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NISTIR
6917
Different Timelines for Different Technologies:
Evidence from the Advanced Technology Program
VII. Summary
of Findings by Technology Area, Conclusion, and Future Work
A summary of findings
presents the results of the factor analysis presented in Section
VI in the context of the life-cycle framework. We conclude with policy
implications and plans for future work.
A. Summary of Findings
by Technology Area, Conclusion, and Future Work
Some of the key findings,
by technology area, are as follows:
Biotechnologies
and Information Technologies
Biotechnologies and information technologies support a host
of new-to-the-world applications in a number of industries. They support
formation of new industries.
Information technologies enter the market quickly, with a significant
percentage of applications expecting commercialization during the period
of ATP funding, and with nearly two-thirds expecting commercialization
by a year later. For half of IT applications, the window of market opportunity
is expected to close within a year after ATP funding ends. This timeline
is consistent with the rapid pace of the early phase of the innovation
life cycle for small firms competing to open and capture new markets.
Service applications can be important commercialization strategies as
an initial point of market entry to end users in many industries, as a
more primary mechanism for technology advancement in mature manufacturing
industries, and as a strategy for addressing growth industries like health
care and telecommunications services.
Biotechnology projects
have a number of early opportunities for service applications (for example,
research and testing services) that are useful for market conditioning
and validation. That is the case even if biotech applications do not generate
large cash flows or economic impact in therapeutic markets until much
later.
Regulatory requirements
prohibit fast market entry for many health care applications. The market
is expected to remain open for major applications for more than five years
after ATP funding ends.
- The innovation
focus is on achieving basic functionality and performance of new-to-the-world
products.
- The flow of investment
capital suggests investors envision the broad future potential of the
markets expected to emerge.
- The precise nature
of the larger markets and distribution mechanisms is still blurred.
- Technology-based
competition is keen, and dominance changes rapidly in new and emerging
markets.
Manufacturing
and Materials-Chemistry Projects
Manufacturing and materials-chemistry projects more typically are
developing new process technologies for existing classes of products in
mature, commodity-oriented industries. Manufacturing technologies and
materials-chemistry technologies commercialize slowly; however, opportunities
are expected to accelerate about two years after ATP funding ends and
then to decline relatively slowly compared with other technologies.
- The focus is on
manufacturability and cost to gain advantage in “cents per pound,”
high-volume markets, as well as on higher performance products.
- Capital investment
and validation requirements are costly and lengthy. Financing typically
comes from retained earnings.
- Product life cycles
and market windows are longer than for IT or electronics projects. Technological
change occurs more slowly than in new product areas, particularly for
commodity types of products.
- Joint ventures
are an important vehicle for sharing risks and technological uncertainties,
particularly in addressing interdisciplinary issues where different
technologies converge, such as information technology for manufacturing
or healthcare applications or many electronics/photonics projects that
involve a mix of materials, electronics, and manufacturing issues.
Electronics
Electronics (and related materials) projects tend to involve a
mix of new and established firms in transitional, rapid-growth stages
of innovation, company, and industry development.
- Product applications
are more common than process applications.
- Cost and manufacturability
are critical objectives.
- Electronics product
markets are extremely competitive; product life cycles are short; and
capital requirements for high-volume production remain steep barriers
to market entry.
- Nearly three-fourths
of applications are expected to earn revenues within two years after
ATP funding ends. Windows of market opportunity are expected to diminish
quickly after two years.
B. Conclusion and Policy
Implications
The innovation life-cycle
model provides a useful framework for illuminating differences in commercialization
patterns across ATP-funded technology areas. Our analysis shows that characteristics
such as speed to market, size of firm, project structure, commercialization
strategy, and technology area map to most features and stages of the innovation
life cycle summarized in Table 1. This innovation life-cycle framework
provides a general trajectory of what to expect when and under what circumstances
for future use in project selection and assessment of project performance.
For example, credible and appropriate commercialization plans and expectations
about revenue must be expected to vary by technology area, consistent
with the analysis presented in this study. Project proposals that indicate
pathways to markets with major deviations from this analytical framework
need to be examined before funding is committed.
C. Future Work
The data on timing
of commercialization and windows of market opportunity used in the body
of the study reflect expectations at the time of the last
report on file from each ATP project participant, rather than actual
commercialization history. This study initiated a further effort to compare
actual commercialization histories of ATP-funded technologies against
expectations. These analyses are presented in the Appendix.
Data presented in
the Appendix from Close-out Reports for a large portion of the project
participants covered in the body of the study suggest that ATP projects
are meeting or exceeding expectations for their earliest commercial applications.
Data from Post-project Surveys conducted two to three years after the
end of ATP funding suggest that the commercialization pace may have slowed
down relative to expectations by that time.
Given the small number
of Close-out and Post-project reports available from each technology area,
their analysis must be judged to be preliminary. Additional data and analysis
by type of commercial application, by technology area, and by type of
ATP project and role within the project are needed to document the longer-term
history and to identify characteristics of success and failure to meet
expectations.
This study is the
first of many anticipated studies that characterize the differences in
commercialization patterns of different ATP-funded technologies. The growing
number of Post-project Surveys provide substantial data documenting the
actual performance of projects against plans over longer portions of the
technology life cycle. Future studies will analyze ATP-funded innovation
by specific industry-use sectors and areas of technology impact as well
as core technology area.
Return to Table
of Contents or go to Appendix. Actual versus
Expected Commercialization Timelines: Preliminary Results
Date created: March
4, 2003
Last updated:
April 12, 2005
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