A Changing Model: Moving technologies from research to applications

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What has to change in the lab-to-market model when there is disruptive change in technologies or markets, such as that now being driven by flexible electronics?

Typical lab-to-market models using primarily internal resources can respond well to incremental market or technology changes, and can also be optimized for rapid development cycles. However, they do NOT handle major disruptions in markets or technologies because too many pieces of the ecosystem have to change simultaneously.

Based on PARC's experience across a range of technologies and industries which has resulted in over 30 new businesses, Mark Bernstein, CEO of PARC, shares some lessons learned and recommendations for addressing the challenges raised by disrupted lab-to-market ecosystems.

This presentation covers: (1) how companies can create an early warning system, bring in outside expertise/ open innovation partners, and position themselves flexibly for new near- and long-term opportunities; (2) specific case studies; and (3) PARC’s view of the ecosystem framework for developing products based on flexible electronics.

Published in: Technology, Business

A Changing Model: Moving technologies from research to applications

  1. A Changing Model: Moving technologies from research to applications Mark Bernstein, CEO PARC (Palo Alto Research Center)
  2. What I’ll share in this keynote <ul><li>Context for PARC’s perspectives in flexible electronics </li></ul><ul><ul><li>… From conducting fundamental research to forming businesses and addressing customer applications </li></ul></ul><ul><li>Moving technologies from research to the market </li></ul><ul><ul><li>… What happens to the classic ecosystem when faced with technology or market disruption? </li></ul></ul><ul><li>Addressing disruptive innovation </li></ul><ul><ul><li>… Lessons learned, and our vision for flexible electronics </li></ul></ul>©2010 PARC
  3. Background: PARC & flexible electronics 1975 1980 1990 2000 2010 a-Si poly-Si organic OLED on flex (with UDC) sensor tape (DARPA) oxide carbon nanotube DoD & startups … long-term investments building on deep expertise ©2010 PARC silicon nanowire laser & inkjet printing expertise for flex many collaborations
  4. The “classic” lab-to-market ecosystem ©2010 PARC research development product design commercial production external assets - IP, etc. core technology bank internal prototyping capability minor role established vendor network <ul><li>WHAT WORKS : </li></ul><ul><li>Market signals the desired incremental features and functions </li></ul><ul><li>Can be “tuned” for rapid development cycles (e.g., cell phones) </li></ul><ul><li>Focuses internal expertise around core technologies </li></ul><ul><li>Flexible for non-disruptive change, “core” innovation </li></ul>market feedback
  5. The challenges to the classic model <ul><li>What happens when (not if…) the technology or market changes disruptively? </li></ul><ul><ul><li>Remember loading film into a camera? Faxes? Encyclopedias? </li></ul></ul><ul><li>How do you anticipate or discover the new markets? </li></ul><ul><ul><li>Be more selective of which R&D projects to invest in? </li></ul></ul><ul><ul><li>Get feedback from a market that doesn’t exist yet? </li></ul></ul><ul><ul><li>Engage appropriate external resources? Which ones? </li></ul></ul><ul><li>How do you develop new competencies and capabilities? </li></ul><ul><ul><li>How do you select the critical competencies you develop vs. the ones you source? </li></ul></ul><ul><ul><li>How do you get to know the “competency network” – centers of excellence, etc.? </li></ul></ul>©2010 PARC
  6. Disruption is truly disruptive – things break! ©2010 PARC external assets - IP, etc. minor role market feedback <ul><li>The ecosystem is undone – </li></ul><ul><li>Missing the essential pieces for system development </li></ul><ul><li>Tuning is no longer sufficient…reset on what’s even possible </li></ul><ul><li>Pieces of internal expertise will no longer be relevant </li></ul><ul><li>Rapid & effective infrastructure innovation is needed </li></ul>research development product design commercial production core technology bank internal prototyping capability established vendor network
  7. PARC’s lessons from disruption – be aware <ul><li>Anticipate the inevitable - ensure your early warning system </li></ul><ul><ul><li>Embed business development people in your research projects </li></ul></ul><ul><ul><ul><li>Create scientist and engineer awareness of market changes and validate your investment assumptions </li></ul></ul></ul><ul><ul><li>Motivate/enable technical staff to keep abreast of external technologies and business trends </li></ul></ul><ul><ul><ul><li>Keep current with external speakers, including customers and competitors </li></ul></ul></ul><ul><ul><li>Actively explore for market and technology disruptions </li></ul></ul><ul><ul><ul><li>Social science techniques applied to identify unmet needs and understanding customer behavior for adoption vectors </li></ul></ul></ul><ul><ul><li>(Help) drive it or be driven somewhere else! </li></ul></ul>©2010 PARC
  8. PARC’s lessons from disruption – be prepared <ul><li>Respond quickly: leverage external resources/networks </li></ul><ul><ul><li>Engage visiting technologists and entrepreneurs to get the real (unpublished) story and access other networks </li></ul></ul><ul><ul><ul><li>Look to adjacent markets and value chains to gain perspective </li></ul></ul></ul><ul><ul><li>Connect to and work with partner institutions </li></ul></ul><ul><ul><ul><li>Customers, suppliers, centers of excellence, investor networks </li></ul></ul></ul><ul><ul><li>Create ecosystem structures that lead to new competency acquisition </li></ul></ul><ul><ul><ul><li>Think about what critical skills you’ll need in-house for this new environment </li></ul></ul></ul><ul><ul><li>Are you changing as fast as the world around you? </li></ul></ul>©2010 PARC
  9. PARC’s key lessons from disruption - change <ul><li>Be flexible: know your goals but don’t get trapped into one set of tactics or approaches </li></ul><ul><ul><li>Plan on losing and gaining key resources – people and assets </li></ul></ul><ul><ul><ul><li>This is part of the price (and reward) from disruption </li></ul></ul></ul><ul><ul><li>Don’t be afraid to import visions along with the people </li></ul></ul><ul><ul><li>Keep on top of progress and be ready to do things differently if you’re not gaining ground on your strategic goals </li></ul></ul><ul><ul><li>Change is the constant, no longer a variable. Be responsive… </li></ul></ul>©2010 PARC
  10. Example case: Open innovation partner <ul><li>Expertise in printing conductive lines using a unique printhead and inks </li></ul><ul><ul><li>For energy/cleantech application </li></ul></ul><ul><li>Brought in outside expertise + created network </li></ul><ul><ul><li>Opportunity identified with help of visiting technologist </li></ul></ul><ul><ul><li>Hired in key personnel to acquire critical skills not in-house </li></ul></ul><ul><ul><li>Validated technology through a major customer </li></ul></ul><ul><ul><li>Discussed with our VC network to shape commercialization path </li></ul></ul><ul><li>Flexibility in the end-game </li></ul><ul><ul><li>Energy funding climate soured for new business creation </li></ul></ul><ul><ul><li>Opportunity to license to the strategic customer as part of early business analysis </li></ul></ul><ul><ul><li>Negotiated deal with customer to complete validation and then license – activity still in progress toward commercialization </li></ul></ul>©2010 PARC
  11. Example case: Creating a new business <ul><li>Significantly invested in a-Si and TFT technology </li></ul><ul><ul><li>Identified the disruptive potential of thin-film electronics </li></ul></ul><ul><li>Identified market-disrupting application – digital cameras for X-rays! </li></ul><ul><ul><li>Strong technical team + major outside collaborations with UC Berkeley, University of Michigan </li></ul></ul><ul><li>Helped shape business through a spin-out – </li></ul><ul><ul><li>Significant PARC technical talent went with the spin-out </li></ul></ul><ul><li>Now an expanding company serving the digital radiography market </li></ul><ul><ul><li>Serving medical, industrial, military, security industries </li></ul></ul>©2010 PARC
  12. We’ve been in disruption for a while now!
  13. Options for handling disruption <ul><li>Regrow/repurpose internal capabilities? </li></ul><ul><ul><li>Takes time (hiring, training, etc.) </li></ul></ul><ul><ul><li>Conflicts with keeping existing products competitive </li></ul></ul><ul><ul><li>Risky (investment, time, competitive pressure) </li></ul></ul><ul><li>Acquire a company? </li></ul><ul><ul><li>Very difficult to find one with all the pieces you need </li></ul></ul><ul><ul><li>Costly, plus transactions take time </li></ul></ul><ul><ul><li>Acquisition integration isn’t easy – it’s risky </li></ul></ul><ul><li>Think differently about the ecosystem </li></ul><ul><ul><li>Begin outside the “box” – not just a cliché! </li></ul></ul><ul><ul><li>Partner to co-develop and/or acquire assets </li></ul></ul><ul><ul><ul><li>Right partners add experience, network; unlikely to be competitors </li></ul></ul></ul><ul><ul><li>Build a temporary structure to get through transition </li></ul></ul><ul><ul><ul><li>Enable internalization/transfer of capabilities over time </li></ul></ul></ul>©2010 PARC
  14. How to reconstruct a new ecosystem? universities ©2010 PARC research development product design commercial production patents, know-how, characterization prototyping capabilities circuits to systems emergent vendor network opportunity discovery printing companies specialized research institutes startups market research companies materials companies
  15. PARC’s Role: Connecting across the spectrum universities ©2010 PARC patents, know-how, characterization prototyping capabilities circuits to systems emergent vendor network opportunity discovery printing companies specialized research institutes startups market research companies materials companies PARC network direct services research development product design commercial production
  16. PARC capabilities and services ©2010 PARC materials/device physics circuit prototyping full-scale prototyping (complete system) materials and device characterization service application development/prototyping service <ul><li>ink-jet printing </li></ul><ul><li>conventional lithography </li></ul><ul><li>sensor development & lamination </li></ul><ul><li>100+ patents available for licensing </li></ul>full system prototyping service poly Si a-Si organic oxide nanowire CNT Core TFT & sensor technologies PARC client services
  17. Snapshot: Applications & prototypes all additive inkjet printed AM backplane all additive printed organic CMOS inverter flexible blast sensor tape flexible image sensor full system prototype of X-ray camera for DoD ©2010 PARC V in gate Bilayer dielectrics p-type n-type dielectric
  18. Summary <ul><li>Traditional “lab-to-market” ecosystems work best in predictably changing technology and market scenarios </li></ul><ul><ul><li>They have difficulty in responding effectively to market or technology disruption – like now </li></ul></ul><ul><li>Flexible electronics represents both a major technology disruption and a major market disruption </li></ul><ul><li>Companies will need to transform their technology ecosystems to respond to the opportunities created by these disruptions </li></ul>©2010 PARC <ul><li>Session 10.2 Printed electronics </li></ul><ul><li>Session 12.1 Flexible sensors </li></ul><ul><li>Meet PARC in booth 204 </li></ul><ul><li>Slides: http://www.parc.com/flextech2010 </li></ul>
  19. One view of PARC’s ecosystem MSWord now part of www.parc.com

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