PLANNING AND IDENTIFICATION OF THE MARKETABLE TECHNOLOGY FROM THE RESEARCH AREA

1. PLANNING AND IDENTIFICATION OF THE MARKETABLE TECHNOLOGY FROM THE RESEARCH AREA Fernando A. Kohrs Aldape Director of planning and technical support of the Institute of Electric Research (México)

2. CONTENTS • BACKGROUND • 2. COMMERCIALIZATION OF TECHNOLOGY • 3. TECHNOLOGY MANAGEMENT FRAMEWORK • 4. KEY FEATURES OF AN INTERNATIONAL MODEL OF COMMERCIALIZATION • 5. THE MODEL OF COMERCIALIZATION OF THE IIE

3. Expansion of knowledge Growth of the world competition Fragmentation of the markets and change in the consumers’ preference Technology diversification with greater capacity and response flexibility Technologies for the same product TECHNOLOGICAL TRENDS

4. Pretend that tomorrow would continue today (maybe different mix –same configuration) What is value for our costumers? Take advantage of the unforeseeable Planning – To optimize tomorrow today trends Strategy – exploit new and tomorrow’s different opportunities BUSINESS STRATEGIES FOR TOMORROW

5. “Management is the organ of institutions, the organ that converts a mob into an organization, and human efforts into performance” Peter F. Drucker

6. Preparing today’s business for the future Innovation performance Know when to score a goal or only play beautiful What is being done well and what needs to be improved? Process control MEASUREMENT OF MANAGEMENT

7. 2. COMMERCIALIZATION OF TECHNOLOGY ( D E F I N I T I O N ) “The process of acquiring new ideas, augment them with complementary knowledge, developing and selling the goods in the market” Michell W., Singh K “To move a new technology from its creator organization into market place” World Intellectual Property Organization “Technology comercializaction involves a set of skills including identifying customer needs, developing product concepts, designing products and processes, prototyping and manufacturing” Shane S.

8. Sources of technological uncertainty Will the new product work as promised? Will the delivery timetable be met? Will the vendor give you high quality service? Will the product or service have side effects? Will the new technology make old obsolete? Sources of market uncertainty What needs might be met by the new technology How will need change in the future? Will market adopt industry standards? How fast will the innovation speed? How large is the potential market? Moriarty and Kosnik 1989 CHARACTERISTICS OF HIGH TECH MARKETS

9. Market uncertainty, arising in good part from costumer suspicion and / or confusion Technological uncertainty Competitive volatility and technology cycles HIGH TECHNOLOGY MARKETING A MANAGEMENT MUST ADAPT ITSELF TO THE FOLLOWING CHARACTERISTICS:

10. Technology push vs. market pull Local vs. global market Complete solution vs. incomplete product Business intelligence We know vs. they do not know Who is my costumer? ALIGNMENT OF THE TECHNOLOGICAL STRATEGY WITH THE COMMERCIAL STRATEGY

11. Environment Organization Commercial perspective Strategy I Pull mechanisms - requirements (Knowledge flows) P Technology base Push mechanisms – capabilities (Knowledge flows) Innovation Operations S E A Technological perspective Showing technology management process (Identification, Selection, Acquisition, Exploitation and Protection) highlighting the dialogue that is needed between the commercial and technological functions in the business to support effective technology management Phaal Robert, Farrukh Clare y Prober David t, Technology Roadmapping: linking technology resources to business objectives, Center for Technology Management, University of Cambridge. 3. TECHNOLOGY MANAGEMENT FRAMEWORK

12. To inventory To identify technologies that the company dominates. To follow the evolution of the new technologies. To watch over the technologies of the competitors To watch To determine the own technological potential. To study possible strategies. To evaluate To plan the projects of research. To buy technologies. To form alliances. To enrich To optimize To use the resources in the best possible way. To defend the industrial property with patents, brands, etc. To protect TECHNOLOGY MANAGEMENT

13. What does motivate it? Benefits & value of creating What for? Why? How to achieve goals Products & services What? How? Areas of priority and of approach Key competitions to be developed Which ones? Where? Resources Value Creation With what? When? ELEMENTS FOR A SUCCESSFUL MODEL OF COMMERCIALIZATION Clear & simple to be understood

14. 4 . KEY FEATURES OF AN INERNATIONAL MODEL OF COMMERCIALIZATION 1. The commercialization is based on risk taking • Policies Must Encourage Such Risk Taking and Must Respect Constructive Failure. Successful commercialization should allow the end customer to be a driver of the commercialization process 2. • It is more common for downstream buyers and receptors to provide feedback that guides industry-oriented R&D practices. Education and skills development 3. • Ongoing and lifelong learning to develop and enable a skilled workforce are critical components. • Education in entrepreneurship and managerial skills is also critical to commercialization.

15. Intermediary organizations 4. • Suitable mechanisms must be developed to ensure that the outcomes of cooperative projects can be diffused 5. Understand and Establish Appropriate Incentives for Researchers, Firms and Intermediaries • Lack of, or even negative, incentives for academics (for instance, slower professional advancement) to become involved in commercialization activities is a major barrier to innovation in some countries Development of a Consistent System for Intellectual Property Management 6. • Many countries are recognizing the importance of developing a community patent (similar to the U.S. system of patents for research supported by federal funding under the Bayh-Dole Act).

16. COMMERCIALIZATIONS STRATEGIES BEING USED IN OTHER COUNTRIES The United States Australia Europe Finland France Sweden The United Kingdom

17. INSTITUTE OF ELECTRICAL RESEARCHES (IIE)

18. Mission Vission To promote and support innovation through value-adding applied research and development to increase the competitiveness of the electric industry. To be a leading institute formed by prestigious scientific and technical groups whose results provide benefits to the national electric industry and contribute to protect the ecological and the sustained develpment of the energy sector.

19. Technologi-cal services and specialized engineering Basic and applied research Technological development SUBSTANTIVE ACTIVITIES AND OF BUSINESS OF THE IIE • Experimental or theoretical works. • To generate advances in the scientific knowledge with orientation to topics of potential practical application. • To generate innovative solutions to specific problems of engineering. • Using the knowledge generated by the basic and applied investigation and the available one in the means. • Application of well-known methodologies and available knowledge for the solution of the clients' problems

20. CENTER KNOWLEDGE COMPLEXITY INNOVATION CONTINUES IMPROVEMENT CONTINUES IMPROVEMENT OPERATION OPERATION OPERATION TIME 15 5 10 CONSTRUCTIVE PROCES BY STEPS

21. FIDEICOMISO PARA EL AHORRO DE ENERGIA (TRUST FOR THE SAVING OF ENERGY) COMISION FEDERAL DE ELECTRICIDAD (FEDERAL COMMISSION OF ELECTRICITY) LUZ Y FUERZA (LIGHT AND POWER COMPANY) COMISION NACIONAL PARA EL AHORRO DE ENERGIA (NATIONAL COMMISSION FOR THE SAVING OF ENERGY) PETROLEOS MEXICANOS (MEXICAN OIL COMPANY) CONDUMEX GROUP MAIN USERS

22. STRATEGIC PLANNING RESEARCH & DEVELOPMENT HUMAN RESOURCES MISSION & VISION MARKET MANAGEMENT FINANCE OPERATION FRAMEWORK OF THE IIE: HIGH PERFORMANCE TEAMS Balanced Scorecard (BSC) Business Inteligence Customer Relationship Management (CRM) Project management

23. RESEARCH & DEVELOPMENT • 27 lines of R&D linked with the chore of the companies of the Energy Sector of Mexico • HUMAN RESOURCES • 17% Doctorate • 37% Master • 46% Licentiate Researches: 200520062007 503 517 509 Number of projects: 200520062007 283 300 315 • 5% Controls means and superiors • 52% Researches • 6% Administrative staff • 37% Union employees Staff strength: 200520062007 975 986 984 MARKET • 65% CFE • 24% Pemex • 8% CLyF • 3% Otros MISSION & VISION Billing in millions of pesos: 2005 20062007 499.3 488.5 520 • FINANCE • 59% Projects under contract • 23% Agreed projects with CFE • 14% Fedeeral Goverment • 4% Others Revenues in millions of pesos: 200520062007 546.6 595.5 674.8 OPERATION FRAMEWORK OF THE IIE • MANAGEMENT • Certification in ISO 9001:2000 • Modern systems of Information for the operation and internal administration (Computer Software) • Strategic Planning

24. 5 . THE MODEL OF COMERCIALIZATION OF THE IIE CONSIST IN: Establishing and supporting the permanent contact with the users to identify opportunities, to detect needs, to commercialize and to make concrete the supply and application of products, services and integral solutions, orientating the institutional efforts to guarantee the satisfaction of the user.

25. Other centers of research and development Universities Technical trainers Technological capacity of the IIE 2 5 1 Recognition of the technological available capacity 7 Activities of commercial intelligence for the area of technological promotion, managerial and research 4 6 Valuable contribution to the user productive processes Negotiation of technological solutions Execution of technological solutions Breakdown Structure 3 Recognition of the needs and user requirements User needs TECHNOLOGY COMMERCIALIZATION PROCESS OF THE IIE

26. Agility, Flexibilitt, Scalabilty Innovation, Business diferentiation COMPLEXITY, RISK MANAGEMENT, COMPLIANCE Cost managment Security, protection, continuity FOUNDATIONS GLOBAL STRATEGY OF THE IIE

27. “ If we keep doing what we are doing, we will achieve what we are achieving ” Stephen Covey

28. THANK YOU

29. 1. Activities of commercial intelligence for the area of technological promotion, managerial and research Exploration of the market • Alertness on the potential technologies • Identification of potencial costumers Initial contact • Meetings with the electrical industry executives Activities of institutional promotion • Participation in fairs, congresses and seminars

30. Follow up of our key users Identification of problems and necessities susceptible to be satisfied by the IIE. Presentation before the users of the capacities and resources of the IIE. Objective: to visualize to the IIE as a solver of technological problems Creator of innovative solutions 2. Recognition of the available technological capacity

31. 3. Recognition of the user needs and requirements Identification and rating of the technological resources of the IIE for the satisfaction of the necessities of the user. Search of synergies with universities and other investigation and development centers with the purpose of having a larger technological covering of the products and services to be offered.

32. Elaboration of proposal of solution technological preliminary: Negotiation and agreement of the terms of the proposal of technological solution with the tally, until achieving the final version, settling down: • Mount • dates of beginning • Validity • Areas technological participants 4. Negotiation of technological solution • Defining the objectives and the reach • Mount, taking in consideration the chart of Prices of human resources

33. Formalization of the negotiation of the contractual framework, through the signature of the contract. • Alliance • Agreements • Research projects and technological development • Technological services • Specialized engineering 5. Breakdown Structure

34. The project of conformity is developed to that agreed • It is reported the advances monthly until the termination of the project. • Activities made at the same time of the execution of the technological solution • Identificación de servicios adicionales y determinación de rutas tecnológicas con posibles reemplazos de tecnologías. 6. Execution of technological solutions

35. Bigger impact in the productive processes of the users Bigger institutional performance Management of knowledge based on the contribution of value • Resultados - Know –how technological - Benefit technician and economic - Optimization of their parameters of efficiency, dependability and readiness. - Impact technological in the user's competitiveness and of the energy sector. 7. Contribution of value to the productive processes of the users • Solve technological integral • - Efficacy • - Effectiveness • - Efficiency • Experimental infrastructure • Main activities • - B&AR • - TD • - TS&SE

36. T H E U N I T E D S T A T E S Basic Data on Commercialization • Almost a third of industrial research projects in the U.S. make use of public research, more than a fifth make use of public instruments and techniques, and the impact of public research on industrial R&D is at least as great as that of R&D undertaken by rival firms in the same sector. • The private sector accounts for 70 percent of total R&D in the U.S. • Industry supports 6–8 percent of total academic research in the U.S. • In 2000, public research institutions in the U.S. produced 4200 inventions, 2100 patent applications and 1400 new patents.

37. Specific Commercialization Initiatives and Programs • Cooperative Research and Development Agreements Through these standard agreement templates, the performing companies retain the title to the inventions created through the funded research. • Business Incubators In 2001, there were 950 active incubators assisting 35 000 start-ups and earning more than US$7 billion annually in the U.S. • Industry-University Cooperative Research Centers and Engineering Research Centers • The 50 Industry-University Cooperative Research Centers and 20 Engineering Research Centers are administered by the National Science Foundation. The majority of funding for these come from partnering firms to support partnered approaches to new and emerging research areas.

38. Specific Commercialization Initiatives and Programs • The Bayh-Dole Act: Promote technology transfer by granting the intellectual property rights for research undertaken with federal funding to the institutions performing federal research. It is widely acknowledged to be a cornerstone of U.S. commercialization activities • Technology Transfer Offices All federal labs have technology transfer offices. The lack of skilled personnel is a huge barrier to the success of these offices as the nature and complexity of deals increase and their staff need to master increasing numbers of skills. • Small Business Innovation Research Use the small business sector to meet federal R&D needs.Increase the private sector commercialization of innovations derived from federal R&D.

39. A U S T R A L I A Basic Data on Commercialization • Australia has improved the turnover by companies from publicly funded research from A$300 million in 1983 to A$1.5 billion in 2002. • A couple of hundred Australian SMEs have emerged from publicly funded research, including a limited number of stars and solid performers. • These stars tend to be based on cutting-edge technology, while the solid performers can be based on incremental research and a supportive commercialization environment. • Investments in the R&D system have not yet fully paid off for Australia. • Policy-makers need to take a longer-term and consistent approach to commercialization.

40. Specific Commercialization Initiatives and Programs • Australian institute for Commercialisation Coordinate commercialization activities on a national scale, respond to areas of market failure. • Building on Information Technology Strengths Incubator Program Assist in the development of business plans and marketing strategies and provide start-up and seed funding. In return for these services and investment capital, Incubators take equity in the firms that they assist. • Commercial Ready Program Encourage the growth and successful innovation of Australian companies by increasing the level of research and development, proof-of-concept and early-stage commercialization by Australian businesses.

41. E U R O P E Basic data regarding technology transfer institutions in 15 European Union countries • Technology transfer institute activities include: • Patenting; • Licensing of intellectual property rights; • Liaison for contract research; • Support of spinoffs including business services; and • Financing of spinoffs.

42. Specific European Commercialization Initiatives and Programs • European Business and Innovation Centres Network Promote the growth of BICs in order to support the creation and expansion of SMEs. To this end, the network provides a range of services, including technical assistance, risk analysis and business plan support. • Sixth Framework Programme • Create the European Research Area as a vision for the future of research in Europe. Focus on progressive integration of European research activities. • EUREKA Enhance European competitiveness through support to businesses, research centres and universities that carry out pan-European projects to develop innovative products, processes and services.

43. F I N L A N D Basic Data on Commercialization • Drivers of success for the development of the current of Finland S and T ecosystem: • Selecting the right technologies and appropriate levels of funding, and avoiding the dispersal of promotion efforts; • Developing suitable mechanisms to ensure that the outcomes of cooperative projects can be diffused, • Encouraging cooperation between industry and research enterprises in order to address the increasing risk of applied research • Acknowledging that communications technologies can play a predominant role in the rate of technology diffusion.

44. Policy Bodies • Science and Technology Policy Council of Finland Act as a contract research organization providing a wide range of technology and applied research services for its clients, private companies, institutions and the public sector. • VTT Tecnological Research Center of Finland • Promote the competitiveness of Finnish industry and the Finnish service sector by technological means

45. F R A N C E Basic Data on Commercialization • Public sector research enterprises and Universities had their own technology transfer offices. • The National Centre for Scientific Research has a subsidiary program, to address issues of commercialization and technology transfer. • There are also a number of regional technology transfer institutions focused on French SMEs. Specific Iniciatives • OSEO anvar • Promote and finance innovation in French industry, particularly among SMEs. Facilitate the emergence of new products and processes in all fields of activity.

46. S W E D E N • Sweden's relative spending on R&D has been the highest in the world for more than a decade • The performance of its academic start-ups has been weak • In 2002, only 11 of 47 universities in Sweden had subsidiaries that managed patenting and the commercialization of intellectual property rights. • Police bodies • Swedish Government Research Advisory Board

47. Specific Iniciatives • VINNOVA — Swedish Governmental Agency for Innovation Systems Promote sustainable growth by financing problem-oriented R&D and developing effective innovation systems. • Swedish Industrial Development Fund The fund provides loans and equity finance to innovative, fast-growing companies that have strong export potential and strong management teams.

48. T H E U N I T E D K I N G D O M • Policy Bodies • Council for Science and Technology • Technology Strategy Board • Specific Iniciatives • Small Business Research Initiative • Provide opportunities to small firms whose businesses are based on providing R&D. Create opportunities for starting new technology-based or knowledge-based businesses. • Technology Programme • The program focuses on supporting research into potential big-breakthrough, disruptive technologies. Suppor the following products: Collaborative Research & Development, and Knowledge Transfer Networks.