An analysis of the process from innovation to commercialization: a South African perspective
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Date
2010
Authors
Booysen, Karen
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Free State
Abstract
Afrikaans: Ekonomieë, ondernemings (klein, medium en groot) en individue moet nuwe produkte ontdek en kommersialiseer om mee te ding en vooruit te gaan in die globale 21ste eeu ekonomie. Die belangrikheid daarvan om nuwe produkte aan die mark bekend te stel kan gesien word in die feit dat dit ‘n volhoubare mededingende voordeel vir ekonomieë, ondernemings en individue meebring. Die nuwe produkte lei nie net na wins vir individue en ondernemings nie, maar dit verbeter ook die kwaliteit van lewe van alle individue en genereer verdere ekonomiese geleenthede. Deur die kommersialisering van innovasie word die gaping tussen die behoeftes van die mark en die uitvindsels van die innoveerders oorbrug. Dit bly tog ‘n kern uitdaging vir alle innoveerders om ‘n uitvindsel van idée-fase na die mark te neem, ten einde ekonomiese opbrengste te produseer. Idees of uitvindsels kan nie ekonomiese opbrengste vir die innoveerder lewer nie. Slegs wanneer die uitvindsel suksesvol in die mark absorbeer word kan die innoveerder wins genereer en hierdeur word die belangrikheid van kommersialisering weer beklemtoon. Die mislukkingskoers van nuwe produkte is internasionaal baie hoog en dus verhoed dit innoveerders om finansiële voordele te bekom. Nuwe produkte se mislukkingskoers word bereken op tussen 50-80% en selfs groot ondernemings met genoegsame hulpbronne sukkel met die kommersialisering van uitvindsels. Die hoë mislukkingskoers van uitvindsels kan toegeskryf word aan ‘n wye verskeidenheid faktore, insluitend beperkte toegang tot hulpbronne, die onvermoë van innoveerders om hul uitvindsels genoegsaam te beskerm of swak bemarkingspogings, Een so ‘n rede vir mislukking is die feit dat innoveerders onseker is oor die stappe om te volg in die kommersialisering van hul uitvindsel. Innoveerders neem vals stappe en mors kosbare tyd, of hulle laat kritiese stappe in die proses uit. Dit is belangrik vir innoveerders om te weet wat die stappe in die kommersialiseringsproses is en dit te volg ten einde te verseker dat hulle ‘n logiese proses volg, beplan vir al die belangrike aspekte aangaande kommersialisering en bewus is van wat van hulle vereis sal word in die verskillende fases van die proses. Suid Afrika vaar nie goed daarmee om nuwe navorsingsuitvindsels na die mark te bring nie en daar kan verskeie redes vir die probleem wees. Ten einde suksesvol nuwe uitvindsels aan die mark voor te stel deur kommersialisasie is dit belangrik om te weet wat die probleem/hindernisse is wat innoveerders gedurende die kommersialiseringsproses ondervind. Dit is ook belangrik om die behoefte aan ‘n gemeenskaplike raamwerk wat verstaan word deur die regering, hoër onderwys, navorsingsrade, tegnologie ondernemings en risikodraende kapitaliste, ten opsigte van die rolle en funksionele verhoudings in die sisteem van innovasie uit te wys. Die studie het gepoog om inligting rakende die probleme en/of hindernisse wat entrepreneurs in die kommersialiseringsproses konfronteer te bekom deur te bepaal hoe suksesvol individue en SMMEs was in die kommersialisering van hul innovasie. Die kliëntebasis van die Centrum for Rapid Prototyping and Manufacturing (CRPPM) en die Tegnologie Stasie (PDTS) vir 2005 tot 2010 is gebruik in die studie. Die sekondêre doelwitte het ingesluit om die stappe wat die entrepreneur in die kommersialiseringsproses gevolg het, te ondersoek; om die faktore, beide positief en negatief, wat die die kommersialisering van innovasie beïnvloed te identifiseer; om die probleme/foute wat entrepreneurs maak in die kommersialiseringsproses te bepaal; en om die suksesfaktore vir entrepreneurs in die kommersialiseringsproses te bepaal. Die resultate het gewys dat die minderheid van die respondente (20%) suksesvol hul uitvindsels kommersialiseer het. Die oorblywende 80% van die respondente was of steeds besig om deur die kommersialiseringsproses te beweeg of het stagneer. Die resultate het verder ook uitgewys dat die tipiese innoveerder nie die kronologiese orde van die stappe in die kommersialiseringsproses, soos aangedui in die literatuur, volg nie. Baie van die stappe in die kommersialiseringsproses is nie so deeglik voltooi soos wat nodig is nie en verskeie van die stappe is bloot uitgelaat. Die redes wat die respondente die gereeldste aangehaal het vir hul tekort aan vordering en/of stagnasie in die kommersialiseringsproses was ‘n tekort aan fondse en ‘n tekort aan ondersteuning. Met ander woorde, die respondente het nie genoegsame kapitaal gehad om die uitvindsel op hul eie te kommersialiseer nie en het of nie geweet waar om finansiële hulp te kry nie, of was onsuksesvol in hul aansoek om finansiering. Die tekort aan ondersteuning waarna verwys word, sluit in ondersteuning ten opsigte van kennis aangaande die kommersialiseringsproses (maw. wat die stappe in die kommersialiseringsproses behels) sowel as wat volgende gedoen moet word in die kommersialiseringsproses. Die twee redes is gereeld genoem as hindernisse tot die suksesvolle kommersialisering. Ten einde die bogenoemde hindernisse te oorkom word verskeie aanbevelings aan die einde van die studie gemaak. Die fokus val hoofsaaklik op die regering, en verskeie aanbevelings aangaande die regeringsondersteuningsinstellings word gemaak ten einde innoveerders beter deur die kommersialiseringsproses te help.
English: Economies, organizations (small, medium and large) and individuals must discover and commercialize new products in order to compete and prosper in the 21st century global economy. The importance of introducing new products to the market can be seen in the fact that it builds a sustainable competitive advantage for economies, organizations and individuals. Furthermore, these new products do not only lead to profits for individuals and organizations, but it also improves the quality of life of all individuals and generate further economic opportunities. Through the commercialization of innovation, the gap between the needs of the market and the inventions which innovators have can be bridged. However, it remains a key challenge to all innovators to take an invention from the idea phase to the market in order to produce economic returns. Ideas or inventions cannot generate economic returns for the innovator. It is only once the invention is successfully absorbed into the marketplace that the inventor can benefit from its profit, and therefore the importance of commercializing inventions is highlighted. Globally the failure rates of new products are especially high, preventing innovators from gaining financial benefits. New product failure rates are estimated at between 50-80% and even major companies with sufficient resources struggle with the commercialization of inventions. The high failure rates of inventions can be attributed to a wide variety of factors, including limited access to resources, failure of innovators to sufficiently protect their inventions or weak marketing efforts, among others. One such reason for failure, however, is the fact that innovators are unsure about the steps to follow in commercializing an invention. Innovators either take false steps and waste valuable time, or they leave out critical steps in the process. It is important for innovators to know what the steps in the commercialization process are and to follow them, in order to ensure that they follow a logical process; plan for all the important aspects regarding commercialization and are aware of what will be required of them at the different stages in the process. South Africa is not doing well in bringing new research discoveries to the market and there may be many reasons for this problem. In order to introduce new inventions to the market successfully through commercialization, it is important to know what the problems/barriers are that innovators experience during the commercialization process. It is also important to identify the need for a common framework understood by government, higher education, research councils, technology organizations and venture capital to help identify roles and functional relationships in the system of innovation. This study aimed to acquire information regarding the problems and/or barriers confronting entrepreneurs in the commercialization process, by determining how successful individuals and SMMEs were in commercializing their innovation. The client base of the Centrum for Rapid Prototyping and Manufacturing (CRPM) and the Technology Station (PDTS) for 2005 to 2010 were used in this study. The secondary objectives were to investigate the steps the entrepreneur followed in the commercialization process; to identify the factors, both positively and negatively, that influence the commercialization of innovation; to determine the problems/mistakes that entrepreneurs made in the commercialization process; and to determine the success factors for entrepreneurs in the commercialization process. The results showed that the minority of the respondents (20%) managed to commercialize their inventions successfully. The remaining 80% of the respondents were either still busy moving through the commercialization process or had become stagnant. Furthermore, the results indicated that the typical innovator does not follow the chronological order of the steps in the commercial process, as indicated in the literature. Many of the steps in the commercialization process were not completed as thoroughly as needed and some of the steps were omitted completely. The reasons most often cited by the respondents for their lack of progress and/or stagnation in the commercialization process are a lack of funds and a lack of support. In other words, the respondents did not have sufficient capital to commercialize the invention on their own and either did not know where to go to obtain the financial aid needed or were not successful in their application for funding. The lack of support the respondents referred to include support in terms of knowledge regarding the commercialization process, i.e. what each step in the commercialization process entails as well as what should be done next in the commercialization process. These two reasons were the most often cited barriers to the successful commercialization of the respondents. Several recommendations are made at the end of this study that could bridge the abovementioned barriers. The focus falls mainly on the Government, and various recommendations regarding government support institutions are made that could better aid innovators through the commercialization process.
English: Economies, organizations (small, medium and large) and individuals must discover and commercialize new products in order to compete and prosper in the 21st century global economy. The importance of introducing new products to the market can be seen in the fact that it builds a sustainable competitive advantage for economies, organizations and individuals. Furthermore, these new products do not only lead to profits for individuals and organizations, but it also improves the quality of life of all individuals and generate further economic opportunities. Through the commercialization of innovation, the gap between the needs of the market and the inventions which innovators have can be bridged. However, it remains a key challenge to all innovators to take an invention from the idea phase to the market in order to produce economic returns. Ideas or inventions cannot generate economic returns for the innovator. It is only once the invention is successfully absorbed into the marketplace that the inventor can benefit from its profit, and therefore the importance of commercializing inventions is highlighted. Globally the failure rates of new products are especially high, preventing innovators from gaining financial benefits. New product failure rates are estimated at between 50-80% and even major companies with sufficient resources struggle with the commercialization of inventions. The high failure rates of inventions can be attributed to a wide variety of factors, including limited access to resources, failure of innovators to sufficiently protect their inventions or weak marketing efforts, among others. One such reason for failure, however, is the fact that innovators are unsure about the steps to follow in commercializing an invention. Innovators either take false steps and waste valuable time, or they leave out critical steps in the process. It is important for innovators to know what the steps in the commercialization process are and to follow them, in order to ensure that they follow a logical process; plan for all the important aspects regarding commercialization and are aware of what will be required of them at the different stages in the process. South Africa is not doing well in bringing new research discoveries to the market and there may be many reasons for this problem. In order to introduce new inventions to the market successfully through commercialization, it is important to know what the problems/barriers are that innovators experience during the commercialization process. It is also important to identify the need for a common framework understood by government, higher education, research councils, technology organizations and venture capital to help identify roles and functional relationships in the system of innovation. This study aimed to acquire information regarding the problems and/or barriers confronting entrepreneurs in the commercialization process, by determining how successful individuals and SMMEs were in commercializing their innovation. The client base of the Centrum for Rapid Prototyping and Manufacturing (CRPM) and the Technology Station (PDTS) for 2005 to 2010 were used in this study. The secondary objectives were to investigate the steps the entrepreneur followed in the commercialization process; to identify the factors, both positively and negatively, that influence the commercialization of innovation; to determine the problems/mistakes that entrepreneurs made in the commercialization process; and to determine the success factors for entrepreneurs in the commercialization process. The results showed that the minority of the respondents (20%) managed to commercialize their inventions successfully. The remaining 80% of the respondents were either still busy moving through the commercialization process or had become stagnant. Furthermore, the results indicated that the typical innovator does not follow the chronological order of the steps in the commercial process, as indicated in the literature. Many of the steps in the commercialization process were not completed as thoroughly as needed and some of the steps were omitted completely. The reasons most often cited by the respondents for their lack of progress and/or stagnation in the commercialization process are a lack of funds and a lack of support. In other words, the respondents did not have sufficient capital to commercialize the invention on their own and either did not know where to go to obtain the financial aid needed or were not successful in their application for funding. The lack of support the respondents referred to include support in terms of knowledge regarding the commercialization process, i.e. what each step in the commercialization process entails as well as what should be done next in the commercialization process. These two reasons were the most often cited barriers to the successful commercialization of the respondents. Several recommendations are made at the end of this study that could bridge the abovementioned barriers. The focus falls mainly on the Government, and various recommendations regarding government support institutions are made that could better aid innovators through the commercialization process.
Description
Dissertation (M.Com.(Business Management))--University of the Free State, 2010
Keywords
New products -- South Africa -- Marketing, Inventions -- South Africa -- Marketing, Economic development -- South Africa, Creative ability -- South Africa, Technological innovations -- South Africa