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Bridging the gap between knowledge generation and technology development
Ian Lawrence
Partner; Managing Director, The STEM Partnership Pty Ltd, Melbourne VIC
Ivor Bryan
Partner; Technical Director, The STEM Partnership Pty Ltd, Melbourne VIC
Abstract
The link between scientific discovery and the development of new technology is poorly understood.
This overview explores the process and cultural gaps in this understanding and proposes a process and innovation model that enables science and technology development to be managed in a value-creating way.
The model identifies 7 key process features of knowledge generation and 9 key features of technology development and indicates appropriate management styles to facilitate value creation.
Keywords
value creation, innovation model, knowledge generation, technology development, managerial style, process linkages, cultural linkages
Article Text
The links between scientific discovery and the delivery of practical results - what we call technology - is vital to the wealth of individuals, businesses and the nation. Yet the link between scientific discovery and the development of new technology is poorly understood1.
The lack of linkage or gap has a process dimension and a cultural dimension. This article will explore the gaps in understanding and present a new approach that provides the link and bridges the gap with a language that enables science and technology development to be identified and managed in a value-creating way.
Process gap
There is a fundamental difference between the process of scientific discovery (knowledge generation) and the process of technology development. If we accept that science is first and foremost a process of discovery and that technology development is about the application of knowledge to useful objectives we can see that philosophically we have very different value expectations from science and technology development activities.
Cultural gap
The gap increases when the cultural differences between stakeholders are considered. The lack of understanding of the process of transforming science into technology is shaped by technical understanding, community needs and business forces and brings together scientific, business and government people whose outlooks, specialised knowledge, and professional languages are very different.
Innovation Model
The process and cultural issues can be further explored by referencing the following generic Innovation Model, Figure 1.
Process issues
This model highlights the process differences between projects in Knowledge Generation and those in Technology Development and Innovation.
The key process features of Knowledge Generation are:
- Quality of research is a key management issue
- The primary focus is on developing new information and learning
- The identification of quantifiable commercial benefits may be difficult
- The knowledge generation process can be a cyclical process
- The elements in the cycle are driven by the research need
- The technical merit of the project is regularly reviewed and decisions made whether to continue in the cycle
- Reviews of progress are required nodal points to allow commercialisable opportunities to be harvested
The key process features of Technology Development are:
- The fundamental science is generally proven
- The project is staged with identified outcomes
- The primary focus is on delivery of the outcomes relative to the stages
- The drivers of the projects are the commercialisation benefits delivered at implementation
- Projects can be more easily stopped if outcomes are not delivered
- Commercial outcomes can be valued and readily adjusted to take account of risk
- Commercial outcomes are typically the key for advancement to the next stage
- New knowledge may be created at each stage but this on its own will not necessarily drive the project to the next stage
- Valuations are typically based around Benefit Assessment, Decision Tree Analysis, Monte Carlo Simulation and risk and uncertainty assessment
Cultural issues
From the previous discussion it is clear that different management approaches are required for projects in either phase. These different management responses will develop quite different organisational cultures.
For the Knowledge Generation Projects the key drivers of the management response are:
- The option value of the concept or idea
- The reputation of the researcher or inventor
- The quality of the research program
- Clarity of technical objectives
- The experimental program
- The quality of the infrastructure
- The quality of the support services
- Knowledge growth and peer review
In the case of the Technology Development Projects the key drivers of the management response are:
- The potential commercial value of the project
- The potential market for the technology
- The size of the market
- Entry barriers
- The need for commercialisation partners
- Potential for competing technologies
- The value growth in technology development
- The risk and uncertainties in commercialisation
- Risk minimisation and value optimisation
- The critical success factors relative to project stages
- The deliverables at each stage
The consequence of mismatch
Given the very different management responses needed for the two types of project and the very different management plans that emerge, what are the consequence of a mismatch?
Let us consider the consequence of a knowledge growth project managed as if it were a technology development project:
- It would be difficult to identify clear technical and commercial outcomes and the project would consume a lot of resources in trying to find its way
- The project could be stopped before all learnings were identified
- The project could block or starve resources from other projects that have clearly defined outcomes and commercialisable opportunities
Conversely a technology development project managed as a knowledge growth project would have the following consequences:
- The project would be managed to create new knowledge rather than to deliver a commercial outcome
- It would consume a lot of resources seeking answers to technical questions that have little or no commercial relevance
- The project would be difficult to stop
In our experience a large number of technology developments can be described by these consequences. Clearly the gap is real and requires a bridge.
Bridging the gap
The STEM Partnership has developed a unique capability that enables technology development to be classified as a knowledge growth or a technology development.
The STEM process allows key qualitative information to be collected, collated and analysed relative to a structured set of technical and commercial dimensions. The dimensions focus on the benefits that the project will deliver to the stakeholders upon successful implementation.
For a technology development project it is possible to calculate the current and future value of the project. Decision points identify the critical technical and commercial factors that the project must overcome. This coupled with the ability to compare the value added at each gate to the cost of each stage allows the development of a powerful three-dimensional management plan.
In the case of a knowledge-growth project the option value can be calculated or is intuitively understood.
In order to strike the option there is a need to recognise that the knowledge generating activity does have the potential to move into the commercial technology development. The opportunity for a commercial outcome will be identified in the option to engage in knowledge generating activity. Additional opportunity may be recognised as the new information emerges (an embedded option).
Regular reviews of the project by people who are not directly involved in the test work but rather have an interest in the commercial outcome is critical to moving to a technology development phase The cost of the option is the cost to progress to the next stage of knowledge generation. Provided that the new knowledge generated does not waive or extinguish the option then as knew knowledge emerges there is sufficient drive in the option to progress to the next stage. In this way there is a decision process established that identifies any commercial outcomes and either extinguishes, exercises or defers the option.
This approach allows for the development of a management plan that targets the quality of the research process and calls for the external review of new knowledge at relevant points of the cycle.
The process we have described allows a project to be described relative to powerful value metrics that all stakeholders can understand. These metrics coupled with a regular project review provides the language to bridge the gap in the technology development process.
1The Valuation of Technology - Business and Financial issues in R&D. F Peter Boer. Wiley 1999. New York NY. USA.
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