This document discusses developing new technology products and innovation. It covers several key areas: paradigms for innovation; issues with invention commercialization; product evolution versus revolution; why companies need innovation; examples of innovation; sources of innovation; types of innovation; principles of innovation; and challenges with commercializing university research such as market problems, technology taker problems, legal problems, and institutional problems.

1. Developing New technology products Workshop 21st December 2009 Murray Hunter

2. Why are you here?

10. What Does it take?

11. Cultural Paradigm Skills Paradigm Chance & Fate Paradigm Positive Entrepreneur Attributes Strategic Paradigm Interpersonal Paradigm Personality Paradigm Action Paradigm Creativity Paradigm

12. Invention Less than 2% of filed patents are ever commercialised Does a new invention have consumer benefits or create any competitive advantage? Can consumers accept the new invention?

13. Product Evolution

14. Evolution Verses Revolution Changing Technology (slow to Change) Changing Lifestyles Cheap Clothes Available (substitute) Had to Reinvent the Company due to Slow Product Development

18. Vanilla Breakthrough? Evolution New Flavour – New Product

20. Examples of Innovation

21. Examples of Innovation

22. Examples of Innovation

23. Cationic Breakthrough?

24. To soap or not to soap?

25. Is this a breakthrough or not?

26. Prawn fishing successful in Kuala Lumpur

27. Not all innovations are successful Why did it fail in Perlis?

28. Not all innovations are successful Because these people in Perlis can fish for free by the roadside

29. The Myths of Invention

31. Present time The Future The Past A Radical change in technology Will radically change the timeline into a new industry This changes the parallel of the market gradually We know the past and present The effect of competitor innovation will bring product evolution Without any changes our timeline will remain relatively unaltered

32. Present time The Future The effect of competitor innovation will bring product evolution The Past Without any changes our timeline will remain relatively unaltered This changes the parallel of the market gradually A Radical change in technology We know the past and present Will radically change the timeline into a new industry

33. Areas of Firm Innovation

34. Technology/Market Positioning Hotel Coffee Shop Coffee Bean High Style Kedai Kopi Fast Food Low Low High Technology

35. Many Factors Change Markets and Give rise to Opportunities

36. Product Lifecycle IP Value & Novelty Potential Profitability IP Value Competitive Risk Taking Concept Risk Taking Profit Late Majority Late Followers Pioneers Early followers Early Majority Time

38. What are the sources of innovation?

39. Sources of Innovation Drucker (1984) Identified seven sources of innovation

40. Unexpected occurrences unexpected success

41. Unexpected failure

42. Incongruities

43. Process needs

44. Demographic changes

45. Industry and Market Changes

46. Perceptual changes

47. Knowledge based concepts

48. Types of Innovation

49. Invention Totally new product

50. Extension New use or different application of an already existing product

51. Duplication Creative replication of an existing concept

52. Synthesis Combination of existing concepts and factors into new use

53. Other Examples Teflon Unexpected occurrences

54. incongruities

55. incongruities

56. incongruities

57. Process Needs

58. Industry Changes

59. Demographics

60. changes in perceptions

61. New knowledge

62. Principals of Innovation Scan opportunities through purposeful processes Be both conceptual and perceptual – get out into industry To be effective, it has to be simple and focused – has to be used by average people Pursue ideas that are going to make major change Market knowledge is important

63. New Knowledge Innovation is the most risky Better to focus on other sources of innovation: ie, applications of existing ideas and technologies as new knowledge technology development is extremely long term. Bright ideas are the riskiest source of innovation and rarely succeed. Receptability is always the problem (look at patents files but never commercialised) Issues about University Commercialization

64. Introduction Traditionally Research has been: ● Single disciplinary ● Followed personal interests of researchers ● Research output objectives: ►a paper ►a conference presentation ● Not part of any strategic research plan

65. Researchers’ Environment Teaching commitments Intellectual and market isolation Research driven by need of funding Little expectation other than ‘traditional research output’ ‘Lukewarm’ supportive environment Something that is expected

67. No or limited economic study or little consideration to scale up potentialNB: to bioprocess engineer has this as a fundamental consideration (difference between scientist and engineer)

68. Types of Research Pure Basic Research Experimental and theoretical work undertaken to acquire new knowledge without looking for long-term benefits other than the advancement of knowledge

69. Types of Research Applied Research Original work undertaken primarily to acquire new knowledge with a specific application in mind

70. Types of Research Strategic Basic Research Experimental and theoretical work undertaken to acquire new knowledge directed into specified broad areas that are expected to lead to useful discoveries

71. Types of Research Experimental Development Systematic work, drawing on existing knowledge gained from research and/or practical experience, that is directed to producing new materials, products or devices, to installing new processes, systems and services, or to improving substantially those already produced or installed.

72. Types of Research Experimental Development Systematic work, drawing on existing knowledge gained from research and/or practical experience, that is directed to producing new materials, products or devices, to installing new processes, systems and services, or to improving substantially those already produced or installed.

73. Types of Research Collaborative Research research projects jointly developed by the university and the external partner

74. Types of Research Contract Research request made by industry or government agency for a specified research project to be carried out with identified aims & objectives

75. Types of Research Sponsored Research granting agencies advertise a call for applications and applications are normally peer reviewed. Research projects are normally basic or strategic but not normally concerned with commercial outcomes

76. Types of Research Consultancy project involves buying the skills and expertise (background IP) of university staff, as well as infrastructure to work on a specified project

77. Types of Research Demonstrative Research Seeks to answer a question or solve a problem from data collected, usually un-replicated, for the purposes of demonstrating a concept or process to a group, or a method, part of skill development or experiential learning

78. Thus research will stem from Basic Research to Applied, Collaborative, demonstrative & Contract Research

79. Problems Associated with Commercialization

80. Problems Associated with Commercialisation Market Technology takers Legal Institutional Technology Other

81. Market Problems Failure of invention to meet market needs Small size of target market Lower price than expected Unable to gain distribution Lack of market research

82. Technology Taker Problems Lack of willingness of companies to take up technology Disagreements on terms and conditions of technology transfer Perceived complexity of technology and risk Limited human resources on the part of companies to put time into implementing the new technology or launching the product Not familiar with industry Financially weak Returns not attractive enough High capital expenditure not worth the risk Limited distribution capability

83. Legal Problems Lack of Clear and clean patent ownership Government regulations Legal costs Due diligence and burden of risk License exclusivity Long period of time for patent grant

84. Institutional Problems Too many people to deal with at the university or research institute Low priority by university administrators to allocate resources for patents, contract research, consultancy, technology transfer and education services High cost of licensing Post license technical support offered by university Researcher leaves institution Researchers too many projects (time constraint) Lack of expertise in commercialisation unit

85. Competency and Strength of Research Institutes/Universities Investors expect complete technology transfer R&D Institutes offer to development stage Research Laboratory Results Development Pilot Plant/ Prototype Commercialisation Industrial Scale Technology Transfer Strong Moderate/ Strong Moderate/Weak Tan Sri Dr. Yusof Basiron, Commercialisation of R&D Outputs – MPOB Ex

86. Other Problems Unreliable financial estimates Rely on Government grant that never comes Poor follow up

87. University Organisation Hierarchical Process orientated Procedurised Departmentalised Strong “conformity” values Social goals verses performance goals THIS IS AN EXCELLENT ORGANISATION DESIGN FOR A TEACHING INSTITUTION

88. Conflict Between Organisational Design and the Creative Individual Hierarchical design excellent for time and motion activities – In macro terms a teaching organisation is a time and motion logistical exercise An organic organisational structure has been found to be much more supportive of a creative environment

89. Typical Research Project Structure Problem Potential Applications of Technology Basic Technologies Industry Collaborators Resources Entrepreneurs Potential Product/Process Outcomes Research Institutions Milestones/Expected Outcomes Market or Other Significance for Developed Application Technology Needs Spin-Offs Downstream/Vertical Solution

90. A simple Market Driven Research Model Parameters of problem researched with reference to interdisciplinary frames Theoretical solution thought out, becomes project objectives, with boundaries of industry requirements Industry defined problem or issue Laboratory trial Scaling up Process design Industry implementation

91. Steps in the New Product Development Process

92. Steps in Commercialisation Adopt Market Driven Research Framework View Research in a Product Development Framework View Technology as a means to problem solving rather than an end (i.e., what basic technologies can be utilised?) Seek to develop a multidisciplinary team with industry representatives

93. Steps in Commercialisation (Cont) Once established technology, identify its benefit to particular applications Horizontal diversifications Focus on IDS (Information Delivery Systems) for user friendliness Protect IP Show off Potential applications where potential takers are

94. Some Problems Finding out what the market requires is a skill that needs to be developed There may be no companies involved in a particular niche of an industry sector that we are interested in – This is another barrier to commercialisation in Malaysia Scientists are used to working in isolation to industry

95. The Product Development Process Ideation Developing Product Specifications Market and Application Planning Concept and Prototype Generation Product Registration Product Design Further System Development

96. Steps in the Product Development Process (Cont.) Manufacturing System Design Review Packaging and Product Marketing Review Test Market (Optional) Refining of Product Before Major Launch Major Launch

98. Opportunity is a Construct Vision Platform Resources Networks Having the right Skills Product/Market Strategy Ability to make linkages Anchoring a source of innovation Cognitive, hemispherial & field Perception

99. Opportunity is a Construct Vision Platform Resources Networks Dream, ego, aspiration, greed, survival, education Experience Reference & Benchmark Having the right Skills Product/Market Strategy Ability to make linkages Anchoring a source of innovation Cognitive, hemispherial & field Perception

101. Figure 11.14. The Risk Matrix for a New Product/Strategy

102. Intellectual Property

103. Commercialisation Commercialisation of intellectual property is taking or using the idea, expression, invention, process or other intangible item to the marketplace for the benefit of the holder.

104. Patent Is an exclusive right granted for an invention, which is a product or a process that provides a new way of doing something, or offers a new technical solution to a problem.

105. Manner of manufacture A legal term used to distinguish inventions which are patentable from those which are not. Artistic creations, mathematical methods, plans, schemes or other purely mental processes usually cannot be patented.

106. Industrial Design An industrial design - or simply a design - is the ornamental or aesthetic aspect of an article produced by industry or handicraft

107. Trademark Is a distinctive sign which identifies certain goods or services as those produced or provided by a specific person or enterprise.

108. Copyright and Related Rights A legal term describing rights given to creators for their literary and artistic works (including computer software). Related rights are granted to performing artists, producers of sound recordings and broadcasting organizations in their radio and television programs.

109. Trade Secrets/Undisclosed Information Is protected information which is not generally known among, or readily accessible to, persons that normally deal with the kind of information in question, has commercial value because it is secret, and has been subject to reasonable steps to keep it secret by the person lawfully in control of the information.

110. Why?

112. Figure 4. Two Pathways for the Commercialisation of Research (example for a plant extract) Farm to Consumer As an Intermediate Product Identification of Active ingredient in plant Identification of Active ingredient in plant Preliminary ASSAY Preliminary ASSAY Seek advice on market potential Cultivation, harvesting, extraction, refining, stabilisation, etc Cultivation, harvesting, extraction, refining, stabilisation, etc Collaborate Trials in ‘made up’ formulations, eg shampoo, cream Trials in ‘made up’ formulations, eg shampoo, cream Collaborate Various trials and assays Collaborate Go to market and sell product to customers, supermarkets, direct selling, distributors, etc. Find a distributor Negotiate Agreements (farming, processing, marketing) Product Registration To international market as a raw material fine chemical Little IP Generated Most likely to stay in domestic market IP Generated that is transferable for Value Potentially has a global market Beware of Becoming Dyfunctional

113. Thank You