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Performance
of 50 Completed ATP Projects
Status
Report - Number 2
NIST SP 950-2
Chapter
1 - Overview
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Part
4 - Commercialization
of the New Technology
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| New
technical knowledge must be used if economic benefits are going to
accrue to the nation. This generally means the introduction into the
market of a new product or process by the innovating firm, its collaborators,
or other companies that acquire the knowledge. In competitive markets,
the producer is typically unable to capture all the benefits of a
new product or process, and the consumer reaps part of the benefits.
The higher up the supply chain the innovation occurs, the more value-added
steps there are before final consumption, and the more intermediate
firms in the supply chain may benefit, in addition to the final consumer.(16) |
Commercialization
of Products and Processes—A Critical Step Toward National Benefits
Thirty-three of the projects had already spawned 62 new products or processes
when the data for this report were collected. Companies in seven additional
projects expected to achieve their first commercialized results shortly,
and companies in nine projects that had already commercialized their technology
expected to add new products and processes soon. Thus, nearly 80 percent
of the projects had spawned one or more products or processes in the market,
or expected to do so shortly. Table 4 summarizes the commercialization
results.
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Table
4. Progress of Participating Companies in Commercializing the New
Technologies
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| |
Number
of Projects
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Number
of Products/Process
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| Product/Process
on the Market |
33
|
62
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| First Product/Process
Expected Soon |
7
|
9
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| On the Market
with Additional Product/Process Expected Soon |
9
|
10
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| On the Market
or Expected or Expected Soon–Totals |
40
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81
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A Quick Glance at
the New Products
A variety of new products and processes resulted from the projects. For
a convenient, quick reference, brief descriptions of the new products
or processes for each project are listed in Tables A1–A5 in Appendix
A, in Column C. For each new product or process, the new technology
on which it is based is also listed in the tables, in Column B.
Commercialization:
A Critical Step, but Not the Final Word
Commercializing a technology is necessary to achieve economic benefit,
but it does not ensure that the project is a full success from the perspective
of either the company or the ATP. Widespread diffusion of the technology
may or may not ultimately follow the initial commercialization. Nevertheless,
it is significant that these products and processes are actually on the
market.
Rapidly Growing Companies
Rapid growth is generally a signal that the small innovating company is
on the path to taking its technology into the market. And one dimension
of company growth typically is its employment growth. (17)
Figure 1.8 shows employment
changes at the 31 small, single-company ATP award recipients.(18)
Nearly one-fifth of these companies experienced job growth in excess of
500 percent from the beginning of the project to several years after the
project had completed. The largest share experienced job growth between
100 and 500 percent.
Figure 1.8 Employment
Change at 31 Small Companies receiving a Single-Applicant Award
A recent look at Fortune’s
“Fastest Growing 100 Companies” lists 2 of the 31 then-small
ATP-funded companies on the list: Vitesse and Cree. Vitesse now has nearly
800 employees and a market capitalization of $15.6 billion. Cree has grown
to a market capitalization of $4.9 billion.(19)
Not all the small
companies have grown. A little more than one-fifth of them experienced
no change, or a decrease in staff. But taken as a group, the 31 small
companies have grown rapidly. Sixty percent have at least doubled in size;
four of them have grown more than 1000 percent. The ATP helped these companies
develop advanced capabilities, which they have subsequently leveraged
into major businesses.
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16.
For a detailed
treatment of the relationship between spillover benefits (knowledge, market,
and network spillovers) and commercialization, see Jaffe (1997). He notes:
“Market spillovers will not be realized unless the innovation is
commercialized successfully. Market spillovers accrue to the customers
that use the innovative product; they will not come to pass if a technically
successful effort does not lead to successful commercialization”
(p. 12). In commenting on spillovers that occur because new knowledge
is disseminated to others outside the inventing firm, he observes: “Note
that even in the case of knowledge spillovers, the social return is created
by the commercial use [emphasis in the original] of a new process or product,
and the profits and consumer benefits thereby created” (p. 15).
17.
Employment is considered here as an indicator of the commercial progress
of small, award-recipient companies. Assessing employment gains in a macroeconomic
sense from the technological progress stimulated by the 50 projects is
beyond the scope of this project.
18. Employment changes in joint ventures, larger
companies and nonprofit organizations are less closely tied to the success
of individual research projects, and, therefore, they are not shown in
the figure.
19. Market capitalization and employment data cited
here are from Hoover’s Online Company Reports as of August 30, 2000.
Return to Table
of Contents or go to next section.
Date created: April
2002
Last updated:
April 12, 2005
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