NISTIR-6098
Development, Commercialization, and Diffusion of Enabling Technologies
Progress Report for
Projects Funded 1993-1995
4. STIMULATION OF COLLABORATION
AND RELATED EFFECTS
Stimulation of R&D Collaboration
Stimulation of collaborative
R&D relationships among companies, universities, and other research
organizations is part of ATP's legislated mission. The objectives are
to increase research efficiency and effectiveness, expand capabilities,
reduce R&D cycle time, and accelerate commercialization and competitiveness.
The level of collaborative activity has indeed been considerable from
the beginning of the program. In the first competition, ATP funded five
joint venture projects among the first 11 awards. From 1990 through 1997,
the ATP has funded 119 joint ventures, involving about 600 participants.
Many of these joint ventures involve companies which had never worked
together before and were formed explicitly to apply for ATP funding (Silber,
1996, p. 23). Of the approximately 285 organizations in 179 FY 1993-1995
projects for which data are available after one-to-two years of ATP funding,
164 are members of 58 joint ventures. (See Chapter
1, Figure 2.) In addition to the formal joint ventures, the ATP has
found that most of the "single company projects" it funds are, in fact,
also rich in collaborative relationships. These are implemented through
subcontracting arrangements and informal alliances.
As shown in Figure
14, 78 percent of respondents, including a mix of 77 single company
awardees (64 percent of the entire single company award group) and
144 joint venture participants (87 percent of the entire joint venture
participant group), reported that collaboration has helped them achieve
the goals of their ATP project. Of the group indicating this positive
effect of collaboration, 55 percent indicated that the ATP was responsible
for the collaboration to a great extent. Eighty-five percent indicated
ATP was responsible to a moderate or great extent.
Figure 14. Stimulation
of Collaborations
As indicated above, many
ATP collaborations reach beyond the official, defined joint venture relationship.
Both single company award recipients and joint venture members form collaborative
relationships through subcontractor arrangements and informal alliances.
A total of 436 subcontractor arrangements, for example, have been reported
by single company awardees and joint venture awardees filing BRS reports.
Nearly one-half of the subcontractors are small companies; the remaining
half consists of universities and medium-to-large companies, in near
equal numbers; eight others are government or non-profit laboratories.
Collaboration Effects
Figure
15 shows effects most significantly
enabled by ATP collaborations of these multiple types. More than
70 percent of respondents indicated that collaboration enabled
these effects significantly or moderately. Nearly everyone (99
percent) indicated that collaborations had "stimulated creative
thinking;" over 80 percent indicated that collaborations had
enabled the company to accelerate entry to the marketplace and
to save time in general (corroborating acceleration effects cited
in Chapter 3); about 75 percent reported that collaboration had
enabled the company to obtain R&D expertise, and to identify
customer needs; and 79 percent indicated that their experiences
with ATP collaborations had encouragedthem to consider future
collaborations.
Figure 15. Effects
Most Enabled by Collaboration
Figure
16 shows other effects of ATP collaborations. Among the other
effects analyzed, "ensuring a reliable/quality source of supply" was
cited as significantly or moderately enabled by 56 percent; "labor
cost savings" were cited by 50 percent; "attraction of investment
capital," "planning for manufacturing," and "saving equipment costs" were
cited as significantly or moderately enabled by 32 percent, 45 percent,
and 37 percent, respectively. These effects may be indicative of
the relatively early project stage of most of the organizations reporting
and may become more important as the companies move closer to commercial
deployment.
Figure 16. Other
Effects Enabled by Collaboration
There is no doubt that
R&D joint ventures/consortia involve some project start-up time and
costs, and possibly continuing costs not experienced by single-company
awardees. As shown in Figure 17, of the organizations
which indicated that collaboration had helped them achieve their project
goals, half confirmed that project coordination and management costs
had increased significantly or moderately as a result of collaboration.
More detailed analysis of this group (not shown) reveals that nearly
all reported only a "moderate" cost increase. Only 20 percent indicated
that associated delays in starting projects had resulted significantly
or moderately as a result of collaboration, and only six percent anticipate
a delay of product entry into the marketplace as a result.
Figure 17. Costs
Attributed to Collaboration
Anecdotal
Comments
Anecdotal information from
the BRS provides additional insight into effects of collaboration experienced
by ATP-funded organizations and amplifies the statistical analysis. Some
comments elaborate on the positive and negative impacts of ATP collaboration;
others address issues not covered in specific reporting questions.
Obtaining expertise not otherwise
available
"The work with
our subcontractors [has] enabled us to utilize their expertise
in fields [where we] are not staffed. The interactions with our
joint venture partners provide us access to work they are doing
in fields [where] we are not active." [Joint venture member]
"Critiques of work
conducted independently [have] provided invaluable outside perspective
to stimulate creative thinking and exposed several oversights early
in the development process." [Single applicant]
"The breadth of experience
brought in on these projects is extensive." [Joint venture member]
"Excellent collaborative
environment and complementary technical capabilities have improved
the quality of technical output and effectiveness of the team. There
has been tremendous synergy between the companies that are collaborating
on this project. Each company brings a particular expertise that
the others don't have and which would be difficult to develop. Each
party is an enabler for the others." [Joint venture member]
"Collaboration has
provided [us] with access to compounding, conversion, and fabrication
resources, complementary ... materials and technical expertise that
would not otherwise have been available." [Single applicant]
"In general, [subcontractor]
has a wealth of experience and knowledge on ... processing and control.
Their insight has been a primary driver on overcoming several technical
problems and developing process simplifications." [Single applicant]
"Our collaboration
with other partners has helped us to access first hand data for medical
vocabularies, and understand size and complexity of that data." [Joint
venture member]
"Exposed to new ideas,
technologies that would otherwise not have been exposed to. Enabled
us to leap forward with newer approaches into our architectural design." [Joint
venture member]
"Access to software
has been very beneficial in defraying costs which may have been prohibitively
high and blocked any attempt to accomplish this work." [Joint venture
member]
"Medical expertise
and related product requirement insight would not have been possible
from within our own organization." [Single applicant]
"Through collaboration
we have been able to bring experts in this field to our test facility
and work with live systems." [Single applicant]
"Able to evaluate
other alternative processes for research and development...that would
not have been possible from both cost and time considerations....
Both [companies] have benefitted by mutual exchange of core competencies....
No negative impact." [Joint venture member]
Obtaining assistance from universities
"University
students are exposed to industry as summer students so they become
acquainted with the needs of industry and the workings of an
R&D industrial lab. The resulting collaborations result in
joint publications and patents. [Single applicant]
"[Our] collaboration
with ... University (as subcontractor) has [led] to the acquisition
of some fundamental optimization technology that has been useful." [Single
applicant]
"Our collaboration
involves working with two universities and an equipment vendor. The
universities have done early work to explore ... possibilities. We
have then followed up with more results-oriented experiments. This
saves us time in helping to identify things that work and provides
us with an estimate of the process regime in which decent results
can be obtained." [Single applicant]
"1. Significant input
on optimized structural shape design from Dr....at [university].
2. Structural testing facilities and equipment at [university] utilized
for testing ATP prototype shape. Could not perform test with in-house
laboratory facilities." [Single applicant]
"We have just begun
the first phase of a collaboration with the ... center at [university],
which involves the use of their clean room facilities. Duplicating
those facilities at [our company] would have been completely impossible.
In addition, we are being trained in various ... techniques, which
speeds up the research phase considerably. The only negative impact
has been the time required for setting up the legal structure of
this collaboration." [Single applicant]
"There have been a
number of positive collaboration effects, particularly with our work
with the [university]. He has a group of excellent students, that
have helped us to produce ... software, better ... layout technology,
and also increase our research standing in the community of international
researchers. Our company always had strong people working for it,
but we have been able to attract, and keep several very talented
people because of the NIST funding and are grateful for this. So
I would say that the research collaboration with this university,
sponsored through NIST has been very positive." [Single applicant]
"Our ability to use
subcontractors from academic medical centers has greatly improved
our ability to achieve the goals of our project. These collaborators
have given us both a lab for testing and a reality check on what
works." [Single applicant]
Learning more about potential markets
and customer needs and accelerating entry into the marketplace
"The most significant
collaboration has come from securing a contract ... to install
a pilot demonstration.... This has facilitated a number of discussions
which has identified the real customer needs and therefore accurate
functional and performance requirements of the products. In this
process the team at ... working on the project have been introduced
to domain knowledge that would have otherwise been difficult
to obtain." [Single applicant]
"The manpower-multiplying
and synergistic creative effects of using subcontractors has accelerated
the R&D process to make it possible to plan and begin to initiate
business alliances for the technology that capitalize on a fast-approaching
market opportunity." [Single applicant]
"Main advantage is
to fully understand all criteria for success upfront thereby avoiding
the cost and project delays associated with unnecessary re-development." [Single
applicant]
"Maximize resource
dollars. Expedite new composite applications." [Joint venture member]
"The partnership which
was established for this ATP project is a true vertical partnership
of suppliers and a manufacturer. Unlike other R&D alliances in
which [these companies] have participated, which were horizontal
partnerships of manufacturing companies, this project had no inherent
conflicts of interest. There is a single motivation in this project:
to advance the state-of-the-art of the ... technology ... to allow
for broad substitution of composites for traditional materials. And
to date the NIST/ATP project has been central to achieving this goal." [Joint
venture member]
"The collaboration
has allowed us to understand healthcare needs for the technology
to which we have been able to focus our R&D. This has greatly
increased commercialization chances and technology impact. Collaborator
has already started to use our technology and has hired our students
as interns and employees, which represents an important form of technology
transfer. More collaboration has occurred than originally planned." [University
joint venture member]
"In general, the collaboration
has allowed us to contact new potential collaborators and markets.
Some of these markets are for new equipment using our technology
in ways we had not considered. Due to the success of the JV, the
various members are investigating projects outside the ATP." [Joint
venture member]
"Without the joint
venture and collaborations from the other members it would have been
almost impossible to assess the market needs and define the customers
and requirements." [Joint venture member]
"The vertical structure
of our joint venture (2nd tier vendor, 1st tier vendor, OEM) assures
that our project direction is kept focused on real customer needs
and addresses real customer concerns." "Better coordination of program
brainstorming to advanced technology has enhanced the commercial
focus. Has accelerated the commercialization effort." [Two members
of a joint venture]
"Huge time savings;
by vertically integrating the consortium, we can effectively design
at all levels of the system simultaneously, rather than the serial
design process normally used." [Joint venture member]
"It has created a
greater awareness of the complete HDTV product environment. It has
allowed [us] to pursue alliances outside of our narrowly defined
... product environment and work towards a greater understanding
of new product and services offerings." " Complex system architecture
issues are better studied in industry teams. This is made possible
by the ATP grant." [Two members of a joint venture]
"There have been no
negative impacts. Positively, the collaboration has increased our
awareness of our partners' need for advanced materials and the partners'
efforts in identifying opportunities in emerging markets which might
match our long-term R&D material development work." " Assisted
greatly in development of understanding of manufacturing costs and
customer requirements, eventually leading to the abandonment of the
plastic LCD substrate effort." [Two members of a joint venture]
"The collaboration
would have happened, eventually, but ATP has been the catalyst. The
program has moved along much faster than anticipated and has been
able to obtain managerial support and external assistance which would
not have happened without ATP affiliation." " Intercorporate collaboration
has fostered business relationships which are likely to continue
beyond the ATP into product development and commercialization. This
should greatly accelerate the application of the ATP-developed technology." [Two
members of a joint venture]
Formation of stronger supplier-customer
relationships
"The other joint
venture partners are also customers for [company]. General understanding
of business practices and other developmental needs have had
a positive impact on all parties." [Joint venture member]
"Our collaboration
with the equipment vendor has led to a promising new area of development.
We hope to build a better _______ using their technology. It may
allow us to surpass our original throughput goals." [Single applicant]
"[Collaboration has
given us] a broader base of creative ideas for problem solving. Identify
potential problems in future manufacturing." [Joint venture member]
"Our subcontractor
has a good deal of credibility in the marketplace. We have gone farther
with prospects and vendor alliance discussions because of the choice
of the subcontractor." [Single applicant]
"Collaboration has
helped to align ideas of users and suppliers greatly." [Joint venture
member]
"As an end user of
the core technology being developed for this program, we would not
have early access to the technology without the collaboration. Collaboration
at this phase allows us to influence the design to meet our end product
needs during the development. We have no intention to manufacture
the [component], but to use it in our product; therefore collaboration
is essential." [Joint venture member]
"There has been an
awakening to the advantages of networking with our suppliers on an
informal basis. This has resulted in leveraging research within [our]
supply chains." "The collaboration with [lead company] has given
us much insight and understanding as to the interests, needs, values,
and talents of one of our largest international customers." "Without
collaboration on this project with a major customer, this project
probably would not exist. Collaboration provides us an unusual opportunity
to work together." [Three members of a joint venture]
Strengthening credibility within
the organization and with other organizations
"The joint venture
with [partner] has focussed our R&D effort to a specific
application and our price performance objective.... We anticipate
the most significant impact will come in the near future when
[partner] can assist us in gaining the capital investment for
the transition to manufacturing and in the well-established market
share [partner] currently enjoys." [Joint venture member]
"There is heightened
credibility obtained from the concurrence of our competitors that
we are doing the right things; i.e., if we tried to get this project
approved in house alone, it might be perceived to not be as big a
problem." [Joint venture member]
"Provided visibility
into automotive market segment which we wouldn't normally have had
access to." [Joint venture member]
"The fact [our company]
has an ATP award has added credibility to our commercialization effort
and in fact it has attracted some of our early collaborators and
has been a major source of interest for our partners." [Single applicant]
"The mere fact of
having won an ATP project has opened many doors to potential beta
test partners, OEMs, and/or Resellers." [Single applicant]
"Expanded awareness
within the Products Group for need for more resources devoted to
product R&D." [Single applicant]
Elaboration of the "benefits and
costs" of collaboration
"The main positive
of collaboration is the sharing of expertise, and the stimulation
of new approaches to the problem. The main negative has been
that one of the companies was not really committed to provide
sufficient resources to execute tasks on schedule and this slowed
down all tasks in the critical path. Another negative (not major)
has been the added approvals to change program directions, and
the slow down in schedule due to co-ordination of tasks (technical
and administrative)." [Joint venture member]
"This vertical teaming
has enabled a free flow of ideas between the two companies and has
made this collaboration a positive experience to date. The only negative
of the collaboration, which is a result of the "large company syndrome," is
that while large companies such as ... offer tremendous manufacturing
resources, scheduling these resources can be difficult at times." [Joint
venture member]
"Positive: Reduction
of "not invented here syndrome"; reduction of capital cost on equipment
available from JV partner; positive factor in negotiating other contract
research with outside company that involves complementary technologies
of both JV partners. Negative: Difficulties experienced in initial
collaboration with JV partner revolving around issue of trust (viewing
the other company as a potential competitor)." [Joint venture member]
"Some negative impact
results when a participant does not contribute to the extent expected
and others have to fill the void." [Joint venture member]
"Positive Impacts:
Elevated awareness of Healthcare marketplace. Understanding the healthcare
information technology requirements. Negative Impacts: Very difficult
to settle the intellectual property rights between multiple collaborators." [Joint
venture member]
"On the positive side,
there was a great exposure to other technologies and transfer of
technical knowledge between large multinational companies and research
institutions. On the negative side, the research has been delayed
because of the effort required to establish collaborative agreements
and work through conflict resolutions." [Single applicant]
"On the positive side,
the collaboration has allowed a group of companies to come together
that otherwise wouldn't have and work jointly through a leveraged
investment of R&D efforts. On the negative side, not all of the
business models of the participating companies were compatible which
resulted in some serious business negotiation problems relative to
intellectual property." [Joint venture member]
Formation of Strategic Alliances
Outside the ATP Project for Commercialization of ATP-funded Technologies
The numerous ATP joint
ventures represent concrete evidence of ATP's ability to stimulate strategic
alliances. Some are largely horizontal R&D collaborations attacking
problems of mutual interest across an entire industry. Most involve complex
R&D and commercialization collaboration across the supply chain.
For example, in the area of data storage, one project is using a "virtual
corporation" approach to develop and integrate multiple technologies--spanning
laser optoelectronics, media materials chemistry, lens optics, motors
and mechanisms, and software algorithms--needed for affordable mass data
storage using optical tape. The joint venture participants (Terabank
Systems, Polaroid, Science Applications International, Energy Conversion
Devices, Xerox, and Motorola, with technical assistance from University
of Arizona and Carnegie-Mellon University) are developing the individual
component technologies. Several of the companies plan to form a new company
(outside the ATP project) to commercialize the resulting low-cost tape
library storage product capable of holding many hundreds of gigabytes
of data. At the same time, the ATP-funded joint venture members are making
plans to take advantage of the new technical capabilities in their existing,
distinctly different product areas.
Many other strategic alliances
have been formed outside the ATP research project to commercialize ATP-funded
technologies. Following announcement of the ATP award and capitalizing
on technical accomplishments that occurred early in their projects, a
number of ATP-funded small companies have formed one or more commercialization
partnerships. Although information concerning negotiations with potential
commercialization partners, and the resulting alliances, is provided
to ATP on a confidential basis, articles published by the industry and
trade press sometimes provide public substantiation. Public sources confirm
that partnering between ATP-funded small businesses developing DNA diagnostics
technologies and pharmaceutical and medical instrumentation companies
has been particularly active. Among the publicized alliances, GeneTrace
(a 2-person start-up when it received an ATP award in the 1994 Tools
for DNA Diagnostics Focused Program competition) has negotiated a licensing
agreement with Incyte Pharmaceuticals which will generate cash payments
in exchange for gene sequencing services utilizing the unprecedented
speed of GeneTrace's time-of-flight (TOF) mass spectrometry technology.
A key to this and future GeneTrace alliances is the coupling and synergy
between their TOF mass spectrometry and proprietary DNA sequencing and
sizing reactions controlled by pharmaceutical companies (Sedlak, 1996,
p. 23). Affymetrix, also a 1994 award recipient in the Tools for DNA
Diagnostics Focused Program competition, has recently entered into agreements
with OncorMed to collaborate in development of clinical validation of
genetic testing services utilizing their GeneChipTM for analysis
of genes associated with cancer. Under a separate distribution and instrumentation
alliance between Affymetrix and Hewlett-Packard, Hewlett-Packard is developing
and supplying a next-generation scanner to read the GeneChipTM (Regalado,
1996, p. 22). Affymetrix has other collaborations with Genetics Institute,
Roche Molecular Systems, Incyte Pharmaceuticals, and Glaxo Wellcome (Regalado,
1996, p. 18). All of these partnerships are outside the ATP projects,
but they occurred relatively early in the R&D phase as a means of
accelerating commercialization of the ATP-funded technology and raising
capital for continuing R&D.
Table
3 summarizes strategic alliance activity focused on commercialization
of technologies funded by the ATP during 1993 to 1995. The data reveal
that a substantial amount of negotiation and discussion activity
is underway. Seventy-six alliances had been formed by December 31,
1996: 27 with suppliers; 24 with customers; 17 for joint production;
and 8 with distributors. Fifteen license agreements had been signed
by that time.
Table 3. Strategic
Alliance and Lisensing Agreements for Commercialization
|
Number
of Projects |
Number
of Companies |
Number
of Applications |
Negotiations/discussions
held with potential strategic partners |
69 |
77 |
114 |
Alliances
formed with suppliers |
24 |
27 |
34 |
Alliances
formed with customers |
24 |
24 |
30 |
Alliances
formed for joint production |
16 |
17 |
21 |
Alliances
formed with distributors |
8 |
8 |
9 |
Total
alliances formed |
72 |
76* |
94 |
Negotiations/discussions
held with potential licensing partners |
32 |
32 |
47 |
License
agreements signed |
15 |
15 |
19 |
Note: *Companies reporting more than one type of alliance are included
twice.
Source: Business
Progress Reports for 778 applications being pursued by 375 companies
in 207 ATP projects funded 1993-1995.
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Date created: December
1997
Last updated:
August 3, 2005
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