Commercialization of innovations: definition, concept, features and methods of implementation

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The commercialization of innovation is the process of bringing a new product or production method to market, making it available on the market. This term often refers to going into mass sales. But it also includes the transition from laboratory to trade. Many technologies begin in the inventor's research and development workshop and may not be practical for commercial use at so-called "infant" age (as prototypes).

The "research spectrum development" segment requires time and money, as systems are developed with the goal of making a product or method a commercial offering. The release of a new product is the final stage of development. At this point, advertising, sales promotion, and other marketing efforts develop commercial acceptance of the product or method. Beyond the ModelThe commercialization of innovations (in which technologies enter the business world) may be underpinned by the consumer model (in which they become commodities like computers, first sent from the lab to the factory and then to the home or pocket). The process of commercializing innovation is often confused with sales, marketing or business development.

Three Key Aspects

Distinguishing is very important to consider many ideas, get one or two products or business that can be sustainable in the long run. The commercialization of innovations is called a phased process, and each period has its key goals and stages. It is critical to involve key stakeholders early on, including customers.

Problems

The proposed innovation commercialization model may raise the question of when to launch it? Factors such as the potential cannibalization of sales of the supplier's other products, any requirement for further improvement, or adverse market conditions may delay the launch.

Where to start?

A potential supplier may start marketing in one location or several regions, or even in a national or international market. Existing resources (in terms of capital and operational capacity) and the level of management confidence can greatly influence the proposed launch mode. Smaller suppliers usually appear in attractive cities or regions, while morelarge companies can immediately enter the national market. Global deployment usually remains the prerogative of conglomerates, since they are of the required size and use international distribution systems. Other multinational corporations may adopt a "lead country" strategy. Introducing a new product in one region at a time.

Who should be guided by

Marketing research and testing can identify a primary consumer group. The ideal community should be made up of innovators, pioneers, power users, and opinion leaders. This will encourage adoption by other buyers of the product during the growth period.

How to get started?

Potential vendors must decide on an action plan for introducing the proposed product. The concept is formed by answering the questions above. The supplier must develop a viable marketing mix and structure an appropriate budget.

Definition

The commercialization of innovation is the process that transforms ideas, research or prototypes into viable products and manufacturing systems. Which retain the desired functionality while being designed to be easily manufactured at low cost and quickly launched or implemented with high quality designed equipment. The commercialization of innovation also includes the development of effective production and supply chain strategies at an early stage.stage. This action may be a necessary step for commercial success for innovation coming from new ventures, research, technology acquisitions, patents, etc.

Common causes

Here are common grounds that include false assumptions and counterproductive practices:

1. You need to get something that works fast, regardless of manufacturability and cost. Everything can be fixed later.
2. Make it run fast with whatever parts you can find now. Through any innovation commercialization process you have access to.
3. Make sure the prototype will work now at all costs by specifying tight tolerances and using highly skilled labor.

How to design commercial items?

The ideal way to commercialize innovations and production systems would be to build them "the first time". For optimal manufacturability, cost, quality, time, and functionality, research commercialization should include the following: Summarize results so that the study does not define, limit, or imply product architecture, manufacturing strategy, or any aspect of design when one looks at a physical proof of principle or experiment. Be sure to use general words such as "mean", "perform" and so on.

As patent attorneys say, words like "mean" are the strongest. And if the invention has a claim starting with "means"it would be a very broad application, resulting in a powerful patent. Common words must be documented in real time in the workshop on a word processor that is projected onto a screen. Done right, the general description will contain only vocabulary gems, and you can even surprise the team with brevity and unusualness. Basic postulates:

1. Valuable resources and time should be devoted to product identification.
2. The development team must identify, isolate and preserve the “jewels” that are the actual basis of innovation, and then optimize projects around it. Similarly, it pays to make sure that the product requirements express the “voice of the customer” in general.
3. It's important to incorporate manufacturability from the start to rapidly develop low cost, high quality products for lean manufacturing. If the whole enterprise needs to learn this, or if a cultural shift is needed, then training should be organized along the same principles through seminars. For products or services that need to be built on demand or mass-customized, the principles of “Build to order and general customization” are implemented. Ultimate management of the commercialization of innovations and a lean manufacturing strategy for low-cost on-demand manufacturing without forecasting or inventory.”
4. Leaders should understand and support these principles by reading books and attending training sessions and product development strategy classes for executives and managers.
5. Quantifying the total cost. The more important the price, thebetter to measure it. For ambitious cost targets, it is imperative to quantify all costs that affect sales. Until company-wide measurements of totals are in place, the development team needs to make cost decisions based on general analysis or to make important decisions manually. Since much of the savings will come from overheads, you need to make sure that new product costs are not burdened by average prices.

Stages of commercialization of innovations

A strategy of prototyping, mock-ups or applied research in any form must begin with the identification and preservation of a "gem" - a technology that is the basic premise or essence of what has been proven. Without changing the form of innovation commercialization, everything related to core technology and supporting systems will be developed or redesigned to provide better cost, quality and time to market. In doing so, it will be integrated into the optimal product architecture and manufacturing strategy.

Science would be the same, but equipment, software, materials, innovation commercialization management systems would be commercialized to become more productive.

One way to realize this is that the product or service "knows no difference". Here are some examples of the commercialization of innovation: the rays of light are always the same. The flow of electronics, liquid, cells, sounds - all these concepts do not knowdifference.

This analysis quickly reveals what is not a gem, including cutlery and power supplies, which can be quickly acquired at lower cost and higher quality. For example, if the electronics module is 20" wide, it will not fit in a standard 19" rack.

If early architectures ensure that common electronic functions can be performed from off-the-shelf boards, then they are built well at low cost and better availability, leaving the customer to focus on quality. If not, custom schemas may need to be developed, which is resource intensive and complicates other parts of the project.

For example, if user circuits arbitrarily choose the voltage that everyone needs, then a non-standard power supply may be required instead of choosing a proven one and calculating voltages that are already available. This approach will allow the design team to focus on the model itself, rather than wasting precious time and resources on the template.

The format and size of a product or production system should not be based on an arbitrary output, capacity that corresponds to a certain value. Instead, the product format should be optimized to match the best price/performance ratio for the system. This will allow you to buy cheaper key purchased parts and assemblies.

Efficiency of innovation commercialization

Without this action, there is usually a temptation to just takeresearch that "works" and then "prepare" it and put it into production. And this may seem like "early progress" and may temporarily please managers and investors, or satisfy arbitrary deadlines that may be counterproductive. However, this will lead to several weaknesses. What? Consider further.

Real time on the market

One of the biggest weaknesses of non-commercial research can be that the product or process of commercializing an innovation will not be ready to be produced in sufficient quantities under the right conditions. And this will lead to delays during which many resources will be wasted fighting fires and fulfilling change orders. This is a warning to scientists and managers who are only interested in functionality that itself can be compromised by poor manufacturability.

Real time to market will be delayed. Or a product's chances of success could be compromised if the innovation fund isn't commercialized until all testing has been done. The company is then faced with a dilemma between two unpleasant alternatives: try to start production without adequate commercialization, or delay the launch of the product. And then you have to re-introduce the product and maybe re-qualify the process or even update the clinical trials.

Cost

As mentioned above, the price of a product is determined by the concept or architecture. But the possibility of achieving the minimum probablevalue is missed when the product system is based on a research prototype or, worse, a mockup. Also, once the parts are designed in this way, costs are not easily reduced, but trying with a change order wastes valuable resources without actually reducing them and, again, compromises the integrity of the product and process.

Researchers are missing out on a big opportunity - spare parts. Typically, scientists only innovate to "optimize" functionality and then fit parts into an "architecture" that eliminates the standard spare bits and usually requires very unusual products, sometimes with cost and availability issues (which in turn delays the real-time market). In contrast, the center of innovation commercialization must begin with a careful search and selection of finished products and subsystems. And then the product will literally be designed around those details. This is rather paradoxical for research scientists. However, a finished parts strategy is a key element of commercialization to focus on the jewels.

Quality

Research that is not financial can have problems commercializing innovations with reliability. Because research that works well is often done by highly trained technicians, scientists and engineers who know how to make things work (despite the drawbacks) with dimensionssampling is probably not statistical.

Common causes are the following commercialization errors, which are based on observations or press quotations.

Prototypes can be easily "downgraded" in the future

As noted above, cost is very difficult to change once a product has been designed. Because 80% of total lifetime costs are for development and creation. And so much has been done that systematic cost reduction will be difficult. In addition, changes will cost money that cannot be returned during the life of the product. And change will also cost time, especially if pre-orders are required, which can delay market entry, sometimes severely. In addition, changes can cause more problems, so you need to upgrade even better, thus spending extra hours, calendar time and money on subsequent products. Which, in turn, can compromise functionality, quality and reliability. And the worst consequence of cost reduction is that devoting valuable resources to post-design trials of retroactive DFM detracts from other more efficient efforts to develop low-cost products through design, quality improvement, and manufacturing.

Launch Experimental Product

As a general rule, once a prototype is up and running, it needs to be assembled and put into production. Unrefined products that are not designed for processability will inevitably have problems withinitial launch, quality assurance, consistent functionality. And so the actual production will cost more than the target. Another variant of the same problem is when management or investors insist on "proven technology" and then don't allow any changes to the buggy prototype. Which then enters production without commercialization.

Next error

Commercialization of innovations in Russia can be bypassed by risk management. One might think that a non-commercial design would really be worthless by achieving success that might just prove different aspects of functionality. However well-received this product may be, it may not be technologically advanced enough to achieve stable production quickly.

All young businesses need is maturity

Some people say they are working on "still young technology, so costs are still high." This implies that costs will naturally decline as they mature. This error almost always occurs with the following very common postulate. Consider it in the next paragraph.

Mass production alone will reduce the cost

The head of the enterprise may think that the final income will depend on very large orders. That is, a large customer is needed to achieve economies of scale. In fact, many people believe that the industrial myth is the only way to commercialize innovation. Cost reduction is to increase the volume. This may apply to commercial products of significant quantity that have little or minimal variation in markets or in design. However, large capital investments are required to build such capacity. If this opportunity is greater than firm orders, then the business runs the risk that economies of scale will drive the cost down low enough to create the necessary demand to fill such a market. However, if the product has not been commercialized, then that sales factory will try to mass-produce prototypes or raw products, services - and will face many problems like those mentioned above.

And since it is very difficult to make an inherently expensive product or service, the actual cost reduction will result in very little return on the amount spent on building a mass production factory. Worse, the business could be in trouble if the expected cost savings do not materialize. Finally, mass-produced factories are so inflexible that it will be difficult to retool them to make a more fruitful product.