Level of Progress in Completing
R&D Phase
Data available
for this report reflect commercialization planning and progress during
early phases of R&D for most of the projects covered. Of the
210 projects reporting, 31 were in their first year of ATP funding
and/or had submitted only their baseline commercialization plan;
179 had completed one-to-two years of ATP funding and submitted one
or two anniversary reports of actual commercialization progress and
other effects of ATP funding. ATP funding had been completed for
only three projects. Projects funded in FY 1995 represent about half
the projects covered, none of which had completed more than one year
of ATP funding by the end of the period covered by this study. (See Chapter
1, Table 1.) The study looks at the overall progress of the entire
group of projects in the BRS as a whole, at their varying levels
of R&D completion.
Reports
for the projects which had completed at least one year of funding
by December 31, 1996, indicate in Figure 11 that
31 percent were less than 25 percent complete; only six percent were
75-100 percent complete with their R&D, which corresponds with
the small number of organizations that had completed their projects.
The median level of completion of the ATP project is estimated for
the group in the database to be 35 percent. Considering the total
R&D (including that beyond the ATP project) needed for significant
commercialization to occur, the median level of R&D completion
is estimated to be 23 percent. These two median values mean that
50 percent of the organizations have completed at least 35 percent
of their ATP-funded projects but only 23 percent of the total R&D
needed for full-scale commercialization. The fact that considerable
additional R&D will be required for many organizations after
the ATP funding period ends is not surprising given that ATP is funding
relatively early stage applied R&D with considerable technical
risk.
Figure
11. R&D Status
Effect of ATP Funding on R&D
Progress
After
just one-to-two years of ATP funding, project participants indicate
that they are already significantly ahead in their R&D cycle
as a result of ATP funding as compared with where they would be without
their ATP award. As shown in Figure 12,
86 percent indicate that ATP funding has helped accelerate R&D
efforts in the ATP-funded area. Of these, 39 percent believe they
would not have pursued the R&D at all without the ATP award;
53 percent believe they are one to three years ahead as a result
of ATP funding. Only one percent indicated they were behind. Those
reporting they were behind are all members of joint ventures and
may catch up as their projects progress and overcome initial organizational
start-up delays. Overall, measurable progress appears to have been
made towards meeting critical windows of opportunity for the ATP-funded
technologies.
Figure
12. Acceleration of R&D
When Can Revenue Be Expected?
Although
the ATP funds R&D that involves considerable technical uncertainties
and difficulties, technical progress tends to come in stages. Early-to-intermediate
stage accomplishments may have commercial value worth capturing by
incorporating newly gained knowledge in a near-term generation of
products and processes even though attainment of the ultimate goals
required for the full spectrum of applications remains distant.
A significant
amount of commercialization planning activity is expected over the
course of the ATP project, and some projects are expected to experience
the beginnings of revenue generation from spin-off activities. Across
the projects, companies, and applications encompassed by this report,
approximately one-third of the projects and one-third of the companies
pursuing commercialization expect to see some revenues from at least
one early application of the ATP-funded technology by the end of
the ATP funding period. (See Figure 13.)
For more than 50 percent of the applications, revenue isn't expected
until a year or more after the end of ATP funding; for nine percent
of applications and projects, revenues are not expected until four
or more years after the end of ATP funding. Only two percent of organizations
indicated they do not expect to earn revenues at any time. All these
were universities, non-profits, or other joint venture members without
a significant future commercialization role, although they might
be performing testing and other services important to future commercialization
by companies in their joint ventures.
Figure
13. When Can We Expect To See Revenues from ATP-funded
Technologies?
Small,
young companies, such as the large number of start-ups the ATP has
funded, typically strive for early spin-off products to generate
cash flow needed for financial survival. Taking advantage of early
product opportunities may help them attract the private capital needed
to pursue the breadth of technological development required to compete
in cost-sensitive markets, and for a broad range of potential applications.
From observation of ATP-funded companies involved in manufacturing
of advanced products and from analysis of individual company reports,
it appears that at any given time many of the companies are engaged
in a mix of R&D and related commercialization activities involving
a single core technology. These activities may feed into the development
of several different generations of products, including some entirely
new product lines, which will enter the marketplace at different
times over the next five or more years. In the case of bio-technologies
for human therapeutics, for example, early applications may involve
research tools and test kits. Significant commercialization of the
targeted human medical therapeutics may not be possible for five
or more years after ATP funding ends because of the lengthy regulatory
processes required.
The remainder
of this report describes the effects of ATP funding, actual commercialization
progress, and the beginnings of technology diffusion, within the
context of the relatively early R&D stage of most of these projects.
Substantial technical uncertainties remain, and full business and
economic potential are very difficult to predict in the face of both
technical and economic uncertainties still remaining at this time.
These caveats notwithstanding, early effects of ATP funding can be
identified and conditions necessary for significant future commercial
success and national economic impact can be monitored. With the further
passage of time, and additional data collection and analysis, we
will learn much more about the evolution of these projects. At this
time, the evidence points to the conclusion: "So far, so good."
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to Chapter 4: STIMULATION OF COLLABORATION
AND RELATED EFFECTS
Date created: December
1997
Last updated:
August 3, 2005