Risks and Pitfalls related to Technology Commercialization

Technology Commercialization is a lengthy and challenging process and most of the time, great promises of new product development are seldom fully realized. Therefore, it is important to review all the influential factors of the new technology and the market in order to reduce the risks of technology commercialization. Before any strategies are being discussed, this chapter first discusses some of the risks and pitfalls mentioned in the textbooks and papers and how is it related to technology commercialization in the real world as follows:

Table 6.1 Risks and pitfalls of technology commercialization Problems occur: Problems occur in

technology development, product exploitation and marketing that cannot be overcome;

Formosa 21 Inc. is a low cost digital video surveillance solution provider that created an “intelligent digital surveillance video system”. The company states that the hardest part of technology

commercialization is not in its technology but how to apply it to their surveillance system. Therefore, the company still has to lower their technology failure rate in order to successfully turn their R&D technology into a product.

Technology Itself (R&D)

Unexpected technical problems:

Delays and cost overruns because of overestimates of the company’s

technical capabilities or simply its lack of depth and resources.

Aebos Tech professes in power tool designing and manufacturing and has developed a “digital wireless video surveillance system” through the SBIR program. The reason the technology failed to commercialize is because the technology is not mature enough. The technology was unable to transmit surveillance images stably during the testing stage.

Market Demand (Marketing)

Limited industrial growth: The growth of the invested industry is not as high as expected

The market of IC assembly nano-coating services have continued to recede, so NanoWin Tech has moved its technology focus into other fields.

Business rivalry: Profit gain

deteriorating due to harsh rivalry from business competitors;

In a very short time, many competitors joined in the IC assembly nano-coating service market with cheaper price or better business models, therefore, the market quickly became hard to maintain for NanoWin Tech

Patents and intellectual properties:

Controversy and disputation concerning the use of technology patents or intellectual properties

The controversy and disputation concerning the use of technology patents or intellectual properties occurred in the mechanical industry

The moving target: The basic product concept misses a shifting market or the company may make assumptions about channels of distribution that don’t hold up.

Sometimes projects get into trouble due to inconsistencies in focus.

Wistron Optronic Co. specializing in the design and manufacturing of TFT-LCD, has developed a “High brightness and color gamut display technology for mobile phones” with ChuangHwa Picture Tubes Ltd. However, ChuangHwa Picture Tubes Ltd., has decided not to further

commercialize the technology due to its high cost.

Insufficient experience: The business and management experience of the high tech firm’s technical team is not sufficient;

Many SBIR participants failed with technology commercialization due to their inexperience in the marketing and

management field.

Loss or lack of professionals: Brain drain of professionals and technical personnel due to long term deficit and loss; or lack of technology

professionals for the product development to continue

Aebos Technology professes in power tool designing and manufacturing, and has developed a “digital wireless video surveillance system” through the SBIR program. The reason that the technology was unable to commercialize was due to the difficulty to train related R&D personnel.

The company has a shortage of

professionals and therefore technology commercialization is unable to proceed.

Internal Management (Business)

Financial difficulties: Expected profit income has not occurred, yet the demand and financial gap for business capital is expanding. Thus, the

company is facing financial difficulties;

88 firms (13.23%) of SBIR participants have mentioned that the lack of capital is the main reason that their technology commercialization failed.

Over optimistic estimation:

Professionals’ over optimistic estimation in the business plan and over confidence with the new

technology, resulting in the neglect of possible risks and danger

Nano Win Tech had designed heat sinks for LED. When the product was first developed, its function was much better than copper made heat sink; however, by that time, the price for cooper made heat sink went from $6000 NT dollars a piece to no more than $60 NT dollars. Therefore, even though the function of the new heat sink was much better, the product was unable to provide a price that could both satisfy customers and cover the company’s expenses.

Cognition dissonance: Differences of opinions and cognition dissonance regarding business and management strategies between primary

shareholders and management teams

NanoWin Tech has experienced differences of opinions between the president and its shareholders on the company’s business strategies, and thus some resistance towards technology commercialization took place during the process.

Misjudgment of firm’s business strategy: Serious income loss due to misjudgments of the firm’s business strategy.

72 firms (10.82%) of SBIR participants mentioned that the misjudgment of the firm’s business strategy was the main reason for their technology

commercialization to fail.

Mismatches between functions: One part of the organization has unrealistic or even impossible expectations of another (i.e. Engineering may design a product that the company’s factories cannot produce).

Wistron Optronic Corp. has developed another technology “Rapid responsive and high color gamut display technology for mobile phones”. However, the technology commercialization cannot be pursed due to callowness of its LED manufacturer.

Therefore, the company is still waiting for the LED manufacturer to overcome technology difficulty in order for the technology commercialization to proceed.

From the above chart, it is clear that problems occurred more often in regard to market demand, internal management and business strategy than the new technology itself.