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Technology Commercialization: Russian Challenges, American Lessons (1998)

Chapter: Appendix D: Commercializing Technology

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Suggested Citation:"Appendix D: Commercializing Technology." National Research Council. 1998. Technology Commercialization: Russian Challenges, American Lessons. Washington, DC: The National Academies Press. doi: 10.17226/6378.
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Appendix D
Commercializing Technology

On March 12, Bardwell Salmon gave a broad overview of the key components of technology commercialization from his perspective as an investor and entrepreneur. Mr. Salmon is chairman of Technology Capital Network, a New England regional network for investors and entrepreneurs located at the Massachusetts Institute of Technology, and chairman of RealityWave, Inc., a small company focusing on three-dimensional internet technology.

According to Mr. Salmon, there are four key ingredients for success: people, technology, markets, and money. People need an environment that provides an incentive to succeed, coupled with some personal loss for failure, and the freedom to excel. To increase the chance of success, individuals require education in entrepreneurship and mentors. Finally, the small technology-oriented businesses need a source of talent for workers and advisors, and so locating close to a university can boost the probability of successful commercialization.

The second important factor is having a technology which people will demand. The innovation must be cutting-edge and difficult for others to duplicate. In order to protect the technology, there must be an adequate legal infrastructure, including a well-developed patent system.

The other two areas, markets and money, are the ones in which innovators often have the most trouble. Previously, markets were thought of in geographic terms, with local, national, and global markets representing a series of concentric circles. Now new technologies may have very small niche markets, and the customers may be scattered across the globe. For this reason, those interested in commercializing technology must think early about the complex issues of distribution and protection of intellectual property rights that accompany working in a global market.

Suggested Citation:"Appendix D: Commercializing Technology." National Research Council. 1998. Technology Commercialization: Russian Challenges, American Lessons. Washington, DC: The National Academies Press. doi: 10.17226/6378.
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Finally, start up companies need money. In the United States, there is a wide variety of sources for funds to commercialize technology, including risk capital and individuals, who are known as "angels." Venture capitalists are critical to many innovative companies but they are actually involved in a small number of cases, and one should not overemphasize their importance to technology commercialization. Many small firms obtain a large boost from alliances with larger corporations, which increasingly work as "hunters and gatherers" of new technology instead of owning and developing it themselves. Finally, beyond the existence of potential financing, governments must ensure that there are tax and other incentives for investors and entrepreneurs to risk their money in technology commercialization.

Suggested Citation:"Appendix D: Commercializing Technology." National Research Council. 1998. Technology Commercialization: Russian Challenges, American Lessons. Washington, DC: The National Academies Press. doi: 10.17226/6378.
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Page 105
Suggested Citation:"Appendix D: Commercializing Technology." National Research Council. 1998. Technology Commercialization: Russian Challenges, American Lessons. Washington, DC: The National Academies Press. doi: 10.17226/6378.
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Page 106
Next: Appendix E: U.S. Patent Law Provisions that Promote University-Based Patenting and Technology Transfer »
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This collection of papers—by American and Russian specialists—addresses a variety of legal, regulatory, institutional, and financial issues that can promote or hinder technology commercialization. The book is the result of a series of workshops organized by the National Research Council with the Russian Academy of Sciences on commercialization of technologies, particularly those developed at research and educational institutions.

Technology Commercialization concludes with a list of actions, programs, and policies which warrant further consideration as Russia tries to improve the success of technology commercialization. This book will be of interest to those concerned with small-business development in post-communist states, university technology management, and comparative technology commercialization.

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