Managing Technology from Laboratory to Marketplace

This chapter (“Introduction”) introduces the concept of the Valley of Death and the importance of high-tech innovations to successfully negotiate their way through the Valley and enter into the mainstream economy. It discusses the central role of advanced materials and allied technologies in the ability of firms and nations achieving competitive advantage, particularly within the context of the rise of the Fourth Industrial Revolution. Various models of technological change as possible approaches to understanding advanced materials innovation are introduced and critiqued. Particular attention is paid to the product-centered model, which focuses on marketing as the primary strategic tool used for conquering the Valley of Death. The gap between early and later adopters posited by this model is questioned and an alternative evolutionary scheme proposed as more appropriate for twenty-first-century innovation. The structure of the book, designed to further develop these ideas and underscore the role of advanced materials in the growth of high-tech today, is outlined.

This chapter (“Levers of Survival”) develops the concept of those mechanisms—the levers—that have to be engaged at different times over the course of the R&D cycle of radical innovation. We derive these 11 levers of survival empirically using the results of our survey of promising advanced material startups. In doing so, we find that the successful completion of each stage of the cycle depends on the engagement of a unique set of levers and that these must act in concert to be effective. Our results also reject the notion of a sharp break in the transition between the early and later, mainstream stages. They suggest that these phases of R&D communicate with, and learn from, one another and that the radical innovation process proceeds in a more or less evolutionary manner.

This chapter (“Creation”) explores the process by which high-tech companies generate the first iteration of their new product, process, or material. At this stage, the technology is still incomplete and generally incapable of competing effectively in a mainstream market. However, it is still commercially functional and able to attract certain niche customers composing a possible beachhead market. The chapter identifies the six critical levers of survival required for a firm to reach this important benchmark. In doing so, it considers the significance of early-stage strategic alliances in providing firms those levers of survival they failed to secure during the project selection phase. The chapter argues that, by bringing into the deal needed levers, such alliances can be an essential component in the successful realization of the creation phase of the R&D cycle. The chapter presents case studies of innovations in wireless communications and nanotechnology to show how these levers function in real-world technology creation and to underscore the relevance of early-stage strategic alliance formation in the radical innovation process.

This chapter (“Targeting”) considers the task of targeting that first market entrance. The chapter assumes that the creation stage has produced the first iteration of the new product, process, or material. While still in a raw and unfinished state, it is still commercially functional, particularly within an initial, niche market segment. It is assumed that the technology will continue to improve as it experiences real-world conditions in the beachhead market. The chapter considers the three critical factors in finding potential beachhead opportunities: connectedness, focus, and acceptance. It identifies the three critical levers of survival required for an innovating firm to use as tools in helping to pin down from the range of possibilities that one optimal beachhead. The chapter concludes with a case study from the field of nanobiotechnology that illustrates these points.

This chapter (“Competing”) considers how new technology competes for space in an initial beachhead market. In doing so, it identifies and discusses three major competitive strategies: confrontational, contextual, and timing. Important conclusions drawn from these discussions include (1) close collaboration between the beachhead and future mainstream market is vital to obtain competitive advantage in the former and to accelerate transfer of technology to the latter; (2) compressing the R&D cycle to speed up initial entrance into the beachhead is a powerful competitive tactic; (3) two new skills or levers of survival not used in the “creation” and “targeting” phases of R&D are now important: technical flexibility of scale and identification and connection to an external context; (4) new and advanced technologies in the field of informatics—including quantum computing—are beginning to be used to further compress the R&D cycle.

This chapter (“Expanding”) explores the stage in the R&D cycle when the innovation extends its market reach beyond the beachhead and enters into the mainstream. The discussion highlights the new types of competencies that need to be engaged to successfully expand its range and be accepted by mainstream original equipment manufacturers (OEMs). These competencies include the ability of top management to push and steer radical innovation, a technology itself that is capable of interconnecting and evolving with external systems, and the active participation of a champion connector who can arrange and nurture these external connections. Within this context, the chapter focuses on three principal expansion strategies, namely platforming, spanning, and complementing. Of the three, platforming poses the greatest risks for a company but also promises the greatest benefits. Case studies presented in the areas of polymers, wireless technology, and microelectromechanical systems (MEMS) illustrate these points.

This chapter (“A Case Study: ESS, Inc. and the Energy Storage Revolution”) traces the development of an important player in energy transition and the 4IR economy. In doing so, it follows how the levers of survival operate over the various stages of the R&D cycle and demonstrates the fundamental concepts developed over the previous chapters.

This chapter (Conclusion: The End Game) reviews the results of the previous chapters and poses important questions that potential investors, entrepreneurs, and managers need to ask prior to selecting projects to develop. The chapter then considers the importance of rethinking traditional end game strategies both to individual firms and to national competitiveness. It argues that startups in particular need to move away from end game strategies focused on their being acquired by established companies and toward optimizing their chances of surviving and growing as a firm. We contend that those young firms that succeed in securing the critical levers of survival are the best candidates to do this, and that ultimately their ability to realize the full economic payoff for entering into radical innovation depends on them following this difficult but, in the end, rewarding path.