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NISTIR
6917
Different Timelines for Different Technologies:
Evidence from the Advanced Technology Program
I. Introduction
The Advanced Technology
Program (ATP) is a public-private partnership program aimed at bringing
new civilian technologies closer to commercialization. It emphasizes the
development of risky but enabling technological capabilities with multi-industry
and economy-wide benefits.(1)
These benefits include increased productivity and competitiveness of U.S.
firms, new and better products, and increased high-wage employment. Project
proposals address specific business and economic criteria established
by the program. The proposals are submitted to rigorous peer review by
scientific, engineering, and business experts.
Awards are made on
a cost-share basis for both single applicants and joint ventures. Single-company
awards have a maximum allowable length of three years. ATP funding is
limited to $2 million for single applicants and may cover up to 100% of
direct project costs for small and medium-sized companies.
However, all indirect costs are the responsibility of the single applicant.
ATP funding may cover up to 40% of total project costs (direct plus indirect
costs) for large, single-applicant Fortune 500 companies. Joint venture
(JV) projects can last for up to five years and there is no mandated limit
on the award amount. JVs must cost share more than 50% of the yearly total
project costs.
The ATP’s Economic
Assessment Office (EAO) performs a variety of evaluation studies,
including data collection and analysis, case studies, econometric studies,
and modeling. This study will use data collected through ATP’s Business
Reporting System (BRS) to assess the status and nature of the path
to commercialization across the different technology areas funded by the
program. The BRS is an internal database of information reported by ATP
project participants to ATP on a routine and systematic basis. The database
contains technical and business data on project progress, including R&D
status, business status, collaboration, and commercialization activities.
A. Justification, Objective,
and Scope of the Study
The study addresses
the following research questions:
- How do expected
commercialization patterns differ for ATP projects in different technology
areas?
- What factors appear
to account for at least some of the differences?
- To what extent
are actual commercialization patterns mapping to plans?
By legislative mandate,
a key objective of ATP is acceleration of R&D and commercialization
of risky technologies for broad national economic benefit. Does the program
meet this mandate? This study provides some direct evidence to answer
that question. It has the additional policy value of providing technology-specific
data that might inform ATP policy design and proposal evaluation, and
aid prospective participants in future ATP competitions. The time frame
covered by the data is from 1993 (the beginning of the BRS) to early 2002.
This is the first study to use BRS data to track a given group of projects
over time.
ATP does not fund
commercialization activities or product development. Rather, it funds
high-risk, early-stage R&D. Nevertheless, parallel conduct of R&D
and planning for commercialization is a cornerstone of the program’s
strategy for achieving acceleration in technology development and commercialization.
Many technology-development projects have early spin-off applications
that offer initial commercial potential, even though the major benefits
will occur later. This study illuminates the patterns of commercialization
associated with different technologies over their life cycle.
The present study
differs from studies based on more general R&D expenditure data in
at least two ways. Studies based on R&D expenditures tend to underestimate
innovative activities related to production done by companies’ departments
other than corporate labs, such as production engineering departments.
This activity may or may not be recognized by formal R&D accounting.
Another drawback to such R&D expenditure studies is their limited
coverage of small firms and firms in the service sector (Patel and Pavitt,
1995).
ATP’s BRS, on
the other hand, reflects the high proportion of start-up and other small
firms funded by the ATP, while also capturing the participation of leading
industrial laboratories across America. ATP activity likely overemphasizes
innovation by companies in the highest-risk, earliest-stage technology
sectors relative to national data sources. ATP excludes funding product
development costs, such as incremental adaptations and imitation of existing
technologies, which typically comprise the bulk of industry R&D. In
this sense, the BRS is a picture of the innovation process, and its parallel
commercialization activity, for the subset of leading-edge R&D. Nevertheless,
the data is rich in information about the innovation process—from
prototype and design, to product planning and strategies, collaborative
activity, and financing—for a broad spectrum of advanced technology
development. Analyzing this rich field of data provides an insight into
the role of the ATP program in the national innovation process, and also
grants a perspective not afforded by more standard measurements of technological
activity in the United States.
B. Related Studies
The present study
follows a series of case-study status reports of ATP’s completed
projects by Long (1999) and ATP (2001) and statistical studies by Powell
(1999) and Powell and Lellock (2000). The status report volumes were the
first ATP studies to examine technical and commercialization performance
by technology area. Both found differences in the time-to-market of completed
projects across the different technologies for ATP’s first 50 completed
projects. However, the status reports were based on short case studies,
not on more comprehensive BRS data. The present study partially updates
the earlier statistical studies by Powell and Lellock (2000) and Powell
(1999) and also extends those analyses to examine variation by technology
area. Powell and Lellock (2000) is a general report on commercialization
progress of ATP projects based on the BRS database through 1997. Powell
(1999) focused on small firms in comparison with larger firms.
A number of non-ATP
empirical studies in the time-to-market literature attempt to quantify
key factors in commercialization progress. For example, Cooper (1994)
found that project organization, up-front planning (pre-development activities),
and marketing activities were the most significant drivers of timeliness
in a study of chemical engineering firms.(2)
ATP’s project
selection criteria and project management guidelines reflect these findings
by emphasizing that early identification of commercialization channels
and collaboration partners may contribute significantly to timeliness.
Ultimately, the ATP seeks broad diffusion of the technologies it funds.
Profitability at some level will be a necessary but not sufficient indication
of broad impact.
C. Organization of the Study
Section two describes
the methodology and ATP project data used in the study. Section three
draws on the economics of innovation literature to establish a framework
for data analysis. Section four provides an overview of technology areas
and targeted industrial sectors, with a statistical profile of projects,
participants, and commercial applications by technology area. Section
five examines revenue expectations of project participants and compares
those expectations with expected windows of market opportunity. Section
six then discusses several technology-specific features that may lie behind
the observed trends. Applying factors cited in the literature to data
collected in the BRS, the analysis considers different strategies for
commercializing ATP-funded technologies, different types of competitive
advantage, and capital availability, as well as embedded characteristics
of firm size and R&D project structure. Section seven summarizes the
findings and policy relevance. An Appendix
provides preliminary data that compares expectations about timing of commercialization
with actual performance for a subset of companies using Close-out Reports
and Post-project Surveys.
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1.
See Ruegg (1996)
for more discussion of enabling technologies and ATP program objectives.
For a related concept from the macroeconomic perspective see Helpman (1998).
2. See also McDonough (2000).
Return to Table
of Contents or go to II. Data and Methodology
Date created: March
4, 2003
Last updated:
April 12, 2005
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