In this posting, we will provide an overview of commercialization – what it means and how it’s done.
What is Commercialization?
Probably the best definitions for the term “commercialization” (at least, the best that we’ve found so far) come from two fairly different sources: the Intergovernmental Panel on Climate Change and the Legislature of the State of Michigan. We combined the two and came up with the following which, in our experience, exactly defines the term:
Commercialization is the steps taken in the transition of an innovative technology or process from research to a competitive product or service.
The commercialization steps will vary widely from technology to technology and from market to market.
For example, we have had experience taking a sensor that was hosted on an integrated circuit (IC) from a lab to market that involved little more than developing some expanding some IC technology (so more units could be processed in a single run) and building some electronics around it. We have had another experience where the commercialization involved taking an idea into a completely new design from scratch. One took a couple months; the other took several years, but both werre successful and could be considered part of the commercialization process because both involved taking the existing idea or technology and turning it into a real, viable product (as opposed to continuing some level of research).
What Does the Process Typically Involve?
Commercialization can involve the following initial steps:
- an honest evaluation of the technology;
- an honest evaluation of the potential market(s);
(we emphasized the word "honest" because it can be difficult to be objective about something that you've spent a long time developing; it can be hard to come to the realization that there is no market for an idea that you've spent a lot of time on . . .)
- an evaluation of the steps that need to be taken to turn that intellectual property (IP) into a product (the idea may be great but the market may not be there; or the market may exist, but the idea might not properly address it; or the IP might be ready, the market might exist, but is may simply cost too much to get to market to make it a viable product);
If all the numbers add up and things look good, then there are additional issues that need to be dealt with:
- is the money available?
- are the personnel available?
- are the facilities available?
- is the equipment available?
- is the IP protected and, if not, can it be protected (or should it be protected; on rare occasions, it may make more sense to keep something as a trade secret rather than pursue a patent)?
- how long it will take to get the technology commercially ready?
- how will the resulting product or service be marketed, and who will do it?
- what will the expected revenues and profits be?
- and, importantly, will it be worth the effort?
In future installments, we will look at some of the specific activities and analyses that may need to be done, followed by some discussions on trademarks and copyrights.