Collaboration and commercialization – research from CATAAlliance

InsightaaS summary: Like the IT industry as a whole, InsightaaS generally equates "collaboration" with "technologies that enable collaboration": SharePoint and other file sharing systems, telephony and conferencing, even CRM. However, this meaning of "collaboration" really describes a toolset that is a means to a broader end — the connections between individuals and entities to perform actions that could not be done (or done as well) without the integrated efforts of multiple parties.

In "Beyond R&D — Gaining Economic Value through Effective Commercialization of Innovations," Dr. Sorin Cohn — working on behalf of CATAAlliance — highlights the impact of this broader sense of collaboration. He cites a "weak culture of collaboration, which exacerbates the difficulties of operating in a global marketplace" as one of four primary factors constraining commercialization within Canadian industry.

Beyond R&D — Gaining Economic Value through Effective Commercialization of Innovations is a report written by Dr. Sorin Cohn for CATAAlliance. Based on a combination of a survey of more than 1000 Canadian companies and Dr. Cohn’s extensive expertise in commercialization (he is a member of the board of Startup Canada, and is active with both the i-Canada Alliance and CATAAlliance), the report identifies both causes and potential remedies for Canada’s struggles in developing vibrant, globally-focused SMBs.

Dr. Cohn’s report starts by acknowledging that Canada "does not suffer from an "Innovation Gap". Canada suffers from a "Commercialization Gap." It is a meaningful distinction, because it shows that Canada, like many global regions where engineering talent is more plentiful than sales and marketing experience, needs to focus on ‘fixing the right problems’ — not on stimulating new inventions, but on bringing inventions to market. Cohn highlights four problem areas which are impeding commercialization success in Canada, and in particular, within Canadian SMBs:

  • Lack of commercialization success and business management acumen
  • Weak culture of collaboration
  • Insufficient capitalization and funding for commercialization
  • Lack of "competitive drive and strengths necessary to succeed in fierce competition in world markets."

In Cohn’s view, these factors have a direct impact on the vibrancy of the "innovation value chain." Cohn sees this chain as stretching from idea generation to development and productization, and ultimately, to commercialization "for the actual harvesting of its [the innovation chain’s] value for…the individual, the organization and the economy as a whole," adding that commercialization "materializes the value of innovation by transforming the knowledge embedded in market understanding and the company’s products/services into money."

The importance of collaboration

The report states that "The huge scientific-technical and business knowledge accumulated to date, the inexorable need for higher specialization, the instantaneous anytime anywhere access to information and the market globalization have led industry to evolve from an integrated product paradigm, where direct cost control was paramount, to the Knowledge Services Economy, where the name of the game is collaborative value creation in communities of interest. This notion has particular relevance to SMBs, which, as Cohn observes, "generally need to complement internal expertise with that available in other companies selected as collaborative business partners." Cohn goes on to highlight a contradiction apparent in the Canadian market: "In this context, it is surprising to find that more than half the companies in Canada do not have any form of cooperative agreements, unwisely thinking that they can make it to success by themselves." These companies should, he believes, reach out to lead customers and to "anchor companies" (large companies that work with a cluster of smaller firms). As the Figure below (click to enlarge) illustrates, this type of behaviour is relatively rare in the Canadian market:

Anchor co figure

Considering collaboration in the context of other commercialization issues

To be sure, Cohn does not suggest that collaboration is the sole obstacle to Canadian commercialization success, but it is a theme that recurs throughout the rich, 85-page report. In his "ideas and recommendations for industry executives," Cohn highlights four important tactics, including building strategic alignment, strategic focus on customers and competitiveness, target marketing, pursuit of "smart money," but also includes prominently on this list a fifth admonition, "collaborate to conquer." Under this last heading, Cohn notes that "corporate leaders need to understand that global success is predicated on ‘local approaches’ through partnerships" — highlighting the requirements for business collaboration, which in turn creates the case for the kinds of collaborative technologies generally covered in this section of InsightaaS.com.

According to Cohn, collaboration is particularly critical in the "knowledge services economy." In a product-based economy, vertical integration drives product control and cost reductions. When the "product" is knowledge, however, a much wider range of inputs must be identified and assembled to create the deliverable to the end-customer — and this, as Cohn notes in the following figure, means that knowledge services rely on "collaborative value creation in intelligent communities."

Cohn knowledge economy

(click to enlarge)

The complexity reflected in the chart is particularly daunting for small businesses. As Cohn notes, "a small company cannot afford to hire all the necessary expertise in house, and therefore it must complement its in-house expertise with that available in collaborating companies." Despite what appears to be a clear requirement, though, Canadian SMBs are loathe to take action: Cohn reports that "shockingly," 53% of Canadian companies surveyed "do not have any collaboration agreements of any kind."

InsightaaS summary: This last finding is particularly daunting for Canadian suppliers of collaborative technologies — it suggests that suppliers don’t just need to illustrate how their products are superior to competitive offerings; they need to make the case for the importance of collaboration as a first step to creating a base level of demand. The good news is that, according to the CATAAlliance report, these suppliers should ultimately find a responsive market: Cohn’s research has found that "some of the most successful companies have achieved their dominant position in the market precisely because they know how to complement their technical and commercialization strengths with those of their partners," implying that a robust collaborative infrastructure (and culture) are keys to market success.

Beyond the collaboration-related issues discussed in this piece, there are many aspects of Cohn’s report that provide compelling reading for both technologists and the entrepreneurs and policy makers whose decisions impact the use of collaborative systems. For example, findings from a survey asking respondents to compare their firms with their main competitors on 20 factors grouped under the headings "technology," "product/service," "marketing" and "commercial status" identified common characteristics for three company types: "built to flip," "built to lead" and "built to endure" — and the associated analysis provides meaningful insight to readers across the commercial spectrum.

The Beyond R&D — Gaining Economic Value through Effective Commercialization of Innovations report written by Dr. Sorin Cohn for CATAAlliance can be downloaded from InsightaaS.com. Click here to access the report.

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