direction the technology or product supplied is pushing toward the marketplace expecting to meet a demand. In supply push, Technology Producers (e.g., inventors and researchers) on the left side of Slide 6 can initiate technology transfer by pushing new technology developments toward the Technology Consumers (e.g., manufacturers and government agencies).

C.2. Demand Pull - demand pull means that the technology transfer process starts with an identified unmet market need which is seeking an appropriate solution—the demand identified is pulling a technology or a product toward it (Von Hippel 1987). In demand pull, from the right side of the figure Product Consumers (e.g., end-users and service providers) can pull at Product Producers (e.g., manufacturers) to meet unmet market needs (Stewart & Nihei 1987). Despite the supply push and demand pull forces, technology transfer will only occur if a manufacturer (in the role of Technology Consumer or Product Producer) is able to transform a technology in supply into a product in demand. This transformation process involves varying degrees of research and

2 development, which must be conceived, financed and successfully accomplished before the opportunity can be realized.

D. Three Critical Events Demarcate Technology Transfer Progress. [Slide 7]

Title: The three critical events – idea, prototype and product.

depicts the three points of intersection between the wave and the axis in the technology transfer process. These three points of intersection represent the three critical events in the technology transfer process: idea, prototype and product (Rogers 1995).

D.1. Idea Event - The Idea Event is the point at which a specific idea is conceived—an idea that identifies a new discovery or existing technology and matches it to a new or novel application area. For example, the idea of taking lightweight, composite materials used in military aircraft and applying them to consumer products such as sporting goods or assistive devices. As a point of idea conception there is not yet any tangible development; it is only the genesis of the idea itself. At this event, a person or group has invested sufficient thought and discussion for a clear concept to emerge. An example concept is: composite materials could improve consumer goods by reducing weight and cost while increasing strength flexibility.

D.2. Prototype Event - The Prototype Event occurs when the idea for a technology application is developed into a functional prototype. The prototype is based on a technology which may be embodied in hardware, software, a process or a system. The prototype may be in a shoebox or on a laboratory bench. The defining moment is when the prototype demonstrates that the technology concept functions as expected in reality; where the technology concept is first reduced to practice. In our example, a prototype event is: the first bicycle and wheelchair frames formed from composite materials in a workshop or laboratory.

3 These prototypes may be too crude or fragile for use, but they demonstrate the feasibility of the technology in the application.

D.3. Product Event - the Product Event is when the prototype has been developed to the point where it is ready for production and distribution for the marketplace. At this point, the product’s components, design and operation appear reliable and are reproducible in mass numbers. This event is typically under the control and direction of a private sector company. In our example: the recent proliferation of bicycle and wheelchair frames from composite materials— along with limb braces, tennis rackets and golf club shafts—all demonstrate the market viability of applying composite materials to consumer products.

E. Four Activities Underlie the Three Critical Events [Slides 8 - 13]

Title: The four activity areas with the technology transfer process.

The three events described above are singular points in time, representing the end point of prior activity and the starting point for activity to follow. In Slide 8, the sine wave and horizontal axis together form boundaries around four areas— two above the axis and two below it. These four areas represent the technology transfer activity surrounding the three critical events: Technology Applications, Technology R&D, Product R&D and Product Commercialization.

E.1. Technology Applications (TA) - The Technology Applications activity precedes the idea conception. The Technology Application includes the existing science and technology base and the potential applications of all technology within the field of interest—such as assistive technology. Technology Applications represents all of the individual thinking and all of the group communication that precedes the conception of a new idea (Lane, 1996). The positive slope in the wave across the TA area (Slide 9), represents a gradual convergence of thinking about technology and application opportunities, as

4 people negotiate the conceptual maze of the idea generation process. Technology Applications activity terminates at the idea event, because at this point all of the possible combinations of technologies and applications have been narrowed to one clear idea (Livesay, Rorke & Lux, 1989).

E.2. Technology Research and Development (Technology R&D) - Technology Research and Development activity begins after the idea event. Technology R&D activity encompasses the intellectual and physical activity involved in transforming an idea for a technology application to a specific prototype form (Schoenecker, Myers & Schmidt 1989). In Slide 10., the area first increases as the initial idea expands through research into the application area, into a wide range of application options. Over time, as the intellectual research activity is replaced with the physical development of a prototype, the area diminishes as the range of options available diminishes. This may require multiple tests of various options, shown by the circle of arrows.

also shows Technology R&D above the horizontal axis because it represents the fairly visible and public communication necessary to refine the idea into a working model. The communication should involve evaluative feedback from the likely producers and consumers of the eventual product envisioned (Patton, 1989). The options available diminish until the technology application idea is reduced to a single developed prototype—the prototype event.

The prototype is the point of intersection between technology activity and product activity. The idea takes form in a prototype. The prototype is a tangible example of the technology’s potential value in a new or novel application. Sometimes the technology developer is also the product developer, as in the case of internal corporate research and development. Within the technology transfer process, the technology developer is typically seeking a product developer (e.g., manufacturer to implement the transition from technology to product.

5 E.3. Product Research and Development (Product R&D) - Product R&D activity commences after the prototype event. It represents the research and development activity involved in transforming a prototype device into a product ready for commercial production (Scherer & McDonald, 1988). The transformation from prototype to product is widely known as the “valley of death” in product development literature (U.S. Department of Energy, 1991). The “valley of death” is the favored phrase, because few attempts survive the activities required. These activity includes developing and testing working models, engineering beta and production prototypes, tooling and setup for production, and detailing and acquiring manufacturing raw materials and components for assembly. As in the prior R&D phase, there may be multiple iterations as various options are studied sequentially or simultaneously.

If sufficient investments of capital and expertise are not made at this time, the project ends before a commercially viable product is realized (United States Navy, 1997). Crossing the “valley of death” requires rigorous evaluations by internal staff and external potential consumers. The Product R&D activity is similarly portrayed as a valley in Slide 11. The wave drops below the horizontal axis signifying the increasing likelihood that the initial financing and development will not occur. The wave regains a positive slope as the product prototype research and development generates additional enthusiasm and support. Product R&D culminates in the third event; the final product ready for commercial introduction.

E.4. Product Commercialization (PC) - Product commercialization is the activity of rolling out a new product into the marketplace, so it naturally follows the product event. Product commercialization activity includes the manufacturing, distribution, sales and support for the product (Dakin, 1991). In Slide 12, the wave again rises above the axis because the product is introduced to the public marketplace. The PC wave’s slope remains in a positive direction as long as the product gains new market share. The wave’s slope will eventually level off as the

6 product matures, turn negative as sales and market share decline, or will simply terminate because the product is replaced by a “new or improved” product, sometimes based on even newer technology (see Product Life Cycle in Slide 13).

F. Five Stakeholder Groups Participate in the Process [Slide 14-15]

Any transfer requires a transaction between two parties—a producer and a consumer. Technologies have producers and consumers, and products have producers and consumers. All producers and consumers require resources to conduct the technology transfer process. For many transfers addressing small or niche markets like assistive technology, outside entities provide the necessary resources.

lists the five stakeholder groups. Two groups are involved with production; one producing new technologies and the other producing new products. Two other groups are involved with consumption; one consuming new technologies and the other consuming new products. The fifth group provides resources to the other four to enable technology transfer. Each group is a vital stakeholder in the technology transfer process (Verberg, McPherson, Blancher & Blancher, 1993).

The five stakeholder groups each represent various participants, summarized in the table in Slide 15. The five stakeholders are also plotted on the technology transfer diagram in Slide 16 for discussion purposes.

F.1. Technology Producers - A technology is developed by Technology Producers and then transferred to Technology Consumers (left side of Slide 16). Technology producers are the people who conduct the technology application activity and first generate the idea for matching a technology to a new application. The technology producer stakeholders include inventors and researchers in academic or federal laboratories and companies (Matkin, 1990).

7 F.2. Technology Consumers - The Technology Consumers translate the idea into a prototype technology. The technology consumer stakeholders include government agencies with a mission to apply technologies to serve national needs (e.g., defense, space exploration, veterans’ health care), private sector manufacturers seeking to develop new products based on advanced technologies, or intellectual property brokers in the business of re-selling technology.

F.3. Product Producers - Technologies are transformed into products by Product Producers for sale to Product Consumers in the marketplace (the right side of Slide 16). The product producer stakeholders include manufacturers of products, distributors of products through domestic and international markets, and value- added retailers that offer the products for sale to consumers and provide services to support the products (Pajer & Gibler, 1990).

F.4. Product Consumers - The Product Consumers include end-users and family members who acquire and use the product, and professional service providers who prescribe or recommend the products to others.

The Technology Producers and the Product Consumers are at opposite ends of the technology transfer process. Most Technology Consumers are private sector manufacturers, as are most Product Producers. Manufacturers are the entities willing to invest the time and resources necessary, and have the expertise necessary, to transform the technology into a product (Scadden, 1987). So, manufacturers are the critical link in the technology transfer process because they are the only stakeholder positioned to transform a technology into a product (Vernardakis, Stephanidis & Akoumianakis,1997). However, the manufacturers are totally reliant on the other stakeholders to comprise the marketplace (Knorr, 1990).

8 F.5. Resource Providers - Resource providers are the fifth critical stakeholder group. Resource providers include: government and private entities which provide financial support to fund technology transfer; government and private insurance third-party payers that fund a majority of the product purchases; programs that analyze and change policies and systems; technology transfer intermediaries providing technical expertise to conduct the transfer; and professionals providing content expertise within the transfer application area. The Resource Providers support all phases of technology transfer, so they are depicted as underlying the entire diagram in Slide 16. The Resource Providers are most critical for transfers of technologies lacking sufficient market incentives for the private sector to fund independently-particularly orphan products (Prosser, 1995).

9 G. Composite of All Five Elements in the Technology Transfer Process [Slide 17]

presents a model of the entire technology transfer process. Although the model contains multiple activities, events and stakeholders, it is important to recognize that they all contribute to one overall process.

The composite model can be used to plot any particular action either taken or planned, within the overall context of the technology transfer process. Having an understanding of where a particular action falls, helps the participants determine what needs to be done and who needs to be involved in doing it. This knowledge also helps the participants plan for future requirements to keep the process moving toward eventual commercialization.

H. The Problem of Technology Transfer in Small Markets [Slide 18]

The pace and breadth of technology advances make them increasingly essential to an expanding array of products (Branscomb & Keller, 1998). Small companies producing technology-based products for small markets lack significant resources to allocate toward internal corporate research and development. Technological advances have to be imported from Technology Producers outside the field (Gilden, 1997). This approach fits the definition and model of technology transfer.

These small companies need a systematic process for handling the procedural, legal and financial issues involved in acquiring external innovations, whether in the form of ideas for technologies, prototypes or products. Otherwise the cost (in time or money) of completing the acquisition would always exceed the value. However, the stakeholders in small markets often even lack the resources,

10 incentives and networks for effective and systematic technology transfer (Swanson, 1995).

Without a systematic process, technology transfer occurs as a serendipitous event. Unfortunately, small market stakeholders cannot rely on serendipity for the development and transfer of new products based on advanced technologies (National Institutes of Health, 1995).

I. Intermediaries Resolve the Problem for Small Markets. [Slide 19-21]

Technology transfer may have potential value for small markets, but how can it be implemented effectively? The overview simplifies a rather lengthy and complex process. Given the presence of five stakeholder groups, the four types of activities in the technology transfer process, the three critical events, and the two origins, it is not surprising that technology transfer is a difficult process to execute effectively. Moving from technology to product has so many extraneous variables it is more likely to fail than succeed. Without a knowledgeable entity acting as a broker for the stakeholders and as a manager for the process, technology transfer would remain a process heavily dependent upon coincidence (Rosenau, 1996).

The solution is to establish intermediary entities capable of facilitating transfers while accommodating the varied interests of the multiple stakeholders (Eveland, McNeal, Rogers & Valente, 1991). These intermediaries must establish efficient supply push and demand pull models, based on systematic processes and focused on effective outcomes. The intermediaries can provide the stakeholders with some of the knowledge they lack, and offer the tools needed to bring new or improved products to a target market.

11 All stakeholders must be viewed as customers by a technology transfer intermediary. Also, the process must be managed so that technology applications progress through all of the critical phases from idea conception to product introduction. Each phase is necessary for successful transfer but no single one is sufficient. Successful transfer requires a seamless progression from idea formulation through product sales and support (Sheredos & Cupo, 1997).

A technology transfer intermediary must design and implement a scope of work that encompasses all of these stakeholders and process phases to ensure success. A analysis of technology development and transfer in a small market recognized the critical role for intermediaries. “Technological ‘gatekeepers’ are people who have the ability to monitor and anticipate uses of new technology. They are crucial to the diffusion of new technologies because of their unique role as intermediaries (Emiliani, et al, 1994)."

12 As shown in the following table and summarized in Slide 20, an operating intermediary, the RERC on Technology Transfer has eighteen distinct roles for an intermediary to facilitate technology transfer (Lane, 1997):

Stakehold Roles for Intermediaries er Group

Technology  Opportunity analysis – assessing if technologies meet needs. Producers  Idea/Invention clearinghouse – screening devices for appropriateness.  Prototype evaluation – obtaining stakeholder input.  Product information – determining what exists in the marketplace.  Research & development – improving prototypes.  Business agent – representing technology and negotiating transfers. Technology  Marketplace gateway – accessing information and resources in a field. Consumers & Product  Concept reviews – securing feedback on market receptivity. Producers  Market research – conducting analyses of market opportunities.  Research & development – refining pre and post production products.  Product testing - bench testing by technicians and field use by Product Consumers.  Local or national surveys – assessing the size and composition of markets. Product  Focusing input – distinguishing between technologies and products and guiding Consumers evaluations.  Guiding selection – evaluating features in existing products.  Convening evaluations – involving end-users, family members and care providers in the evaluation of new inventions and existing products. Resource  Advising – ensuring all necessary stakeholders are involved. Providers  Networking – identify and recruit resource providers for process.  Negotiating – broker deal addressing return to resource providers.

Technology transfer is said to be a contact sport, because success requires interpersonal communication and cooperation. As shown in the preceding sections, technology transfer involves a progressive advancement from technology to product. This advancement requires individuals who take responsibility for completing every step in the process. Thus, each and every technology transfer effort needs champions to become successful.

13 An intermediary may function as a champion for the entire process by providing appropriate support and facilitation to all stakeholders, in all phases of technology transfer activity. However, the intermediary cannot achieve success alone. Success also requires a champion within each stakeholder group [Slide 21]. These champions must understand their relative role in the process, see the roles of the other stakeholders, and recruit champions from the other stakeholder groups. By understanding and participating in the technology transfer process, each of us has the potential to become a champion.

14 REFERENCES

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17 ACKNOWLEDGMENT This is a publication of the Rehabilitation Engineering Research Center on Technology Transfer, which is funded by the National Institute on Disability and Rehabilitation Research of the Department of Education under grant number H133E980024. The opinions contained in this publication are those of the grantee and do not necessarily reflect those of the Department of Education.