KUALA LUMPUR, March 16 — “Commercialisation” is a prominent buzzword to those who are in the innovation ecosystem. If you are in the ecosystem, you would know what I am talking about.
It typically involves the application for intellectual property protection; attempt to license; attempt to spinout; attempt to market and sell; as well as attempt to mass produce and export.
However, the most conventional definition begins as early as an attempt to derive any direct monetary gain from the exploitation of an intellectual property (IP).
In my article, I will use the more conventional and general definition of the term “commercialisation.” For policy-making, however, it is my opinion that it would do us good to study and decide on the specific commercialisation outputs that would positively affect the country’s economy and its people’s wellbeing — setting national KPIs in alignment with that, and standardising the measurement methodology across the various agencies involved in promoting commercialisation and ensuring the same definitions are used.
It is worth pointing out that “commercialisation” is an iceberg, that we are trying to shave down to ice-cubes in order for us to tackle it and be rewarded for successfully doing so.
Experts take years identifying the variables affecting commercialisation and the recipe for successful commercialisation: Using statistical studies, experience-based conjectures, real-life anecdotes of active players, etc.
This is the first of two articles I will be writing, attempting to highlight some of the factors affecting commercialisation, with suggestions to increase the likelihood of successful commercialisation and finally, how PlaTCOM Ventures plays a significant part in the national ecosystem.
In this first of the two, I will be covering the factors affecting commercialisation, and in the latter, suggestions for more successful commercialisation and PlaTCOM Ventures’ role in this grand endeavour.
Based on my observation, the variables affecting commercialisation can be dichotomised, into supply and demand for the activities of commercialisation: "Supply" being the resources that are poured in and the capabilities available to increase the activities and quality of IP generation.
“Demand” for commercialisation activities would be driven by reduced cost of ownership, increased living conditions, progression up industry value chains and increased confidence of businesses to invest. To complicate things, these two categories interact cyclically and so finger-pointing is a common result.
One of the biggest factors driving commercialisation from the supply-side is the funding aspect to spur research and development activities. Research has shown that this variable is pro-cyclical with commercialisation.
One could also observe that gross expenditure in research and development (GERD) is positively correlated with the country’s gross domestic product (GDP). Statistics by the Malaysian Science and Technology Information Centre (Mastic) show that Malaysia’s GERD to GDP ratio is on an incline.
Tying in with demand factors, increasing GDP means improved living standards, hence higher demand for the commercialisation of innovations which solve daily problems which in the past people used to tolerate.
Going back to GERD, IP generation is the seed of commercialisation: if there is no IP generation, there is nothing to commercialise. It is also often an expensive activity, as a lot of trial and error is involved before arriving at a robust solution which truly solves a need.
Having said that, it is often the case that IP generators are not rightly incentivised to most effectively contribute to successful commercialisation.
By this, I mean that KPIs set on researchers at universities and other research organisations are often the result of losing sight of the bigger picture of commercialisation. Having a wider range of KPIs may be able to give room for researchers to explore how their skills and resources can best contribute to commercialisation — either in the form of licensing of the IP or creating a spin-off company or mass production of the final product.
Of course, a balance between fundamental knowledge generation and commercialisation needs to be worked out by individual research organisations, and how that balance would be reflected in set KPIs.
On the demand-side, one factor that typically slips past attention is the creation of the right business models to attract inventors and businesses to take the risk in commercialising disruptive technologies. The first thing to consider is whose job this is — is it the inventor’s or the prospective business’?
I will elaborate further and discuss several examples in my subsequent article.
Another factor, more commonly acknowledged, is the grasp of market demands by IP generators, or often the lack of. This could be due to poor or no interaction between IP generators and users in the R&D process, leading to a lack of empathy by IP generators with end-users (and knowledge of their requirements), and also an over-positive view of one’s IP.
When a researcher has unrealistic expectations of the benefits that his or her IP brings to the table, the cost of ownership of the particular IP will be inflated beyond its true market value. Simple economics tells us that demand must meet supply at an agreed price. When this does not happen, the IP is shelved.
Overall, economic and societal progress bodes well for commercialisation, especially on the demand-side whereby the cost of ownership is reduced (spurred by innovations which aim to reduce cost), living standards improve, and what used to be nice-to-haves gradually turn to must-haves.
But we certainly cannot rely on this factor alone in bolstering commercialisation, since IP generation needs to be able to cope with the rate at which market-driven needs are created and driven by this progress. Supply must then meet with demand.
A platform for connecting these two is crucial to bridging this critical gap — and this is the foundation on which PlaTCOM was created. The High Impact Programme 2, run by PlaTCOM Ventures in partnership with Agensi Inovasi Malaysia and SME Corporation Malaysia, aims to do just that.
Stay tuned for more details on how we do it.
* Michelle Lim Woodliffe is a Commercialisation Specialist and HIP2 programme manager of PlaTCOM Ventures Sdn Bhd, the national technology commercialisation platform of Malaysia, a wholly-owned subsidiary of Agensi Inovasi Malaysia formed in collaboration with SME Corp. Malaysia.
