Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable (2003)

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SUMMARY 1 Summary1 Innovation is the process by which an invention, idea, or concept is converted into a real process, commercial product, or the like. Considerable pressure exists in the commercial sector to shorten the time frame and increase the yield of innovation from basic research, but there is no obvious pathway. Innovation in the chemical sciences—particularly starting at the level of basic research—is complex, often involving multiple interfaces in which chemistry is likened to some other area of science and technology. This workshop focused on factors such as work processes, systems, and technologies that could enable and accelerate the pace of innovation and increase the yield of major innovations from work in the basic chemical sciences. More specifically, speakers identified teamwork, commitment, standardized portfolio management, clear goals, well-defined milestones, and effective technology transfer as some of the characteristics of innovative institutions and practices. Successful approaches to innovation have taken place in different environments and between different environments—despite infrastructure and cultural differences, both interdisciplinary collaborations and collaborations between industry and academia have proven beneficial for all parties. Funding must also be available to promote innovation at stages of research often ignored. Through this workshop the chemical sciences community was given the opportunity not only to hear from colleagues who have lengthy experience with innovation but also to pose questions and discuss their own pressing, innovation-related concerns. Short summaries of the workshop presentations are found below; the presentations in their entirety are in the following chapters. The first speaker at the June 4, 2002, morning session, Richard M. Gross, of Dow Chemical 1David R. Rea of E. I. du Pont de Nemours and Company prepared the presentation summaries of Richard M. Gross, Allen Clamen, Elsa Reichmanis, and Lawrence H. Dubois. The summaries for the presentation of Mary L. Good, James R. Heath, Francis A. Via, and Kenneth A. Pickar were prepared by Ned D. Heindel. Andrew Kaldor wrote the summaries of the presentations by Venkat Venkatasubramanian, Michael Schrage, and Richard K. Koehn. 1 

2 REDUCING THE TIME FROM BASIC RESEARCH TO INNOVATION IN THE CHEMICAL SCIENCES Company, emphasized the importance of innovation to industrial success, quoting Peter Drucker by stating: “Innovation is the fuel of corporate longevity.” Gross pointed out the strong link that exists between science and innovation in the chemical industry. He identified three key macrotrends in innovation—high-throughput research, global teams, and market-driven research. High- throughput research is made possible through the use of computational chemistry and is critically important to accelerating innovation. Global teams reflect how a company does business rather than where the company is located, and their success is dependent on the willingness to share data at all levels—that of individual employees, departments, and the company. Market-driven research is neither applications research nor product tailoring but is a collaborative effort between customer and supplier to target a next-generation need. Gross believes that people, work processes, and partnerships are critical success factors in innovation. Employees are most productive and happiest when their strengths are matched with the organization’s needs. Work processes can be continuously improved by standardizing best practices through the stage-gate process and Six Sigma quality control program. Partnerships have continued to increase at Dow (they have tripled in the past 4 years) and aid speed to market. Gross stressed that speed is essential in the 21st century. Allen Clamen, retired from ExxonMobil, discussed ExxonMobil’s business practices stemming from the belief that a structured innovation program, including a well-organized business portfolio management process, increases the effectiveness of innovation. Rapid innovation requires a corporate commitment to innovation, a culture that encourages risk taking, trained program managers, and a strong link to the market. He cited an Industrial Research Institute study of eight companies that offers specific suggestions to improve the effectiveness of early-stage innovation. Reduced cycle time is a main factor contributing to innovative improvements, and several common approaches used to reduce cycle time were discussed. To achieve major objectives, Clamen encouraged the pursuit of parallel approaches to counter the uncertainty of success and advocated the prioritization of long-range research according to the degree of fit with business strategy, the strength of the supporting science base relative to the industry, the breadth of impact, the existence of multiple approaches, and the expected business value. Clamen envisioned an ideal environment for innovation. It should have an open, sharing culture and customers who are active in setting product targets. Innovation should be considered vital to the business strategy, and structured processes should be used for both innovation and portfolio management. Elsa Reichmanis, of Lucent Technologies, illustrated that, through the new functionalities it pro- vides, chemistry is an enabling science for the electronics and photonics industry and specifically for Lucent. Her examples from photonics and lithographic materials design showed the importance of translating long-range product targets to desired molecular characteristics and described the interactions of materials selection, process design, and hardware design. Reichmanis stated that building on previous work is vitally important to keep the time from concept to commercialization to 10 to 12 years. She placed high value on long-range research and believes that experience shows that it is difficult to innovate more quickly than that 10- to 12-year time frame. Lawrence H. Dubois, of SRI International, concluded the morning session by describing the Defense Advanced Research Project Agency’s (DARPA) mission: innovation in support of national security. DARPA aims to solve national problems and enable operational dominance in the battlefield by supporting high-payoff core technologies. It strives to support radically innovative research, a risky strategy requiring strong leadership. Dubois explained that DARPA uses an array of management practices, including highly autonomous program managers, and a blend of multidisciplinary skills to 

SUMMARY 3 accelerate innovation. Fuel cell development was discussed as an example of how DARPA focuses on an important problem, keeps the end point clearly in mind, and empowers through funding. The afternoon session began with a presentation by Mary L. Good, of the University of Arkansas, who served as the Department of Commerce under secretary for technology during the Clinton administration. Her office had oversight of the Advanced Technology Program (ATP). ATP was established with the mission to overcome the “investment gap” by funding precompetitive early-stage technology and enabling technology research in private companies and universities. The program’s existence—and whether the federal government should be involved in private technology development— has always been debated. Good pointed to historic precedents in which the U.S. government has funded the development of private technologies in the past. These included the telegraph, aviation, the Internet, and agricultural technology. Good maintained that the ATP grants program has had considerable success in product and process development. ATP funds large companies in high-risk development as well as many joint ventures between small business, large businesses, universities, and national laboratories. She noted: “There are lots of success stories, but the real question is (and should be) ‘Is the ATP program needed?’ not ‘Does the program work?’” Good concluded that ATP or a similar program needs to be a strategic piece of the federal government’s research portfolio because it provides opportunities for entrepreneurs in any geographic location. It also provides opportunities in areas traditionally neglected by corporate and governmental sponsors. She believes that the strategic federal R&D portfolio must contain a balanced blend of support for fundamental research that is not targeted to any foreseeable commercial use, for applied research, and for technology research. James R. Heath, of the University of California, Los Angeles, discussed molecular electronics as a prototypical “hot topic,” exemplifying the kind of early-stage technology that has extraordinary commercial potential but lacks sufficient certainty to attract development funding. He presented a vision for developing commercially valuable nano-level computers that was in sharp contrast to the reality of limited venture capital or governmental aid available to develop the field. Heath started by posing questions: “From first principles, what are the physical constraints that define the ultimate size of a computational or memory element?” In more pragmatic phrasing: “Is it feasible to pack the equivalent of 1,000 Pentiums on a single grain of sand?” Heath answered the second question in the affirmative and maintained that an interactive molecular system would eventually be fabricated into a computing machine with molecules acting as the switching components. Despite holding six patents relevant to nanocomputing, one of which was cited by MIT Technology Review magazine as being among the new patents most likely to change the world, Heath has problems obtain- ing financing. He concluded by stating that nanotechnology needs long-term funding toward product development that does not currently exist in the private sector. Francis A. Via, of Fairfield Resources International, documented his experiences developing in- dustrial collaborations with national laboratories and universities as director of external research at Akzo Nobel. Such collaborations are useful to corporate objectives because they evolve new knowledge and concepts, provide different perspectives on current research, and help accelerate corporate R&D. Via noted that most of industry’s external collaborations focus on the upstream discovery stage, although many examples exist in which universities and national laboratories take part in later-stage development. Via provided specific examples of industry-initiated collaborations, which greatly accelerate the development of a concept to a product. Using examples including zeolite catalysts for specialty chemicals, novel chlorination catalysts, and ozone-friendly substitutes for chlorofluorocarbons, Via showed how collaborations not only accelerate discovery but frequently facilitate it. A key organizational principle to foster and accelerate development is to maintain technical capability teams in support of 

4 REDUCING THE TIME FROM BASIC RESEARCH TO INNOVATION IN THE CHEMICAL SCIENCES core competencies. These team members can then be assimilated into a focused response team to accelerate new product or process development. Maintaining these capability teams is a growing challenge for R&D management. Via noted that no matter how useful and productive external liaisons are, they collapse if the company’s business commitment to that area ceases. He commented: “Sustaining external collaborations over a long haul is possible only if there is real success early on. It is especially challenging to achieve management support to sustain collaborations in the areas of potential new products for new unproven markets.” Kenneth A. Pickar, from the California Institute of Technology, discussed the growing importance of university-industry collaboration. Corporate central R&D laboratories have been in decline, which has driven industry’s need for academic research partners. Such interactions present equally compelling benefits to the university; these include the capture of economic value, an environment attractive to young faculty, and contributions to the economic viability of the local community. Despite mutual benefits, Pickar noted, “the process of technology commercialization from univer- sity research is still characterized—in most universities—by misunderstanding, dysfunction, and lost opportunities. There is a serious cultural impedance mismatch, a lack of trust between the parties.” He believes that, for the time for translation of basic research to innovation to be reduced, mechanisms must be found to improve the understanding between university and industry. Pickar described Caltech’s unique National Science Foundation (NSF)-funded Entrepreneur Fellows Program, as well as the aggressive pro-patent approach of CalTech’s Technology Transfer Office and its “grubstake” program, which uses alumni funding to finance student research with a commercial objective. He concluded with thoughts on specific ways to improve relations between universities and large companies. The morning session of June 5, 2002, began with a presentation by Venkat Venkatasubramanian of Purdue University. His discussion focused on the early innovation process—discovery in the early stages of a project in which the design space is explored for improvements on product formulation based on the original idea. He described product formulation and design as “the systematic identification of the molecular structure or material formulation that would meet a specifically defined need” and explained how that research base is managed using modeling- and knowledge-based techniques. Venkatasubramanian spoke of three modeling options. The first was a fundamental model depicting the physics and chemistry of the problem, which can be used to predict material properties. The second utilized the experience of formulation scientists, using a rule-based model. The last option was a data- driven approach, in which data are used to make correlations, largely ignoring the physics and chemistry. In his experience, a hybrid framework that mixes all three approaches is the best method of modeling. His lab has developed a single computer program that utilizes all three modeling approaches. Venkatasubramanian used examples from industry to illustrate his computer program’s effectiveness in molecular design. In all three examples the computer program was able to save formulation time, improve the design of models constructed by traditional approaches, or both. He closed his discussion by mentioning that his program has “led to better formulation, new chemistry, and the understanding of the driving forces for all of these problems.” Michael Schrage, of the Massachusetts Institute of Technology, emphasized the importance of human behavior to the economics of and the tradeoffs associated with modeling. Schrage discussed how innovation is based on how people behave around versions of models, rather than solely on the model itself. In his lecture Schrage identified the “Big Lie of the Information Age.” It is usually assumed that people’s behavior is directly correlated to the quantity and quality of information available to them, but this is not true. Instead of managing information, Schrage stated that we need to better manage iteration. He described the new wealth as “our ability to iterate and perform more iterations per unit time.” 

SUMMARY 5 One area that Schrage identified as needing improvement is the communication between scientists and businesspeople. He stated that poor communication yields better models that are less accessible to nonscientists, due to the scientist’s inherent interest in the question and the businessperson’s interest in only the answer. Additionally, modeling infrastructures would be improved by increased participation by all relevant parties in the modeling process. This is achieved by increasing the usability, increasing the attraction factor, and targeting the evolution of models. Richard K. Koehn, of Salus Therapeutics, Inc., has extensive experience in managing innovation of technology in universities and bringing it to commercial development. He focused on the intermediate phase of the innovation process, where innovation is transformed into a product with an economic impact. This is the stage at which action by an institution can enhance the economic impact of the discovery. Three factors that significantly increase rates of innovation during the intermediate phase are (1) financial—how much investment is made in the discovery process; (2) administrative—decreasing administrative policies and practices of the university to provide a smooth transition from university to industry; and (3) cultural—how the faculty and corporate institutions see themselves as a larger community. Koehn then discussed the idea of intramural funding, which he described as “monies mobilized, identified, and deployed by an institution for a specific purpose.” He offered examples of intramural funding projects on the university level and methods to make these projects more lucrative. Koehn believes that closer tracking of technology transfer will increase the commercialization of products. In addition, those who invest funds and seek a return on their funds should be involved in management decisions about projects. Lastly, these programs must be responsive to faculty and encourage partnerships between investors and scientists.