FIGURE 21-1 Three different business models at Sandia National Laboratories. SOURCE: Model developed by Denise Koker, Manager, Business Development, Sandia, Calif.

partnerships with industry. A new business model currently under consideration focuses on the development of incubator-type environments, where technologies can be spun off when appropriate (Figure 21-1). Input from industry will help Sandia make this transition in business models.

Once a market opportunity is identified, several paths can be taken to commercialize a technology: creating a large, multiyear CRADA; evolving from a small business agreement to a strategic partnership with a licensing agreement and CRADA; obtaining a license for a new start-up venture (spin-off); and commercializing stand-alone inventions, from laboratory directed R&D to licensing. These processes have evolved since the Federal Technology Transfer Act was enacted by Congress in 1986 to commercialize government technologies.

Methods of moving ideas into the marketplace have also evolved. Industry generally uses models that are based on customer-driven demand, i.e. filling a market need. Such a model involves the following steps: research and development (R&D); prototyping; pilot production; and volume manufacturing. The model used more frequently at Sandia has the Department of Energy (DOE) as the primary customer. Non-DOE customer needs must be consistent with national security needs. In this model, national security-related products are provided to the government when Sandia’s technology is transitioned to industry. Such a model involves the following steps: Sandia R&D; prototyping; pilot production; commercialization partner (private sector); and volume manufacturing. Under this model, discretionary revenue can be fed back to the laboratory through licensing agreements. The main differences between the two models arise from the fact that Sandia is national security-centric, works with nuclear weapons, has restricted outsourcing policies, and is a not-for-profit organization. Similarities include the R&D programs, generation and licensing of intellectual property, and customer-driven product development.