Introduction

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Introduction and Background
 A common definition of technology commercialization is that it is the process of taking an idea to market and creating financial value -- typically through licensing or creating a new business. Although the concept of technology commercialization sounds disarmingly simple, many government officials are discovering to their chagrin that implementing a successful technology commercialization program is more complex than they initially believed.

 Science and technology (S&T), competitiveness, and knowledge economy government policy declarations in many middle and low income countries frequently highlight the development benefits that are expected to accrue from government programs to promote technoparks, incubators, innovation hubs, and high tech spin-offs from university and Government research laboratories. These policy initiatives are generally seen as the modern route to becoming a successful, middle income, innovative economy. If such institutions and mechanisms operate successfully in Silicon Valley and Austin, Texas, why shouldn’t they work in Maputo and Kuala Lumpur? Unfortunately, many government officials (and even occasional Bank staff) talk about technology commercialization, Intellectual Property (IP), technoparks, and incubators etc. without having a clear, practical sense of what it takes to make these programs and organizations effective and efficient. It is not surprising, therefore, that these initiatives do not always generate the expected economic benefits.

 There are a number of “typical” pitfalls that plague these programs ( somewhat ironically and unfortunately, failed initiatives and mistakes tend to proliferate rapidly and efficiently from country to country. Successful lessons of experience tend to diffuse much less rapidly). Among the more common are the following:

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 * Scientists with a promising scientific invention begin discussions about licensing their invention to a potential customer. But as discussions and negotiations progress and a deal seems immanent, the scientist suddenly breaks off all communications with the potential customer. Why? We believe it is because the scientist has no way of knowing whether he/she is getting cheated and no real sense of what a good deal looks like, how to protect his/her interests, how to protect IP, and how to reveal enough information to enable the potential customer to make an informed decision without giving away all the IP embedded in that invention.
 * Technoparks and incubators in Oxford, Cambridge, Silicon Valley, Singapore, Taiwan, and elsewhere are currently situated in prime real estate office parks. But their success is not due to their location. Instead, it is due to a whole host of other factors which are not automatically apparent to an outside observer. Unfortunately, officials in many developing countries attempt to emulate the real estate dimension of these institutions without understanding that their success is due primarily to all the “invisible” technology commercialization software, processes and know-how employed by the people who inhabit these buildings. As a result, all too often, technoparks and incubators in developing countries become little more than subsidized real estate ventures with little or no real connection to national competitiveness priorities and objectives.
 * Scientists do not know what product they should attempt to sell. Scientists frequently believe that their only marketable product is a scientific discovery embedded in a specific product. They do not realize that their most valuable asset may be their know-how and technical problem solving capacity. Therefore, rather than attempting to sell a specific product, for which a market may or may not exist, they should try to market their technical problem solving services. However, this requires an entirely different approach to marketing and commercialization.
 * Scientists do not generally know how to identify potential markets for their inventions and services. Nor do they understand how to market these goods and services. Not surprisingly, housing them in an incubator or technopark, supporting their commercialization efforts with a variety of financial subsidies and matching grants, and offering incentives and subsidies for venture capital, frequently fails to produce the desired result.
 * Government officials mistakenly believe that the absence of a vibrant venture capital (VC) industry is a major impediment to the success of their national innovation program. VC is important, but liquidity //per se// is generally not the main factor determining the success or failure of most national innovation programs. Much more critical factors include the weak pipeline of bankable deals which, in turn, can be directly attributed to many of the other issues discussed above. Promoting venture capital with subsidies and matching grants will not surmount these other obstacles nor will it induce venture capitalists to enter the market and solve these problems.
 * Government officials frequently think of technology commercialization only in terms of high-tech spin-offs from university or government research laboratories. This is an overly narrow approach. Not only does it ignore many promising commercialization opportunities that do not involve high tech spin-offs, but it also gives the mistaken perception that technology commercialization is relevant only for countries with relatively sophisticated national R&D systems.
 * Separation of technologies into high-tech and low-tech categories is frequently unhelpful. Developing countries relying on technology diffusion (absorbing and adapting foreign technologies and the knowledge associated with these technologies) may miss opportunities for engaging in commercialization if it is believed that the output of technology commercialization can only be high-tech products with global markets. Commercialization can also produce new-to-the-country or new-to-the-firm technologies of significant economic and social value.

<span style="color: black; font-family: Arial,Helvetica,sans-serif; font-size: 10pt;"> Other common "disconnects" are summarized in this diagram

<span style="color: black; font-family: Arial,Helvetica,sans-serif; font-size: 10pt;"> Government officials frequently note with satisfaction that their IP laws are TRIPS compliant. This simply means that their laws conform to WTO standards and afford appropriate protection to MNCs. There is nothing wrong with achieving this standard. But achieving it has no bearing on whether the country’s IP rules and regulations support the commercialization of IP produced with government funds in government research laboratories and universities. Officials in many countries do not appreciate the importance of this issue. Although they want to foster technology commercialization and diffusion of knowledge as well as international research collaboration, they don't seem to recognize that their own IP ownership laws and practices may be hindering these worthwhile, high priority government objectives. Nor does it say anything about whether IP rules and regulations prevent the country from losing control of its biodiversity and indigenous knowledge.

<span style="font-family: Arial,Helvetica,sans-serif;">Fortunately, there is a common core of technology commercialization issues and experiences from both developed and developing countries that can guide action and policy formulation in developing countries. Among the “core know-how” issues which are transferable, without significant changes, to developing countries with different histories, social structures, and development paths are those listed on this Handbook's Home Page.

<span style="font-family: Arial,Helvetica,sans-serif;">While the effectiveness of programs and projects developed around this core know-how have been demonstrated in many countries, these components should not be treated as quick and easy plug-in solutions. The components will only work if they are carefully integrated into a comprehensive project. For example, some projects may include science park or incubator components -- because incubators and science parks have been effective elsewhere -- without carefully analyzing whether an incubator will be the correct solution in this particular case. Others may be overly focused on licensing as a way to realize income from knowledge – because licensing has been effective elsewhere - without investigating alternatives.

<span style="font-family: Arial,Helvetica,sans-serif; font-size: 10pt;">Mitra Bhikajee, Director, Mauritius Oceanography Institute, has stated the situation succinctly when he declared, “there are a number of reasons for which innovative ideas are not presently being commercialized, the major one being that the basic policy for commercializing innovation does not exist yet in Mauritius. Most scientists would not know how to commercialize their idea and they would not care to know unless there were a clear-cut path and some form of a reward system.”