Development, Commercialization, and Diffusion of Enabling Technologies

NISTIR-6098
Development, Commercialization, and Diffusion of Enabling Technologies
Progress Report for Projects Funded 1993-1995
6. EARLY COMMERCIALIZATION ACTIVITIES

Even for applications where commercial production is several years off, successful, timely entry into the marketplace is likely to entail a significant level of effort in market analysis, capital planning and acquisition, and negotiation with potential partners over the entire R&D phase. The trend to shorter product life cycles in many industries dictates that companies engage in market analysis and planning for manufacturing and scale-up from the earliest stages of R&D in order to have a new product or process ready in time to compete successfully in international markets (See Laidlaw, Chapter 1, 1997). ATP monitors this activity as part of its project management and evaluation process both to assess the likelihood that successful commercialization will result and to measure the level and significance of progress. This chapter provides a statistical snapshot of commercialization progress, along with some specific examples from individual companies and projects.

Commercialization Planning Activities

As shown in Figure 23, companies in 77 percent of the projects have completed product/process definition for at least one application; companies in 56 percent of the projects have completed concept testing for at least one application; and concept testing has been conducted for one-third of all applications being pursued.

Figure 23. Market Analysis Progress

As shown in Figure 24, 47 percent of the companies report they have increased their investment in facilities for R&D; 19 percent have increased their investment in facilities for production; 25 percent have moved to expand production related to the ATP-funded technology. Acquisition of new facilities and equipment is significant to economic activity in two ways: (1) as an indication of intention to intensify commercialization activities to bring new goods and services to market and (2) as generating commercial activities in the construction and equipment sectors.

Figure 24. Acquisition of New Facilities and Equipment

Companies are engaged in the long-term process of planning for scale-up from preparation of small-sample prototypes to commercial production. As shown in Figure 25, 29 percent of companies, participating in 41 percent of projects, indicate they have completed a production prototype, and 35 percent of projects have completed pilot production or a commercial demonstration for at least one application of the ATP-funded technology. A small percentage of the companies (eight percent of companies from 12 percent of the projects) indicate they have actually begun production for at least one application. Production has begun for four percent of applications.

Figure 25. Progress Towards Commercial Production

Early Economic Impacts

Although revenues are relatively small, a number of new products have been announced. The following are some examples from company press releases and product announcements.

Fragment Length Polymorphism for DNA Diagnostics. In mid 1996, Third Wave "launched its initial product from its lead product platform, Cleavase^R Fragment Length Polymorphism (CFLP^R) developed as part of its ATP project, into the life science research market using two distributors," and had over $300,000 in sales by the end of the year. This product is part of the "tool box" of faster, cheaper, and more user-friendly technologies for detecting and manipulating DNA that Third Wave is developing for molecular human diagnostics applications such as assessing tissues for transplantation suitability, forensic and paternity tests, diagnosing hereditary and infectious diseases, assessing susceptibility to specific diseases, and monitoring the response of disease pathogens to specific medical treatments.

Process Advisor for Advanced Process Modeling and Optimization. AI Ware has launched a next generation software product called Process Advisor for advanced process modeling and optimization. "Process Advisor's modeling and optimization benefits have been proven in [these] industries: plastics, rubber, paper, paint & coatings, electrical utilities, adhesives, sealants, petrochemicals, biotechnology, glass, alloys, specialty chemicals, food products, building materials, castings, [and] pharmaceuticals." This new tool incorporates self-teaching neural networks and genetic algorithm optimization techniques which build dynamic time series process models from information buried in current process data in order to discover and control the complex, non-linear forces driving the process. It is different from conventional diagnostics, SPC and SQC, in that "you get more insight and more accuracy when you base your analysis and decisions on accurate process models rather than just trends of individual parameters. Process models help you understand relationships and trade-offs in all their complexity, and anticipate changes."

CyberDisplay Miniature Display Device. Kopin Corporation recently introduced "the world's smallest high-performance, high resolution, full-function information display. The low cost CyberDisplay^TM is light-weight, power efficient, rugged, solid state, and only 0.24-inch diagonal in size. It enables portable communications devices and personal information products to display text, e-mail, graphics, and video from Internet, intranet and other data or video sources."

T-Vox Volume Visualization Software. HT Medical, recently named one of the fastest growing companies in Maryland, has officially released T-Vox^TM, volume visualization software that allows researchers to interactively explore internal and external human anatomy through real-time volume rendering, in gray-scale or color.

Low-cost Manufacturing of Composite Structural Shapes. "Ebert Composites has developed an advanced process for machining pultruded composites to make complex high strength structural shapes. The new process substantially reduces the cost of manufacturing and enables the company to produce large load-bearing structures made of fiberglass-reinforced composites for construction and infrastructure applications. Structures like transmission poles and towers for electric power lines can be made using light-weight corrosion-resistant composites as a cost-effective replacement for steel, wood, and concrete."

Precision Gear Inspection System. "M&M Precision Systems, with its new ability to provide the highest accuracy ever achieved on the open market, is securing orders for inspection systems for U.S. manufacturers of large precision gears formerly produced overseas."

Figure 26 provides a statistical summary of early commercial progress reported by the FY 1993-1995 projects after one-to-two years of ATP funding. Forty percent of companies, participating in 52 percent of the projects, believe they are now able to make a new or better product as a result of their ATP project; 28 percent of companies, participating in 39 percent of projects, have adopted process improvements embodying ATP-funded technology; 10 percent of companies, participating in 15 percent of projects, report revenues from sales of prototypes and early spin-off products that amounted to more than $20 million from eight percent of applications by December 31, 1996 and licensing royalties that amounted to $445 thousand by that date.

Figure 26. Progress Towards Early Products and Processes

Anecdotal Comments

Anecdotal comments provided in the business reports help establish a clearer perspective for the commercialization progress reported above at relatively early stages of the R&D.

Ability to make new and/or better products

Many of the 40 percent who report an ability to make new and/or better products are not yet ready to start commercial production. Market launch may be some years off; however, key technical barriers to commercialization have been overcome.

"We are able to make ....drills with life expectancy 10-20X."

"We can now make good quality, repeatable automotive lighting fixture parts. The performance is good, and samples have gone past the prototyping stage, and are now in the designed-in stage of development."

"Five-inch diagonal proof of concept display built."

"Developed new, improved, lower cost product."

"We have taken an observation made just prior to ...ATP proposal... and transformed it into a revolutionary product line ... that we manufacture and that are distributed by '2' of the world's largest and most respected life science companies."

"We are able to make a better metrology product for the fuel injector industry. Based on test results and direction from our strategic partner..., we have reduced the amount of residual instrument error....Work continues ... to improve its thermal stability. Further, we have achieved better accuracy while implementing phase diffractive optics."

"Higher density of the part was achieved. Extended the range of usable materials. Enhanced magnetic properties."

"Higher power, higher reliability red devices are now possible."

Prototyping and customer testing

"We are currently conducting field molding trials at five different potential customers. A wide variety of specialty electrical parts are being prototyped with significant positive response."

"Our first prototype fabrication allows us to make a manufacturing cost estimate based on experience and known processes. It predicts [our product] will be at least 2X less expensive than other optical technologies and competitive with comparably performing copper interconnections."

"We have gone from concept to a demonstrable prototype and will soon have scalability and performance data to match."

"An early prototypical implementation has been built and demonstrated, with additional work planned for the second and final year of performance leading to a 'beta' release, appropriate for technology transfer to the product development side of the company."

Implementation of new or improved production processes

The 28 percent of companies reporting implementation of new or improved production processes embodying some part of ATP-funded technology (Figure 26), in experimental or actual production lines, further described early effects on production efficiency, costs, and/or product quality.

"Implemented continuous cable assembly fabrication technique, which should result in lower cost cable assemblies."

"Laser lithography brought fully on line as viable in-house process."

"...We have made great strides in improving the quality and repeatability of our manufacturing processes."

"These improvements include: 1) Getting our cleanroom cleaner, and identifying the sources of contaminants, early in the 'master' preparation process. 2) switching to a new method of making ...masters, from which replicas are later made....3) [installing] a new UV curing system, which allows much more control over the amount and timing of UV exposure... an important breakthrough, because it gives us much more control over dispersion angles, performance, and has reduced rejects."

"Improved raw materials screening, improved process control and improved measures to assure product consistency."

"We have reduced necessary on-site time by approximately one third and developed much better reporting systems."

"1) Improved glue seal dispensing method; 2) new production method reduces labor component, reduces cost, and increases total capacity."

"We established a new way of casting ...with the proper coefficient of expansion as well as other parameters such as 1) size, 2) thickness. This achievement is unique as only one in the industry has been able to achieve same."

"ATP has enabled [us] to begin building an interoperability lab for testing interoperability between different video and network devices from multiple vendors. This interoperability lab will enable us to build better products and solve interoperability issues before products reach the field."

"We have developed engineering scale automated cleaning-in-place and testing systems for membrane separations and are developing new applications."

Installation of demonstration units

A number of companies have reported installation of prototype demonstration units with potential customers and users:

Integrated Surgical Systems (ISS) has installed their new software for controlling revision hip replacement surgery at two hospitals in Germany (where the regulatory approval process is shorter than in the U.S.). According to the company, the software "is fully functional and requires no explicit ISS intervention or supervision although it does require experienced, well-trained users."

Wizdom, a member of the Health Informatics Initiative, reports it has launched two healthcare pilot sites for testing and demonstrating project tools which will add validity and credibility to future commercialization efforts. The work will be done remotely using ATP-funded tools. Through a strategic alliance with other consortium members, Wizdom anticipates a joint-product demonstration soon.

Lumina Decision Systems announced the "first interactive, medical decision support application" available over the World Wide Web. The company "completed a test of its Decision Engine Object Library. The test included a Web based, interactive application to help expectant parents consider the risks and benefits of amniocentesis."