The Innovation Continuum:
Moving Promising Technologies off the Shelf
Genome Canada GPS Policy Brief
Canadian Science Policy Conference
Calgary, November 5, 2012
Professor Jeremy Hall
Professor Jonathan Linton
Beedie School of Business
Simon Fraser University
Power Corp Professor for the Management
of Technological Enterprises,
Institute for Science, Society and Policy,
University of Ottawa
Editor-in-Chief
Journal of Engineering and Technology
Management
Editor-in-Chief
Technovation: the Journal of Technological
Innovation, Entrepreneurship and
Technology Management
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Context
• Increased emphasis on publically funded research for invention,
leading to commercialization for societal benefits
– How can new scientific endeavours be commercialized to
provide societal benefits?
– How can we get promising technologies from public research off
the shelf?
• Science-based innovation is a complex process involving different
individuals throughout cycle, where individuals variously enter and
exit (Langford et al, 2006)
• High heterogeneity in knowledge; heuristics to exploit opportunity
(Hall and Martin, 2005)
2
Context
• Scientific/technical knowledge migrate across institutional
boundaries through (Reamer et al, 2003)
– Cooperative research and development
– Licensing or sale of intellectual property (IP) and spin-offs
– Technical assistance
– Information exchanges
– Hiring skilled people
• Idiosyncratic, context dependent
• Currently available indicators for university research outcomes
‘blurs’ the idiosyncrasies and unique path dependencies
(Langford et al, 2006)
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Context: Genome Canada Research
• Increasingly moving beyond discovery research towards
“translation of discoveries” for the global bioeconomy
(Halliwell and Smith, 2011)
– Not just medical but also industrial applications – including:
manufacturing, chemicals, bioremediation, biomonitoring
tools and biofuels (Sheppard et al, 2011)
– More integrated GE3LS research
• Consistent with recent discourse on more reflexive , interactive
approach to innovation rather than linear “technology push”
(Nightingale, 2004; Guena et al, 2003)
• Costs of greater integration?
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Key issue: A need to understand heterogeneous,
idiosyncratic features of innovation
• Heuristics, incentives differ among key technology developers,
users, other stakeholders
– Insights from wide range of stakeholders needed, but…
– Adds complexity; ambiguity, e.g. difficult to identify salient
stakeholders, their interests, heuristics (Matos and Hall, 2007.
• Industrial setting plays key role in whether a public technology
will be sought out and commercialized by firms
– Some actively monitor, engage with university researchers
(e.g. pharmaceuticals), most industries more passive
• Are technology transfer offices, scientists, early developers
adequately prepared to manage relationships with passive
industry players?
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Theoretical Underpinnings
The Challenges of New Product Development
Clark and Wheelwright
Number of
new ideas
Concept
Commercialisation
6
The Challenges of New Product Development
Clark and Wheelwright
Ability to influence
outcome
Number of
new ideas
Concept
Commercialisation
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The Challenges of New Product Development
Clark and Wheelwright
Ability to influence
outcome
Actual management
activity
Number of
new ideas
Concept
Commercialisation
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‘Contemporary’ Development Funnel
Clark and Wheelwright
Technology Strategy
Technology
Assessment &
Forecasting
Market
Assessment &
Forecasting
Development
goals &
objectives
Aggregate
project plan
Project mgmt
& execution
Post-project
learning &
improvement
Product/Market Strategy
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TCOS Framework
Exogenous technological developments,
market trends, global financial conditions, etc.
that affect cognitive legitimization processes
Technological
Uncertainties
Commercial
Uncertainties
Organizational
Uncertainties
Development
goals &
objectives
Aggregate
project
plan
Project
management
& execution
Post-project
learning &
improvement
Social
Uncertainties
Social trends, legal issues, controversies
etc. that affect socio-political
legitimization processes
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Typology of Innovative Uncertainties
Hall and Martin, 2005; Matos and Hall, 2007; Hall et al, 2011
1. Technological uncertainty:
• Does it work?
• Domain of scientists, engineers
2. Commercial uncertainty
• Is it commercially viable?
• Domain of marketing, business analysts
3. Organisational uncertainty
• Will your organisation accept/adopt the technology and
appropriate the benefits?
• Domain of the strategists, business development experts
4. Social Uncertainty
• Is it acceptable to civil society?
• Domain of ??
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The TCOS Framework (Hall et al, 2011)
Paradigmatic issues  Creative destruction (Schumpeter, 1934, 1942)
Kuhn, 1962  Changes in selection environments; breaking org.
routines & heuristics (Nelson & Winter, 1982)
 Competency-enhancing vs. destroying innovation
(Abernathy & Clark, 85; Henderson & Clark, 1990)
 Impact on innovation value-added chain (Afuah, 1998)
↓
Impact/Influence
TCOS Uncertainties
Organizational
Social
Hall & Martin, 2005 Technological Commercial
Risk Characteristics Variables & interactions can be More variables (complexity),
Knight, 1921; identified, probabilities
some not easily identified
Simon, 1959 estimated
(ambiguity)
Type of Legitimacy
Cognitive
Socio-political
Aldrich and Fiol, 1994
Heuristics
Piece-meal social
Conjecture – refutation
Popper, 1945, 1959
engineering
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Organizational and Social Uncertainty
• Organizational uncertainty: can organization appropriate the
benefits of the technology (e.g. Teece & Teece et al):
– Org. capabilities, complementary assets, legal/institutional
settings for IP protection (appropriability regime)
determines who profits from the innovation
• Social uncertainty: how diverse secondary stakeholders may
affect, or be affected by technology development
– Differ from TCO uncertainties: more interacting variables
(more stakeholders beyond value chain, some which may
be difficult to identify - complexity and ambiguity)
– Require different heuristics
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TAIGA Forest Health: Forest Pathogen
Detection and Monitoring
• Early detection/prevention best strategy for managing forest
health, using new genomics-enhanced pathogen detection &
monitoring tools for rusts, cankers leaf spots, root diseases
• Reg. agencies rely on visual inspection for known pathogens;
proposed technology faster, more accurate
• Nurseries another potential market
• Potential market size unknown; certification regulations in flux
• While good for industry and society (socio-political legitimacy),
may be resisted by individual stakeholders
– Some firms may be proactive; others reactive
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Biocatalyst Lignin Transformation Technology
• Forest biomass can replace petroleum through lignin-based
polymers for aromatics, resins, carbon fibers, biofuels
– Renewable; can reduce env. impacts
– May affect forestry, chemicals, energy industries
• More efficient lignocellulose degradation via
genomic/metagenomic approaches such as manipulating naturally
occurring metabolic diversity of forest soil communities
• But… “You can make anything from lignin except money”
– Regulatory pressures, increased concerns over non-renewable
feedstocks provide socio-political legitimacy
• Promising products include lignin-based vanillin and resins
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Levers
Hurdles
Hurdles
Commercial
Levers
Technological
TCOS Uncertainty Analysis
Pathogen Detection
Potential to enhance
certainty in risk assessments
RHA1 Vanillin
Demonstrated proof
of principle
LPF Resin
Demonstrated proof of
principle
Cannot detect if pathogen is
dead or alive
False positives and negatives
Screening for key genera and
race may be needed
Trade most significant
application; may expedite
confinement time at borders
Voluntary phytosanitary
certification programs may
benefit private sector
Production scalability
Particle size, distr’n,
solubility, viscosity of
solutions
Petroleum free;
potential eco–
products
Abundant, renewable
and stable supply
Production scalability
Strict certification (extreme
temperatures & moisture;
National and international
building codes)
Eco products increasing
market niche
Renewable; not dependent
on fluctuating oil prices
Reduces input costs
Phytosanitary Certificates
(inter-provincial Nurseries
problem)
End use differs - not defined
Industry price sensitive
Int. trade complexities
Perceived only as a reg. tool
Compliance with
market needs
R&D to develop new
applications
Skepticism regarding
making profit from
lignin
Thin margins
Need for reliable supply
High transport costs
Skepticism regarding profit
from lignin
Fluctuations in
construction industry
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Levers
Hurdles
Hurdles
Social
Levers
Organizational
TCOS Uncertainty Analysis
Pathogen Detection
Adds value in risk assessment
procedures; help protect
Canada against pathogens
Complementary collaborative
relationships
RHA1 Vanillin
Patentable
Out-licensing opportunity
‘Low hanging fruit’; establish
cognitive legitimacy
LPF Resin
Patentable, opportunity to
out-license
Specialty resin suppliers
possess compl. assets,
capabilities
Lack of guidelines,
Training issues
May provide too much info
(e.g. may identify problems
that do not have solutions)
Protects forests
Could impact agriculture
Climate change may be key
driver
Access to compl. assets
Need to secure patents
Tech-transfer offices not
equipped to deal with low
margin industries
Env. attributes provide
socio-political legitimacy
Short term trade implications
NGOs, local communities,
First Nations unclear
Stakeholder ambiguity issues
Need clear post detection
actions
Need to ensure env. sound
practices through-out life
cycle stages
Need regulatory approval
Capabilities & compl.
assets weak Tech-transfer
offices not equipped to
deal with low margin
industries
Renewable; no
formaldehyde concerns
Favorable for LEED cert.
Env. attributes provide
legitimacy
Need to ensure env. sound
practices throughout life
cycle stages
Need regulatory approval
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Implications
Early Scanning
• Key for innovative success: early scanning of industry features
and market dynamics, firm capabilities and appropriability
issues, and potential social/env. impacts.
• Gatekeepers’ link between research team & environment:
• Technological gatekeepers
• Market gatekeepers
• Stakeholder gatekeeper
The Role of Technology Transfer Offices:
• Passive versus active role, depending on industry
• Must move beyond medical (active) if translational model is to
engage the bio-economy
• Training for heterogeneous skills?
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Implications
Opportunity Identification
• Early interaction reduces risks, plus identifies opportunities
• Enroll unanticipated users for future applications, identify
opportunities otherwise beyond scope of initial project
• The role of the ‘gate-opener’
• Temporary project structure/ short term funding, versus long
term potential applications needed for translational model
Learning Levers for Legitimization:
• New technologies compete against well established
incumbents with scale economies (cognitive legitimacy)
• Effect of learning (Linton and Walsh, 2004)
• Social/env. attributes as lever - different value proposition
based on social legitimacy, which can provide developers with
time to improve technological and commercial attributes.
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Implications
The Cost of Translation
• While benefits are promising, there are also costs:
– Increased transaction costs (finding industry partners,
potential customers, consultations with more stakeholders)
– IPM legal & admin costs
– Increasingly demanding accountability/research ethics
• Individually all provide utility, but also time-consuming,
requires skills, heuristics peripheral to lead researchers
• Schumpeterian vs. Kirznerian entrepreneurship - researchers
creating new knowledge expected to take on larger share of the
risks, admin under translational research, but currently not
clear if rewards go to them or others
• Are we expecting too much from our scientists?
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Acknowledgements
TCOS Lab Contributors
•
Senior Researchers (and co-authors of this brief): Drs. Stelvia Matos; Vern
Bachor & Robin Downey
•
Adjuncts: Dr. Mike Martin (retired); Dr. Bruno Silvestre (UofW)
•
Students: Deb Farias; John Prpic
•
Research Projects
• Genome Canada and Genome BC Studies
• Genomics-based forest health diagnostic and monitoring (PI:
Richard Hamelin, UBC)
• Harnessing microbial diversity for sustainable use of forest
biomass resources (PIs: Lindsay Eltis and Bill Mohn, UBC)
• SSHRC & others: Brazil studies on innovation & entrepreneurship in
poor communities
We would also like to acknowledge our colleagues Professors Edna
Einsiedel and Cooper Langford, and special thanks to Karine Morin for
organizing this session
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