Table of contents(13 chapters)
Technological innovation is not simply invention, but rather is a process that includes all the steps from the decision to conduct research to the identification of opportunities and paths for that research to contribute to society through diffusion and commercial application. While scientific discovery is central, it is a single (albeit critical) piece of a complex process involving navigation of the business, legal, regulatory, and economic issues that define the innovation landscape.
This chapter explores the extent to which an innovator is able to capture innovation rents. After examining the two main drivers of such rents, the strength of the appropriability regime and the ownership of specialized complementary assets, the chapter examines how their interaction is so critical in affecting imitation, commercialization options, and firm performance. After reviewing the underlying conceptual framework and empirical evidence, and using a perspective that cuts across both time and industries, the authors then discuss the implications of innovation profits for the resources to be devoted to the discovery of new or improved product and processes.
In this chapter, we focus on the people component of the technology commercialization process. We review how the need for a variety of skills and knowledge sets creates unique challenges and opportunities for the team, particularly given the complexities associated with commercialization and the need for creativity throughout the process. We suggest that simply having a multidisciplinary team in place does not ensure success and highlight the potential benefits and liabilities. In particular, we highlight the relevancy of team composition in terms of professional orientation and social network ties. We then review how team composition influences internal team processes.
This chapter provides an overview of five modes of intellectual property (IP) protection – patents, designs, copyrights, trademarks, and trade secrets – available in the United States, the European Union, and Japan. After describing the purposes of and principal differences among the five types of IP protection and outlining the advantages of each form, the chapter provides country- and region-specific information. The authors highlight the aspects of IP law in which international harmonization has, or has not yet, occurred, and offer insights into the relative advantages of various national and regional IP protection systems.
This chapter discusses current issues raised by the use of patents in university-industry technology commercialization. After introducing how patent laws operate in the global marketplace, this chapter provides an overview of the U.S. patent system, describing aspects of the process by which patents are obtained and enforced. The focus of the chapter then turns to some of the benefits and costs to academia of the impact of the Bayh-Dole Act, which allows universities to capture returns from federally funded research. The chapter identifies some of the challenges created by the expanding scope of subject matter eligible for patent protection and concludes with a discussion of some of the issues and opportunities associated with the strategic licensing and enforcement of patents that may impact invention and innovation in the academy and beyond.
This chapter suggests that, while researchers and teachers of university technology transfer often think exclusively in terms of patents and the Bayh-Dole Act, we ought to adopt a more nuanced view of intellectual property rights (IPRs). In the text, I discuss the primary non-patent types of intellectual property (IP) protection, copyright, trademark, and trade secret, and argue that while patents are normally the “default” position when we think about protecting technologies and profiting from them, evidence suggests that patents are among the least important means of capturing value from innovation. Moreover, I suggest that while many consider that IP protections act as substitutes for one another, thinking about IPRs as complements is a more relevant approach to this issue. Adopting this more nuanced view better reflects reality and does a superior job of alerting our audiences to the opportunities available in the technology commercialization process.
This chapter provides an overview of the marketing strategy development process in the commercialization of breakthrough technologies. Important concepts and elements that are considered critical when developing market applications are presented with emphasis on three key decisions: target market selection, segmentation, and positioning. These strategic decisions will guide the more tactical considerations relating to the specific elements, or marketing mix, of the product's marketing strategy. Marketing strategy development is a dynamic process impacted by many factors. This chapter highlights the dynamic nature of this process as well as provides insight into the fundamental considerations in strategy formulation.
This chapter introduces the reader to the meaning of competitive advantage and posits that a firm's strategy is defined as the managers’ theory about how to gain and sustain competitive advantage. The author demonstrates how a firm creates its competitive advantage by creating more economic value than its rivals, and explains that profitability depends upon value, price, and costs. The relationship among these factors is explored in the context of high-technology consumer goods-laptop computers and cars. Next, the chapter explains the SWOT [s(trengths) w(eaknesses) o(pportunities) t(hreats)] analysis. Examining the interplay of firm resources, capabilities, and competencies, the chapter emphasizes that both must be present to possess core competencies essential to gaining and sustaining competitive advantage through strategy. Next, the chapter describes the value chain by which a firm transforms inputs into outputs, adding value at each stage through the primary activities of research, development, production, marketing and sales, and customer service, which in turn rely upon essential support activities that add value indirectly. After describing the PEST [p(olitical) e(conomic) s(ocial) t(echnological)] Model for assessing a firm's general external environment, the chapter explains Porter's Five Forces Model. The chapter then describes the strategic group model and illustrates that model by reference to the pharmaceutical industry. The author notes that opportunities and threats to a company differ based upon the strategic group to which that firm belongs within an industry. Finally, the chapter explores the importance of strategy in technology intensive industries and emphasizes that sustained competitive advantage can be accomplished only through continued innovation.
This chapter presents a framework for evaluating commercialization strategies available to start-up innovators operating in high-technology industries. The chapter uses a stream of research relating to three major considerations for commercialization strategies: intellectual property rights’ strength; requisite complementary assets; and licensing/alliance transaction costs. The authors describe the options available to the innovator and explain how the attractiveness of alliances increases with the strength of the innovator's IPR position and the cost of acquiring complementary assets. The four distinct commercialization environments defined by these factors then are related to the likelihood an innovator will commercialize an invention through cooperation or competition. The chapter then applies the framework to five case studies of start-up innovators in a major research university's business incubator.
The purpose of this chapter is to serve as a basic guide to introduce the reader to different types of valuation techniques utilized when valuing new technologies. The goal is to familiarize the reader with the differing techniques along with some of the issues in utilizing them. The chapter begins with the foundation of corporate finance – the time value of money – and moves through brief discussions on discounted cash flow, decision tree analysis, Monte-Carlo analysis, and real option analysis. The chapter ends with a discussion emphasizing the need to place valuation into a larger context of firm control rights and ownership.
The purpose of this chapter is to outline the steps involved in obtaining venture capital funding for a start-up business. The chapter first discusses access to Venture Capitalists (VCs) and provides the reasons behind VCs’ preference for investing in a traditional C corporation rather than a limited liability company or other pass-through entity. The chapter then describes both the due diligence performed by VC's counsel and the documentation a start-up must provide to satisfy that diligence need. Next, the chapter addresses typical terms of financing deals with VCs, including the types of securities issued and the rights, preferences, and pricing of those securities. Finally, the chapter concludes with a chart identifying the VC financing terms available before and after a significant market downturn and a sample term sheet summarizing the terms of preferred stock to be issued to a hypothetical VC or VC group investing in a start-up business.
This chapter explains the structure of two contracts commonly involved in university licensing: the license granting a company (or companies) outside the university rights to make, sell, or lease products or processes based on a university invention, and the nondisclosure agreement (NDA) that plays a role in the license negotiation process. In the context of the Bayh–Dole Act, the chapter explains that license contracts often contain a complex combination of payment terms intended to provide sufficient incentives for licensees to undertake the (often risky) development of embryonic research. The authors relate the intent of the Bayh–Dole Act to the concerns of university licensing professionals who often negotiate licensing agreements. The chapter then examines the same incentive issues (and the universal contract issues of money, risk, control, standards, and endgame) in the context of NDAs, used by potential licensing partners to protect their respective interests while sharing information about a licensable technology. The chapter concludes with an assignment that provides students with an opportunity to evaluate a license, not from the university's perspective but from that of a client interested in licensing an invention owned by the university.
- Publication date
- Book series
- Advances in the Study of Entrepreneurship, Innovation and Economic Growth
- Series copyright holder
- Emerald Publishing Limited
- Book series ISSN