January 30, 1996

Prepared by: Silber & Associates
Dr. Bohne Silber
13067 Twelve Hills Road
Clarksville, MD 21029-1144

SHORTENED THE R&D CYCLE

Ninety-five percent of participants believe the ATP award has accelerated their progress, greatly shortening their time involved in research and development. The majority of

One approach to expediting the research cycle is distributing the effort. A joint venture partner, describing the impact of the ATP on his project, said, "Without the award we wouldn't be finished now; it gave our technology a sense of urgency. Because of the award, divergent companies came together who wouldn't have otherwise. ATP advanced the research by about five years and enabled us and other companies to keep ahead of the Japanese, who are investing enormous amounts." Others concurred that their research was accelerated by the ATP award, explaining, "We've gone twice as fast because we've doubled our effort."

Without ATP to push the technology forward, some companies would have missed the window of opportunity. Without the funding, reported a scientist, "We would have been much slower, probably three years out, which in this industry is forever. Our product development cycle is under one year." Another participant commented, "ATP was critical for us. Time to market is critical, and we would have been delayed. We never could have recovered that time."

"We accomplished in two years what would have taken five to six. It kept us from missing the window of opportunity," explained a scientist, "which was extremely critical." Similarly, another participant explained, "Our technology should have a return in the billion dollar range, and this wouldn't have happened without ATP. Or if it had happened, we would have lost the window of opportunity."

ACCELERATED COMMERCIALIZATION OF THE
ATP- RELATED TECHNOLOGY

One consequence of a shorter R & D cycle is early entry of technology into the market. In the realm of cutting-edge research, this advantage is often critical. Indeed, 81.1% of the organizations described speed to market as critically important or very important, and only one participant said it's "not very important" (refer to Figure 5).

Participants who plan to market an ATP-related technology, estimated at about two-thirds of participating organizations, anticipate entering the market well before their window of opportunity closes. Without the ATP funding, many say their projects, if they occurred at all, would not conclude in a realistic time frame. "The ATP award," said one scientist, representative of others, "has allowed us to identify critical areas where there's opportunity to reduce lead time. It allows us to engage in research which will help reduce time to market."

Under the ATP, many companies perceive the market potential of their evolving technology as even more favorable than at the outset. Now several years into their work, they have found increased cause for optimism, due in large part to clearing technical hurdles and reaching the market sooner. Of the companies who plan to commercialize a result of their ATP work, 51.5% consider the market potential of their technology better than before.

"Because of technical progress," reported a scientist, "we can now be more bullish. We've conquered thorny problems. We loved getting into the ATP because it gave us the chance to leverage the money in an area with huge market potential." Another researcher described his experience: "There were some real technical issues we weren't sure we could overcome, at least for some applications. Now we've gotten to commercialize some already. The market needed these applications. ATP was aimed at the core of what we do. If we could overcome technical barriers, the prospects were good."

A few companies believe they are facing a decline in the marketability of their technology, something they attribute primarily to technical obstacles and market forces. Commercialization potential, according to one researcher, is "still favorable, but during the two years of the project, competing technologies have emerged." For a few others, the market for their technology is not yet ripe; the technology is ahead of demand. "We didn't appreciate the time frame," said a researcher. "We developed the process, but the industry isn't ready for us."

INCREASED CREDIBILITY

A significant fruit of the ATP award, according to recipients, is the measure of prestige associated with it. Besides the prestige of the award itself--validation of worth by external panels of scientific and business experts--companies appreciate gains in exposure and credibility from the technology developed through the program.

Nine out of ten participants reported benefiting to a "great" or "moderate extent" from enhanced credibility associated with the award. As illustrated below, most often they cited credibility within their industry and business community, among customers, within their own company, and among their scientific peers.

A researcher, commenting on the prestige associated with the award, said, "Although it hasn't yet turned a dollar, everywhere I go we're recognized as a leader in this technology. We're sought after as a partner in other ventures. It has started many new opportunities, and it has far-reaching effects." As another participant described, "A lot of the companies in our industry thought of us as 'behind' and now they have a different perception of us. Their respect has changed. They are buying our products more."

Credibility is almost equal in importance to the direct financial impact of the award, particularly since increased credibility can mean increased business activity. "On top of giving us R & D money," a JV partner explained, "it gave us credibility in the eyes of investors and potential customers. For example, our relationship with [partner company] has extended beyond the usual subcontractor role, and they're now interested in our technology on a corporate level...The award paved the way for us to do business with them by giving us credibility with their people."

Because of the ATP award, corporate management may view the developing technology with greater respect, making company decision-makers more willing to devote resources to the project. "Within our company," explained a participant, "the ATP has high visibility. We've been validated by an outside group and that brings respect from within. People see that it's a serious project; it has momentum." Another participant,

The ATP program is well-known in the scientific community. The review process, explained a participant, is known as "rigorous. It brings instantaneous credibility." Another researcher offered a similar comment: "We're developing new technology and an ATP award is recognized as difficult to attain. The message is that the research must be first-rate."

Investors, too, are familiar with ATP, and the award reduces their

In fact, 40% of award recipients have attracted additional funding related to their ATP technology, and 78% of this group attribute their success at capturing funding to the ATP award. Not surprising, 1990 participants, whose projects are the oldest chronologically, are most likely to have secured more funds for pursuing the technology which originated with ATP--51.9% have won additional funding, amounting to $1.3 million each2. About 36% of 1991 participants and 38.5% of those from 1992 have received funding of approximately $2 million and $1 million3 each, respectively.

Table 4 illustrates the sources of additional funding, according to participants' reports.