Commercialization

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By Lee Smithson

Successful Commercialization depends upon all participating partners in a region working in concert to maximize the opportunities which present themselves. A regional commercialization model is not a new idea, more than a few studies on commercialization recommend this type of regional strategy and cooperation among stakeholders. We, at The Stiller Centre, firmly believe that a regional commercialization process is essential to enable the region to become the incubator of ideas. We see our own role as just one ingredient in the recipe for success. The key components of a truly regional strategy must include (but are not limited to):

•     Primary commercialization agent or agency needs to be business centric in its thinking and not a direct subsidiary of any of the large institutions from a participating region.
•     Continued cooperative efforts from the post secondary institutions, from focused efforts by the Industrial liaison offices and tech transfer groups, to integration of college skill sets and focused expertise inside the college.
•     SME receptor strategy- Small and medium sized business (SME) interaction to ensure this diverse group of companies and seasoned entrepreneurs are engaged and aware of new technology opportunities available to them in the region.
•     Large corporation involvement, especially those with head offices in the region or decision making locations and those with C-level innovation agendas.
•     Municipal, provincial and federal representatives need to be very active in promoting not only their programs and availability of them but how they leverage each other for maximum advantage.

Why are these the essential ingredients and how do they contribute to commercialization success? Most regions are doing some of these activities well but the regions that experience the greatest degree of success are utilizing more of the key pieces and benefiting from the synergistic efforts to a greater degree.

The Primary Commercialization Agent for a region needs to be an organization which is business and commercialization focused. This organization will have well connected individuals with significant political capital and the entrepreneurial business success to draw all the connected partners together. The role is to focus on the business opportunities and draw available resources together, to maximize the chances of business success. The primary commercialization agent needs to be a conduit for businesses to network together and a matchmaker for opportunities when the venture needs additional support. This needs experienced business people with a passion for commercialization, who advocate for businesses and commercialization in any form and integrators of the opportunity.

Determining or helping to determine the best path to bring an idea to market whether a licensing opportunity, service business needs, R&D recommendations (if the opportunity is not ready). Not every opportunity needs to enter through this network but opportunities with some question to their viability or an immature management structure will benefit most.

The following situation illustrates the value of this partner in the larger picture.

Universities, through their industry liaison offices, in the commercialization arena, have become good at finding IP, licensing it to large and strategic partners, recognizing a start up opportunity and spinning it out.

Most of us are familiar with the efforts they are contributing. I would put forward however, that universities are not good at recognizing or developing a business opportunity, which is a service based model, and they have a greater deal of difficulty putting a value to it or putting appropriate resources in place to support this type of venture. A primary commercialization agent will vet the idea to its network or advisory partners, and match the expertise available to the business requirements to maximize its chances for success. The biggest issue with opportunities like this is that the payoff to the institution is less direct and less immediate than with licensing type transaction. The plus is they often need less investment to reach profitability. The advisory groups and networks engaged by the agent are comprised of member’s from all active participants in the region working for commercialization and willing to engage the financial and political capital to provide every opportunity to the ventures.

Through a true regional strategy, post secondary institutions including Universities and colleges can contribute a tremendous amount of expertise and opportunity to the process while also enhancing their existing commercialization efforts. Universities gain the advantage of an objective valuation of the IP or idea from a broader experience base than they employ in their tech transfer offices. The ideas gain exposure to the Venture and Angel community for feedback as well. Development partners in the SME sector are also identified reducing the reliance on startup or spinoff solutions when the “go it alone” opportunity or participants are not ideal.

These partners come with cash flow and established, complementary distribution channels to benefit the opportunity’s chance for success. Exposure to the large corporate partners has usually been achieved so this gain is not new but should be enhanced through broader exposure through already expanded advisory groups. Universities are also exposed to new R&D opportunities which are ideal for them to pursue, to develop co-funded research and lever granting opportunities by being part of this exchange. All of which are being done now with the gain in this model being increased deal flow through broader networks, and expanded commercialization options such as service company opportunities alluded to previously. The increased deal flow and successful commercialization allow the university to garner more grants since many require commercialization potential for grant funding.

Why not rely on the University to be the primary commercialization agent? Ultimately the people working in their commercialization offices are employed by the Institution, are required to get the best deal for the institution and are rewarded accordingly for these efforts. They are an essential partner in the effort but have tremendous difficulty in some key areas discussed previously. By definition commercialization is a transition phase. It represents a successful “arrival” at the end of the research process and a “departure” in a new business building process.

Through a true regional strategy Colleges achieve greater exposure and project work in prototype and product development, industrial design opportunities, short run manufacturing and increased involvement in the commercialization process. Again some of this is being done now, but the volume will increase and the scope of work will broaden with the exposure gained through regional involvement. The increasing opportunities to train more students in real world applications will attract more funding and better students.

A key component of the regional strategy is the SME receptor strategy, to engage the SME market in commercialization efforts. SME’s will achieve greater utilization of their facilities, project work to offset downtime, new products which dovetail their own or participate in the markets they currently serve. A SME receptor strategy is working effectively in some regions, where these companies are engaged by a specialist who works to understand their unique issues, competitive landscape, existing advantages they have and expertise which could be diversified, then matches them with technology opportunities from large corporations, universities, colleges, or other companies in the same SME space with complementary skill sets. SME’s also access expertise through this network to improve their current offerings. The SME group also can develop additional revenue streams through licensing technologies they have discovered but are not core to their business operations and do not have the interest or finances to pursue them. This group will also see increased revenue opportunity with nontraditional large corporate projects where the core businesses of each party do not mix but the technology strengths of each allow for a collaboration or development agreement to be engaged.

Again the primary commercialization agent should be involved to vet these opportunities through its own broader networks, and bring to the table additional resources to lower the hurdles facing any new venture.

Not forgotten in the model are large corporations, especially those with a head office or a decision making location in the region are necessary partners in successful commercialization. They have internal expertise to take a product to market as well as the financial resources necessary to get it there. They can partner with universities, colleges or SME’s to take maximum advantage of an opportunity. They do however need to focus on their core businesses and need to be engaged when the opportunity is of immediate or downstream advantage to its business mission.

The true regional strategy leverages governmental and intergovernmental support programs and service offerings. Ideally, these should be seen as cooperative and supportive of the commercialization efforts in a region. Key individuals who represent the Municipal, Federal and Provincial (in Canada) government need to be constantly engaged to ensure any opportunities have taken advantage of each offering. The NRC-IRAP programs, MRI-OCE representatives and programs and funding they offer are good examples of these groups. To ensure they are focused on the regional opportunities available the broader community needs to be constantly engaged with them. Successful commercialization efforts will provide tangible results in the form of the jobs created, retention or attraction of key demographics, tax base enhancement, development activity and revenues etc. In addition, successful commercialization will diversify the local economy towards knowledge-intensive value-added companies with greater long term success opportunities. This constant engagement is best be championed by the primary commercialization agent for the region to provide a cohesive link between these organizations.

All of these groups must be networked together for regional commercialization to achieve its full potential. The provincial Regional Innovation Networks in Ontario, of which the Stiller Centre is one, are good examples of a regional commercialization strategy.

Each RIN is focused on commercializing opportunities in its region, helping companies start up or helping with new product offerings. These networks provide a conduit to the various funding opportunities and expertise inside its region and direct connectivity to the expertise in other regions if it is a better fit.Each of the RINs are different, functions differently and are customized to its home region’s needs and they are making a difference.

Whether you engage the The Stiller Centre in London or any Regional Innovation Network, a network of individuals and relevant expertise will be engaged to ensure the right tools are brought to the table to provide the utmost advantage to your commercialization opportunity. While not yet a perfectly oiled machine, each organization is pursuing a regional commercialization strategy and each is beginning to realize the benefits of the efforts put forward. To the extent that these organizations are business led, and empowered to serve as the Primary Commercialization Agent they are ideally positioned to lead a True Regional Strategy for Commercialization.