Commercializing Micro-Nanotechnology Products [1 ed.] 9780849383151, 0849383153

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Commercializing Micro-Nanotechnology Products

© 2008 by Taylor & Francis Group, LLC

Commercializing Micro-Nanotechnology Products

Edited by David Tolfree and Mark J. Jackson

Boca Raton London New York

CRC Press is an imprint of the Taylor & Francis Group, an informa business

© 2008 by Taylor & Francis Group, LLC

CRC Press Taylor & Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742 © 2008 by Taylor & Francis Group, LLC CRC Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Printed in the United States of America on acid-free paper 10 9 8 7 6 5 4 3 2 1 International Standard Book Number-13: 978-0-8493-8315-1 (Hardcover) This book contains information obtained from authentic and highly regarded sources. Reprinted material is quoted with permission, and sources are indicated. A wide variety of references are listed. Reasonable efforts have been made to publish reliable data and information, but the author and the publisher cannot assume responsibility for the validity of all materials or for the consequences of their use. No part of this book may be reprinted, reproduced, transmitted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying, microfilming, and recording, or in any information storage or retrieval system, without written permission from the publishers. For permission to photocopy or use material electronically from this work, please access www. copyright.com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC) 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization that provides licenses and registration for a variety of users. For organizations that have been granted a photocopy license by the CCC, a separate system of payment has been arranged. Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data Tolfree, David, 1938Commercializing micro-nanotechnology products / David Tolfree and Mark J. Jackson. p. cm. Includes bibliographical references and index. ISBN 978-0-8493-8315-1 (alk. paper) 1. Nanotechnology. 2. Microtechnology. 3. Nanotechnology--Economic aspects. 4. Microtechnology--Economic aspects. I. Jackson, Mark J. II. Title. T174.7.T65 2007 620’.50688--dc22 Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the CRC Press Web site at http://www.crcpress.com

© 2008 by Taylor & Francis Group, LLC

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Contents Preface .....................................................................................................................vii Editors ......................................................................................................................xi Contributors ............................................................................................................. xv Chapter 1

The Path to Commercialization ........................................................... 1 David Tolfree and Robert Mehalso

Chapter 2

Entrepreneurship’s Role in Commercializing MicroNanotechnology Products .................................................................. 29 Bruce A. Kirchhoff and Steven T. Walsh

Chapter 3

Roadmapping Nanotechnology .......................................................... 51 Steven T. Walsh, Bruce A. Kirchhoff, and David Tolfree

Chapter 4

Technology Transfer of Nanotechnology Products from U. S. Universities ................................................................................ 71 Mark J. Jackson, G. M. Robinson, and M. D. Whitield

Chapter 5

Commercialization Strategies for Public Research Organizations: How to Move from Public Research into the Market by a Leading Dutch Institute ................................................. 81 Kees Eijkel and Arend Zomer

Chapter 6

Market Analysis and Growth for Micro-Nano Products.................. 105 Jean-Christophe Eloy

Chapter 7

Oxonica Plc: A Leading U.K. Nanotechnology Business ................ 143 Kevin Matthews

Chapter 8

Zyvex Corporation: Providing Nanotechnology Solutions — Today™ ....................................................................... 167 James R. Von Ehr II

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Commercializing Micro-Nanotechnology Products

microParts GmbH: The History of the Development of a Successful German Microsystems-Based Business ......................... 189 Reiner Wechsung

Chapter 10 Shaping the Future ........................................................................... 229 David Tolfree Chapter 11 Glossary............................................................................................ 253

© 2008 by Taylor & Francis Group, LLC

Preface Now, in the irst decade of the twenty-irst century, we are witnessing a quiet manufacturing revolution resulting from the rapid advances made in science and technology in the twentieth century. We are now in the information age and the third industrial revolution based on a knowledge-driven economy. Small technologies, led by micro-nanotechnology, the products of physics, chemistry and engineering and more recently biology, are key drivers of this economy. They are already impacting industries and are having a profound effect on the way people live and work. The ubiquitous use of computers and mobile telephones in industry and commerce, satellite links for communication, improved protective sunscreens, cosmetics, stain-resistant fabrics, composite materials for vehicles and sports equipment, portable diagnostic medical devices, targeted drug delivery systems, ire and water resistant coatings and materials for fuel cells are among some of the products currently on the market or are near-market. There is the promise of many more products in the foreseeable future. The further application of these technologies to manufacture new products and systems is well underway in the US, Asia and Europe but their potential disruptive nature, coupled with public concerns about some aspects of nanotechnology, have raised possible health issues that need to be examined. The emergence of the global market is producing unparalleled opportunities but is also forcing up the pace of international competition. Nations that have a strategy for economic development based on innovation and the exploitation of science and technology, since they are the key to wealth creation and prosperity, will become leaders in this market. We can expect a high demand for new products, systems and services to meet the growing needs of the new economies of Europe and Asia. It is predicted that the global market for micro-nanoproducts and systems will exceed $1 trillion in the next decade. Companies create wealth from the commercial exploitation of their intellectual property. Taking the results of research to full commercialization requires experience in design, manufacturing and marketing and a suitable infrastructure that encourages innovation and the training of technologists and engineers with an understanding of business. Competitive advantage is gained by deploying such a workforce for the development and realization of low cost, high quality products and services that offer at the right time unique advantages to the buyer. Failure to do this will put delays in the full commercialization cycle. Most Governments in the industrialized world are funding micro-nanotechnology research and development because of the economic beneits they will bring to their countries. At present the number of companies that have been successful in markets for micro-nanoproducts is relatively small but this is expected to grow signiicantly in the coming years. There is an urgent need to: raise awareness, encourage private investment, establish reliable manufacturing processes and agree on standards for design.

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Commercializing Micro-Nanotechnology Products

The manufacturing of micro-nanotechnology products raises particular challenges and important fundamental issues related to costs, yields and reproducible quality and acceptability. It is clear that new manufacturing methodologies and processes will have to be developed together with metrology systems, particularly for nanomanufacturing. These will need to extend across multi-disciplinary domains (mechanical, electrical, optical, chemical and biological etc.) if a wide range of new products and systems are to be realized. The challenge facing nations, regions and companies who embrace micro-nanotechnologies is to understand how to manage the economic and social changes they will bring about. The chapters in this book have been written by some of the world’s leading academics and practitioners. Chapter 1 sets the scene by taking the reader along the path to product commercialization, detailing the steps that are needed to convert an idea into a marketable product. Examples are given of products that have successfully entered the market. The authors relate their own experiences in developing and bringing micro-nanoproducts to the market. Chapter 2 is about the importance of entrepreneurship, what is needed to build a successful start-up business and the steps that need to be taken to inance and develop a marketing strategy. Roadmaps are essential tools for planning a future business or helping decision-makers to develop future strategies. Roadmapping nanotechnology is relatively new, so in Chapter 3 the authors discuss the various deinitions of nanotechnology and how the issues they raise relate to the production of roadmaps. The various types of roadmaps and the methods used to collect information and produce them are described. In Chapter 4, the role of government agencies, private investors and corporations in expediting technology transfer from universities is covered with particular reference to the US National Nanotechnology Initiative. Public research organizations carry out much of the research and development in micro-nanotechnology. This can raise problems when reaching out into the commercial market place. In Chapter 5, the authors describe their experiences on how the Dutch Institute of Nanotechnology known as Mesa +, located within the University of Twente, developed a commercialization strategy based on a partnership with government and industry by applying the Triple Helix concept which is described in the text. The roles of the partners and the collaboration process at three levels, the conceptual level, the procedural level and the operational or practical level are described. Commercialization is about making products that sell in the market place. First, there has to be a market and then a knowledge of how to access it. In Chapter 6, Jean-Christophe Eloy, the Director of Yole Développement, a market research and strategy consulting company and world leader in the analysis and evaluation of the MEMS markets, explains how such markets are developed and analyzed. Examples are given with illustrations of a number of products such as ink-jets and pressure sensors and the markets they supply. In the remaining Chapters, 7, 8 and 9, three leading micro-nanotechnology development and manufacturing companies in the UK, US and Germany describe how their businesses started and progressed to become market leaders. They provide a valuable insight into how they overcame the dificulties of raising inance and inding the right product to develop for the growing market for micro-nanoproducts.

© 2008 by Taylor & Francis Group, LLC

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Their experiences will be a valuable aid to anybody or any company wishing to follow a similar path to commercialization. In the concluding Chapter 10, the author takes an optimistic but realistic view of how the new technologies will shape the future. Based on current developments, he makes some guarded predictions up to 2030. Beyond that although predictions are tainted with speculation they can help readers visualize the shape of things to come. The book gives an appraisal of the current status of small technologies and their ability to produce and commercialize new products and systems. An outlook and future perspective of how micro-nanotechnologies will change the future is given to help those concerned about economic and social change. It will be of speciic interest to people, companies, and governments wishing to invest in these new technologies and ind out about more about the path to commercialization. The editors wish to thank all the chapter authors for their valued contributions to this book and to the many other professionals from whom we sought knowledge and assistance. We particularly acknowledge the proofreading skills of Valerie Tolfree, the wife of the lead editor, whose patience and encouragement helped in the writing of this book. David Tolfree and Mark J. Jackson Editors

© 2008 by Taylor & Francis Group, LLC

Editors David Tolfree, MSc., F.Inst.P., CPhys., F.IoN. is the co-founder and Executive Director of Technopreneur Ltd, a consultancy company for the exploitation of micro-nanotechnology, established at Daresbury in Cheshire, England. He is one of the founders of MANCEF (Micro and Nanotechnology Commercialization Educational Foundation), an international body dedicated to commercialization and education, and is currently its European Vice-President. David is also one of the founders of the UK Institute of Nanotechnology and is a member of its Advisory Board. He is a Chartered Physicist, a Fellow of the Institute of Physics and the Institute of Nanotechnology and has published over 130 papers, including news articles, chapters for books and conference papers, and has given interviews on television and radio. He is internationally recognized as an authority on the exploitation of micro-nanotechnology and co-authored chapters in the MANCEF International Microsystems and Top-Down Nanotechnology Roadmap. He is currently the guest editor and contributor to the International Journal of Nanomanufacturing; and is also on the advisory boards of a number of international conferences. David gained over 40 years’ experience in research, project management and the marketing of research facilities while employed by the Council for the Central Laboratory of the Research Councils (CCLRC) at Daresbury in the UK. His earlier career was spent doing basic research in nuclear particle and accelerator physics, reactor instrumentation, and nuclear weapons development. In 1994, whilst working at the Daresbury Laboratory, he was the irst to establish non-silicon microfabrication technology in the UK, transferring much of it from Germany. At that time he was appointed to be the UK coordinator of the irst European R&D Network in Microtechnology involving nine countries. He established the irst industry-led UK network in LIGA technology, known as the LIGA Club, and acquired over £300K of industry funding for prototype microstructure development using deep X-ray lithography. Afterwards, he created the SMIDGEN (Small Microengineering Intelligence Design Generation Exploitation Network), a consortium of companies and universities, to drive the commercial exploitation of microsystems technologies. xi © 2008 by Taylor & Francis Group, LLC

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Acknowledged by the UK Government’s Foresight Directorate as an example of best practice, it laid the early foundations to the UK MNT Network, part of Government’s £92 million Micro and Nanotechnology Manufacturing Initiative established in 2003. In 2004 David originated a successful proposal to the UK Northwest Development Agency to create a National Microsystems Packaging Centre in the North West of England. Since that time he has been proactive in the exploitation of micronanotechnology, working with Government Departments, Regional Development Agencies, companies, research institutes and universities worldwide. In 2005 he was the co-director of the COMS2005 international conference at Baden-Baden in Germany and a session chair at the COMS2006 conference in St Petersburg, Florida. He was on the Joint Organizing Committee of the COMS2007 conference held in Melbourne, Australia and is currently co-chair of the International HARMST-LIGA Commercialization Group. Mark J. Jackson, Ph.D., M.A., C.Eng., M.Eng. is Professor of Mechanical Engineering at The College of Technology, Purdue University. He began his engineering career in 1983 when he studied for his O.N.C. part I examinations and his irst-year apprenticeship-training course in mechanical engineering. After gaining his Ordinary National Diploma in Engineering with distinctions and I.C.I. prize for achievement, he read for a degree in mechanical and manufacturing engineering at Liverpool Polytechnic and spent periods in industry working for I.C.I. Pharmaceuticals, Unilever Industries, and Anglo Blackwells. After graduating with a Master of Engineering (M.Eng.) degree with Distinction under the supervision of Professor Jack Schoield, M.B.E., Dr Jackson subsequently read for a Doctor of Philosophy (Ph.D.) degree at Liverpool in the ield of materials engineering focusing primarily on microstructure-property relationships in vitreous-bonded abrasive materials under the supervision of Professor Benjamin Mills. He was subsequently employed by Unicorn Abrasives’ Central Research & Development Laboratory (Saint-Gobain Abrasives’ Group) as materials technologist, then technical manager, responsible for product and new business development in Europe, and university liaison projects concerned with abrasive process development. Mark Jackson then became a research fellow. In 2004 he moved to Purdue University as Associate Professor of Mechanical Engineering in the Department of Mechanical Engineering Technology. Mark is

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active in research work concerned with understanding the properties of materials in the ield of micro scale metal cutting, micro and nano abrasive machining, and laser micro machining. He is also involved in developing next generation manufacturing processes and biomedical engineering. Mark Jackson has directed, co-directed, and managed research grants funded by the Engineering and Physical Sciences Research Council, The Royal Society of London, The Royal Academy of Engineering (London), European Union, Ministry of Defense (London), Atomic Weapons Research Establishment, National Science Foundation, N.A.S.A., U. S. Department of Energy (through Oak Ridge National Laboratory), Y12 National Security Complex at Oak Ridge, Tennessee, and Industrial Companies, which has generated research income in excess of $15 million. Mark has organized many conferences and served as the General Chair of the International Surface Engineering Congress. He has authored and co-authored over 150 publications in archived journals and refereed conference proceedings, has edited a book on ‘microfabrication and nanomanufacturing,’ is guest editor to a number of refereed journals, and has edited a book on ‘surgical tools and medical devices’. He is the editor of the ‘International Journal of Nanomanufacturing,’ ‘International Journal of Molecular Engineering,’ International ‘Journal of Nanoparticles,’ ‘International Journal of Nano and Biomaterials,’ and is on the editorial board of the ‘International Journal of Machining and Machinability of Materials’ and ‘International Journal of Computational Materials Science and Surface Engineering.’

© 2008 by Taylor & Francis Group, LLC

Contributors Kees Eijkel Kennispark Twente Netherlands

David Tolfree Technopreneur Ltd Denton, Manchester, United Kingdom

Jean-Christophe Eloy Yole Développement Lyon, France

James R. Von Ehr II Zyvex Corporation Richardson, Texas USA

Mark J. Jackson Birk Nanotechnology Centre and College of Technology Purdue University West Lafayette, Indiana USA Bruce A. Kirchhoff Professor of Entrepreneurship School of Management New Jersey Institute of Technology Newark, New Jersey USA Kevin Matthews Oxonica Yarnton, Oxfordshire, United Kingdom Robert Mehalso Microtec Associates Fairport, New York USA Grant M. Robinson Micromachinists LLC Purdue University West Lafayette, Indiana USA

Steven T. Walsh Alfred Black Professor of Entrepreneurship and Co-Director of the Technology Management Center Anderson School of Management University of New Mexico Albuquerque, New Mexico USA Reiner Wechsung microParts GmbH Dortmund, Germany Michael D. Whitield Micromachinists LLC Purdue University West Lafayette, Indiana USA Arend Zomer Centre for Higher Education Policy Studies University of Twente Netherlands

xv © 2008 by Taylor & Francis Group, LLC

1

The Path to Commercialization David Tolfree and Robert Mehalso

CONTENTS Introduction................................................................................................................ 2 Infrastructure for Commercialization........................................................................ 4 Basic Requirements ........................................................................................ 4 Disruptive Technologies .................................................................................4 Government Infrastructure Programs ............................................................ 5 Clusters and Supply Chain Networks .............................................................6 Intellectual Property and Patents ................................................................... 7 Summary ........................................................................................................8 Steps to Commercialization ....................................................................................... 9 Meeting the Challenge ....................................................................................9 Ideas and Concepts ....................................................................................... 10 Design, Modeling, and Simulation ............................................................... 10 Integration..................................................................................................... 11 Standardization ............................................................................................. 12 Manufacturing .............................................................................................. 13 Prototyping ................................................................................................... 13 Packaging...................................................................................................... 14 Testing and Reliability .................................................................................. 15 Final-Product Realization and Marketing .................................................... 15 Examples of Products that have taken the Commercialization Path ....................... 17 The Ink-Jet Printer ........................................................................................ 17 A Brief History of the Ink-Jet Printer ................................................ 17 Nano Coatings on Textiles ............................................................................ 18 A Portable Blood Analyzer........................................................................... 19 Practical Experiences in Commercializing Micro/Nano-Based Products ..............20 References ................................................................................................................ 27

1 © 2008 by Taylor & Francis Group, LLC

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Commercializing Micro-Nanotechnology Products

INTRODUCTION The ultimate value of any technology to society is its ability to generate useful and marketable products and systems using available practical knowledge and skills. Unlike curiosity-driven scientiic research, the purpose of technology is to apply knowledge to facilitate design and manufacture. New products result from years of research and development. Research generates new knowledge and therefore intellectual property (IP). Real wealth derives from the commercialization of that IP. Possession of intellectual property is a necessary beginning of the commercialization process. Creating proit from commercialization is industry’s main interest and purpose. This is not the main purpose or irst interest of academia since it derives most of its funding support from government. Universities are, however, under increasing pressure to raise revenue by exploiting their IP. Most have set up commercial ofices that operate knowledge and technology transfer schemes to expedite revenue. This difference of purpose identiies the fundamental cultural gap between industry and academia. Most government bodies (national and regional) now recognize this cultural gap and are directing their funding strategies more towards projects that are likely to generate economic value and produce a return on the investment. Research and development programs are more likely to be funded if there is a clear path to commercialization and hence wealth generation. Funding bodies now look for a closer link with industrial priorities than to academic vision. The latter is, and will always remain, the source from which ideas and new initiatives emerge. Miniaturization technologies encompassing micro and nanotechnologies are current leaders in the industrial revolution that is driving the new economy. These technologies have the potential to provide an unlimited range of new products by leveraging skills from across many domains. They can be disruptive and thus create new product-market paradigms. Disruptive technologies lead to innovations that have a discontinuous rather than evolutionary nature.1 These discontinuous innovations can create unique products, processes, and services that provide exponential improvements in value for the customer or end user. But disruptive technologies are unstructured and have uncertain technological outcomes, making commercialization dificult to quantify and justify inancially.2 They attract risks that have to be balanced against beneits when planning a development and marketing strategy. Many products have evolved over the last ten years using established manufacturing methodologies developed for the semiconductor industry. These microcomponents and microsystems are embedded in products and systems that are now part of everyday life. Some examples are mobile telephones, laptop computers, digital cameras, ink-jet printers, and a huge range of medical diagnostics. However, new products being produced using nanotechnologies largely depend on an advanced understanding of the behavior of materials and processes at the molecular level, where properties are different from operation at the more familiar macroscopic level. For example, there may be some toxicity issues associated with nanoparticles used in the formulation of a range of chemicals for consumer products, like sunscreens and cosmetics. Here, governments generally agree there is a need for further research

© 2008 by Taylor & Francis Group, LLC

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The Path to Commercialization

Cash-flow Benefits Income Reduction

Market Launch Time: years

Expenditure

FIGURE 1.1

Time-to-market reduction.

linked to new materials development to determine whether existing regulations for handling and manufacturing toxic chemicals need to be augmented when particles reach nano-dimensions.3 The inevitable convergence of bio- and nanotechnologies will produce unlimited opportunities for manufacturing new materials and products. In the pharmaceutical and biomedical industries, such products will have to undergo stringent tests and evaluation before they are accepted. This delays production and raises costs. The challenge facing researchers, technologists, and manufacturers is whether the same well-trodden path taken to commercialize macroproducts can be used for products based on a combination of micro- and nanotechnologies. This challenge will be greatest in the life sciences, which include medical diagnostics and surgical techniques. These new devices and techniques will revolutionize medical practices and health care. The challenge for companies is to reduce the time to market for new products as illustrated in Figure 1.1. This is particularly relevant for small companies where cash low dominates proitability and survival of the business. In this chapter, we set out to describe the steps on the ladder that deine the commercialization path for new micro-nanoproducts and systems. The complex, multidisciplinary and potentially disruptive nature of the processes used to manufacture micro-nanoproducts and systems makes advances along the path interactive. This path leads to the market but does not guarantee the product will be globally competitive and create a sustainable business. The issues that need to be addressed and the pitfalls and barriers that need to be overcome to achieve full commercialization of an end product from concept to inal market penetration will be described. Some examples of products that have been successfully commercialized will be discussed at the end of this chapter.

© 2008 by Taylor & Francis Group, LLC

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Commercializing Micro-Nanotechnology Products

INFRASTRUCTURE FOR COMMERCIALIZATION BASIC REQUIREMENTS The absence of a suitable infrastructure that supports research, product development, and manufacturing of an end product is the main barrier to developing any commercialization strategy. Ideally, an infrastructure must support and incorporate a seamless path from concept to end-product realization for the market. The prerequisite for the government of a nation is to understand that success in the global market will bring economic beneits that surpass its capital investment. The challenge facing both public and private investors is to ensure the quality of the management, particularly relevant to emerging technologies, where there is a greater risk element. Technology alone will not ensure that products can be manufactured in volume, at costs a customer is willing to pay, and then delivered to the customers at the right time. Good management of the technological exploitation process is therefore an essential element for success. It is necessary for a nation to link its world-class research with a supporting exploitation path if it is to succeed in the global economy. Industry can no longer compete by selling products made with standard processes that can be applied anywhere in the world, particularly with countries with low-cost economies. Traditional manufacturing is now moving to Asia where labor costs and hence manufacturing costs are lower, and therefore proitability is higher for those who own the IP. Businesses must constantly innovate to raise the quality of production, introduce new product lines or services, and add greater value to their outputs. Those that embrace the new technologies will survive and prosper. Micro-nanotechnologies (MNTs) are among those enablers that will lead to the evolution of new products and new industries. Some of these will be different because they can have a “disruptive” technology base. That may create problems for those unprepared for the changes that such technologies will bring about. For example, ink-jet revolutionized printing in a very short time, causing dificulties for manufacturers of typewriters and more conventional forms of printing that had been unaware of the technological developments. Even if they had been aware, they did not have the technical knowledge or manufacturing infrastructure to support this new printing technology.

DISRUPTIVE TECHNOLOGIES A more detailed text on disruptive technologies can be found in Chapter 2, so here we shall just give a brief summary of what they are, since they inluence the type of infrastructure required to enable companies to maximize commercial beneits. Disruptive technologies are those that do not support the existing product manufacturing linkages within the industries that embrace them. Thus, the companies that adopt these technologies must essentially revolutionize their manufacturing practices. This is nearly impossible for small companies as they lack the technology infrastructure or resources to dedicate to this task. It is also dificult for large companies to make changes and divert resources from what may currently be proitable endeavors. The innovation process that results from disruptive technologies is called “discontinuous,” where progress is made not through the conventional incremental,

© 2008 by Taylor & Francis Group, LLC

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The Path to Commercialization Technology Push

Basic Research

State of Industrial Manufacturing

Force Fit Prototypes

Nonexistent Market Channels (primarily developed for Internal customers)

Bottlenecks Technological Development

Modifications to Existing Processes

Initial Market Market Acceptance (one market accepts device technology then industry specific vehicles emerge)

Stable New Technology Robust Infrastructure

Market New Augmentation Markets New markets utilise e.g Inertial sensing devices for multiple existing productapplications technology, paradigm forming product platforms

Market Pull

FIGURE 1.2 Infrastructure model for discontinuous innovations.

continuous, or generational evolutionary processes, but rather through breakthroughs and signiicant modiications among a wide array of technologies. For this reason, to succeed with these technologies, governments must create an environment that supports discontinuous innovation. An infrastructure model is shown in Figure 1.2. This often requires investment in cutting-edge research, facilities, and equipment. Many large companies invest in their own research and development because it is critical for them in order to maintain their economic competitiveness. However, smaller enterprises need help. It is here where government investment has a pivotal role to play.

GOVERNMENT INFRASTRUCTURE PROGRAMS A number of government-supported infrastructure programs now exist in many countries in Europe, Asia-Paciic, and in the U.S.A. Details of most of these programs can be found on appropriate Web sites. We shall outline a recent program established in the United Kingdom. After accepting a report by the U.K. Advisory Group on Nanotechnology Applications4 in 2003, the government sanctioned an investment of about £90 million for a micro-nanotechnology infrastructure development program. This leveraged an additional £300 million from development agencies and industry, thus encouraging a wider industrial interest, largely absent before 2003. Funds were provided to enhance some recognized centers of excellence and create new ones and also to support new industry-related projects. A key element of the infrastructural program was the formation of a national MNT network5 to bring together all the centers and the 12 regional development agencies into a working partnership. The object of this was to provide a market-orientated focus for facilities, people, and organizations engaged in MNT in the U.K.

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Commercializing Micro-Nanotechnology Products

TABLE 1.1 Global Funding for Nanotechnology R&D Programs Total World Funding on R&D Region U.S. European Union (FP6 + NGovs) Asia-Paciic Japan

> $10 Billion in 2005 (since 1997 $18 billion) ~$2.56 billion ($435 million VC funding) ~$2.37 billion ~$4.5 billion ~$2.28 billion

In the continental U.S., a vast infrastructure connects federal government funding programs initiated by DARPA (Defence Advanced Research Agency) or NASA (National Aeronautics and Space Administration) with the private sector. It is worth noting that the semiconductor industry spawned MEMS (microelectromechanical systems) technologies. It started as a segment of the semiconductor industry back in the 1960s, utilizing sensor technologies and later developing its own technology platforms. In the 1980s, MEMS became a fully established nomenclature. In Europe the term “microsystems technology” (MST) was the nomenclature used. MST was based on a wider and more descriptive deinition embracing non-electronics components like mechanical, optical, and luidics systems. Nanotechnology started to be used in nomenclature in the early 1990s. Today the more comprehensive terms “small technologies” or “miniaturized systems” are used. They embrace micro- and nanotechnologies. The interpretation of these technologies underpins the type of commercial infrastructure needed to exploit them. Hence a difference in approach exists between Europe and the U.S. Governments in all the major industrialized countries are now adapting their infrastructures to include R&D support for nanotechnologies. The current level of such support is shown in Table 1.1 above. The U.S. and some European infrastructure strengths are linked to the development of “clusters.” These are geographically close groups of interconnected companies and associated institutions in a particular ield, linked by common technologies and skills. Most states have one or more clusters focused on various technology or product areas.

CLUSTERS AND SUPPLY CHAIN NETWORKS Clusters signiicantly enhance the ability of state and local economies to create wealth and build prosperity because they can act as the incubators of innovation. The primary elements they possess needed to transform ideas into inventions are summarized as follows: • • • •

Universities or research centers that generate new knowledge Companies that transform knowledge into products or new services Suppliers that provide critical components or equipment Marketing and distribution irms to deliver the product to customers

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Companies in strong industry clusters can innovate more rapidly because they can draw on the local networks that link technology, resources, information, and talent. Successful clusters are usually centered on a world-renowned research university. This model for a cluster has been adapted and used successfully in many regions and countries for progressing commercialization of MNT-based industries, notably in Germany and the U.S. According to Grace,6 on a global scale, more than 100 microsystems companies have been created in clusters. No fewer than 35 MEMS, microsystems, and nano clusters have been formed since the irst one was created in Dortmund, Germany, in 1986. Further examples of industry MNT clusters will be given in later chapters of this book. Key elements in building commercialization infrastructures are the establishment of supply chain networks. These provide the support needed to ensure industrial sustainability in particular sectors. It is rare for companies, particularly small ones, to have all or even some of the experience or expertise required to design, develop, manufacture, and market products. An MNT-based industry, like any other, will not mature unless effective supply chains exist. Companies in supply chains do not necessarily have to be located in the same region but can be outside the country or region where the manufacturing is taking place. Where this applies, then, wellstructured communication networks are imperative. Having good Internet or personalized computer-based communications support is essential to any global business development. Supply chains give opportunities for growth to very small companies or start-ups. Being part of a supply chain gives visibility and accessibility to potential customers. It also reduces risk to the company and increases customer conidence. Micro-nanotechnology is already stimulating new business opportunities. Estimating the number of companies that are involved in product development and manufacturing worldwide is dificult. Kaiser7 estimates that currently worldwide there are more than 4000 companies and research institutes involved in nanotechnology, with about 2000 focused on services, 1000 focused on products, and 1000 on research; these contribute to the global network of suppliers. The leading countries are the U.S., Japan, China, and Germany. China is growing fastest with more than 600 nanotechnology companies currently registered. The inclusion of product manufacturers that make use of nanomaterials has increased in applications areas and redeined the classiications used to describe such companies.

INTELLECTUAL PROPERTY AND PATENTS A MEMS patent review has been given in the latest edition of the Micro and Nano Technology Commercialization Education Foundation (MANCEF) Roadmap.8 Here the authors produce an analysis of patents and patent applications based on data from the U.S. Patent Ofice. Some of the key issues associated with intellectual property (IP) protection and patents are given below. The creation of intellectual property occurs at universities and research institutes that are generally funded by public monies; acknowledgment usually occurs through patent ilings. Due to inancial constraints, universities often do not ile patents but publish papers instead, thus putting information into the public domain and reducing

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Commercializing Micro-Nanotechnology Products

the commercial value of the IP. In the U.S., however, there is a 12-month allowance after publishing to ile a patent. Publishing by academics often brings earlier awards and is part of their cultural infrastructure. Patenting is a mechanism that allows individuals as well as small and large companies to protect their valuable IP. It is the only form of legal protection for assets from which income or wealth can be derived. A plethora of help exists for those wishing to patent. It is available through government agencies, private companies, and consultants. The process of patenting is expensive and takes a signiicant portion of budgets, particularly from small companies. Each country has its own system, so multiple patents are needed to protect IP internationally. Patents and agreements made in Europe and the U.S. are not always honored in Asia, so at times other protective measures have to be taken. Patents only deal with processes or products, not with conceptual ideas. They can also include modiications to materials and new design software. Multiple ownership of software can give problems when modiications made by one owner have not been agreed to or registered by the others. Nanotechnology is raising many issues, particularly in the biomedical ield in areas like genetic modiication and drug development. There are three types of patents: utility, design, and plant. The utility patent covers any new invention or discovery of a useful machine, process, manufacture, or composition of matter. These are recommended for new small companies like startups owing to their extensive coverage of new products. The design patent covers any new or nonfunctional design but not structural features. Plant patents are issued for asexually reproducing plants. The pathway to commercialization does not stop with the patent iling. Generally, patents from a number of sources must be compiled and integrated to build a portfolio to protect the new product or company that may be formed to produce the product. The new product is then developed around the portfolio of patents, and the inal product will use the patents as protection to maintain a position in the marketplace. IP can be expensive to protect and can be a deterrent to investors. However, if a technological-based company has no IP, it is unlikely that an investor will invest without some form of asset to protect that investment. Micro-nanotechnology companies beneit from licensing patents if they have an inherent value to the company, since they constitute part of its asset portfolio. Sublicensing to manufacturers is often done to build up speciic relationships with them and give protection from competitors.

SUMMARY We can summarize the basic requirements and key elements for a working commercialization infrastructure as follows: • Commercialization strategy with market foresight and awareness • Appropriate level of investment in facilities for research and development • Appropriate level of investment in design and manufacturing facilities (including prototyping and end-product development)

© 2008 by Taylor & Francis Group, LLC

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The Path to Commercialization

• • • • •

Trained personnel in MNT design manufacturing technologies and marketing Knowledge of existing and potential customer base for MNT products Engagement of stakeholders and society interest to allay fears and concerns Suitable environment for collaboration, partnerships and network clusters Appropriate protection for intellectual property

STEPS TO COMMERCIALIZATION MEETING THE CHALLENGE The ten major steps in the ladder to take an idea for a new product to the market are shown in Figure 1.3. Each step can be subdivided into smaller sets of tasks depending on the nature of the product and state of knowledge that exists. It is not a linear path, because of the disruptive nature of the technology and because we live in a world where change, challenge, and risk will always offer barriers to progress. It is not a path for the faint-hearted or for those without determination, knowledge, and experience. Experience shows that unless a suitable infrastructure, as described above, is in place, then it will be dificult, if not impossible, to take the steps on the path to commercialization. If the required infrastructure does not exist, then companies have to seek prototyping or manufacturing facilities outside their immediate location or country, Micro-NanoSystem End Product Realisation concept -design – prototype – End product manufacture-market Markets Final Product Pilot Production Process Steps

Reliability Verification Pre-production Prototype Manufacture Inspection and Testing Integration & Assembly of Micro Components

Microcomponent Fabrication

Modeling-simulation Design for Manufacture Concept-idea-foresight

FIGURE 1.3 Steps to commercialization.

© 2008 by Taylor & Francis Group, LLC

Package Design Interface Electronics

Product Development

Test Support Functions

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Commercializing Micro-Nanotechnology Products

which can substantially add to the development and production costs. Large-scale production is another hurdle that needs to be considered early on if the product falls into that category. Increasingly, such production can be done more economically in countries with low labor costs. Such countries do not always have the suficient knowledge required to meet the stringent demands of manufacturing the product. It is essential to have an understanding of the viability of the market for the inal product. With the rapid increase in technological development and the shorter lifetimes of products, the reduction in the time to market has become an important factor.9 Globalization has generated the need for global networks and supply chains. Manufacturing companies need to be part of these if they wish to have access to services and markets that may not be attainable in their own countries at competitive rates. There are many examples of innovative companies in the U.K. that, because of the lack of local facilities, have had to seek such assistance in Asia, the U.S., and Europe to manufacture their products.

IDEAS AND CONCEPTS Every new product or system, innovation or invention is born from an idea or a concept produced by an individual or a group of individuals. These are sometimes driven by need, sometimes by inspiration, sometimes by a desire to make money — but more often by chance. The latter usually results from an association or interconnection between existing products or systems. There is a large gap between an idea and a proven concept. It may be termed a “chasm of death.” Most ideas do not make it across this gap. Advancing even to a point where an idea is conceptually viable takes both research and focused determination. It follows basically the path of any invention. In the multidisciplinary, multidimensional ields of MNT, specialized technology knowledge is essential. The ield is relatively new, so there are unlimited applications and opportunities, but the problem facing the idealist or company who might see such opportunities is that to realize that vision, enthusiasm is not enough. It has to be backed up with knowing the best way to proceed, even to advance to the proof-of-concept stage. Most researchers applying for research grants for development projects are judged on their ability to make reasoned cases for success, usually based on the production of demonstrators to prove that the idea or principles used can actually realize a marketable product. Private investors also require individuals or companies to make convincing arguments or demonstrators to back up their claims. A demonstrator is still a long way from the manufacture of a reliable end product. Our model for successfully producing a product is to be sure that each step along the path shown in Figure 1.1 can be taken. We shall outline what is required to take these steps.

DESIGN, MODELING, AND SIMULATION Once a proof-of-principle has been carried out to test that the science is sound, then a design study is the next step. With miniaturized components, devices, and systems, an integrated approach must be taken. The design must satisfy a number of criteria. The knowledge and tools must be available. Gone are the days of a draftsman’s

© 2008 by Taylor & Francis Group, LLC

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sketch design on a drawing board. Microengineering requires a different skill set and software tools. Computer-aided design (CAD), modeling, and simulation tools are vital for inding the best solution to a product development, particularly when many components have to be integrated on a single microchip or substrate. Computer simulations shorten development cycle times, lower costs, and enhance inal product performance. This enables optimization of assembly and component integration, thus reducing the probability of failure at the prototype stage. Sometimes the irst prototype can be used as a demonstrator to test out the product speciication. Many companies now provide software packages for MEMS-based devices, but gaps exist down at the nanoscale. Some customized software for drawing nanoscale patterns for nanolithography is now available. Good design has to take into account all stages of manufacture and include all aspects of packaging to achieve a successful end product. Commercially available software products available from a variety of companies like ANSYS Inc. and Coventor are written for the microsystems environment. In order to simulate complex 3-D geometries, either the Finite Element Method (FEM) or the Element Boundary Method (EBM) needs to be used. The accuracy of simulation and modeling is dictated by a knowledge of the material properties and its behavior at small scale where large surface-to-volume ratios dominate. At these levels, surface forces such as adhesion, stiction, friction, wear, surface tension, viscosity and electrostatic charge have to be considered. Reliability becomes a major problem because the lack of understanding of how material properties age, or the rate at which they change from the original design point when in different operating environments, is one of the many challenges facing designers. In aerospace, automotive, and medical applications, reliability and longevity are of utmost importance. Here, a zero tolerance to failure is required. As we move into the nanotechnology domain, quantum effects become important. New sets of modeling software and design methodologies are required for atomic and molecular scale processes before any realistic advances can be taken. Although much progress has been made in modeling and simulation, software for use at the micro-nanoscale needs more development for accurate simulation.

INTEGRATION The rapid growth of microchip and microsytems technology has led the electronics industry toward integration of more functionality onto a single chip. This decreases costs and gives increased reliability to products since they contain fewer discreet components. A number of review articles in a dedicated edition of the International Newsletter on Micro-Nano Integration (MSTnews)10 outline the importance of the subject to manufacturers. In particular, the European INTEGRAMplus project11 has successfully demonstrated the value of integrating micromechnical and microluidic systems based on silicon chips. This is predicated on the adoption of a multitechnology and multidomain approach with a focus on integrating silicon-based components with other materials such as polymers as platforms for packaging and interfacing to the macro-world. It also provides a design methodology in the CAD environment for the design of components and associate electronics.

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Commercializing Micro-Nanotechnology Products

The systems integration approach is now being adopted by most designers and manufacturers and provides a low-cost option for companies, particularly small- to medium-sized companies that do not have the necessary in-house experience or resources to do it alone. The U.S. National Nanotechnology Initiative (NNI)12 has identiied manufacturing technology as one of its “grand challenges,” a key area for investment. It has a target to establish ten R&D integration facilities or centers for nanoscale and microscale testing and manufacturing before the end of 2007. Other countries are pursuing similar initiatives. Micro-nano integration has been slow owing to different levels of maturity on the two technologies. Microsystems technology is more mature and serves many mass markets. In comparison, nanotechnology is still mainly embedded in the research base of many countries. Most of the current work integrates low-dimensional materials in microsystem components. The IBM Millipede Project13 is an example of micro-nano integration. Millipede is an atomic force microscope (AFM)-based data storage concept. Thousands of nano-sharp tips punch indentations representing individual bits into a thin plastic ilm; a data storage density of a trillion bits per square inch, 20 times higher than the densest magnetic storage currently available, is achievable. It opens up new horizons in high density data storage. Other applications that can be envisioned are in large-area, high-speed imaging and high-throughput nanoscale-lithography as well as atomic and molecular manipulation/modiication. Another example of micro-nano integration is the development of single molecule biosensors that have microelectronic interfaces. These are packaged to be available as handheld instruments and give rise to a whole range of portable biomedical devices.

STANDARDIZATION Industry needs agreement on standards before any new manufacturing methodology can progress. Manufacturing standards are a continuing issue for the MEMS/ MST/NEMS industries, but progress is being made. Unlike the mass production associated with the semiconductor industry, where standards for processing are generally accepted, MEMS and NEMS products do not have the same magnitude of volume production. It is too early for the adoption of standards in nano-manufacturing except in materials production. Additionally, each product is unique, requiring different manufacturing approaches to produce the product. Here health and safety rules will have to be adopted as more manufacturers come into business. The setting of internationally acceptable standards is one of the many challenges to be faced. Setting and agreeing on standards is now a serious issue for manufacturers of products based on the use of micro-nanotechnologies. Nanotechnology poses special problems that relate to whether top-down or bottom-up manufacturing methodologies are required. There are many standard development organizations worldwide. Inside Europe, the Network of Excellence in Multifunctional Microsystems (NEXUS) is a leading body. In America, the Institute of Electrical and Electronic Engineers (IEEE) and the National Institute of Standards and Technology (NIST) and, in Japan, the Micromachine Centre (MMC) are key players. The main international bodies are the

© 2008 by Taylor & Francis Group, LLC

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Semiconductor Equipment and Materials International (SEMI) and the International Organization for Standardisation (ISO). International Organization for Standardization (ISO). The latter facilitates the development and communication of standards for the semiconductor industry. It has been the leading organization in setting standards for MEMS and nanotechnology. In 2005, an agreement was reached between the American IEEE and SEMI to foster MEMS and nanotechnology standards.14-15 This underpins the importance given to the establishment of standards for the new emergent manufacturing industry. In addition to acceptance by the world’s leading countries, the global community must also agree. Each of the organizations above has produced or participated in surveys and reports representing the views of their own members. The European project MEMSTAND16 (standardization for microsystems technology) established a roadmap to forecast the future trends of standardization.

MANUFACTURING Acronyms: MEMS (Microelectricalmechanical Systems) MST (Microsystems Technology) NEMS (Nano-Electrical-Mechanical-Systems) RF (Radio Frequency) CAD (Computer-Aided Design)

PROTOTYPING There is prototyping, rapid prototyping, and preproduction prototyping. All are essential prerequisites for volume manufacturing. Modeling and simulation tools theoretically can make it possible to take the design directly to the preproduction prototyping stage. In practice, the tools are not mature enough for this to happen. For this, there has to be integration of these tools with the fabrication processes; they need to operate across many technology domains to enable designers to produce systems-based products and services. The manufacturing of micro-nano structured devices raises challenges. Few companies currently have the experience or expertise to carry out prototyping without assistance. Companies often form partnerships or strategic alliances with foundries or specialist providers for this purpose. As more and more companies are realizing the importance of the need for integrated solutions, the need for engineering simulation becomes a major factor to ensure company success. The fundamental physics and engineering that govern the behavior of micronanoproducts differ from their counterparts in the macro world. Conventional scaling down from the macro level to the micro level and beyond usually does not work. Prototyping places demands on design and modeling tools. There is an urgent need for improved tools for speciic needs. At the nano level, molecular modeling exists, but for practical purposes of manufacturing, very few useful packages are available. A working knowledge of CAD is essential. The type of simulation software used will depend upon the application and the operational environment. As microsystems increasingly have to work in complex domains, such as RF, optics, and harsh

© 2008 by Taylor & Francis Group, LLC

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Commercializing Micro-Nanotechnology Products

environments, many different software suites may be needed to integrate the application with a speciic functionality. These enable the design engineer to predict the behavior of microstructures and microsystems under a multitude of physical effects such as electrostatic loads, stress, heat, and electromagnetism. These CAD products can, as they mature, replace hardware prototyping and enable the testing of designs, thus providing an engineering simulation solution that is fast, eficient, and more cost effective.

PACKAGING Packaging is fundamental to product functionality and is required to interconnect, protect, and provide an interface to the macroworld to facilitate human interaction. It is the most costly part of the process cycle and can represent up to 80% of the total product development costs. Packaging is central to the design process and must be considered at that stage, often beginning at the wafer level. Critical features include cost, reliability, and accuracy. Most microproduct failures have resulted from designs that have failed when packaging solutions are added late in the product development. The same applies for products that have embedded nanocomponents, nanomaterials, and nanosystems. Packaging design must relate to the operational environment. In sensor and actuator applications, it must protect and interact with the environment. For other applications, it may be isolated as in accelerometers or gyroscopes. For medical in vivo systems, complex packaging is required and can be the most important and most costly part of the device or product. Good interference-free RF or optical connectivity is placing increasing demands on packaging when the device or component has to operate in a harsh chemical or biochemical environment. Packaging also has to be reliable to work in multidomain technologies that include structural, mechanical, electrical, optical, thermal, chemical, and radiation environments. A series of connections and interconnections is required in moving from the nano-size domain to the micro-size domain where humans communicate with products. Whether it is for optics, luidics, thermal, mechanical, or electronics, combining functions in a micro- or nanosystem complicates the interconnection schemes and will sometimes require a new fabrication and packaging approach. The packaging of MEMS/MST devices and systems ultimately determines their commercial success. Each product has its own speciic requirements related to the environment in which it has to operate. MEMS packaging is more challenging than IC packaging due to the diversity of MEMS devices and the requirement that many of these devices be in contact with their environment. MEMS devices are more complex, having 3D geometries, often with moving parts that are vulnerable to dust and moisture, mechanical stress, and vibration; therefore, greater protection is required. Packaging materials are critical to obtaining the correct protection in a particular environment. Sealing and bonding of these materials sometimes require special techniques, particularly for operation at high temperatures. Most companies ind that packaging is the single most expensive and timeconsuming part of the manufacturing process. As for the components themselves, numerical modeling and simulation tools for MEMS/NEMS packaging are virtually

© 2008 by Taylor & Francis Group, LLC

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nonexistent. Approaches that allow designers to select from a catalog of existing standardized packages for a new device without compromising performance would be beneicial. This is essential if large-scale manufacturing is to develop across the wide product domains.

TESTING AND RELIABILITY Long-term reliability is essential for all miniaturized components if they are to be incorporated or embedded into products. Failure usually means replacement of the whole product. Production and assembly methods for integrated circuits and MEMS systems make replacement of individual components or maintenance schemes too costly. No product will retain its market credibility without total product reliability assurance. Design for reliability must understand, identify, and prevent failures before the manufacturing stage is reached. All possible failure modes in different environments must be vigorously tested to ensure that failure model predictions are veriied. Lack of knowledge between material properties and process parameters could lead to failure after manufacture, resulting in expensive recall for the product and loss of manufacturer and market credibility. Some industries are more sensitive to this than others, notably the automotive and aerospace industries, which are among the large-scale volume manufacturers. PATENT-DfMM17 (The European Network of Excellence) provides European industry with support for integration and reliability issues. This ensures that problems affecting the manufacturing and reliability of micro-nano products can be addressed before prototyping and manufacture starts. Members of this network engage with the European Aerospace community to support manufacturers. Failure modes need to be programmed into the test procedure. Procedures will vary for different types of devices.

FINAL-PRODUCT REALIZATION AND MARKETING The reader is referred to Chapter 6 on “Market Analysis and Markets” in this book, but we will outline here some of the fundamental issues because they constitute the most important step that needs to be considered on the path to commercialization. Fundamentally, buyers or customers probably do not care how the product was made or have any interest in the technology used to produce it. Their interest in the product is based on its performance and cost advantage. Therefore, normal marketing practices are the same as for any other product. Companies are cautious about this because of any adverse publicity that may have resulted from other products using the same technology where problems have arisen. This is particularly the case for nanotechnology. For example, new sunscreen product manufacturers often refer only to the advantages not the technology that gave the advantages. The problems experienced by Monsanto over genetically modiied plants are often related to nanotechnology. Initially this deters manufacturers of food or healthcare products from using the term. Success in achieving a marketable inal product means the journey is nearly over, but the inal destination of penetration into a competitive market is still to be reached. In a changing global market where market forces operate and demand can luctuate, the ogre of risk lurks. There are no certainties, and success or failure

© 2008 by Taylor & Francis Group, LLC

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Commercializing Micro-Nanotechnology Products

hangs on the marketing skills of the company and its agents. Prior to reaching the end-product stage, the diligent company would have already put in place a marketing strategy based on all available market intelligence. This will take into account the sales impact that the new product will have on the competition, if any exists. Companies often do not pay enough attention to product promotion and publicity, although it should be inherent in their marketing strategies. This can result in a lack of awareness of the prospective buyer, thus delaying early sales. Increasingly, buyers scan the Internet for new products or updates of existing products. This is now an attractive and cost-effective medium for promotion since changes and updates can readily be made, particularly for high-tech products. But expectation and demand must be met; otherwise credibility is quickly lost. This can be a major problem with high-volume Internet-based sales when demand can exceed availability. Some examples of new products now on the market are listed below. These were taken from the Forbes.com website.18 • • • • • • •

Apple IPod with sub 100 nm elements in its memory chips Choleterol-reducing nanoencapsulated oil, Shemen Industries Canola Active Nanocrystals that improve the consistency of chocolate Zelen Fullerene C-60 Day Cream Easton Stealth CNT baseball bat Nanotex textiles ArcticShield polyester socks from ARC Outdoors with 19 nm silver particles that kill fungus to reduce odor • NanoGuard developed by Behr Process for improved paint hardness • Pilkington’s self-cleaning Activ Glass • NanoBreeze Air Puriier from NanoTwin Technologies, where the UV light from a luorescent tube cleans the air by photochemical reactions with nanoparticles Between 2006 and 2008, the following key products will be available on the market: • Intel products with 45 nm linewidth transistors (available from 2008)19 • Batteries that are increasingly incorporating nanostructures • Flexible, cheaper, or more luminous lat-screen displays In addition to the products listed above and many others that are likely to be available in the coming years, we will outline below three product areas that are having a profound impact on society: ink-jet printers, coated textiles (clothing), and portable blood analyzers.

© 2008 by Taylor & Francis Group, LLC

FIGURE 1.6

 

I-stat blood analyzer and cartridge.

IXH O FH OOV 5) 0(06

 

0LFURIOXLGLFV 02(06 LQFO '0' *\URVFRSH V

0DUNHW LQ 0

 

$FFH OH URP H WH UV 6LOLFRQ 0LFURSKRQH V 3UH VVXUH VH QVRUV ,QNMH W +H D G

 

 

 

 

FIGURE 6.3





Value of the MEMS markets.

© 2008 by Taylor & Francis Group, LLC







FIGURE 6.7

Airbag module (Bosch) source.

FIGURE 6.8

Gyro sensor (Bosch source).

© 2008 by Taylor & Francis Group, LLC

FIGURE 8.5 Zyvex nProber with positioners aligned 250 microns apart from each other, just a few millimeters above the center stage.

FIGURE 8.6 This Easton road bike, created using Zyvex’s NanoSolve materials, was given to President George W. Bush in June 2006.

© 2008 by Taylor & Francis Group, LLC

FIGURE 8.7

Four NanoEffector® Probes in a Zyvex nanomanipulator.

© 2008 by Taylor & Francis Group, LLC

FIGURE 9.12 Schematic diagram Respimat brochure.

© 2008 by Taylor & Francis Group, LLC

FIGURE 9.14

(d) Robotic system for mounting and assembling Respimat.

FIGURE 9.24

Respimat production line.

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The Path to Commercialization

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FIGURE 1.4 Ink-jet printers.

EXAMPLES OF PRODUCTS THAT HAVE TAKEN THE COMMERCIALIZATION PATH THE INK-JET PRINTER A Brief History of the Ink-Jet Printer Some of the following information has been obtained from the Castleink website.20 The four companies that are market leaders in the supply of ink-jet printers are Hewlett Packard, Epson, Canon, Brother, and Lexmark (see Figure 1.4). In the mid-1970s, printer companies realized the potential of ink-jet technology that would make dot matrix printers obsolete. The challenge, however, was to develop a way to create an affordable ink-jet printer that would reliably create high-quality prints and work with desktop computers. It was the need for a portable, easy-to-use printer to use with desktop and laptop computers that produced the customer demand. The quality of the printed page depends largely on the relationship between the ink, the print head, and the paper. Researchers had to ind a way of creating a controlled low of ink from the print head onto the page and preventing the print head from becoming clogged with dried ink. In 1976, the ink-jet printer was invented, but it took until 1988 for it to become a home consumer item with Hewlett-Packard’s release of the DeskJet. Liquid ink-jet printers generally fall into one of two classes — continuous and drop-on-demand. In a continuous ink-jet printer, a continuous spray of ink droplets is produced, and the unneeded droplets are delected before they reach the paper and recirculated for reuse. This technique permits very high-speed drop generation, one million drops per second or faster, but is expensive to manufacture. The drop-on-demand ink-jet printers produce ink droplets only when needed. The two most common technologies to drive the droplets out of the print head are thermal (used by Hewlett Packard, Lexmark, Canon, Olivetti, and others) and the piezo-electric effect (used by Epson). The thermal technique has been by far the most successful because printers can be produced inexpensively.

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Commercializing Micro-Nanotechnology Products

The biggest challenge for piezo-electric ink-jet technology is the cost and dificulty of producing print heads. Today Epson has a very successful line of piezoelectric color printers, namely the Stylus color and Stylus photo family of printers, offering photographic quality.

NANO COATINGS ON TEXTILES Numerous fabrics based on nanocoated ibers are now becoming available on the market. Based on the lotus-leaf principle, whose ine surface structure makes it impossible for water molecules to stick to its surface, nanoparticles dispersed in a solvent can be coated onto fabrics. During volatilization, the nanoparticles independently start to afix themselves to the substrate surface, align themselves, and eventually form a network-like structure. This self-structuring process works downwards, sideways, and upwards, resulting in a three-dimensionally linked network. The U.S. company Nano-Tex LLC has developed and licensed a range of fabrics under the labels Nano-Care,® Nano-Dry,® Nano-Pel,™ and Nano-Touch.™ The ibers of these fabrics have been enhanced to make them behave like the lotus leaf with stain-resistant properties but with their initial material properties remaining unchanged, i.e., they are machine washable and can be tumbled dried; and they feel, look, and possess breathability qualities like the original fabric, so they remain totally unaffected by the treatment. In the nano-enhanced clothing, the ibers have tiny whiskers aligned by spines to repel liquids, reduce static, and resist stains. The properties can be summarized as follows: • Water droplets simply pearl off the fabric • Dirt, grease, and oil spots can be easily removed using a little water • The impregnation is very durable and remains virtually unaffected by wear and tear or washing • The impregnation can be reactivated at any time by the application of heat (e.g., from a dryer or iron) The treatment keeps wearers dry and comfortable by taking moisture away from the body at least ten times faster than most resin-treated cotton fabrics available today. A report published in Innovative Products Based on High-Tech Textiles21 states that “the future of the textile and clothing sector lies not in price reduction but in more intelligent products with additional functionality.” It classiied intelligent clothing into ive major areas: transfer systems; adaptive systems; smart clothing; transponder systems; and microtechnology and nanotechnology. The textile industry is vital to health and competitiveness of many countries’ economies. Many U.S. and European companies outsource manufacturing to Asia, but they retain much of the IP. Nanotechnology offers solutions for keeping the textile industry competitive through the use of nanotechnology. The wider availability of Nano-Tex stain-resistant clothing and fabrics is starting to revolutionize the textile industry. Europe (EU) has identiied the use of nanotechnology as the key to the future competitiveness of its textile industry.22

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FIGURE 1.5 Nano-Tex shirt showing coffee stain removed.

Nano-Tex shirts are some of the early products that are inding their place in retail outlets. The authors possess products like the ones shown and can verify that they repel most materials that stain, such as red wine, coffee, blackberry jam, tomato ketchup, and mustard (see Figure 1.5).

A PORTABLE BLOOD ANALYZER The i-STAT Corporation’s handheld blood analyzer system, the i-STAT System23 (see Figure 1.6), has the potential to revolutionize the way healthcare is administered. It developed a low-cost blood analysis instrument that its in the palm of the hand. The device is used with one of many different test cartridges to produce accurate results from just a few drops of blood in about 2 min. The tests include electrolytes, blood gases, immunoassays, and coagulation measurements. The instrument is completely

FIGURE 1.6 (See color insert following page 16.) I-stat blood analyzer and cartridge.

© 2008 by Taylor & Francis Group, LLC

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Commercializing Micro-Nanotechnology Products

automated and requires no medical specialist to operate it. Each cartridge is capable of performing up to eight tests. The portable blood analysis system eliminates the traditional process of sending a blood sample to a central laboratory for analysis then waiting for some time before the results come back to the patient. Adopting this device means major changes to the way hospitals do blood tests. This initially did raise, and still does, problems of acceptance by the professionals, as it is seen as an example of a disruptive technology that threatens jobs and traditional practices. This is a common problem with new medicine and healthcare diagnostics when the limitations are not due to the technology or public acceptance but to hospital laboratory management adapting to change. Over the last 5 years, the acceptance problem has been largely overcome, and iSTAT has doubled its revenues. It hopes to increase its growth rate signiicantly over the coming years. Currently 15 million cartridges are being manufactured each year, but the company has the capacity to produce 40 or 50 million units.

PRACTICAL EXPERIENCES IN COMMERCIALIZING MICRO/NANO-BASED PRODUCTS The methodology of commercializing products has remained fundamentally unchanged since the irst Industrial Revolution. Design, prototyping, piloting, and production processes have become more eficient through new techniques such as lean manufacturing, as well as computerization and automation. However, most of this knowledge and commercialization infrastructure is optimized for products at the macroscale, not the micro- and nanoscale. In practice, every step in the commercialization pathway for micro- and nanobased products requires signiicant new knowledge and new approaches. In this section, the commercialization pathway will be viewed from the perspectives of conceptualizing, designing, prototyping, piloting, and manufacturing micro- and nanosystem-based products in 15 different companies, all of which had manufactured products as a basis for their business model. These companies were focused on automotive, aerospace, medical, military, telecommunications, or consumer markets. Each company faced challenges at every step on the commercialization pathway when trying to adapt an infrastructure based on commercializing macro-based products to build a micro- or nano-based product. Many micro- and nano-based products travel the commercialization pathway toward the marketplace, but few are able to overcome the challenges. Actual company names have not been used to preserve conidentiality. As with most new technologies, micro- and nanotechnology-based product concepts are primarily developed in research environments at universities and research institutions. Fundamental intellectual property is developed from that beginning. Because micro- and nanotechnology are in their infancy, most original patents are still in effect and must be licensed for product companies to have freedom to operate. This creates a signiicant burden, particularly for start-up companies that must negotiate numerous licenses to insure freedom to operate and produce a product. It is dificult for a start-up company to know what intellectual property it may need when the product has not yet been designed. From our sample of start-up companies, each

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had to license intellectual property from more than one source. This is understandable since most research in micro- and nanotechnology areas is funded by governments. Many funded programs focus on similar areas at different universities and in various countries. Principal university investigators collaborate with one another on a global basis and move from university to university. This results in a dispersion of intellectual property that is dificult to aggregate to form the basis for a company. In one example, at a major United States university, more than 25 microtechnology-based patents were accumulated in the university portfolio. When the patents were analyzed for commercial opportunity, there was not enough intellectual property for a start-up company to have freedom to operate. However, after extensive searches to explore the aggregation of patents from other universities, three companies were formed. Standing alone, none of the universities had hope for a return on their research investment when considering their individual patent portfolios. However, the aggregation of patents resulted in all institutions having a return on their investment. Many of the micro- and nano-based start-up companies considered here did very little intellectual property analysis — some did none at all, even with signiicant committed venture funding. When considering a start-up company or a product in the micro/nanotechnology space, it is important to do an extensive intellectual property analysis in the speciic area to determine the landscape of the intellectual property. As the design matures, the intellectual property landscape should be constantly reviewed to ensure that paths are taken that allow freedom to operate and to generate new intellectual property. As the product concept is developed and as design begins, signiicant challenges arise when attempting to use conventional macro-based product design methodologies. One of the irst challenges is human resource related — the availability of engineers who think and design at the micro- and nanoscales. Challenges begin with universities where researchers and scientists are educated in micro- and nanoscale domains, each in a very speciic area. However, researchers and scientists are not product design engineers. In developing a product concept, researchers and scientists address only about 10% of the total pathway to commercialization. Product design engineers provide a unique capability to successfully move along that pathway to commercializing a product. They start where the scientist leaves off and take the concept all the way to the inished product. For the most part, universities teach design at the macroscale, with little if any education at the micro- and nanoscale. The typical design engineer develops a speciication for a product, deriving its expected performance, shape and size constraints, electrical requirements, etc. A design engineer in the conventional macroworld uses known standards and metrics for piece parts and processes. He would use supplier catalogs to ind components that meet the product requirements. If he needed to fabricate parts, he would use readily available materials with properties that are understood. He would use manufacturing processes that are standardized and well understood, such as machining and injection molding. If the engineer needed a piece of equipment for manufacture or assembly, he would select a supplier who manufactured the equipment as a standard catalog item. It would be delivered to the expected speciication and perform in an expected manner. The design engineer would not risk selecting components or equipment that were unproven.

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At one company that had especially elegant micro/nano product designs, the design engineer was asked how he developed such elegant designs. He responded, “I go into a trance and shrink myself down (as he contorted himself in his chair and began to slide under the table) and put myself inside the device I am working on. I visualize the inside connections and interfaces and design the device from the inside to the outside.” How does one transfer this capability to a university professor teaching design engineering, who most likely has never commercialized a macroproduct and probably has no idea about micro and Nan design? Companies that are successful in designing micro- and nano-based products do not rely on the experienced macrodesigners. They bring baggage from the macroworld that does not lend itself to success in designing micro- and nano-based products. The successful companies hire recent college graduates who are open-minded, very bright, creative mechanical engineers who are not indoctrinated in traditional methods. These engineers have no preconceived ideas of what the limits are. Understanding materials is also important. The industrial designer (even one experienced at the macroscale) who is creative, excellent at visualization, and more of an artist than an engineer can also be very successful at micro- and nanoproduct design. In micro- and nano-commercialization, there are few simulation and design tools and standard manufacturing processes, as well as a lack of metrics, standards, and speciications. There is no repository of knowledge for the design engineer to reference. A great deal of knowledge has been generated by companies that have commercialized, or attempted to commercialize, micro- and nano-based products. Since that knowledge was generated in an industrial environment, most of it has not been published or disseminated to the public. At one company, nearly $50 million was spent developing interfaces, packaging, and manufacturing and assembly processes to produce an ink-jet print head. The processes developed could be applied to other microluidic products; however, they were never published and only disseminated as those who were involved moved into new jobs at other companies and shared their knowledge. Progress has been made in simulation and modelling software at the microscale, but there are signiicant challenges at the nanoscale. For example, modeling of injection molding processes at the microscale with nano-tolerances is not possible. One company making a microluidic medical diagnostic device had to resort to trial and error to mold a precision part to nano-tolerances. In developing the tooling to produce the part to speciication, 55 modiications were made to the mold, requiring a signiicant amount of time and money. For silicon-based MEMS devices, reasonable simulation and modelling software exists to support commercialization. The same is true for microluidics. The dificulty in modelling and simulation comes at the interfaces and connections between the micro- or nanoscale and the human interface at the macroscale where the products are used. As design progresses, the engineer has to consider how he will build the device to make the irst prototype. Engineers, particularly those with experience in macroengineering, would design the prototype to be made in a model or machine shop using traditional machining and forming equipment. This approach will surely result in failure of the product to be optimized. It will not meet performance, size, functionality, and cost requirements, if it functions at all.

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A company building an imaging device that was embedded into its customer’s imaging product exempliies the importance of starting out on the right footing to build the irst prototype. Because of time and cost considerations, the company decided to build the prototype using conventional macro approaches. The imager was far larger than originally envisioned, its performance was lower than expected, and the cost was signiicantly higher. The customer was no longer interested in embedding the imager into the product; the cost to redesign it to accept the imager was no longer justiiable considering the now fewer advantages. The imaging device company could not change its design to relect the advantages of microtechnology because it had built an infrastructure of people and equipment from the macroculture. This company is no longer in business. The micro/nano product design engineer must work closely with process, equipment, manufacturing, assembly, and facilities engineers. This team approach is necessary to design an optimized product. There is a lack of standard, off-the-shelf fabrication and measurement equipment, parts, connections, packaging, processes, and micro-assemblies. Therefore, product design, process development, manufacturing, assembly, and unique facility requirements must be considered together when designing micro-nanoproducts. All of the companies that produced a successful product had to practice the integrated team approach, mainly to develop processes and equipment for manufacturing, assembly, and measurement. One example was a company developing a page-width (300 mm), ink-jet print head for precision, high-speed printing. At that time, the semiconductor industry had developed processes and equipment for 200 mm wafers. To achieve precision and diameter in the ink-jet nozzle position, submicron lithography was necessary. However, at the time, no equipment existed that could handle parts that were 300 mm in length, and no equipment existed that was able to handle geometries different from a silicon wafer. In addition to designing lithography equipment (which included designing unique energy sources), a totally new process and new equipment were needed to coat a resist to the thickness speciication. No measurement equipment existed for submicron measurements over a length of 300 mm. This equipment had to be designed and built. The process to fabricate the ink-jet nozzle structure consisted of 54 variables that had to be precisely controlled. The world’s top statisticians said it was not possible to control the process and produce a consistent product. Dr. Taguchi became involved, applied the Taguchi Method for Robust Design (a revolutionary approach at the time), and within 30 days a predictable, consistent, and repeatable product was delivered. In another example at a different company producing a thermal ink-jet print head with a silicon print element, similar experiences with a team approach were necessary. The print element was made by bonding two silicon wafers together — one a luidic structure for delivering the ink and the other the substrate for the drive electronics and heating element. After bonding (equipment, process, and adhesive for bonding had to be developed), the wafer stack was diced to separate the print elements. Dicing through the wafers to expose the nozzles had to produce a mirror inish with no chipped edges, as illustrated in Figure 1.7. A chip on the nozzle edge would change the surface energy condition, causing the ink-jet drop to stray off course. This would reduce the sharpness of the printed image.

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Silicon Wafer Microfluidic Nozzle Structure

Heater and Electronics Layer

Silicon Wafer Electronics

FIGURE 1.7

Microluidic nozzle on silicon wafer.

Each year, millions of wafers are diced for the electronics industry by specialty dicing suppliers in the Far East. There were many suppliers who claimed they could meet the dicing requirements for the ink-jet nozzles. Even when they tried to improve their processes, they could not come close to meeting the quality requirements necessary for dicing ink-jet nozzle structures. Because the ink-jet print head performance was dependent upon a chip-free nozzle edge, the company undertook developing the dicing process. A high-performance dicing saw was purchased and modiied by dynamic balancing and precision temperature control of the cutting luid, as well as other modiications. This achieved a signiicant improvement — but it was not good enough. Then dicing blade performance was investigated with suppliers who thought their experience and expertise produced the best blade possible — but it was not good enough. The company undertook a development effort to select the appropriate material and develop a dicing blade to meet the ink-jet requirements. When the dicing blade was developed, the process was offered to dicing blade suppliers to produce dicing blades to meet ink-jet requirements. None of the suppliers were able to expand their vision and change their manufacturing processes to make blades to address new markets. It was necessary for the company to build a dicing blade manufacturing operation to meet its quality needs. The new dicing process was able to produce a high-quality mirror inish, with no chips at the nozzle edges. This dicing process was accomplished at speeds considerably faster than the speeds at traditional suppliers and was achieved with a much higher quality output. With nearly every micro-nanosystem product, suppliers who were considered to be top quality could not meet the requirements of micro- and nano-based products. They were boxed in by their past and believed, from their experience and years of process improvements, that their processes were optimized to be as good as they could be. A new view from outside the box (a disruptive approach) can produce signiicant improvement to meet the unique requirements of micro- and nanosystems and is generally necessary for successful product commercialization.

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Companies that were successful in high-volume manufacturing of micro- and nano-based products integrated fabrication and assembly under one roof. Micronanoproducts require environmentally controlled conditions, are sensitive to rough handling, and generally require additive processing of one process step onto another. Success generally requires an integrated approach. For example, a coating on a substrate, followed by a screen-printed layer, followed by an adhesive layer, etc., is an integrated approach as compared to the conventional macro-approach of piece parts that arrive at the assembly line individually and are then assembled. The conventional wisdom of a supply-chain approach is not effective in the manufacture and assembly of micro- and nano-based products. One company used the conventional supply-chain approach to attempt to build an ink-jet print head. Because of the nature of additive processes, the print head traveled more than 1000 miles from supplier to supplier for the fabrication steps to occur. Packaging and shipping costs were high. Cleanliness requirements were impossible to maintain. When the print head did not function, it was dificult to ind the cause of the problem. This type of supply chain approach is akin to each process step in a CMOS (complimentary metal oxide semiconductors) semiconductor fab being performed at a different fab in a different location. The company ultimately integrated manufacturing under one roof. This resulted in signiicant quality and yield improvement and a large cost reduction. Most importantly, manufacturing issues were observed and addressed quickly, and the product was a market success. Figures 1.8a and 1.8b illustrate the traditional and the integrated approach to manufacturing. The supply-chain approach cannot be successfully applied to micro/nano-based products if the full performance, size, and cost advantages of these products are to

FIGURE 1.8A Traditional manufacturing equipment. Layout considering a piece-part philosophy.

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FIGURE 1.8B Integrated, automated manufacturing layout of equipment for each step in a process to build and/or assemble a complete ink-jet print head.

be realized. The integrated approach was used in all of the companies that successfully commercialized a high-volume micro/nanoproduct. For low-volume products, the cost for equipment and facilities may not warrant the integrated approach. However, performance, size, and cost of these products will not be optimized. Customers may also have great dificulty moving out of their paradigm to envision new market opportunities with micro- and nano-based products. They often have trouble communicating in the language of micro- and nanotechnology. Lack of understanding makes customers reluctant to accept these new technologies as part of their product offering because they are steeped in traditional engineering and manufacturing methodologies. A nano-based process was developed to make fuel injection nozzle structures for a large automotive company. The vice president of manufacturing, with decades of traditional manufacturing experience, became increasingly frustrated even as the program exceeded performance and cost expectations. He retired, abruptly, because he had no frame of reference at the nanoscale. He could not make decisions on something he could not see. At the same company, internal political and organizational issues began to surface. After millions of fuel injection structures had been delivered defect free, one of the most powerful groups responsible for the product delivery process, the Quality Department, began to feel threatened. As it became evident that this group was no longer inluential and jobs would be eliminated, roadblocks were put in place attempting to limit the program’s effectiveness. When jobs are threatened, defence mechanisms are often put in place by both engineers and managers. Successfully selling a micro/nano-based development or product program to a traditional customer is a signiicant challenge. In working with customers,

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particularly those with traditional products and infrastructures, one must be sure that senior management supports micro/nanotechnology-based products. Generally, senior management is very interested in high-performance products at a lower cost. This is not necessarily true for all those in the organization below the senior management level, where signiicant change in infrastructure may have to occur to deliver disruptive new products. To ensure that customer requirements are understood, it is necessary to ind a champion below the senior management level. This person should know the company’s product infrastructure and organization structure. He should be a maverick who does not play by the corporation’s book of rules and is not afraid to bypass all intermediate management and go directly to senior management to get roadblocks quickly removed. Each organization has a few of these types; they are the “change makers” that force a company to consider new products. These general comments and speciic examples and recommendations are the summation of experience from companies that were commercializing micro-nanointegrated products. Those products include a variety of ink-jet print heads, optical switching devices, medical laparoscopes and endoscopes, implantable medical sensors, medical diagnostic point-of-use microluidic sensors, automotive fuel injection systems, infrared imagers, vehicle stability management control systems, and energy power devices. As time moves on, universities continue to provide excellent research and intellectual property for future micro- and nano-based products. Education for design engineers continues to be lacking. Simulation and modelling software continues to evolve, particularly for microsystems and microluidic systems. Some dedicated equipment is available for micro- and nanofabrication with continued evolution. Building prototype, pilot, and production quantities continues to be very dificult. The micro-nano model shop or machine shop does not exist. Germany, speciically the Dortmund Cluster, which includes the Microfactory concept, is building a micro-nano commercialization infrastructure. In Melbourne, Australia, MiniFab is beginning to evolve to provide a commercialization infrastructure. However, in general, governments are lacking vision by not investing in and developing a commercialization infrastructure, thus not taking advantage of what will be considered the greatest economic development opportunity in history.

REFERENCES 1. Walsh, S. and Suleiman, M; Models for the commercialisation of disruptive technologies, International Journal of Technology Transfer and Commercialisation, 3, 187– 198, 2004. 2. Walsh, S, MANCEF Roadmap, Sept. 2002. ISBN:0–9727333–0–2 3. Royal Society Policy Document, Nanoscience and nanotechnologies:opportunities and uncertainties, July 2004, ISBN 0-85403-604-0. 5. The U.K. MNT Network, http://www.mntnetwork.com/. 4. Taylor, J.M., Report New Dimensions for Manufacturing — A UK Strategy for Nanotechnology; DTI pub 6182, June 2002. 6. Grace, R., Technology cluster development: the MEMS industry report card 2006, Small Times, January 2007.

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7. Kaiser, H., Report: Summary about the State of Nanotechnology Industry Worldwide 2003–2015, www.hkc.com/nanomarkets, 2006. 8. The MANCEF Roadmap (2nd edition) ISBN: 0–9727333–0–2; Chapter 4, 2004. 9. Tolfree, D. and Eijkel, K., Reducing time-to-market for nicrotechnology produced products, presented at the World-Nano-Economic Congress — Europe, London, 6 November 2003. Talk only reference on www.world-nano.com/WNEL-London. 10. Micro-Nan Integration; MST News, No. 4, August 2006. 11. Richardson, A. and Pickering, C., The INTERGRAMplus Access Service, MST News, No. 4, August 2006. 12. The U.S. National Nanotechnology Initiative, http://www.nano.gov. 13. Eleftheriou et al., Millipede – a MEMS-based scanning-probe data-storage system, IEEE Transactions on Magnetics, 39, 928, 2003. 14. SEMI Standards, www.semi.org/standards, 2004. 15. IEEE Standards, www.ieee.org/standards, 2004. 16. Standardization of microsystems technology — European Commission Project July 2002. 17. Richardson, A., Design for Micro-Nano Manufacture, PATENT-(DfMM), 2003, www. patent-dfmm.org. 18. http://www.forbes.com in 2005. 19. http://www.castleink.com/a-inkjet-printer-history. 20. NewScientist.com, news service, 27 January 2007. 21. Innovative Products Based on High-Tech Textiles, 57, 2004.

22. EuroFutureTex Conference. November 8–9, 2005, Padua, Italy. 23. http://www.abbottpointofcare.com/istat/products/analzsers.htm.

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Entrepreneurship’s Role in Commercializing Micro-Nanotechnology Products Bruce A. Kirchhoff and Steven T. Walsh

CONTENTS Introduction.............................................................................................................. 30 Folklore ......................................................................................................... 30 Two Classes of Technologies ................................................................................... 31 Evolutionary Technologies ........................................................................... 31 Disruptive Technologies ............................................................................... 32 Demand Pull and Technology Push Marketing Strategies ...................................... 33 Technology Class Matched to Market Strategy .......................................................34 Market Strategies for Evolutionary Technologies ........................................34 Market Strategies for Disruptive Technology ............................................... 35 Silicon Pulling Industry: Evolutionary Technology ..................................... 36 Silicon Pulling Industry: Disruptive Start-Ups ............................................ 37 Examples of Disruptive Micro and Nanotechnologies ............................................ 38 Micro Technology: Semiconductor Technology22 ........................................ 38 Nanotechnology: Gene Splicing24................................................................. 39 Sources of Disruptive Technology ...........................................................................40 Recommendations for Starting a New Technology Business .................................. 41 Determining the Nature of Your Technology ............................................... 41 Financing Technology Start-Ups .................................................................. 41 Selling Your Second First Product ............................................................... 43 Distribution is Frequently Complex .............................................................44 Do not Give up Your Original Product Idea ................................................. 45 Create a Team ............................................................................................... 45 Do not Write a Business Plan ....................................................................... 47 Summary and Conclusions ...................................................................................... 48 References ................................................................................................................ 48 29 © 2008 by Taylor & Francis Group, LLC

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INTRODUCTION The purpose of this chapter is to examine the role of technology in new micro and nanotechnology business formations so as to debunk some misperceptions in current folklore and to suggest guidelines for starting a new technology-intensive irm. The widely believed folklore is that newly formed technology-intensive irms succeed using radically new technologies to commercialize disruptive innovations. It is argued that new technology-intensive irms are best at doing this because they have no existing customer base to please and no internal bureaucratic organization to resist change. Much credit for popularizing this concept goes to Christensen in his book The Innovators’ Dilemma.1 Although not a new concept in the academic literature, Christensen successfully brought this information to a much wider audience. We begin by discussing the current widely believed folklore and demonstrating why it is an oversimpliication of reality. Next we provide descriptions of the two classes of new technologies and how these should dictate start-up market strategies. This is followed by a description of two well-known examples of disruptive technologies, one micro and one nano, that have entered world markets in the last 50 years. We use this background information to offer some guidelines for starting a micro or nanotechnology business in today’s markets.

FOLKLORE Christensen’s hypothesis does not agree with actual experiences. The precise operating pattern that the vast majority of new technology irms use to accomplish technology commercialization is not uniform from business to business, and no clear patterns exist because each technology irm’s commercialization effort is unique; no two are exactly alike. Christensen offers this hypothesis as though most newly formed technology irms succeed using disruptive innovations. However, this is a role rarely played by the new irm. More often the invention is based upon a unique use of existing technology, and entry occurs when new irms create substitute or replacement products for the established competitive irms’ existing products/customers. This provides a quick way for the new irms to enter existing markets and achieve relatively quick proitability. Second, contrary to Christensen’s general hypothesis, major established irms’ competitive responses to new high-tech entries have historically protected the major established irms while harming the new irms that threatened existing markets. Often, some established irms respond by simply copying the new technology and forcing the new irms to sue to enforce patent rights, a procedure that often causes new irms to fail. In other situations, established irms will defensively guard existing distribution systems to constrain the new irms’ access to markets. A new paradigm has emerged in the last 20 years reducing the economically vicious competition between large established technology irms and new start-up irms as envisioned in Christensen’s hypothesis. Many major corporations are now acquiring or licensing the intellectual property of new technology irms that have developed products based on radically different technologies than those possessed by the major irms.2 This acquisition process appeals to these acquiring irms because it may be a less expensive way to acquire new technology or simply a speedy way

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to enter new markets — or both. This seems to indicate a growing awareness of the value of innovations brought to the market by new technology irms. This has been true in the micro and nanotechnology ields. Thus, new technology irms have discovered new operating procedures that promise better results. Rather than threatening the existing major irms in a given market, the ambitious irms seek to partner with or become a part of a major irm that takes on the marketing of the product. Still, some new irms continue to independently struggle and achieve success. Behind this complex appearance of new technology irm behavior lay some fundamental principles based upon technology management theory developed over the last 30 years that not only describes the role of new technology irms but also prescribes the appropriate methods that lead to their success. The following sections begin by summarizing the theory of technological inventions as developed by academic authors over the last 30 years. Two classes of inventions have evolved from this theory based primarily on two different science sources. In addition, we provide an example of successful micro and nanotechnology irms in both classes. Then, we describe the two major methods of marketing matching the two classes of technology where each method offers different opportunities and threats. Lastly, we provide some guidelines for high-tech start-ups that emerge from an analysis of how these theories can be implemented for survival and proitability.

TWO CLASSES OF TECHNOLOGIES Herein we use the term innovation as has been widely used in management of technology literature. An innovation is the commercialization of an invention. An invention is a new idea or a new combination of existing ideas. In high-tech companies, the invention embodies one of two classes of technology deined in the last 20 years. The academic research literature has agreed that there are two classes of technology: (1) evolutionary, sustaining, incremental or “nuts and bolts” technologies; or alternatively (2) disruptive, radical, emergent or step-function technologies. For simplicity in this chapter, we use the terms evolutionary and disruptive.

EVOLUTIONARY TECHNOLOGIES Evolutionary technologies might be described as “business as usual” with a continuous low of technical inventions emerging from R&D based upon the supplier’s core technical competencies and/or from customers’ suggestions or requests. Evolutionary technologies, also referred to as incremental, sustaining, competence enhancing or “nuts and bolts” technologies, build off of the existing body of knowledge with respect to production capabilities and manufacturing or processing practices and as such have known performance levels and forms of application.3,4 Technologies can originate either inside or outside an industry. Those that originate inside are said to be based upon “core competencies” of corporations in the industry as deined by Prahalad and Hamel.5 The basis for technology is the organizations’ core competencies that evolve into a stream of “continuous innovations” that are delivered to customers as either replacements or substitutes for existing products or as new

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or greatly improved products. These two product categories are driven by different customer interests and different marketing strategies as discussed below. Replacement or substitute products are those that customers knowingly request to meet their needs, improve their operations, reduce costs, increase the quality of their product, or to produce a competitive advantage in their markets. Major new or greatly improved products are not knowingly requested by customers and do not meet needs that are known to the customers. Thus, although one dominant technology underlies the inventions, the technology’s evolution over time offers the opportunity to invent products for which there are ready buyers or create new inventions that satisfy customer needs that are not apparent to the buyer.

DISRUPTIVE TECHNOLOGIES Disruptive technologies frequently ind their origins in new science, most of which emerges from academic or corporate R&D or independent scientiic research. Schumpeter6 observed that innovations with major impact upon economic activity originate from outside the industry that they affect. Schumpeter also argues that these innovations emerge from and become the reason for the formation of new independent irms, i.e., entrepreneurship. To the extent that Schumpeterian product innovations are technology based, he argues that new independent irms are well suited to bring innovations from outside the existing industry structure and creatively destroy the market structure therein.7 Schumpeter’s observations agree with those of more recent theorists. Abernathy and Utterbach8 state that such technologies are built upon new knowledge and/or new manufacturing practices and are applied to create entirely new product-market paradigms that are often opaque to potential buyers. Further, Anderson, and Tushman,9 evolve from Abernathy and Clark10 and others discussing an “era of ferment” when new technology product paradigms are vying to become the industry dominant design. Bohn11 notes that measuring and managing these technologies is dificult. Bower and Christensen12 further expand this deinition with the statement that technology is considered disruptive when its utility generates service products or physical products with different performance attributes that may not be valued by existing customers. Such technologies are applied to create entirely new productmarket paradigms that are often opaque to potential buyers.13 Commercialization products derived from disruptive technologies are frequently referred to as “radical or discontinuous innovations.” Academic research that develops new science sometimes results in the academic researchers starting new companies to invent and commercialize new products and services. And some new science originates in the R&D departments of major corporations. These are sometimes not wanted by the founding corporation and are rejected for development within the major irms and frequently are either licensed or spun off to new technology irms. The technology founders are sometimes encouraged to or willingly leave their employers to pursue their new science into a product invention. As with evolutionary technologies, disruptive technologies can create innovations that provide two categories of products: replacement or substitute. However, neither category of these is fully recognized by buyers as beneicial to their interests.

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Moore14 states that this customer negative evaluation aspect of disruptive technologies by noting that these technologies generate discontinuous innovations that require users/adopters to change their behavior in order to make use of the innovation. As such, disruptive technologies often require that buyers change their behavior or thinking so to be able to use the products to which the innovations are applied effectively. Inventions that are entirely new products requiring user change behavior are not initially recognized by buyers as being beneicial at all. Commercializing these inventions can be very dificult due to this buyer change behavior no matter how strong the new value proposition is either in a personal or an organizational setting. To overcome buyer/user resistance to adopting disruptive technologies, producers of such innovations must demonstrate that such technologies provide signiicant cost reductions and/or performance improvements. In this way, customers are found who are willing to take the risks of newness. These totally new inventions based on new science and disruptive technologies are what Schumpeter calls “creative destroyers.” By his deinition, such innovations are so radical that they destroy existing markets and the dominant irms that supply these markets, replacing them with entirely new markets and irms based on new technology.15

DEMAND PULL AND TECHNOLOGY PUSH MARKETING STRATEGIES Along with two classes of technology, there are also two types of marketing strategies for new technology products as frequently noted in the academic literature. Demand pull marketing is widely recognized and inds its theoretical underpinnings in the writings of economists over many years. Most recently, economic researchers have described this type of marketing as “opportunity recognition.” One deinition of opportunity recognition is that entrepreneurs earn proits as a result of success in inding and exploiting perceived opportunities in the market.16 This deinition has found reinforcement in the work of Kirzner,17 who suggests that alertness to opportunities in the marketplace and acting quickly to exploit the void in buyers’ needs is the entrepreneur’s chance to earn temporary excess proits. Kirzner’s theory basically argues that entrepreneurs must discover opportunities where demand exists for the technological innovations they have. In other words, it is demand by an existing unsatisied buyer that creates the opportunity in the market. Technology push marketing inds its origin in Schumpeter,18 who argues that the primary driver of the economy is innovation. Innovation comes from an entrepreneur’s intrinsic drive to innovate. This intrinsic drive results in the introduction of new products and services different from those in the marketplace. He argues that unique new products are often created without a well-deined market. Thus, contrary to demand pull theory, technology push market strategy emerges from the technology itself. This dichotomy of demand pull/technology push is frequently found in the academic literature. However, few entrepreneurs use purely one or the other. Thus, although described here as a dichotomy, they are really two ends of a continuum where reality is somewhere in between. Nonetheless, we will argue herein that a

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technology entrepreneur’s choice of market strategy along the continuum should depend on the type of technology that underlies the product or service invention.

TECHNOLOGY CLASS MATCHED TO MARKET STRATEGY Market strategies need to be matched to the class of technology present in a product invention. This matching is shown diagrammatically in Figures 2.1 and 2.2. First is evolutionary technology; second is disruptive technology.

MARKET STRATEGIES FOR EVOLUTIONARY TECHNOLOGIES Putting the technology class together with market strategy yields an interesting set of relationships. Beginning with evolutionary technology, Figure 2.1 shows how this technology based on known science produces a continuous low of innovations that can either be buyer pulled or technology pushed. Core competencies are a foundation for developing evolutionary technologies. Evolutionary technologies are used to create continuous innovations that are then used for replacement/substitute products or alternatively new or major improvement products. Notice that when buyers’ needs are well known, an appropriate technology invention can be created with evolving technology that can meet the known demand. Thus, the invention can be targeted to speciic buyers and can be “buyer pulled” into the customer’s hands. However, when the buyer’s needs are identiied by the supplier but not well known by the buyer, it will be necessary to technology push the invention by offering it as a major improvement or a new product that can produce a competitive advantage for the customer, such as increased quality or decreased costs. The deinition of the uniqueness of the evolutionary technology is essential but usually easy to determine. Typically, for buyer pull market strategy, the potential buyer is a well-known customer and approaches a irm’s sales department requesting some kind of new product of major improvement associated with an existing product or service the irm previously provided. Your response is to apply your core competence technology to produce the desired invention, which the customer then buys. Identifying an invention that is truly unique will involve somewhat greater dificulty. Typically, this invention emerges from R&D based on an evolution in the irm’s core competency technology. While it shows potential for application to Technology Source

Firm Core Competencies

Technology Focus

Evolutionary

Innovation Type

Continuous

Market Strategies

User Application Type

Market Pull

Replacement or Substitute

Technology Push

New or Major Improvement

FIGURE 2.1 Evolutionary technology commercialization model.

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existing customers, some market research by your sales personnel will be required to learn more about your customers and identify their existing need that is not currently in the forefront of their thinking. Then your sales force is challenged to make the customers desire to add this invention to his current list of needs and eventually buy the invention. This invention can be sold on the basis of major improvements in quality or signiicant reductions in costs. Either of these results will give your customer a strategic advantage in competitive markets. This is the essence of technology push market strategy and should be the major work of well-trained sales professionals. In the section above, we provide an example of a start-up business that used well-known science to create a new unique product that potential buyers needed. Dialogic Corporation started with one scientist and two experienced technical marketing/managing professionals. The two industry-experienced team members saw the potential need for a unique invention derived from known technology, and they teamed with the scientist to create the invention that became their irst product. Subsequently, they were able to create a major company in their chosen ield with signiicant inancial success for all three founders.

MARKET STRATEGIES FOR DISRUPTIVE TECHNOLOGY Selecting a radical innovation product and matching it with the appropriate marketing strategy requires more serious thought. As shown in Figure 2.2, much like evolutionary technology, the market strategies are technology push and market pull. However, whenever possible, it is desirable to choose inventions that can appeal to the potential customers so that buyer pull marketing can be used. The reason is that technology push for radical innovations is far more complex and time consuming than for continuous innovations. Typically the start-up does not have the established customer relationships, and the potential customers will recognize that the innovation will require major behavioral change. And behavioral change of this type is commonly traumatic and undesirable. Thus, it may take years before the irst sale is achieved. Many start-up technology irms begin with a new technology that will create radical innovations that will be a hard sell to potential buyers. Unless such irms have major inancial investments or are personally wealthy, they are at great risk of business failure. For example, Genentech formed the irst gene splicing pharmaceutical company by embracing a new science. Genentech attempted to ind buyer Technology Source

Technology Focus

Innovation Type

New Science

Disruptive

Radical

Market Strategies

User Application Type

Technology Push

Creative Destroying

Market Pull

Replacement or Substitute

FIGURE 2.2 Disruptive technology commercialization model.

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acceptance of substitute and replacement products with only modest success. Since Genentech had raised $35 million with the public sale of stock in 1980, it persevered and eventually after 12 years inally scored with a truly new innovation that provided the basis for major growth in its revenues and proits.19 In today’s economic environment, it may be possible to identify other suppliers that already provide products to those buyers who are likely candidates for your disruptive technology products. One or more of these suppliers may be willing to form an agreement with a start-up irm that is pursuing a disruptive technology that is interesting. This has become especially common in the biopharmaceutical industry where technology sharing among established industry members and new irms is becoming very common. This is a possible way of gaining inancial assistance that will allow a long-term project to commercialize a disruptive technology. On the other hand, if you have start-up team members who have established customer relationships with potential buyers, then you have an advantage to use your technology with a buyer pull strategy. The team members with customer contacts become the major mechanism to identify buyer needs for products that can be substitutes or replacements for products that these potential buyers already own. Substitutes and replacements have to demonstrate signiicant quality improvements or cost reductions to close the sale. This is the quickest way to assure survival and become proitable. However, no doubt you would prefer to see a more unique invention that will take advantage of your technology’s major advantages for applications that seemingly need major improvements. It is a long hard pull, however, to bring a disruptive technology into successful products that provide proitable operations. It is better to take the quick route to survival and proitability before switching your attention to your “dream product.” But keep your dream, for you may be able to afford the challenge of creating proitable operations with the dream product in the future. It will take years to bring the dream invention into a proitable product and creatively destroy the established market structure. It took Intel 10 years from the development of the 4004 microprocessor in 1971 to the 8086 that became the big product in 1981. It took another 13 to 14 years for the microprocessor to creatively destroy the established computer industry. And this happened only because a large number of other technologies interacted with the microprocessor — software and hardware — as it evolved into a creative destroying product.

SILICON PULLING INDUSTRY: EVOLUTIONARY TECHNOLOGY Our research has developed a major example drawn from research on the silicon pulling industry. Newbert, Kirchhoff, and Walsh completed a study of the independent new irms formed in the semiconductor silicon pulling industry worldwide from 1953 through 1989. Semiconductor silicon is well known as a major microtechnology raw material.20 Our research looks solely at the newly formed independent irms. Six of the thirty-two start-up irms in our study of semiconductor silicon pulling were irst to adopt newly marketed technologies and successfully beat the major suppliers to the market with the new technology. In all cases, these irms were started by individuals who had existing contacts with one or more of the current buyers in the industry. In

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addition, the newest technology was recently introduced in the industry, and their entry can be described as “early followers.” Since these irms knew the industry buyers, and buyers knew the new technology, they used buyer pull with minor technology push market strategy. This worked well as they acquired market share quickly before major irms entered this market. This combination of new technology with demand pull and minor technology push strategic marketing used by these six startup irms resulted in four of them becoming very successful and the other two modestly successful. All survived or were acquired by larger irms at a proit.

SILICON PULLING INDUSTRY: DISRUPTIVE START-UPS On the other hand, irms that introduced the radically new inventions had little knowledge of the current buyers. Lack of knowledge of the market required that these companies emphasize technology push with minor buyer pull marketing strategy. Of the seven irms that used this strategy to sell radically new technologies, one failed with losses after 12 years, another performed poorly and failed after nine years, three performed modestly, and two performed very well and survive today. One of these successes remains independent, and one was acquired by a larger corporation. Three of the seven irms initiated the “loat zone process,” a major radical technology change that received weak acceptance in the market. One of these was the poor performer that eventually failed, and the two others are still alive and proitable but with specialized, niche market products. The experience of the seven creative, very early entry irms are typical of those start-ups that bring disruptive technologies into existing industries. On the other hand, these seven irms entered the market by introducing new evolutionary technologies that they developed through research and development. They based their effort on the supposition that the buyers in the industry would want to buy this new technology. However, new, radical innovations were not widely accepted by the buyers who resisted the turmoil of adopting a new technology that would require major new investment and operating changes. Thus, these very early entry suppliers found considerable resistance to their product offerings for several years and were not as inancially successful as the early followers of this new technology. In other words, these seven irms that created and introduced radical inventions drawn from disruptive technologies were not the major benefactors of the new technologies’ commercialization. The early followers with the stronger marketing knowledge achieved the greater beneits. It appears from this information that the market pull strategy augmented with a technology push component was more successful than technology push strategy augmented with only a minor market pull emphasis. This inding is true for new, independent irm entries into the silicon pulling industry prior to 1990.21 It is important to note that these indings are presented to make our point about market strategies and may not apply to other industries in other time periods. Next, we focus on both evolutionary and disruptive technologies as we look at the past and future of micro and nanotechnologies.

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EXAMPLES OF DISRUPTIVE MICRO AND NANOTECHNOLOGIES It is relatively easy to identify micro and nanotechnologies that it the deinitions of disruptive and evolutionary — historically they are deined in terms of subsequent events. Forecasting which technologies will qualify as disruptive with radical innovations is very dificult since the deinitions themselves are presented in the form of an examination of the technology’s impact on the buyers and the markets. For example, in hindsight, the invention of the transistor and its disruptive nature is clearly evident now, almost 60 years later. However, it seems obvious that this was not recognized until after the invention of the integrated circuit and then the programmable microprocessor. Also, one can say that the nanotechnology discovery of the makeup of the human genetic code is a disruptive technology. But, this did not become a reality until the early 1990s and has not reached its full potential for disrupting the pharmaceutical industry even today. In the following two sections, we explore the transistor and the human genetic code as two examples of disruptive technology.

MICRO TECHNOLOGY: SEMICONDUCTOR TECHNOLOGY22 Semiconductor technology was invented in 1947 at Bell Laboratories. The fundamental technology was a new understanding of the physical properties of silicon — quantum physics. This new science had all the characteristics to become a disruptive innovation. As time passed, its disruptive characteristics became apparent. The transistor became a production product in 1949 and was used solely for telephone switching, the purpose for which it was invented. Gradually, the transistor evolved into a substitute for vacuum tubes in electronic equipment — pull out a vacuum tube and put in a transistor. Radios were irst. In 1958, Texas Instruments invented and patented the integrated circuit, a major improvement on the transistor but still relying on the physical properties of semiconductor silicon. In 1968, a newly formed irm — Intel Corporation — began to manufacture memory chips (integrated circuits). In 1969, Intel received an order from a Japanese company, Busicom, to make an integrated circuit chip that could be programmed to do many, many different math functions. Ted Hoff realized that it would be more interesting and eficient to do this with a programmable microprocessor. Hoff completed the semiconductor chip in 1971, but Busicom lost interest. Still, the irst microprocessor, the Intel 4004, was made available for sale. Programmable processors found a small market in mainframe computers that used them to operate peripheral equipment commanded by the mainframe. Hobbyists also found them interesting. There was no big proitable business. Still, the microprocessor technology spread among several new start-up companies, including Zilog. Then in 1977 (30 years after the invention of the transistor), Apple Computer (a newly formed independent irm) introduced the mass market to these devices by adding a keyboard and some additional components to a Zilog Z-80 processor. Most important of all, Apple established a retail distribution system to sell these computers. Evolution has taken this science of quantum physics and created the microcomputer that has changed the lives of people everywhere and creatively destroyed all but one of the major computer manufacturers that dominated the computer manufacturing industry through the 1990s.23 However it took 40 years for this “quantum

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physics, semiconductor technology” to be identiied as a truly disruptive technology. And a great deal of evolutionary technology was added over the 40 years to achieve this. But note the important key roles played by newly formed technology irms: Fairchild, Intel, Zilog, Apple, Osborne, Compaq, and Gateway, Dell, Microsoft, Lotus, Novel, etc. Not all survived, but each added a component to the technology evolutionary process. Some of these were marketing and distribution innovations, but each was built upon inventions of other start-up technologies developed by irms that created hard drives, component designs, software, etc. So we can credit major industry and market changes on the science of quantum physics that made silicon a special material in 1947. Still, this technology would have been nothing without the evolutionary technologies — most of which originated from newly formed technology irms.

NANOTECHNOLOGY: GENE SPLICING24 Currently, the healthcare industry is undergoing an explosion of new treatments, products, and processes based upon gene splicing (now termed biotechnology). This began with the discovery of the science of gene splicing technology in 1974. A twoyear-old start-up company named Genentech decided to be the irst to enter this area of technology in 1976. With much fanfare, in 1980, it was able to obtain considerable investment capital based primarily on the development of one biological compound (with no real market) and speculation about the promise of gene splicing technology. However, the technology did not produce products that created the majority of its revenues until 1987. As early as 1980, Genentech’s technology yielded products that were as good as existing products (for example, its irst human growth hormone), but these products did not have the improvement in quality or reduction in price that made them attractive to the majority of buyers. Genentech relied upon licensing fees for its irst two products and did not begin marketing its own product until 1985. In 1988, Genentech for the irst time reported more revenues from product sales than from contract research and returns on invested capital. Commercialization of gene splicing became the major contributor to sales in Genetech’s 12th year and 14 years after discovery of gene splicing science. By the late 1990s, a host of newly founded gene splicing companies appeared. All of these took advantage of the fundamental research discoveries that evolved the technology. But interestingly, the major pharmaceutical companies continued to focus on chemistry and made little attempt to enter the biological ield until after 2000. This allowed the gene splicing companies to gain an advantage, especially in oncology (cancer treatment). So, by 1996, 22 years after the discovery of gene splicing, the industry begins to produce products that are superior to those offered by the chemistry-based pharmaceutical companies. And the path to technology adoption has included and still does include many newly formed irms. Currently, the new irm phenomenon continues but now in the form of research organizations with alliances to the major irms that have established the market distribution systems. Alternatively, new irms are formed with plans to create a product that will make the irm attractive for acqui-

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sition by a major irm. Now, the chemical pharmaceutical companies are buying some of these new irms.

SOURCES OF DISRUPTIVE TECHNOLOGY Not all disruptive technologies originate in new start-up irms. Bell Labs and the transistor is an example of a large irm producing and proiting from a disruptive technology. Keep in mind that the transistor was invented after 13 years of Bell Laboratories’ research for a reliable replacement for the mechanical switching system, a system that was widely used to replace telephone operators. Its nearly instant commercialization is attributed to the anxiously waiting AT&T telephone market.25 New irms have a vital role in the evolution of disruptive technologies into major markets. Newly formed irms carry out much of the technological evolution from the transistor to microprocessor. Many of these grew up in Silicon Valley, and many were at least partially inanced by NASA R&D in its effort to ind reliable, lightweight electronics equipment for space travel. Few commercial products emerged directly from the NASA research, but the research advanced the technology that became staples of the commercial products a few years later.26 Customer resistance to radical innovations based on new science means that the sales effort needed to launch a truly disruptive innovation can be very expensive and time consuming. Genentech, based upon belief of the radical new technology of gene splicing, raised $35 million in investor capital in 1980. Such large sums early in the life of a start-up can easily carry a irm through the early product development process. If you have this kind of venture capital backing, you can also do this with a disruptive technology. However, few new technology ventures are able to obtain capital of this magnitude. That is why evolutionary technology is the mainstay of new technology irms. This approach needs to be emphasized when searching for venture inancing. New science directed into replacement or substitute products that do not involve major customer behavior changes are much easier and less costly to sell. Intel did not capitalize on the microprocessor it invented until Apple demonstrated the value of the microcomputer. Then, Intel entered with the microprocessor as a better processor in response to IBM’s deined need for building and selling microcomputers in a market that was ive years into its expansion phase. By then, Intel had the advantage of 11 years of technology evolution to respond to this buyer’s needs. Genentech’s survival for 11 years without a major successful product is indicative of what a relatively new irm can do with a disruptive technology when it has plenty of venture capital. However, it did take 12 years for its gene-spliced products to become its major income generator. Disruptive technologies take time to develop proitable markets if they are used to market radical innovations using technology push market strategies.

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RECOMMENDATIONS FOR STARTING A NEW TECHNOLOGY BUSINESS There are many books and magazines in libraries and elsewhere that explain how to start a business. Not many are directed to the technology entrepreneur. Here are some differences that set the high-tech start-up apart from all those books and magazines. These recommendations emerge directly from the technology discussion above. And each of these is discussed in the following sections. First, when starting a new irm, make an effort to determine if your technology is evolutionary or disruptive. Second, do not expect major inancing from outside investors. Third, do not be dismayed if your irst product does not receive acceptance from your irst few potential customers. Fourth, ind out how similar products are distributed to customers. Fifth, do not discard your ideas for the eventual use of your disruptive technology. Sixth, create an entrepreneurial team early in the development of your start-up. Last, do not bother spending a lot of time writing and rewriting a business plan; this may work for a coffee shop or a package express company, but it is not for new high-tech businesses — unless you really need someone else’s money to begin the business.

DETERMINING THE NATURE OF YOUR TECHNOLOGY As evident above, there are signiicant differences in new irm success determined by the nature of the technology. Disruptive technologies based on new science meet substantial customer resistance and require considerable time, effort, and money to obtain the irst sale and enough sales revenue to survive long enough to become profitable. Evolutionary products are usually easy to identify since these are built upon a known technology, not new science. Often, the evolutionary aspect will be obvious if you can clearly identify potential customers who will need your product. Self-assessment of a technology is unlikely to be done without prejudice in favor of the scientist’s views of the technology. Technologies become the favorite subject of the inventor and bias every discussion. It is best to try the invention on some knowledgeable persons. One way is to ind a no-cost source of an assessment of the invention. Many universities or incubators have technology assessment procedures. Also, ask technology-savvy friends, relatives, or colleagues. Ideally, you know someone who works for one or more potential buyers, and a properly directed inquiry will gain useful information.

FINANCING TECHNOLOGY START-UPS Obtaining borrowed money from a bank or other lending institutions is impossible unless (1) personal assets (house, paid-up insurance policy, etc.) can be pledged as collateral or (2) until the business has at least three to ive years of proitable operation. Many entrepreneurs do not know this when they start. They usually try to obtain loans from banks and are depressed when they learn that they cannot. The rejection that is received is not because of the invention idea or the character of the individual(s) involved in the start-up. The lender simply is a risk-adverse institution that is lending someone else’s (depositors) money in the face of strict government regulations. And that collateral mentioned above—that borrowed money obtained as

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proceeds from a second mortgage or other personal assets—is personally borrowed money. The borrower must repay this money, and the irm has no obligation to pay. Firm failure or bankruptcy means the borrower must repay the debt. Contrary to what some law irms advertise, forming a corporation is no protection from this personal liability to repay borrowed money. Lenders will always require entrepreneurs to sign personally for borrowed money. Ask an accountant about this. Although not as risk adverse, venture capitalists in all but Silicon Valley and, more recently, Boston are very, very reluctant to invest in a technology start-up that has no cash sales booked.27 Real booked sales conirm the value of the product and company. And, few venture capitalists have the enthusiasm for the invented product until it has passed the test of actually being sold. Applying for and receiving competitively determined government research funding can generate interest among venture capitalists. Sometimes, but not often, investors will carefully examine start-ups that have received research money from a government agency because the funding suggests that outside experts consider the technology to be valuable. The primary source of research money from the U.S. government is the Small Business Innovation Research Program (SBIR).28 The SBIR program is federal legislation that requires 13 agencies of the U.S. government to spend 3% of their extramural R&D budget with small businesses. Each agency issues requests for proposals (RFP) for research that are competitively evaluated on technological quality. The funding, when received, allows all rights to the intellectual property to remain with the small business. In other words, this is investment capital for which you never issue shares of your irm or pay back. In addition, venture capitalists prefer to see a irm receive both irst- and second-stage SBIR grants for research on a speciic technology. Venture capitalists evaluate this as stronger evidence of the value of the technology. Other countries in the European Union have similar programs modeled, to a degree, upon the SBIR program in the U.S. It is worthwhile to check on the availability of such programs. Given the risk associated with new technology, start-up inancing is rare for new technology irms. Without major outside inancing, personal resources and those of the start-up team members, friends, or family will be necessary to start the business. A stream of cash income low from product sales will not develop for at least 12 months. Even if the irst sales are made quickly, they are likely to be made on a “pay later if you are satisied with it” basis. This can delay the receipt of cash for as much as 4 or 5 months. In addition, few technology startups develop a product that sells within 6 to 12 months. Many steps are required to generate the irst sale. Starting a technology irm is an expensive experience. Most successful technology entrepreneurs develop the technology, obtain an assessment of the technology, ile a patent application, and create a prototype before they leave their paying jobs. When the irm is irst started, examine the cash that is available to the business and determine how long it will last. If it is not enough to last at least 12 months, ind more cash investment. Frequently, neither you nor members of your start-up team will draw a salary from this business until many sales begin and collections are made.

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SELLING YOUR SECOND FIRST PRODUCT Market research is much more complex than it may appear. As suggested above, potential customers are contacted, the technology is described, and drawings, sketches, or deinitions of the product and its actions will be presented to seek the potential customers’ approval of the new venture. The meeting will likely go well, but little useful information on the potential customer’s real interest will be obtained. It is very dificult to obtain accurate information in an interview when the presenter is enthusiastic about the invention. If the entrepreneur presents a persuasive argument, the potential customer will undoubtedly agree that this is a great product idea that should be pursued and offered in inished form when the irst product is produced. What this means is that few people will argue with anyone who persuasively argues an issue. Most of us are socially conditioned to avoid arguments with other people of casual acquaintance. Pushing the other person to agree causes agreement simply to avoid arguing. Furthermore, the potential buyer probably does not fully understand the technology since it exists as a real, understandable thing only in the mind of the entrepreneur. Diagrams, equations, sample computer code, and other technological information will not adequately convey the technology. To understand a real technological concept, most of us need to see the product that has the technology imbedded in it. So a prototype is necessary. Do not underestimate the complexity of your technology and its inclusion in a new product. Market research done without a prototype is unlikely to solicit meaningful information. No matter how much market research is conducted, only the presentation of a prototype will elicit meaningful responses. The prototype gives the viewer understanding of exactly what the technology is. So with a prototype, approach one or more potential customers. If the potential customer simple agrees with your presentation and promises to look into your technology at another undeined time, the customer does not understand your technology and does not want to understand. If the potential customers begin to debate about the claims for the product, it means they are interested. The lack of the potential customers’ agreement combined with responses stating that this is not a product they can use may well lead to their suggestion that this technology could create a different product that they could use. The reason for this is that the prototype gives them understanding about the technology and stimulates their thinking about how it might meet their needs. Thus, if the prototype is successful in demonstrating the technology and if the potential customers understand and are interested, they can creatively imagine another, different product built from this technology that could solve some problem they have today. If three or more potential customers suggest the same product idea, they have deined your saleable product. That is a good job of market research. Pause and think, but build a new prototype that meets the speciications that they have described. This “second product experience” is so common among the technology start-up irms we have known that we always discuss it with neophyte technology start-up irms. This extends to software development irms — perhaps more to them than product irms. We refer to it as “How to achieve success with your second irst product.” We have never found a way to avoid the second irst product problem (or opportunity).

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One way to avoid the second irst product problem is to acquire a team member that has been selling similar products to the same customers you are targeting. Even though this is one possible way, it does not always work; however, it is worth a try. For example, in 1983 a Ph.D. physicist joined with two salesmen to form Dialogic, Inc. The salesmen worked for two different suppliers selling equipment and parts to telephone switching equipment manufacturers. Telephone answering systems were becoming more popular and doing more complex functions. The salesmen thought they knew a major problem with the existing answering systems. The scientist recognized that a piece of sophisticated hardware could replace some complex software and provide a faster more responsive answering system. Since they knew the customers and knew their needs, this should be a snap. They began product development using existing technology and completed a inished model in one year. But, when they approached customers, they received the response that this was not exactly what was wanted. Instead of a single-line answering system, customers wanted a multi-line system. After 6 more months of R&D, Dialogic introduced its second irst product, and sales took off. It seems that sometimes even the most experienced and knowledgeable persons still need a second irst product. However, they would have been successful earlier if they had taken a prototype around to their customers irst. Dialogic went public in 1994 and was wholly acquired by Intel in 1999. Needless to say, the founders beneited inancially.

DISTRIBUTION IS FREQUENTLY COMPLEX One question that should be asked of potential customers in early discussions is how similar products are distributed to the potential customers. Distribution is often more complex than most technology entrepreneurs are able to imagine. Typically, technology products are not sold to consumers. They are sold to other manufacturers who sell to consumers. For example, computer hard drives are not sold directly to the vast majority of consumers; instead, they are sold to computer manufacturers. Thus, all the knowledge you may have acquired about selling consumer products is useless. We have experience with several medical device manufactures. The industry is characterized by devices that are installed by doctors in hospitals or outpatient clinics run like hospitals. One entrepreneur assumed he would be successful by having salespersons call directly on the doctors, similar to Avon or other house-to-house sales techniques. But there are thousands of doctors. Think of the cost of creating such a massive sales force. The entrepreneur thought it would be possible to reach these doctors by advertising on TV. This is very expensive advertising that is trying to reach a small and unique population of doctors who watch relatively little TV. The largest pharmaceutical irms have large sales forces, but these irms are selling multiple products that only doctors can prescribe. This type of technology marketing to other irms is quite common, and distribution systems exist. It is desirable to deine the distribution system by which products similar to yours are delivered to buyers. For this inventor’s product, a team of our students began by contacting the purchasing manager of the university’s hospital. By questioning hospital purchasing personnel and a few doctors, the team discovered a very complex system involving

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individual doctor evaluation and approval, hospital committee evaluation and approval, and then a purchasing organization that buys this type of product only from a cooperative distribution organization that services many hospitals. And, the cooperative distributor buys individual products from other distributors. In other words, the medical devices these companies made are not bought directly by doctors. Normally, doctors and hospital staffs make the purchase decision, but actual hospital purchases are made through 2 or 3 levels of distributors. This complex distribution system is a major barrier (or opportunity) for selling medical devices to the healthcare industry. In our experience, few medical device start-ups know this complexity exists. And many of these start-ups have products that are practical, evolutionary technology inventions that could save lives or improve the quality of life of patients. Other industries have similar complexities. Knowing the name, telephone number, and location of the individual who makes the buying decision is very important. And if that individual is in a large corporation, it can take years of sales visits to identify the proper processes and people that will buy this type of new product. Any salesperson who has gone through this process knows the dificulty of inding the buyer in a large irm. With new products, the common way to obtain sales is to identify a irm that already distributes products to those whom you believe will be buyers of your product. Then ind a salesperson in that distributor’s organization that knows who, where, and how your potential customers buy your kind of product. Then negotiate and sign an agreement with the distributor to handle your product for a percentage of the sales price. The names of distributors can usually be found in trade journals. Personal relationships are vital in selling new products. Knowing who, what, where, and when is of great value. This is why venture capitalists prefer to invest in companies that can list probable buyers of an entrepreneur’s product, including names, titles, and telephone numbers of these probable buyers. The venture capitalist makes a few telephone calls to some of these names and determines if you really know these people. If you do, your irm’s stock value is pushed higher.

DO NOT GIVE UP YOUR ORIGINAL PRODUCT IDEA These same personal relationships can be used to launch the product of your dreams. Somewhere after sales of the second irst product are progressing well, congenial, collegial relationships have been established with many customers. Now is the time to rethink the original radical innovation and build the irst prototype updated over time by the evolution of the technology. Now, since the customers have conidence in the products and personnel of the irm, one or more may be willing to give the radical innovation a try — especially if it will provide a competitive advantage for their business. Then your dream product will become a major factor in creatively destroying the established market structure.

CREATE A TEAM A one-person start-up technology company is a rarity in today’s world. Realistically, starting and managing a technology business is far more complex than a new retail

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store, restaurant, auto repair shop, or a consulting business. It is the rare individual who has all the specialized knowledge and skills that are required to start a technology business. And, money is harder to attain since there are only a limited number of people who will believe in your technology’s promise of future success and profits. The head entrepreneur must assess his/her knowledge, skills, and experience to determine what specializations are missing. Then, the entrepreneur must ind persons who possess those missing specializations. Below is a list of the key people that should be in the start up team. R&D: A strong technical specialist who can carry on the R&D work of converting technology into saleable products is essential. Marketing: At irst glance, distribution systems can appear to be very complex, but in reality they are not complex if you have a team member who knows the market and the potential buyers you are targeting. Try to obtain an experienced marketing professional with knowledge of the industries that you believe are most likely to contain potential customers. Manufacturing: Manufacturing a prototype and bringing it to actual production-level manufacturing requires special skills, so an experienced manufacturing manager makes a useful addition to your team. Human resources: The process of hiring, iring, and compensating employees is fraught with major issues such as taxes, social security, healthcare beneits, and antidiscrimination and handicap access laws. And the process of selecting employees can be very challenging. A team member with experience in human resources can be worth a lot in avoiding the sinkholes in employee regulations and laws and selecting the proper employees. Finance: Private accountants can be hired by the hour, but the complexity of guiding and operating a business requires much more than an accountant. A inancial specialist is the person who plans and executes the steps necessary for survival and eventually proitability. You need a team of 3 to 6 competent people to start a new technology irm. Chief executive oficer/manager: Management is an important skill. A professional experienced manager is valuable. This is why most venture capitalists install their own experienced CEO when they invest in a technology irm. This is a very important part of the team. In fact, the initial team may consist of fewer specialists by using outside organizations. Human resources can be acquired by using an employee leasing irm. Rather than hiring employees (non-ownership participants are employees), you lease them from the leasing irm. This gives you a zero employee irm since owners are not employees under U.S. law. This is different in some European Union nations. In addition, you need a certiied public accountant, a patent attorney, and a business attorney. Also, there are many accounting irms that will not only keep your books but also provide management information reports (different than the accounting data routinely provided by accountants) and consult about the irm’s inances. A manufacturing manager need not be hired if you sub-contract all manufacturing to a reliable manufacturing company. The choice of this manufacturer is critical, and it may be desirable to hire an experienced manufacturing specialist to assist in choosing a irm to do your manufacturing.

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That leaves the founding team as three persons: a CEO, a technical R&D expert, and a marketing specialist. The technical expert frequently is the lead entrepreneur and takes the CEO role. You will notice that Dialogic began with two technical sales engineers and a Ph.D. physicist. The Ph.D. shared the CEO responsibilities with the two technical marketing experts. After 3 years of proitability, the team hired an experienced CEO.

DO NOT WRITE A BUSINESS PLAN Every book, radio and TV program, and magazine on entrepreneurship states emphatically that an entrepreneur begins a new business by writing a business plan. However what is the purpose of a business plan? Most planners will tell you it is important for a business organization to have clear goals and objectives to know where it is going and to communicate this to the employees. Only in this way can the irm be sure that all members of the organization are working toward the same goals and objectives. Thus, experts conclude that business plans are a necessary part of starting a business. This seems logical, but it takes a lot of time and money to create a business plan. And in the early months, the irm probably does not have employees. Banks and venture capitalists are not interested in funding the irm, so a plan serves no purpose in the early development of the business. It is not obvious who will beneit from the business plan. Some say the entrepreneur will beneit by thinking through the directions the new irm will take in the future. It is unlikely, however, that a small technology start-up irm of two or three team members has communication dificulties experienced by large corporations. Moreover, during the early stages of developing a new technology business and a saleable product, it is not deinite that the irst invented product will be saleable. And the type of product, proposed market for it, cost of producing it, and price may change quickly as market research reveals a different product and perhaps a different market. Also, technology may evolve that suggests a better product. A written business plan becomes obsolete every month, perhaps every week. With only a few people involved in the start-up, it is easy to express and agree on a long-term direction for the irm without having a formal written business plan. Communication can be achieved by informal conferences with all old and new team members. These conferences can be “spur of the moment” with a loose agenda. The major purpose is to interact to discuss and decide what the company is doing and what it wants to do as a business. The basic topics are how to survive, generate revenues, and eventually generate proit. Somewhere along the way, the discussion includes the subjects of how the shares of founder stock will be distributed and how all shares of stock will eventually become cash income for the holders. The technology should not be a major topic since only one or two of the team members are interested in the details about the state of and future potential of the technology. A business plan can require a large amount of team members’ time. Alternatively, the irm can spend a large amount of its limited cash to buy someone to write the plan. So, when the decision is made to ind an outside investor to put money into

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the irm, the time has come to write the business plan. The plan’s value is to persuasively explain the future of the irm to someone outside of the founding team. Hopefully, a well-developed team exists and sales have been made. Team quality and sales revenue are the strengths that need to be presented to potential investors through the business plan. This is the irm’s plan for the future, including the opportunity for all investors to take their original investment and proits out of the company as cash payments when it becomes successful. It is a fact of new businesses that no investor, nor team member, wants to leave all the hard-earned proit tied up in the business forever.

SUMMARY AND CONCLUSIONS Starting a high-tech company is an exhilarating experience. However, technology dominates the form and process of technology entrepreneurship. The two types of technology, evolutionary and disruptive, require that the irm market strategy be created to accommodate the technologies’ unique character. Evolutionary technology offers the faster route to sales revenue. Disruptive technology offers more long-term opportunity for proitability but also requires a long time before revenues are seen. Obviously, the latter also requires much more invested money up front. Both of these can create products that can be sold with technology push or buyer pull marketing strategies. The real challenge is to correctly assess the technology so that a saleable product can be put on the market in the shortest time period. The sooner sales revenues are collected, the less up-front capital investment will be required. And, contrary to recent popular theory, it is not a requirement that a disruptive innovation must be produced. We have provided 7 guides to follow when starting a high-tech business. Most of this comes from our own experiences, especially with fellow university colleagues, clients of our incubators, entrepreneurs that sought us out, those we met at professional meetings, and businesses we have started ourselves. As you contemplate starting your own technology businesses, keep in mind that the irst step is to obtain an assessment of your technology. Search for a university or government organization that provides assessment of new technologies. The assessment may not be the inal word on your intentions, but it should give you some additional information to think about.

REFERENCES 1. Christensen, Clayton M., The Innovator’s Dilemma, Harvard Business School Press, Boston, 1997. 2. McHugh, J., Forget old-school R&D. These companies purchase their ideas one startup at a time, Wired, July 6, 2006. 3. Foster, Richard N., Timing technological transitions, in Technology in the Modern Corporation: A Strategic Perspective, M. Horwitch, Ed., Pergammon, New York, 1986. 4. Bower, Joseph L. and Christensen, Clayton M., Disruptive technologies: catching the wave, Harvard Business Review, 73, 1995. 5. Prahalad, C.K. and Hamel, G., Corporate imagination and expeditionary marketing, Harvard Business Review, 69, 81–92, 1991.

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6. Schumpeter, Joseph A., Capitalism, Socialism and Democracy, Harper and Brothers, New York, 1942. 7. Schumpeter, Joseph A., The Theory of Economic Development, Harvard University Press, Cambridge, 1934. 8. Abernathy, William J. and Utterback, James M., Patterns of industrial innovation, in Readings in the Management of Innovation, 2nd ed., Tushman, M.L. and Moore, W., Eds., Harper Collins, New York, 1988. 9. Anderson, P. and Tushman, M., Technological discontinuities and dominant designs: a cyclical model of technological change, Administrative Science Quarterly, 35, 604–633, 1990. 10. Abernathy, W.J. and Clark, K.B., Innovation: mapping the winds of creative destruction, Research Policy, 14, 3–22. 11. Bohn, R.E., Measuring and managing technological knowledge, Sloan Management Review 36:3, 61–73. 12. Bower, Joseph L. and Christensen, Clayton M., Disruptive technologies: catching the wave, Harvard Business Review, 73, 43–53, 1995. 13. Bower, Joseph L. and Christensen, Clayton M., Disruptive technologies: catching the wave, Harvard Business Review, 73, 43–53, 1995. 14. Moore, Geoffrey A., Crossing the Chasm: Marketing and Selling Technology Products to Mainstream Customers, Harper Business, New York, 1991. 15. Schumpeter, Joseph A., The Theory of Economic Development, Harvard University Press, Cambridge, 1934, p. 75. 16. Schmookler, J., The Theory of Economic Development, Harvard University Press, Cambridge, 1966. 17. Kirzher, Israel M., Perception, Opportunity, and Proit: Studies in the Theory of Entrepreneurship, Chicago University Press, 1979. 18. Schumpeter, Joseph A., The Theory of Economic Development, Harvard University Press, Cambridge, 1934. 19. Barker, R., Taking stock of Genentech: are investors overestimating its promise?, Barron’s National Business and Financial Weekly, March 4, 1985, p. 6–7. 20. Newbert, Scott L., Kirchhoff, Bruce A. and Walsh, Steven T., Deining the relationship among founding resources, strategies, and performance in technology intensive new ventures: evidence from the semiconductor silicon industry, Journal of Small Business Management, in press, July, 2006. 21. The cost of a manufacturing plant exceeded $500 million by 1990, and no new irms were founded thereafter. 22. The information in this section has been taken from various parts of two sources: Chandler, Alfred D., Inventing the Electronic Century, The Free Press, 2001. Kaplan, David A., The Silicon Boys, William Morrow and Company, New York, 1999. 23. IBM is the only major producer of mainframe and minicomputers that survived the microcomputer revolution. 24. The information in this section was taken from two sources: Barker, R., Taking stock of Genentech: are investors overestimating its promise?, Barron’s National Business and Financial Weekly, March 4, 1985, p. 6–7. www.gene.com – Genentech’s website last accessed March, 2000. 25. Chandler, Alfred D., Inventing the Electronic Century, The Free Press, 2001. 26. Zhang Junfu, High Tech Start-Ups and Industry Dynamics in Silicon Valley, mimeo, Public Policy Institute of California, 2003. 27. Junfu Zhang, Easier Access to Venture Capital in Silicon Valley: Some Empirical Evidence, mimeo, Public Policy Institute of California, 2006. 28. Full information can be found at: http://www.sba.gov/sbir/indexsbir-sttr.html.

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Roadmapping Nanotechnology Steven T. Walsh, Bruce A. Kirchhoff, and David Tolfree

CONTENTS Introduction.............................................................................................................. 51 What is the Nature of Nanotechnology?....................................................... 53 But what is Nanotechnology? ....................................................................... 53 It is often easier to relate the nature of nanotechnology than attempt to deine it............................................................................................... 53 What is Roadmapping? ................................................................................. 54 Background .............................................................................................................. 55 The First Law of Small Technology ............................................................. 57 The Second Law of Small Technology ......................................................... 57 The Third Law of Small Technology ........................................................... 58 The Fourth Law of Small Technology.......................................................... 59 Methodology and Information Gathering ................................................................ 61 Background ................................................................................................... 61 Methodology ................................................................................................. 62 Data Collection ............................................................................................. 63 Discussion ................................................................................................................ 63 Conclusions ..............................................................................................................66 References ................................................................................................................66

INTRODUCTION Technology roadmaps are a type of strategic plan that attempts to align the research, development, and application of technology with business goals. Unlike strategic plans, however, technology roadmaps often integrate the talents of diverse stakeholders to solve current problems. They help industry, its supply chains, academic and research groups, and governments come together to jointly identify and prioritize the technologies needed to support strategic R&D, marketing, and investment decisions. The various deinitions of roadmapping that are used will be discussed with the special issues of roadmapping disruptive technologies. Microsystems and nanosystems are potentially disruptive technologies, so roadmapping them is of special signiicance. Disruptive technologies can redeine the competitive landscape in traditional 51 © 2008 by Taylor & Francis Group, LLC

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industries and create new ones. Companies and governments that ignore the impact of such technologies do so at their peril. Strategic roadmapping for any technology is an enormous task. This task is made all the more daunting by the newness of a technology, the extent of its useful industrial breadth, the choice of a irm, industry, or region perspective, and inally the degree to which the technology either supports or tries to expunge a current industry technology product paradigm. In this chapter, we will examine the nearly 100 years of efforts that have gone into making technology roadmaps of all types. We recognize that roadmaps have, over this span, been a primary tool to establish new technology into companies, nations, and regions. They have helped to give a focus to strategic vision and policy-making for companies and governments. Numerous elements comprise a roadmap, including the work of many individuals needed to carry out the task of completing it. As a rule of thumb, the larger the audience and size of the stakeholder group, the greater the number of participants required to cover all interests. Furthermore, the nature of the technology under review can add much complexity to the process.1 Nanotechnology2 is vastly different from semiconductor technology.3 Semiconductor microfabrication technology is a fast-paced high technology base that has enjoyed the same technology lifecycle curve for nearly 60 years. Nanotechnology, on the other hand, is an emergent and often disruptive technology that has the potential to redeine the product technology paradigm in several industries, thus making the nanotechnology roadmapping task all that more dificult. Nanotechnology is one of the reasons why the pace of technological change in the world is increasing exponentially,4 making it dificult for strategists and policy makers to fully utilize technologies for competitive advantage. In this introduction, we provide a view of the nature of nanotechnologies and some useful deinitions and a discussion on the formational issues of roadmaps. Roadmapping is now an established tool. Over a number of years, many different types of roadmaps have been produced covering almost every sector of technology. Until the publication of the irst MANCEF International Roadmap (IMR) in 2002, there were none that speciically covered the special issues associated with the roadmapping of disruptive technologies. This roadmap was the result of 4 years’ work of more than 325 companies and 400 people from 4 continents, including most of the major companies that are involved in the development and production of miniaturized components and products. Many useful lessons were learned during the production of this roadmap, from the process of compiling it, to the differing views and approaches made to the understanding of the technologies. In this chapter, we shall use the MANCEF roadmap as our example since it will help the reader understand the nature of miniaturized technologies and how the roadmapping process can bring opportunities and beneits to companies and nations that want to take the path to commercialization.

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WHAT IS THE NATURE OF NANOTECHNOLOGY? Nanotechnology is enabling technology5 in many commercial ields. It is disruptive to the technical skill base that it requires to produce products. Nanotechnology can be bifurcated into “Top-down” and “Bottom-up” technologies.

BUT WHAT IS NANOTECHNOLOGY? IT IS OFTEN EASIER TO RELATE THE NATURE OF NANOTECHNOLOGY THAN ATTEMPT TO DEFINE IT.

There are actually a number of different deinitions of nanotechnology. Those who work in the ield will be reminded of the old adage “I will know it when I see it.” Any unifying deinition is further complicated by the hype associated with nanotechnology since that has created different visions in the minds of non-scientists and technologists. We will discuss the origins of nanotechnologies and the usage terms. The deinition of nanotechnology has migrated and expanded over time due to a widening of scientiic and public interest in research in this ield dating back even further than Richard P. Feynman’s classic presentation, “There is Plenty of Room on the Bottom.” 6 The technical deinition of nanotechnology is generally attributed to Taniguchi.7 Initially the ield was deined in a purely technological realm, but new deinitions are being produced to include the concerns and interests of wider technical and social communities. We start our discussion with Taniguchi’s deinition, which states that nanotechnology is “the production technology to get extra high accuracy and ultra ine dimensions, i.e., the preciseness and ineness on the order of 1 nm (nanometer, 10 -9 meter in length).” The term “nano” comes from the Greek word meaning “dwarf.” The name of nanotechnology originates from the nanometer. In the processing of materials, the smallest bit size of stock removal, accretion or low of materials is probably one atom or one molecule, namely 0.1 ~ 0.2 nm in length. Therefore, the expected limit size of ineness would be of the order of 1 nm. Accordingly, nanotechnology mainly consists of the processing of separation, consolidation, and deformation of materials by one atom or one molecule. The deinition used by the United States Group, Nanoscale Science, Engineering and Technology Sub-Committee (NSET) in 2000 states that nanotechnology is research and technology development at the atomic, molecular, or macromolecular levels, in the length scale of approximately 1–100 nanometer range, to provide a fundamental understanding of phenomena and materials at the nanoscale and to create and use structures, devices, and systems that have novel properties and functions because of their small and/or intermediate size. The novel and differentiating properties and functions are developed at a critical length scale of matter, typically under 100 nm. Nanotechnology research and development includes manipulation under control of the nanoscale structures and their integration into larger material components, systems, and architectures. Within these large-scale assemblies, the control and construction of their structures and components remain at the nanometer scale. In some particular cases, the critical length scale for novel properties and phenomena may be under 1 nm (e.g., manipulation of atoms at ~ 0.1 nm) or be larger

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than 100 nm (e.g., nanoparticle reinforced polymers have the unique feature at ~ 200–300 nm as a function of the local bridges or bonds between the nanoparticles and the polymer).8 There are many other deinitions that are inluenced by the geographical region or technological environment in which they are derived, the community that is presenting the concept, or other factors. The U.S. National Nanotechnology Initiative deinition is one of the most useful and explicative and can be directly related to that used by NSET. They suggest that a certain technology can be considered a nanotechnology only if it involves all of the following three attributes: • Research and technology development at the atomic, molecular, or macromolecular levels, in the length scale of approximately 1–100 nanometer range • Creation and use of structures, devices, and systems that have novel properties and functions because of their small or intermediate size • An ability to control or manipulate on the atomic scale However, for the purposes of roadmap discussion, it is important to understand the basis for the deinitions used. Nanotechnology is the practical application of nanoscale science. The British Royal Society has made a clear distinction between these: Nanoscience is concerned with the study of novel phenomena and properties of materials that occur at extremely small length scales — “on the scale of atoms and molecules.” Nanotechnology is “the application of Nanoscale science, engineering, and technology to produce novel materials and devices, including materials for biological and medical applications.”

WHAT IS ROADMAPPING? There is no deinitive deinition of technology roadmaps. A number of people have expressed their views. Robert Galvin9 states that a roadmap “is an extended look at the future of a chosen ield of inquiry composed from the collective knowledge and imagination of the brightest drivers of change in that ield.” Others emphasize the ability of roadmapping to provide a vision of the future.10-15 Distilling from these, the most useful working deinition of technology roadmapping is “a needs-driven technology planning process to help identify, select, and develop technology alternatives to satisfy a set of product needs.” Expanding this, it brings together a team of experts to develop a framework for organizing and presenting the critical technology-planning information to make the appropriate technology investment decisions and to leverage those investments. Given a set of needs, technology roadmapping process provides a way to develop, organize, and present information about the critical system requirements and performance targets that must be satisied by certain timeframes. It also identiies technologies that need to be developed to meet those targets. Finally, it provides the information needed to make trade-offs among different technology alternatives.16 Roadmapping is gaining in popularity and importance as academics and practitioners are aware of the increasing importance of technology in the strategic process.17

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Some strategic theories like competency-based strategies place technology and technology management as the foundation of a company’s search for competitive advantage. They claim unique technologies are a necessary, if not a suficient, condition for long-term success.18-19 Yet even as technology is recognized as critical and interdependent in a company’s strategic process, this focus on technology makes the strategic process more complex. Technology was once thought by strategists as one dimensional and easy to embody in the strategic process.20 It is now recognized as multidimensional and having primal inluence on the strategic process. Further, some of the important managerial aspects of technology, trends in technology development, and sourcing are changing. For example, embodied technology capital and expense costs, the importance of technology at the interface of disciplines, technology complexity, the rate of technology change, global technology sourcing, and many more strategic aspects of technology are more dynamic than ever. Moreover, the importance of long waves and disruptive technology to regions and irms is more understood.21-23

BACKGROUND Whatever deinition of nanotechnology is adopted, technology roadmapping has become an important tool for placing technology in the management process. Today corporations like Motorola, Corning, Phillips, and ALCOA24-27 use roadmaps as part of their strategic process, product development process, R&D efforts, etc. Technology roadmapping is a powerful process for supporting strategic and tactical management decisions.28 Governments, companies, and industrial consortia utilize technology roadmapping to explore and communicate the dynamic linkages between technological resources, organizational strategies, and the changing environment.29-30 Two aspects deine the task of a technology roadmap:31 (1) the nature of the technology under question and (2) the audience for the intended roadmap. In our discussion, we will cover the nature of technology, utilizing terms such as enabling or industry speciic technology, disruptive or sustaining.32 Until recently almost all roadmap studies were performed on sustaining (established) technologies that are characterized by rapidly changing (high technology) industries such as those involved in semiconductor microfabrication or aluminum production. Indeed, semiconductor technology invented in 1947 was disruptive. It was not until late in the 1970s that an industry roadmap was undertaken.33 Further, nanotechnology is such a broadly deined technology base that it has expressions, which in some industries are disruptive, while in others are sustaining in nature. The roadmap selection process is driven by the commercial nature of the technology under consideration and modiied by the strategic nature and scope of the roadmap project. The roadmap selection processes that have embraced enabling technologies logically follow a series of questions that help to bind and deine the task. Questions are: • enabling versus product- or industry-speciic technology base?34 • potentially disruptive versus sustaining technology?35

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Technology bases are said to be enabling when they form the basis for solutions that address many product technology paradigms in separate industry settings. The semiconductor-based transistor is such a solution set. This means that the roadmapping professional will have a variety of competing technologies that are speciic to the application space under investigation. The terms disruptive and sustaining technologies are ubiquitous in the literature.36 Here, we see an example of a deinition that emphasizes their utility as a construct central to the issue of nanotechnology roadmapping. Disruptive or potentially disruptive technologies can set up production platforms based on new sets of technological competencies. They create product technology paradigms that challenge and, if successful, render useless the currently utilized manufacturing competency base or the sustaining technology base. A disruptive technology base usually provides a substantially better value proposition along at least two critical dimensions to be considered commercially viable. When a disruptive technology becomes an industry standard, it becomes sustaining in nature. Sustaining technologies are those that underpin industry standard technology-product platforms. Improvements to these technologies are focused on making expensive changes. The roadmap selection process deines the parameters for the roadmap under question. However, when you have a dichotomy that works, this is exceptionally useful as described in the MANCEF Roadmap by Elders and Walsh.37 The problem with nanotechnology is that it is enabling and simultaneously sustaining in some industries while disruptive in others.38 The nature of a roadmap is further modiied and bounded by its strategic purpose. The following sets of constructs help to deine those bounds. These constructs include the following bifurcations: • Corporate versus industrial in nature • Market versus technologically concentric • Regional versus international in scope Perhaps the biggest strategic modiier of a roadmapping exercise is the purpose of the roadmap itself.39 The stakeholder group who is developing the roadmap will determine its strategic focus. An industry-based roadmap, for example, will be different from one carried out by a company. National or regional roadmaps for international markets have not had a history of success; however, limiting the geographic scope often provides a focus to a dominant technological pathway for a particular region. Similarly, a concentric market focus or a concentric technological focus either by a company or an industry will determine its boundary. Technological roadmaps are now used for tactical as well as strategic purposes.40 Roadmaps differ between physical and service product planning,41-42 product family tree development versus single product development, and service and product technology process planning. Further, technological roadmaps, in practice, are strongly linked to market forecasting efforts sharing many of the same tools, such as the Delphi method and others. Some authors of roadmaps suggest that roadmapping can be performed on two levels, industry or corporate. Further, these levels necessitate a differing scope of

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efforts in terms of time, cost, level of effort, and complexity. Moreover, they provide an overall differing process between a company and an industrial process. Finally, we suggest that roadmapping processes for disruptive technologies may need to be different in scope. In many ways, the roadmapping process has become a victim of its own success. The process provides such value to the strategic planning of companies and regions that many have sought to apply it to technology foresight, technology forecasting, data scanning, etc. We now consider nanotechnology-based roadmaps. They inherently differ from the sustaining technology-based roadmaps. Such technologies are the basis for speciic technology product paradigms that set the path for major industries. The Semiconductor Microfabrication Roadmap (SMR) beneited greatly by the success of the semiconductor industry that had a single technology focus. Let us consider some of the differences between nanotechnology and semiconductor microfabrication. The following questions raise interesting problems: Why was it so hard for “Small Tech” based solution suppliers to use Moore’s Law43 in the same way that semiconductor fabricators do? What does that suggest for the “Small Tech” based solutions communities? Semiconductor microfabrication beneits from Moore’s Law. Does nanotechnology have a Moore’s Law equivalent? These problems may result from the lack of a unit cell for nanotechnology, unlike all electronically driven microsystems that have transistors as units. If it is true that “Small Tech” has no transistor-like unit cell, then this leads to a series of laws that might suggest production space and standardization strategies.

THE FIRST LAW OF SMALL TECHNOLOGY There is no unit cell. The suggestion that no unit cell exists when considering nanotechnologies presents a manufacturing production problem. This law eliminates much of the promise of cross-industrial learning and acts as the basis for many of the next three “Small Tech” laws. While the semiconductor industry focuses on the furthering of MOS technology and, to a smaller extent, bipolar technology, this lack of similar process technologies simply does not exist in the newer small technology paradigms. Where it is true that there are groupings of MEMS production processes, which share many process steps, it is more true to say that there are at least 40 varied routes for manufacturing processes in the MEMS industries. The emerging and encompassing nature of nanotechnology-based applications provides for even more varied based production pathways. This means that the transference of learning in production of micro and nano devices will not keep pace with the learning achieved by their semiconductor cousins in the near future. This leads to the “Second Small Tech Law.”

THE SECOND LAW OF SMALL TECHNOLOGY Application, One Process. This law was irst presented by Eloy at a meeting in 200444 of “Small Tech.” Designers choose production pathways that are application speciic. It suggests serious implications for the roadmapping process. Companies that embrace new nanotechnology-based products will most likely have to modify an existing process

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radically in order to produce it. Further, even though there exists many ways to produce a given product, some of these will be much less cost effective and eficient. In the MANCEF International Roadmap,45 examples are given of many process variants for top-down and bottom-up nanotechnologies that are often speciic to a certain application area or group of applications. For example, the top 10 to 15 MEMS companies use many similar process steps but very dissimilar processes. Texas Instruments, Analog Devices, and Sandia National Laboratories are three leaders in surface MEMS technologies and have been integrating MEMS and semiconductor microfabrication for years. Yet the complexity and typology of these processes are very different. They are different since different end users and product applications drive them. Other industry leaders, Hewlett Packard, Honeywell, and Kulite’s, for example, use other MEMS and NEMS technologies to meet their customer needs and have not only varied processes from each other but from many of the other top ten producers.46 Again, technology choices are driven by applications rather than any unit cell considerations. One implication of this reality is that MEMS or NEMS based foundries, whether commercial or captive, have a dificult time following the semiconductor foundry model.47 Micro and nanotechnologies currently do not have a dominant manufacturing technology as does the semiconductor microfabrication industry’s bipolar or CMOS, ensuring processes in that industry have much more in common than MEMS and NEMS. Nano-based foundries face many more problems than their semiconductor-based cousins. Some foundries trying to provide solutions to a wide variety of applications have had exceptionally high development costs. Many NEMS foundries have learned to tailor the projects they accept to meet their existing or planned capabilities. This strategy has been used with success by such irms as Dalsha and Colybris. Minfab in Australia has taken an islands of competence approach that has been successful for them. This describes only the front-end manufacturing reality of “Small Tech.” There are also back-end issues for “Small Tech” commercial solutions. Nano and microbased devices interact with the macro world by communicating, sensing, or actuating along many different paths. Many applications require pathways to sense or actuate in a wide variety of mediums. The importance, cost, value, and problems of nano- and micro-based packaging are well known. Micro and nano applications that sense differing properties have radically differing packaging requirements. This is the base for the second law of “Small Tech.”

THE THIRD LAW OF SMALL TECHNOLOGY One Application, One Process, One package. The success of small technologies and their increasing importance over the last decade have become evident. Yet many of the applications share technologies in both the front-end and back-end process have little in common except that they are small. Companies with the highest volume productions enjoy process standardization that derives from high-volume processes. However, the lack of a unit cell does not allow the multiplication effect that comes from the acceptance of common processes across applications. Testing is application speciic, leading to the Fourth Law of “Small Tech.”

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THE FOURTH LAW OF SMALL TECHNOLOGY One Application, One Process, One package, One Testing Procedure. The Fourth Law was derived from MANCEF’s First International Top Down Nanotechnology Roadmap produced in the late 1990s.48 The Fourth Law suggests that alternatives to the semiconductor foundry model might be necessary. This law drives many to think that where some applications might follow a semiconductorlike model, more seem to follow the precision machining, islands of competence, or shared facilities model. These four laws provide a basis to understand “Small Tech” and how it should be treated in a roadmapping process. These laws suggest that successful technology product packages and test paradigms will be modiied and shifted to other application spaces as is being done by Olivetti ink-jet to microluidics, Bosch bulk automotive sensors to the commercial sensors, and many others. These laws modify greatly any nanotechnology-based roadmapping. Nanotechnology-based process then differs greatly from a traditional roadmapping process in many ways: • The breadth of the technology and the types of technologies in its base are exceptionally varied. • This requires a roadmapper to be selective. For example, the MANCEF process49 focuses on a subset of nanotechnology. Another roadmapping study focused on Atomically Precise Manufacturing (APM). This roadmapping requires a focus on a new, emerging, enabling and disruptive technology base, which does not have, for the most part, dominant technology product architectures within solution sets they provide. The MANCEF roadmapping process utilized these constraints in order to deal with: • the enabling or meta-systemic nature of the markets that nanotechnology addresses • the lexibility required of irm-based nanotechnology product platform that companies need to develop in order to be robust and address the uncertainties of different markets • The MANCEF roadmap process, unlike traditional ones, did not focus solely on current or future nanotechnology but applied to a speciic market to replace a technology derived from a particular market application space. The process also reviewed the traditional technology product paradigm in the existing space that nanotechnology sought to replace. Finally, MANCEF selected other competing technologies seeking to replace that same industry-based technology product paradigm.50 The MANCEF roadmap process addressed the reality of competing technology product paradigms. • The roadmap process must address not only the technological hurdles that face an emerging industrial solution set but also be a source of conidence for all in the emerging technology solution set value chain acting, thereby acting as a bridge to overcome customer fear of change, the essence of the physiological hurdles involved in managing solutions based or disruptive technologies.

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Roadmaps were developed in response to the growing recognition of technology’s primal importance in the corporate strategic process. Roadmapping is the oldest strategic tool utilized to insert technology into the strategic process of a company. It has morphed over the years and now is designed to have both a strategic and tactical value. The roadmap, much like a business plan, is a living document. Many ind the roadmapping process every bit as beneicial to a company as the inal outcome of the roadmapping process itself. Developing a living roadmap document in any subset enabling technology is a daunting task for a strategist or roadmapping team. Many differing subsets of small technologies can be applied to almost any product arena, but the roadmapping space can soon exceed the scope of any one group. Companies that use micro- and nanotechnologies to develop products that seek to change the manner of technology- product- manufacture- paradigm in a given application space face great risk. An industrial roadmapping process may not reduce that risk but often deines that risk more clearly. This process, for example, will help identify and quantify the nature of the technological, infrastructural, and philosophical barriers to market entry that the companies will face. A huge resistance still exists to the adoption of any new technology-based solution in our society. Roadmaps can help to overcome that resistance. This was the case with MANCEF RF MEMS Roadmap50 that created an output that limited uncertainty and therefore risk for the constituent area. The roadmap noted the RF MEMS-based solutions were not trying to displace a current technology product paradigm but were trying to provide the best value solution compared to other technology product paradigms. Finally, when an emergent enabling technology product solution is trying to replace an existing technology solution, the roadmap chart should be modiied to include deined and well-understood steps. We must be able to show the market that there is a great deal of value embodied in our technology product paradigm at all those levels. Current technology roadmapping uses computer graphical techniques to convey information to their users and provide constructs for their developers. These often link technologies to components, components to products, and products to markets in visual displays. The focus here is on industrial roadmapping utlizing visual displays. Figure 3.1 provides a general schematic of a multitiered technology roadmap. Markets Systems Components Technology

Time

Time

FIGURE 3.1 A multitiered visual output of a technology roadmap.

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METHODOLOGY AND INFORMATION GATHERING BACKGROUND Before any roadmap can be produced, the methodology of collecting and analyzing information needs to be established. This is easier to do for a roadmap that is focused on a speciic technology and when the consultation process requires only small groups of experts. It is very different than that required for developing the MANCEF international roadmap and others of similar size. They required large numbers of experts from different countries to provide input at conferences, workshops, by email, and other means of communication. Let us now look at the production of smaller, more speciic roadmaps. One of the authors, David Tolfree, was involved in setting up a number of expert technology-focused groups as part of the U.K.’s micro-nanotechnology manufacturing initiative and infrastructure development program. The challenge was to ind the best way to identify and bring together experts who could provide the information necessary to compile an accurate roadmap for the area of technology selected. Although a number of consultation workshops on micro-nanotechnologies had been carried out, none had actually produced strategic data from which a useful roadmap showing the future directions for the technology could be compiled. The experience and lessons learned from this exercise, carried out over a year for six areas of technology, are outlined below. The motivation for the U.K. work was based on the urgent need to identify and bring together people from disparate groups, some of which had been working in the ield of micro-nanotechnology for many years. In 2003, the government had allocated about £100 million over six years for developing and enhancing open access centers for micro-nanotechnology and for creating a national network51 in which they could operate. In 2006, more than 700 organizations and companies were identiied as working in the ield and joined or became associated with the network. Initially the following four key areas were identiied: nanoparticulates; nanomedicine; nanometrology; and nano-manufacture and integration.52 It was within these general areas and in the context of the national network that it was decided to form groups from identiied experts whose purpose would be to advise and assist the government on the future directions of micro-nanotechnology where future funding could best be focused to expedite commercialization and business growth. The irst step in the process was to decide where the U.K.’s technology strengths were and to bring together key representatives from industry, academia, and appropriate government departments following the Triple Helix concept.53 It was decided to select technology areas where groups or committees already existed since they would already have the necessary expertise and knowledge. The following six technology areas in which to form groups were selected: silicon technology; integration technology; design, simulation, and modeling; gas sensing; polymer manufacturing; and nanoparticle manufacturing. These represented some of the communities that are growing in strength in the U.K. Each of the communities had a champion, usually an individual representing his own organization. That person was responsible for developing the ield and overseeing its growth. Each was approached, and all consented to taking part in the study. Everybody agreed that roadmaps were an

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essential tool to identify core needs and to track strategic directions and were therefore willing to cooperate in the roadmapping exercise.

METHODOLOGY The MNT network database and personal knowledge were used to identify and make contact with key people and invite them to dedicated one-day roadmapping workshops appropriate to their area of interest. About 20–40 people from industry, research organizations, and academia attended the workshops. A four-stage process was used as represented in Figure 3.2. The participants needed to possess suficient knowledge about the technology, the products it could produce, the existing markets and possible future ones, and the status of business development in the ields. The irst task was to arrive at a consensus on the current status of the technology and then move on to provide a vision of where they saw future developments and where they believed it should go in 20 years. The following stages were to determine what barriers there were to achieving the goals and what decisions were required to overcome the barriers.

Time

Present Business & Activities

Where are we now?

Future Aspirations for Products and Services

Where do we want to be?

Barriers to Progress

What is stopping us getting there?

Solutions and the Way Forward

What needs to done to overcome barriers?

Example of Post-its board

Skills Tooling Costs

Material Drivers Markets

Quality People Needs

FIGURE 3.2

Stages of the roadmapping exercise.

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DATA COLLECTION Small groups numbering four to ive people appointed a chairperson and debated among themselves the key issues and answers to the following questions: • • • • • • • • • • • •

Where are we now? Where do we want to be? What is stopping us getting there? What needs to be done to overcome the barriers? Within each one of the headings above, participants addressed speciic topics such as: Who are our present customers? What are the current trends? What are the main drivers? What is the status of the current competition? Who are the present leaders in the ield? What are the technology gaps? Do we have the right skills?

Color-coded hexagonal-shaped ‘post-its’ were used at every stage of the process to gather written statements that were then pasted on a board for all to see and comment upon. Then, using the post-its, people were asked to make choices and select their priorities. The data were collated and analyzed by the session chairman,54 who originally developed the operational technique described above. This exercise proved to be extremely useful and enjoyable to participants. It provoked positive dialogue, resulting in valuable data to be collected and thus enabling useful roadmaps to be produced with strategic objectives. Roadmaps created using such data help decision-makers to formulate meaningful strategies and plans for the future. This type of roadmap is essentially a living document and has a current value. It is designed to be updated as new information becomes available. Unlike the larger international roadmaps, these enable more current and near future assessments of technological trends to be made.

DISCUSSION This roadmapping process based on nanotechnology, which is an enabling disruptive technology base,55 needed a new perspective on technology roadmapping. The MANCEF roadmapping process has undergone continuous development since 1996. This had to capture both the speciic nature of the technology and also the differing nature of the innovation process on which it is based. This means that the roadmapping process had to capture the technology impact paradigm that describes a technology as either disruptive or revolutionary (the manner in which a product is manufactured radically changes, eliminating the former competencies) or sustaining (evolutionary), which is supportive of the current technology paradigm.

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Technology Focus

Innovation Type

New Science

Disruptive

Firm Core Competencies

Evolutionary

Radical

Continuous

Market Strategies

User Application Type

Technology Push

Creative or Destroying

Market Pull

Replacement or Substitute

Market Pull

Replacement or Substitute

Technology Push

New or Major Improvement

FIGURE 3.3 Technology commercialization model.

Markets

Materials

Medical

Electronics

Building Blocks

NanoMaterials

NanoTools

NanoStructures

Modeling,

Micro &

Technology

Science

FIGURE 3.4

Synthetic, Nano Supramolecular,

Metrology

Advances in Chemistry Physics

Engineering

Biology

Nano markets as extracted from patent search.

A model of innovation based on technology impact and resultant modiications to user behavior is shown in Figure 3.4. We describe as one case resultant user interactions with the resultant product or innovation as requiring a user change paradigm and therefore is discontinuous (user has to change) or in the other case where the user does not have to change their behavior continuous or (evolutionary).56 The ultimate end user, when obtaining a traditional product, does not necessarily know that the product she is using or that was integrated into her system is made in a nontraditional

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manner. These inal products are often designated as replacement applications and demonstrate how disruptive technologies can be commercialized. Successful disruptive technologies over time become “high tech” sustaining technologies. This can be seen in nanotechnology-based products such as feroluidic bearings for use in hard drives for computers. These were irst produced by a company in the early 1980s57 and are now in use in all personal computers in the world. One result of the MANCEF Nanotechnology Roadmap process was that no matter how hard we tried to deine what nanotechnologies were, the roadmapping task remains dificult because at one level nanotechnology could be considered as nanoscale science. It appears to those involved in the effort that there was more meaningful commercial discussion at the next level down. There is a better understanding today for what is occurring in the domain of nanomaterials versus materials, nanoelectronics versus electronics, and the like. Further review of the patent literature suggested dominant patents in terms of citations and numbers in the areas of nanomaterials, nanoelectronics, and nanobiology. The MANCEF Roadmapping team focused its efforts in the development of roadmaps around disruptive and evolutionary technology-based products developed integrating nanotechnology in materials, electronics, and biomedicine (see Figure 3.4). The nanoelectronics/nanocomputing industry today is dominated mainly by large semiconductor irms and their suppliers providing integrated systems. This segment has focused on active bulk nanotechnology advances, which include some companies focusing on atomically precise manufacturing for use in positioning and other subsystems. Nanotechnology application examples include Zyvex partnering with chip equipment maker FEI to bring atomically precise capabilities to their systems and Genus with its atomic layer deposition. Further, in areas such as ion implanting, doping, low and high K dielectric, especially in reference to semiconductor development, traditional suppliers that extend these technologies are more likely to be the dominant suppliers. Materials and equipment suppliers that can utilize nanotechnologies to improve their value proposition to the semiconductor marketplace have annual market sales in the tens of billions of dollars. The MANCEF group examined atomically precise manufacturing as developed by Zyvex. The movement towards atomically precise manufacture, which forms the basis for the utilization of nanotechnology, is being addressed in two fundamentally differing pathways — the top-down and bottom-up nanosciences. The distinctly separate approaches are moving towards the same ultimate outcome of atomically precise manufacturing. In the top-down realm, research is performed with an eye on reducing the scale and feature size of existing processes. For instance, in optical lithography approaches, used in IC foundries, feature size of less than 100 nm is being implemented to reduce the power consumption and increase the transistor density per square inch of silicon. In this realm, we see the use of MEMS and eventually NEMS assemblers building smaller and smaller systems. In the bottom-up realm, we see the work of naturally occurring atomic and biological forces being utilized as the primary manufacturing tool set. The use of ionic charges, atomic lattice holes, catalytic reactions, atomic mobility, and biological selectivity are some of the numerous forces put to work to fabricate complex atomic structures. It is in this realm that the carbon nanotube and buckyball conigurations of carbon reside (as shown in the

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patent discussion above) to be contributing to numerous products. In the engineering approaches, the development of atomically thin monolayer self-assembly units enables unique selectivity for sensing applications. The future of self-assembly is the selective directed location of the self-assembly sites. As researchers more effectively control self-assembly, they will be enabling a new form of imaging to the design at the atomic layer, thereby competing directly with lithographic processes. Whether top-down or bottom-up techniques are used, nanoscience and nanotechnology will be the irst to achieve atomically precise manufacturing. It is clear that in the irst decade of the twenty-irst century, we are embarking on engineering at a level never before conceived. Cost effective fabrication of nanoscale electronic devices could be achieved by combining bottom-up fabrication of silicon nanowires on silicon substrates with topdown formation of connecting electrodes by optical lithography. Limitations of conventional lithography and etching to deine nanosize structures are driving up costs of the top-down approach. Bottom-up techniques are not hindered by these problems but suffer from low productivity and nonuniformity. A combination of selected bottom-up and top-down methods can bring forth complicated devices and systems at a fraction of the cost presently accrued due to adoption of only top-down approaches.

CONCLUSIONS We have provided some new thinking on nanotechnology and roadmapping. We further deined a roadmapping process based on the differing nature of technologies, covering disruptive technology. This process is developing well, but there is still further work to be done. What has been learned will be incorporated in the next set of nanotechnology roadmaps. All roadmaps seek to link technology to a single market or product or a market grouping. Due to the nature of nanotechnology, the exact character of any technology product paradigm is dificult to predict in advance. MANCEF has added a signiicant step to roadmapping disruptive technologies that embraces market drivers rather than markets or products.

REFERENCES 1. Linton, J.D. and Walsh, S.T., Roadmapping: from sustaining to disruptive technologies, Technological Forecasting and Social Change, Elsevier Science, 71, 1–3, 2004. 2. Walsh, S., Giasolli, R. and Elders, J., Eds., The second edition of the International Micro – Nano Roadmap, MANCEF, 674, 2004. 3. Walsh, S., Boylan et al., The semiconductor silicon industry roadmap: epochs driven by the dynamics between disruptive technologies and core competencies, Technological Forecasting and Social Change, 72, 213–236, 2005. 4. D’Aveni, R.A., Hypercompetition: managing the dynamics of strategic maneuvering, The Free Press, New York, 1994. 5. Linton, J.D. and Walsh, S., Acceleration and extension of opportunity recognition for nanotechnologies and other emerging technologies, (to be published), International Small Business Journal.

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6. Feynman, Richard P., There is plenty of room at the bottom, at the annual meeting of the American Physical Society at the California Institute of Technology (Caltech), December 29th, 1959, and irst published in the issue of Caltech’s Engineering and Science, February 1960. 7. Taniguchi, N., One basic concept on nanotechnology, Proc. International Conference Production Engineering, Tokyo, Part II, Japan Society of Precision Engineering, Tokyo, 1974. 8. NSET, the working website on nanotechnology, http://www.nano.gov. 9. Galvin, R., Roadmapping — a practitioner’s update, Technological Forecasting and Social Change, 71, 101–103, 2004. 10. Mansield, Edwin. The Economics of Technological Change, W.W. Norton, New York, 1968. 11. Branscomb, L.W. and Keller, J.H, Eds., Towards a research and innovation policy, in Investing in Innovation: Creating a Research and Innovation Policy that Works, MIT Press, 1998. 12. Rinne, M., Technology roadmaps: infrastructure for innovation, Technological Forecasting and Social Change, 71, 67–80, 2004. 13. Kappel, T.A., Perspectives on roadmaps: how organizations talk about the future, Journal of Product Innovation Management, 18, 39–50, 2001. 14. Probert, D. and Radnor, M., Technology roadmapping, Research Technology Management, 46, 27–30, 2003. 15. Kostoff, R.N. and Schaller, R.R., Science and Technology Roadmaps, IEEE Transactions on Engineering Management, 48, 132–143, 2001. 16. Sandia National Laboratories, Fundamentals of technology roadmapping, available at http://www.sandia.gov/. 17. Friar, J. and Horwitch, M., The emergence of technology strategy — a new dimension of strategic management, Technology in Society, 7, 143–178, 1985. 18. Prahalad, C.K. and Hamel, G., The core competence of the corporation, Harvard Business Review, 79–91, 1990. 19. Linton, J. and Walsh, S., The measurement of technical competencies, Journal of High Technology Management Research, 13, 1–24, 2002. 20. Ansoff, H.I. and Stewart, J.M., Strategies for a technology based business, Harvard Business Review, 1967. 21. Schumpeter, J.A., The Theory of Economic Development, Harvard University Press., Cambridge, 1934. 22. Kondratief, N.D., Long waves in economic life, Lloyds Bank Review, July 1978. 23. Bower, J.L. and Christensen, Clayton M., Disruptive technologies: catching the wave, Harvard Business Review, 73, 43–53, 1995. 24. Walsh, S. and Elders, J., Introduction, International Roadmap on MEMS, Microsystems, Micromachining and Top-Down Nanotechnology, p.26–32, 2002, Ch. 1, published by MANCEF, Naples, Florida. 25. Bray, O.H. and Garcia, M.L., Technology roadmapping: the integration of strategic and technology planning for competitiveness, Proceedings of the Portland International Conference on Management of Engineering and Technology (PICMET), Portland OR, 27–31 July 1997. 26. Martino, J.P., Technological Forecasting for Decision Making, American Elsevier Publishing Company, New York, 1972. 27. Porter, A.L. et al., Forecasting of Management and Technology, John Wiley and Sons, New York, 1991. 28. International Technology Roadmap for Semiconductors (ITRS), 2003. 29. Linstone, H.A. and Turoff, M., The Delphi Method: Techniques and Applications, Addison-Wesley, Reading, MA, 1975.

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30. Kostoff, R.N., Eberhart, H.J. and Toothman, D.R., Database Tomography for Information Retrieval, Journal of Information Science, 2, 4, 1997. 31. Radnor, M., Roadmapping: How Does It Work in Practice? Proceedings of the National Center for Manufacturing Sciences Conference and Exposition, 14 1998. 32. Kostoff, R.N. et al., Citation mining: integrating text mining and bibliometrics for research user proiling, JASIS, 52, 13, 2001. 33. Linstone, H.A., Complexity science: implications for forecasting, Technological Forecasting and Social Change, 62, 79–90, 1999. 34. Linton, J.D. and Walsh, S.T., Roadmapping: from sustaining to disruptive technologies, Technological Forecasting and Social Change, Elsevier Science, 71, 1–3 (3), 2004. 35. Kassicieh, S. and Walsh, S., Models of disruptive technology commercialization, International Journal of Technology Transfer and Commercialisation, 3, 187–198, 2004. 36. Linton, J.D. and Walsh, S., Integrating innovation and learning curve theory: an enabler for moving nanotechnologies and other emerging process technologies into production, R&D Management, 34, 513–522, 2004. 37. Walsh, S. and Elders, J., Eds., International Roadmap on MEMS, Microsystems, Micromachining and Top Down Nanotechnology, MANCEF, 614, Naples, Florida, 2003. 38. Walsh, S. and Kirchhoff, B., Entrepreneurs’ opportunities in technology-based markets, in Technological Entrepreneurship, Phan, Phil, Ed., Information Age Publishing, Greenwich, 17 – 31, 2003. 39. Phaal, R., Farrukh, C.J.P. and Probert, D.R., Technology roadmapping—a planning framework for evolution and revolution., Technological Forecasting and Social Change, 71, 5–26, 2004. 40. Petrick, I.J. and Echols, A.E., Technology roadmapping in review: a tool for making sustainable new product development decisions, Technological Forecasting and Social Change, 71, 81–100, 2004. 41. Baker, D. and Smith, D.J.H., Technology foresight using roadmaps, Long Range Planning 28, 21–28, 1995. 42. Linton, J. and Walsh, S., From bench to business, Nature of Materials, 2, 287–289, 2003. 43. Walsh, S. et al., The search for the unit cell for micro and nano technology through nanopatterning, Journal of Microlithography, Microfabrication, and Microsystems, 2006. 44. Yole, J.C., The state of the micro nano industry, Spring FIF Meeting Proceedings, 2004. 45. Walsh, S. and Elders, J., International Roadmap on MEMS, Microsystems, Micromachining and Top Down Nanotechnology, MANCEF, 614, Naples, Florida, 2003. 46. Linton, J.D. and Walsh, S., Integrating innovation and learning curve theory: an enabler for moving nanotechnologies and other emerging process technologies into production, R&D Management, 34, 513–522, 2004. 47. Walsh, S. et al., Commercialization of microsystems, International Roadmap on MEMS, Microsystems, Micromachining and Top Down Nanotechnology, MANCEF, 33–68, Naples, Florida, 2003. 48. Walsh, S., Giasolli, R. and Elders, J. The second edition of the International Micro – Nano Roadmap, 674, MANCEF, Naples, Florida, 2004. 49. Walsh, S. and Elders, J., International Roadmap on MEMS, Microsystems, Micromachining and Top Down Nanotechnology, MANCEF, 614, Naples, Florida, 2002. 50. Walsh, S. et al., RF MEMS, International Micro – Nano Roadmap (2nd Ed.), MANCEF, 40–152, Ch. 2., Naples, Florida, 2004. 51. UK MNT Programme, http://mnt.globalwatchonline.com.

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52. Tolfree, D.W.L., Commercialisation of nanotechnology in the U.K., 10th International Commercialisation of Micro and Nanosystems Conference, Baden-Baden, August 21– 25, 2005. 53. Leydesdorff, L. and Etzkowitz, H., Emergence of a triple helix of university-industrygovernment relations, Science and Public Policy 23, 279–86, 1996. 54. Dr Alan Smith, U.K. Co-Director, U.K. MNT Network, 2006. 55. Elders, J. and Walsh, S. Ch. 1 Introduction, International Roadmap on MEMS, Microsystems, Micromachining and Top Down Nanotechnology, MANCEF, 26–32,Naples, Florida, 2003. 55. Walsh, S., Kirchhoff, B.,and Newbert, S., Differentiating market strategies for disruptive technologies, IEEE Ttransactions on Engineering Management, 49, 341–351, 2002. 56. Myers, D. et al., A practitioners view: evolutionary stages of disruptive technologies, 49, 322–329, 2002. 57. Walsh, S. and Kirchhoff, B., Entrepreneurs’ opportunities in technology-based markets, Research in Entrepreneurship and Management, 2, 2002. 58. Boylan, R. and Walsh, S., Ferroluidics A, submitted to the On-line MOT Case Journal., 2000.

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Technology Transfer of Nanotechnology Products from U. S. Universities Mark J. Jackson, G. M. Robinson, and M. D. Whitfield

CONTENTS Introduction.............................................................................................................. 71 Investments from Venture Capitalists .......................................................... 72 Start-Up Companies in Nanotechnology ...................................................... 73 Role of Government in Nanotechnology Commercialization ................................. 73 Role of Academic Research in Commercializing Nanotechnology Products ......... 74 Technology Transfer for Nanotechnology Products ................................................ 76 Intellectual Property — Impact and Ownership ..................................................... 76 Patents ........................................................................................................... 77 Trade Secrets ................................................................................................ 77 Copyrights .................................................................................................... 77 Role of the Entrepreneur, Major Corporations, and National Laboratories in Commercialization ........................................................................................ 78 Concluding Remarks................................................................................................ 78 Internet resources ..................................................................................................... 79

INTRODUCTION Technology transfer from universities is largely dependent on support from government agencies, private investors, and corporations. Investment decisions are a major force in how nanotechnology develops, and this is dependent upon the support from government, academia, private investors, and corporations. Nanoscale science and engineering activities are growing in the U.S. The National Nanotechnology Initiative (NNI) is a long-term research and development (R&D) program that began in 2001 and coordinates 25 departments and independent agencies, including the 71 © 2008 by Taylor & Francis Group, LLC

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National Science Foundation, the Department of Defense, the Department of Energy, the National Institutes of Health, the National Institute of Standards and Technology, and the National Aeronautical and Space Administration. The total R&D investment in 2001–2005 was over $4 billion, increasing from the annual budget of $270 million in 2000 to $1.2 billion including congressionally directed projects in 2005. An important outcome of the NNI is the formation of an interdisciplinary nanotechnology community with about 50,000 contributors. An R&D infrastructure with more than 60 large centers, networks, and user facilities has been established since 2000. This expanding industry consists of more than 1500 companies with nanotechnology products with a value exceeding $40 billion at an annual rate of growth at about 25%. With such growth and complexity, participation of a coalition of academic organizations, industry, businesses, civil organizations, and government in nanotechnology development becomes essential. The role of government continues in basic research, but its emphasis is changing, while the private sector becomes increasingly dominant in funding nanotechnology applications. The promise of nanotechnology will not be realized by simply supporting research. A speciic governing approach is necessary for emerging nanotechnologies. This chapter explains the roles of each player and their impact on the technology transfer process.

INVESTMENTS FROM VENTURE CAPITALISTS Investment in nanotechnology can gain much from venture capitalists (VCs). Venture capital is money that is invested in unproven companies with the potential to grow into multibillion dollar industries of the future. Venture capitalists are sources of inancial and business resources that seek to control part of the business. VCs expect to capture 50 to 70% of return on their investments in a four-to-seven-year time period, which is the time it takes to get the start-up company to reach liquidity in terms of acquisition, merger, or initial public offering. Nanotechnology start-ups are not particularly attractive to VCs at the present time because the commercialization horizon is far too long. Start-up companies are particularly attractive to VCs because: • The company has a particularly innovative product that is disruptive and has a sustainable business advantage. • The company has a large and growing market that is worth $1 billion and grows at a rate of 50 to 70% per year. • The company has products with a very short time-to-market horizon (less than two years). • The company has a successful management structure with experienced executives. • The company has an established customer base with strategic partners that will provide a strong revenue stream. Nanotechnology is not a single market but a series of enabling technologies that provide groundbreaking solutions to high-value problems in every industry. Product innovations are characterized by the application of nanoscale materials or with process technology conducted at the nanoscale that changes the functionality of the product.

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START-UP COMPANIES IN NANOTECHNOLOGY Start-up companies in nanotechnology should be measured by the same metrics as other start-up companies in terms of income generating business dynamics and costcontrolling business issues such as sales strategy, management structure, allocation of capital, marketing, business models, product introduction, etc. The key difference of nanotechnology start-ups is that they possess a technology platform that is composed of intellectual property generated by a team of scientists who are interdisciplinary in nature with no business strategy, focus, or management structure. The team is composed of highly respected academic scientists who can lever sources of funding through research contracts. In their initial stages, these companies team up with established companies to help them validate products, provide a channel for marketing and selling products, and provide expertise in manufacturing. At this stage, nanotechnology start-ups are characterized in the following primary categories: materials; biotechnology; software; electronics; instrumentation; and photonics. The greatest growth is in the area of materials, even though most of the funding has gone to developing nanophotonics’ and nanoelectronics’ products.

ROLE OF GOVERNMENT IN NANOTECHNOLOGY COMMERCIALIZATION The role of government in nanotechnology is to support research and development relevant to national priorities, to support the development of a skilled workforce, and to support infrastructure such as government laboratories and research centers to advance nanotechnology. In 2000, the U.S. government announced the National Nanotechnology Initiative, signed into law in 2003 by President George W. Bush, that creates a mission enabling the government to establish goals, priorities, and metrics for the evaluation of federal spending on nanotechnology. The law also provides for investment in nanotechnology through strategic programs and interagency cooperation between government departments. The government also supports the development of workforce education by allowing interested parties to promote the development of curricula via funds channeled through the National Science Foundation (NSF). NSF funds in workforce development are focused on universities to establish the fundamental education in nanoscience and technology and on community colleges that provide training in nanotechnology activities such as manufacturing process operations, materials production, etc. Articulation agreements also provide pathways so that community college graduates can proceed to universities involved in nanoscience and technology in the form of two-plus-two degree programs. Government also provides funds to allow the national laboratories to conduct fundamental research in nanotechnology. The provision of instrumentation is essential, especially to major corporations and small-to-medium enterprises that normally cannot afford to purchase such instrumentation. In the U.S., job creation is down to major corporations and especially SMEs (Small and Medium Size Enterprises), and it is considered essential that job creators gain unfettered access to these facilities. Nanotechnology education and outreach has impacted more than 10,000 graduate students and teachers since 2005. Changes are in preparation for

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education, by the introduction of nanoscience at an early age. Nanotechnology education has been expanded systematically to earlier education, including the NSF’s Nanotechnology Undergraduate Education programme (NVE) that has awarded more than 80 awards since 2002, and high schools (since 2003), as well as informal education, science museums, and public dissemination. All major science and engineering colleges in the U.S. have introduced courses related to nanoscale science and engineering in the last ive years. NSF has established recently three other networks with national outreach addressing education and societal dimensions: (1) The Nanoscale Center for Learning and Teaching aims to reach 1 million students in all 50 states in the next ive years; (2) The Nanoscale Informal Science Education network will develop, among others, about 100 nanoscale science and technology museum sites in the next ive years; and (3) The Network on Nanotechnology in Society was established in September 2005 with four nodes at Arizona State University, University of California at Santa Barbara, University of South Carolina, and Harvard University. The Network will address both short-term and longterm societal implications of nanotechnology, as well as public engagement. All 15 Nanoscale Science and Engineering Centers sponsored by the NSF have strong education and outreach activities.

ROLE OF ACADEMIC RESEARCH IN COMMERCIALIZING NANOTECHNOLOGY PRODUCTS Under the National Nanotechnology Initiative (NNI), the National Science Foundation plays the largest role in funding nanotechnology research in the U.S. Additional funding is provided by the Department of Defense, Department of Energy, National Institute of Health, NASA, Environmental Protection Agency, and the Department of Agriculture. The NSF has created a tier of funding where one-year exploratory research is funded in addition to ive-to-ten-year center awards. Each tier creates a different level of maturity of nanotechnological development that is crossdisciplinary. Nanoscale Science and Engineering Centers (NSEC) are awarded for ive years initially and are used as focal points for developing infrastructure and providing a basis for further funding from other sources. NNI has been recognized for creating an interdisciplinary nanotechnology community in the U.S. Two signiicant and enduring results have emerged from this investment: the creation of a nanoscale science and engineering community, and the fostering of a strong culture of interdisciplinary research. The following centers have been created under the auspices of the NNI: • Columbia University — Center for Electron Transport in Molecular Nanostructures • Cornell University — Center for Nanoscale Systems; Rensselaer Polytechnic Institute — Center for Directed Assembly of Nanostructures • Harvard University — Science for Nanoscale Systems and their Device Applications • Northwestern University — Institute for Nanotechnology

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• Rice University — Center for Biological and Environmental Nanotechnology • University of California, Los Angeles — Center for Scalable and Integrated Nanomanufacturing • University of Illinois at Urbana-Champaign — Center for Nanoscale Chemical, Electrical, Mechanical, and Manufacturing Systems • University of California at Berkeley — Center for Integrated Nanomechanical Systems • Northeastern University — Center for High Rate Nanomanufacturing • Ohio State University — Center for Affordable Nanoengineering • University of Pennsylvania — Center for Molecular Function at the Nanoscale • Stanford University — Center for Probing the Nanoscale • University of Wisconsin — Center for Templated Synthesis and Assembly at the Nanoscale • Arizona State University, University of California, Santa Barbara, University of Southern California, Harvard University — Nanotechnology in Society Network Centers from the Nanoscale Science and Engineering Education Solicitation • Northwestern University — Nanotechnology Center for Learning and Teaching. NSF Networks and Centers that complement the NSECs include Cornell University and 12 other nodes creating the National Nanotechnology Infrastructure Network • Purdue University and 6 other nodes creating the Network for Computational Nanotechnology; Oklahoma University, Oklahoma State University and the Oklahoma Nano Net • Cornell University STC: The Nanobiotechnology Center. With about 25% of global government investments in nanotechnology, the U.S. accounts for about 50% of highly cited papers, ~ 60% of USPTO patents, and about 70% of start-up companies in nanotechnology worldwide. Industry investment in the U.S. has exceeded the NNI in R&D, and almost all major companies in the traditional and emerging ields have nanotechnology groups at least to survey the competition. Small Times magazine reported 1455 U.S. nanotechnology companies in March 2005, with roughly half being small businesses, and 23,000 new jobs were created in small start-up nano companies. The NNI SBIR investment was about $80 million in 2005. More than 200 small businesses, with a total budget of approximately $60 million, have received support from NSF alone since 2001. Many of these are among the 600 nanotechnology companies formed in the U.S. since 2001. All Fortune 500 companies in emerging materials, electronics, and pharmaceutical markets have had nanotechnology-related activities since 2003. In 2000, only a handful of companies had corporate interest in nanotechnology (fewer than 1% of the companies). A survey performed by the National Center for Manufacturing Sciences at the end of 2005 showed that 18% of surveyed companies are already marketing nanoproducts. More

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than 80% of the companies are expected to have nanoproducts by 2010 and 98% in the longer term. Therefore, the role of academic research will play a signiicant part in this growth.

TECHNOLOGY TRANSFER FOR NANOTECHNOLOGY PRODUCTS Technology transfer is conducted at research-intensive universities for a number of reasons. The irst is that there is a federal mandate that universities allow discoveries to be available for commercialization. This is an important means of attracting talented faculty that would not otherwise be attracted to a teaching environment into positions within a university. The other reasons include providing equity to faculty members and providing goodwill that will encourage faculty, alumni, to become donors to the university and to become engaged with the process of commercialization at the university. Technology is usually transferred when the professor responsible for the invention allows the university to ile a provisional patent, thereby allowing the university to provide a license to the professor to commercialize the technology. The commercialization is dependent upon the knowledge created by the professor, and this in turn allows the professor to be rewarded with a 25 to 50% share of the royalties generated by the patent, which is very generous compared to the private sector. The ofice of technology transfer at the university is a key gateway to commercializing such a patent. However, the ofice of technology transfer has responsibilities such as protecting the professor’s intellectual property, inding a market for the invention, and formulating contracts between the professor, the university, and the private investor. Thus, the success of commercializing the invention depends on the abilities of both the technology transfer ofice and the professor. There are cultural issues that need to be addressed at universities that are keen on transferring technology to the market. The ability to share the knowledge with the public must be restricted, and this is usually at odds with the “publish or perish” attitude at most academic institutions. However, the type of business relationship will dictate what can and cannot be revealed. In various forms, the relationship can be based on providing licenses to commercialize, faculty consultancy, strategic partnerships with university spin-off companies, special funding schemes for faculty research, and research partnerships with major corporations.

INTELLECTUAL PROPERTY — IMPACT AND OWNERSHIP During the growth of nanotechnology during the 1990s, the number of papers containing the word “nano” increased fourfold according to the ISI Science Citation Index. By 2004 it had risen to more than 20,000 articles. The U.S. Patent Ofice has issued more than 15,000 patents containing the word “nano” up to the year 2006. Many companies are now placing a greater emphasis on intellectual property (IP). Strong IP portfolios decide whether a nanotechnology company can survive or not.

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PATENTS Utility patents offer protection for inventions that can be classiied as a novel process or method, or a piece of apparatus that is useful and nontrivial. The exchange of the idea for protection seems obvious but may also alert the world of the idea. However, under U.S. law, the patent is protected for 20 years and prevents others from making and selling the invention contained within the patent. Once granted, it is essential that the patent is protected so that maximum returns can be made from the patent. A strong patent with a solid portfolio can be the foundation of creating wealth from a nanotechnology patent. Protecting nanotechnology-based patents may be dificult because not all of the knowledge is known to protect it from being exploited by other nanotechnology players. Because nanotechnology is interdisciplinary, it is more dificult to create a novel patent because it may be on a different scale. Therefore, only partial protection can be guaranteed. Therefore, the decision to protect the idea using patents must be considered very carefully.

TRADE SECRETS A nanotechnology company can also use trade secrets to protect its intellectual property through the use of trademarks. As of 2005, approximately 1800 trademarks containing the word “nano” have been registered and are pending. Trade secrets can be indeinite unless publicly disclosed. They can be revealed if the product is reverse engineered. However, because of the scale involved, it may be dificult to reverse engineer a nanotechnology product. Hence, trade secrets may work if employees maintain conidentiality even when they leave the employ of a particular company. The employment of nondisclosure agreements may also be useful, especially when employees move from their original employment with the company.

COPYRIGHTS Copyrights protect the idea, which is not the case for patents. Protection under copyright protects the idea for up to 100 years for work that is made for hire. This is the case for nanotechnology industries. The case for patenting appears to be self-defeating compared to trade secrets and copyright protection. However, iling a provisional patent as opposed to a utility patent does indeed show to potential investors that the patent is pending and also who the inventor is. This last statement is interesting in that in the U.S. the patent system is based on a “irst to invent” standard rather than “irst to ile” standard. This is unique to the U.S. and does not exist in other countries. The process of iling a provisional patent is simple, inexpensive, and announces the origin of the invention. A provisional iling also preserves the right to foreign ilings. The restrictions on innovation may stem from patent ilings. This may be due to the narrow scope of the inventor’s claims in the patent or to the way that the research was initially funded. If the patent is borne out of government funding, then the government can issue a royalty-free license to the inventor of the patent. This provision was made under the 1980 Bayh-Dole Act and gives universities and small business entities freedom to commercialize the invention at no cost. However,

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innovations that stem from the invention are still governed by the original license, which may cause problems if the business is sold to a third party after the patent and license has been issued. The issue of developing an intellectual property policy and its impact can take many different forms depending on the short-, medium-, and long-term goals of a nanotechnology business. However, combinations of using patents, trade secrets, copyrights, and trademarks can ensure that businesses create revenue streams over differing time scales.

ROLE OF THE ENTREPRENEUR, MAJOR CORPORATIONS, AND NATIONAL LABORATORIES IN COMMERCIALIZATION It should be noted that entrepreneurs are individuals who commercialize products with the aim of making money. This does not appear to match that of the requirements of a professor or research team employed in a university or a national laboratory. Entrepreneurial activity is characterized by the building of a team dedicated to commercializing nanotechnology products, and this is discussed elsewhere in this book. The major corporations play a very important role in commercializing nanotechnology. They are particularly interested in using nanotechnology to enhance and functionalize existing products at all length scales. The corporations are heavily involved in developing their own technology but do maintain an active interest in how government is funding nanotechnology programs and do look at the spin-offs that emerge from nanotechnology-funded programs. The national laboratories are not charged with commercializing nanotechnology products, but they do provide access to very expensive equipment that can be used to develop nanotechnology products. This is particularly so with large equipment such as synchrotron radiation sources that are used in LiGA applications.

CONCLUDING REMARKS The National Nanotechnology Initiative has done much to fund the research and development needed in U.S. universities to commercialize nanotechnology products. However, the commercialization of nanotechnologies for U.S. universities is dependent upon research teams and their relationship with ofices of technology transfer at their home institutions. Although funding is well supported by many U.S. government departments, commercialization is left in the hands of the business relationships made between the research group, ofices of technology transfer at universities, and the private sector. Further strengthening of the commercialization route may be necessary in the future if nanotechnology products are to become more widespread in our society. Governments need to address this problem owing to the amount of resources that need to be provided to fund research and developments in nanotechnology.

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INTERNET RESOURCES http://www.osha.gov http://www.cdc.gov/niosh/ http://www.epa.gov http://www.niehs.nih.gov http://www.fda.gov http://www.nano.gov/NNI_Strategic_Plan_2004.pdf http://www.nnin.org http://ncn.purdue.edu/ http://www.cpsc.gov http://www.nanomanufacturing.eu

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Commercialization Strategies for Public Research Organizations: How to Move from Public Research into the Market by a Leading Dutch Institute Kees Eijkel and Arend Zomer

CONTENTS Introduction.............................................................................................................. 82 Mesa+ Institute for Nanotechnology Within the University of Twente ................... 82 Setting the Stage: Micro-Nanotechnology, Commercialization, and Cooperation . 83 Dynamics in the Field of Micro-Nanotechnology ........................................84 Cooperation in a Triple Helix of Academia, Industry, and Government ..... 86 The Role of Public Research Organizations ................................................. 89 Entrepreneurs and Venture Capitalists .........................................................90 The Role of the Regional Government ......................................................... 91 Creating the Right Structures ..................................................................................94 Accommodating Your Organization ............................................................94 Creating Facilities with a Common/Shared Interest ....................................97 Networks .......................................................................................................99 Inspiring Culture.................................................................................................... 100 Accelerating the Commercialization Process ........................................................ 102 Conclusions ............................................................................................................ 103 References ............................................................................................................. 103

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INTRODUCTION In this chapter, we focus on the issues associated with forming and maintaining a collaborative partnership between three main parties, academia, industry, and government, in the building of a suitable commercialization infrastructure for micronanotechnology. Our experiences are based on the work of the MESA+ Institute, a research and development center in the Netherlands. First, the work of the institute, its history, and the importance of its location in the region will be described. We introduce the Triple Helix1 model as our concept to describe the respective roles of the partners, their interactions, and the contribution that each makes. This is central to the successful implementation of a commercialization strategy. Subsequently, practical recommendations and experiences from MESA+ will be discussed.

MESA+ INSTITUTE FOR NANOTECHNOLOGY WITHIN THE UNIVERSITY OF TWENTE MESA+ was founded in 1999 from a merger between MESA and CMO (the Center for Materials Research). CMO was the materials research consortium of the former faculties of Applied Physics and Chemical Technology that existed since 1985. In later years, CMO’s focus expanded towards the development of devices and systems. This was a domain in which MESA (Microelectronics, Sensors, & Actuators) was also active. MESA was established in 1990 as the cooperation between different research groups at the university in the areas of micro electronics, materials engineering, sensors, and actuators. In addition to that, MESA’s research agenda also became more active in the materials research ield. Thus, combining the two centers into MESA+ was a logical step for both CMO and MESA. Participating research groups in MESA+ come from several different disciplines: chemistry, electrical engineering, applied physics, mathematics, and biophysics. In 2006, MESA+ employed approximately 450 people. About 300 of these are scientists, which include more than 200 Ph.D.s and postdocs. The estimated turnover of the Institute in 2006 will be almost 45 million euros, of which almost 57% was acquired from external sources. These external sources are research grants from national research councils, European Union research programs, and industry. MESA+ also receives industry inancing directly for contract research or facility sharing. Commercialization is a key element in the development strategy of MESA+. It helps to attract industrial funding and encourages the spinning-out of companies that could become partners in future research activities. The socioeconomic environment in which the University of Twente and MESA+ operates is an important driver for its entrepreneurial activities. The University of Twente is a relatively young university, founded in 1961 in the eastern part of the Netherlands, in a region confronted with unemployment and economic restructuring due to the decline of a dominant textile industry. It is therefore not surprising that the University of Twente sees itself as an important player, one that can provide knowledge and skills for companies located in the region. Reacting to the economic downturn and threats of severe budget cuts in the 1980s, the university established an entrepreneurial culture and strategy within its departments,2 a culture

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that would not just provide students with an academic education but would also be able to attract a signiicant amount of high-tech irms to the region. In line with this, the University of Twente implemented a number of technology transfer schemes to support the commercial exploitation of knowledge acquired through industry-related research projects. Examples of such schemes are the Temporary Entrepreneurial Positions Programme (TOP), a Business and Science Park, later developed into a broader Knowledge Park, and the “Holding Technopolis Twente,” a limited company that acts as a holding company for university participations. Recently the university structured all its internal commercialization processes in the “Innovation Lab Twente.” The university is very successful with its TOP program. This scheme offers an interest-free loan, ofice space, advice, training, marketing, and inancing strategies to start-ups that are planning to use knowledge produced at the University of Twente. These and other schemes and institutional arrangements have made the University of Twente “a central partner of the provincial government and regional development agency.”3 The University of Twente and MESA+ play an important role in creating a regional cluster of companies, academic research communities, and a well-educated workforce. Since 1980, the university has spun out some 600 new irms, leading to approximately 6000 direct jobs. During the last 15 years, MESA+ spun out some 35 technology-based companies. The new jobs created by these companies generate an improved economic climate for the region. The activities of MESA+ and the University of Twente described above must also be seen as part of the activities of other players in the region, i.e., the regional, provincial, and municipal governments whose primary objective is regional economic development. They hope to accomplish this, among other things, by supporting organizations and networks dedicated to commercialization. Two examples of regional network initiatives that have been developed in the region are: TKT (Knowledge Kring Twente), a network of high-tech companies that exchanges information for the improvement of high tech businesses in the region. TNKO (Twente Network for Knowledge-Intensive Entrepreneurship) is a network for knowledge-intensive entrepreneurs in their starting phase. A list of such initiatives and other organizations is given by Mensink et al.4 Recently, Kennispark, another initiative, was founded to speciically improve the economic cluster around the campus of the University of Twente. Partners that cooperate in Kennispark range from the TKT network to the regional development agency, i.e., Oost N.V. as well as the college in Enschede (Saxion Hogeschool) and the business accelerators of the University of Twente. The Innovation Lab of the university is an integral part of Kennispark. Kennispark is cooperating with other partners in business, higher education, and government.

SETTING THE STAGE: MICRO-NANOTECHNOLOGY, COMMERCIALIZATION, AND COOPERATION The last paragraph has shown that the University of Twente and the MESA+ research institute reside within a larger regional ecology of companies and governmental organizations. It is within this larger ecology or landscape where all the parties have

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to collaborate with each other in order to succeed. In this section, we will explore the nature of commercialization in the ield of micro-nanotechnology.

DYNAMICS IN THE FIELD OF MICRO-NANOTECHNOLOGY An important and much discussed topic is how to be successful in commercializing micro-nanotechnology following the path described by Walsh or Abernathy & Clark.5-6 We shall focus on the interorganizational aspects of the commercialization process. First, we will address the different markets or industrial linkages in which the new technologies need to position themselves. New technologies sometimes provide an answer to current innovation needs in established industry chains. For example, the introduction of new, stronger lightweight materials will provide innovation steps that will make new and improved products. Such innovations are at the technological core of the product or its production processes. Product platforms within an established industrial infrastructure are mostly very well developed in all aspects of production, distribution, use, marketing, recycling, etc., and with that, one identiies a well-established community of suppliers, systems integrators, etc. This is known as the virtuous innovation cycle. On the other side of the spectrum, we ind products and related technologies that challenge the existing industrial paradigm, either through the fact that such products and technologies could become competitors of existing solutions (“the transistor versus the vacuum tube” in the early 1960s) or create completely new ields of applications currently not occupied (Internet in the 1980s). Such innovations are not rapidly taken up by the industrial infrastructure and the market. Existing industry is either not lexible enough to absorb these innovations or would gatekeep the developments to protect its position. This is the area of the disruptive innovation cycle. On the one side of the dichotomy, we see new technologies that are willfully incorporated into existing technological regimes because they either pose no threat to the current regime or can be beneicial for the existing regime. On the other side of the dichotomy, we ind the new technologies that have the potential to challenge the existing regime. So, while the irst type will not experience much resistance because of its beneicial or nonthreatening characteristics for the current regime, the other type will ind resistance in the introduction of new technologies because it they existing practices and may require long development paths. In a situation where the industrial environment is well developed (virtuous cycle), a strategy is prevalent in which there are strong links with the industry leaders and most important niche players. Between product, market specialists, and enabling technology specialists, teams work on roadmaps to deine the roadblocks for innovation or to open up new market opportunities for the technology-product platform. clearing research and development it is clear who to talk to and what to protect. Industry is more likely to identify relevant intellectual property (IP) issues that require protection before technology transfer and licensing can proceed. Companies have established supply networks so are able to proceed to production. People experienced in technology transfer issues need to be available in universities. It is interesting to note that most of the successful central technology transfer ofices in universities and institutes tend to focus on the pharmaceutics and medical

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sectors. University technology transfer ofices therefore employ people with a range of experience and expertise in areas such as customer relations, IP, legal issues, etc. In the more chaotic environment of potentially disruptive technologies, with their uncertain development paths, a completely different approach to technology transfer is required. First, there is no predictable development path. Roadmaps tend to discuss potential use of a technology rather than deine technological steps to product evolution. Business development in new or young enterprises therefore is a combination of business sense, strong networks, and a profound knowledge of the technology and its development. Technologists have to be aware of the potential impact of their work; they have to understand the product environments and be aware of the fact that they provide just a partial solution to someone’s problem. If a company is a supplier of a potentially disruptive technology, then it will probably not be successful in building relations with other companies in the same market sector. Leaders would not be interested in a development that has a potential of challenging the current market paradigm. They would tend to use such a company as a gatekeeper rather than a supplier. Companies that are interested in commercialization tend to be those looking for unique opportunities for growth or sustainability. Disruptive technologies inluence the approach made toward technology transfer: ideas have to come from the interaction of people focused on applications and markets with the people focused on technology development. Because there are no clear roadmaps, ideas and knowledge exchange is not structured. Therefore, it is essential to create as much interaction as possible between the product and market strategists and the technologists. Opportunities, solutions, and new fruitful ideas are built on the combination of the two. With an absence of structured roadmap processes, one has to rely on intense daily contact (“coffee table and lab loor”) to maximize the transfer and the growth of new ideas. Technology transfer becomes a body contact sport, so maximize the chances for body contact. The characteristics of the industrial landscape in the micro-nanotechnology community are related to the above mentioned dynamics. Apart from a number of large-volume applications taken up by the existing value chains (ink-jet printer heads, hard drive head systems, micro-mirror devices for image projection, etc.), the ield is a gathering of smaller entrepreneurial companies; therefore, the learning process is slow. Many organizations actively support their members in accelerating the learning process through better understanding of the market and industrial process. Such organizations are focused on a particular technology ield (i.e., the Institute of Nanotechnology, UK (i.e., MIG, MEMS Industry Group, or IVAM Germany), and on commercialization, MANCEF (the Micro and Nanotechnology Commercialization Education Foundation). In this system, production infrastructure is either focused towards one of the larger applications mentioned above or has the dificult task of integrating various technology platforms and acting as a foundry for different customers. We expect a further maturing of the ield, leading to increased standardization, but at the same time expect parts of the ield to continue to be based on a wider set of technologies, expressing themselves in different combinations in products. In that regard, the ield of micro-nanotechnology resembles the ield of precision

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engineering rather than semiconductors, where a “unit cell” for design and production is established at a very high technological level. We have tried to show that a commercialization process is not only shaped by its technological possibilities but also by the players that are present or not present in the innovation process. Our message is that an optimized commercialization process takes into account the differences in the role that the technology can play in different product applications, e.g., chip-technology in an existing microsystem technology regime or for an application in a laboratory analysis setting. We feel that players who are linked to the process of commercialization, i.e., research groups, universities, private industry, and local and national government, should be aware of the needs of commercialization trajectories and their respective role in the trajectory. Below we discuss the use of the Triple Helix of university-industry-government concept as a process for cooperation.

COOPERATION IN A TRIPLE HELIX OF ACADEMIA, INDUSTRY, AND GOVERNMENT The idea of a Triple Helix of university, industry and government has been introduced by Leydesdorff and Etzkowitz.7 The Triple Helix model tries to conceptualize the interactions among three types of parties in the contemporary knowledge-based society. The model itself is unclear about how the actual interactions take place between the parties. The use of the Triple Helix as a heuristic model, however, is useful because it provides a way to show the interrelationships among innovation, the commercialization processes, and the parties involved. In the contemporary knowledge-based society, the Triple Helix Model8 authors claim the different academic, industrial, and governmental partners communicate increasingly with each other. Furthermore, regional governments and municipalities also play an important role in the co-creation of the regional landscape or cluster. Within this cluster, the successful collaboration among the industrial, academic, and governmental partners is important to success. The Triple Helix model states that the three parties, academia, industry, and government, have more or less demarcated roles; the contemporary Tri-lateral Networks and knowledge-based society operates in a Hybrid Organizations different way. In contrast with earlier times, organizations in contemporary society had overlapping institutional spheres. Figure 5.1 shows a visualization of the Triple Helix Model. Academia The authors also see the emergence of hybrid organizations at the interfaces of the different parties, such as the Kennispark concept mentioned earlier. Public and private activities differ strongly in State Industry nature. Though they may operate in the same environment, their basic goals and interests differ strongly. Public activities FIGURE 5.1 The triple helix model of uni- are put in place to cover a certain need versity-industry-government relations.

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that is recognized in the public arena. They are task driven and usually receive a basic budget from a public authority to perform that task. Its management decides on the basis of many issues, societal issues (setting the right example, stimulating the desired long-term development, etc.) from to political or inancial issues. The stakeholders are many and are represented in long decision chains with often a strong democratic input. A private activity receives its income from its activities in the market; its management decides in line with the desired strategic development of the enterprise in the market, so decision chains are short. Interestingly, a well-chosen public activity will address a need. Such a need could be translated into “market” in a private setting. Indeed, many public activities could be considered for privatization. As a result of that, the rules for running that activity will change, and the character of the organization will change. This usually leads to a larger “economic transparency” but less societal embedding. In between the public and the private set of rules, an abundance of mineields and pitfalls exists. Many public-private partnerships have shown the problems related to the marriage of the two. Public entities can cooperate with private ones and vice versa, as long as it does not force one into adopting the rules of the other. If the basic set of rules for the public or private environment is not damaged or corrupted, the different parties involved can keep their integrity and strength and work from that into a fruitful cooperation. In every western country, there are numerous examples of the emergence of hybrid organizations among the Triple Helix parties, such as university incubators established to support start-up companies that are based on academic knowledge. Science parks are founded to create geographical concentrations of industry and academic research; they do encourage spin-off companies themselves and can be considered hybrid organizations, i.e., companies with primary interests in wealth creation but stemming from an organization with a dominating interest in new knowledge and often partially owned by the universities themselves. It is these types of organizations that are trying to cross inter-organizational boundaries, stretching and merging different roles. And these organizations, like spin-offs, science parks, or mixed industrial-governmental interest groups, are important bridge builders in the collaboration process. Intermediate companies or organization are often embedded into a stakeholder’s organization, with a task to build relationships with the other partners. Due to the nature of the industrial community, the host of the intermediate organization is often a public stakeholder, either a government or a research institution. It is rare for private companies to be recognized as intermediate organizations. If so, they act on the basis of a clearly deined business model. The most successful ones are active in the intellectual property ield; the British Technology Group is one such example. Where a public research organization has the role of primary player, a number of different forms are found, ranging from a Technology Transfer Ofice through sharing of facilities and start-up support programs to forms of active business development. Examples are many, including the commercialization policies of organizations like Forschungszentrum Karlsruhe GmbH (FZK), Institute of Microtechnology Mainz (IMM), Institute of Nanotechnology Exploitation (INEX), and MESA+. In some cases, we see authorities or mandated bodies taking the role of primary partner to initiate a commercialization structure. Examples are Centre Suisse d’Electronique

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et de Microtechnique (CSEM) and the recently opened Microsytems Technology (MST) factory in Dortmund. We see different solutions in which certain organizations are taking up a primary role in the commercialization process or parts of the process. The power of each of these initiatives is that the initiatives are supported by all the partners in the Triple Helix, perhaps not always in terms of funding but at least in terms of strategic cooperation. We regard this as a condition sine qua non. As hybrid organizations predominantly stem from one of the parties, they can be seen as underlining that partner’s principal role in the commercialization process. This often leads to the partners pursuing commercialization in that regional environment — viewed as an undesired development. Parties involved in the commercialization process for MNT must be made to be aware of their commitment to other partners, to acknowledge the role they play in the larger environment or “innovation landscape,” and to recognize the crucial contribution that each party delivers to the shared goal of the cluster. Subsequently, each can, of course, translate this collective goal to their own. Industry partners located near a university or research center have access to knowledge and academic expertise, including technology transfer facilities. Universities beneit from a good growing local economy because it helps them to procure funds for research from industry and makes them more aware of industry’s needs. Finally, the governmental partners beneit from the creation of new jobs and hence increased economic development. In addition to the emphasis on collaborations between regional players, we wish to stress the importance of excellence of every respective individual player in the regional cluster. Excellent commercialization processes need ine-tuned collaborations and fertile boundary conditions, but they also need excellent partners to work with. Mediocre research and development performance does not create long-term sustainability. Academic partners need to extend their roles and participation in commercialization activities. The same applies for excellence in entrepreneurship, which is a condition sine qua non for commercial success. Maintaining the thrust for excellence in the core competences of the three Triple Helix parties is paramount. Only from such positions can strong bridges in the Triple Helix approach to commercialization be built. A vital economic cluster needs equally excellent entrepreneurs and researchers. In recent years, universities have been encouraged by national governments to engage more in commercialization activities. Universities can and should stretch their boundaries by establishing incubators and commercialization funding schemes, as well as spin-off companies so long as this does not compromise the core academic activities of the researchers. Similarly, companies must become involved but not undermine their need for proitable business. The right balance has to be struck. The idea of collaboration among different partners, to form a vital regional economic cluster based on their own excellence, has to be maintained at a regional economic level. The idea can be translated to very tangible structures. In the Twente region, for instance, a project was started to help beginning enterprises achieve their growth opportunities by the coaching of experienced entrepreneurs. Another project aims to combine spin-off ideas from the university with entrepreneurial students from the Saxion College in Enschede. This combination then should result in business teams

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with strong entrepreneurial skills as well as a thorough understanding of the potentials of new products and product development. These projects consist of the University of Twente, the Saxion College in Enschede, the regional development agency (Oost N.V.), as well as an existing network of entrepreneurs (TKT). The projects illustrate the potential of collaborations between academic and governmental actors. The whole process of collaboration should be a process of being excellent in your own ield as well as working together. Not only can the players themselves create these linkages, but governmental partners, for instance, can create the structures (such as incubators, commercialization funding schemes, and science parks) all for the improvement of commercialization processes and the vitality of the regional economic clusters. So far we have mostly stressed the interrelationships of the different partners and their need for excellence. In the coming paragraphs we will elaborate on the roles of the respective players in the multi-partner environment during the commercialization process.

THE ROLE OF PUBLIC RESEARCH ORGANIZATIONS The traditional nineteenth and twentieth century roles of universities have been education and research. In the past decades, these roles have been extended to include a greater involvement with industry and the regional development organizations. Universities can beneit from income derived from commercially exploiting their knowledge base.9-10 This has been helpful in creating closer involvement with organizations outside of the university. Universities, however, must still retain excellence in their main role as educators. The academic system is geared towards academic excellence. The key driver is “being the best in your peer group”: discovery of new things and subsequent publications. Since the timescale between scientiic research and its commercial exploitation is about 20 years, a university or an institute should educate young people and do good research. This is crucial to a university’s success in the competitive arena of education and R&D. Although universities and institutes disseminate their indings in the scientiic arena, a pathway towards commercialization and transfer of knowledge is less common. In most countries, this role is not made a priority by universities. There is a large difference among researchers in their understanding of that issue. There is a plethora of reasons why universities should be involved in commercial exploitation, some of which are summarized below: • • • • • • •

Attractiveness of the R&D activity for industrial partners New R&D projects emerging from the high-tech cluster Sharing of facilities, leading to a broader and healthier equipment base Political support and visibility Inspiration, increased relevance of R&D Interesting jobs for graduates and Ph.Ds Extra income

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Communicating these advantages, showing best practices, and learning from experience are the means for promoting a culture that invites researchers to look beyond their scientiic community. If done the right way, commercialization enriches the research group. MESA+ has added commercialization to its formal mission and strategy and added a commercialization portfolio to the institute’s management. It turns out that active commitment is a very strong promoter. MESA+ is a university research institute that has deined commercialization as one of the key issues in its strategy. In order to achieve the goals set, we use a bottomup approach. Focus is put on the internal culture and organization in the direction of SME’s, on cooperation with the other crucial partners in the region, and on accompanying measures such as infrastructure, venture capital, etc. We focus on a cluster of industrial activities that shows cohesion and covers the most important markets, technologies, and positions in the chain. The whole system is based on the concept of seamless microengineering.

ENTREPRENEURS AND VENTURE CAPITALISTS As mentioned earlier, the various scattered and often competing interests of the industrial partners, along with the broad range of miniaturization technologies, make it hard to initiate coherent and encompassing commercialization activities for public R&D from the private side. We do ind many singular R&D projects where public R&D and industrial partners engage in a well-deined effort to further develop an interesting technology platform. Joint strategies from industry associations, however, are very limited and do not cover the scope of miniaturization technologies. They often are limited to roadmapping in speciic areas or to speciic attempts to deine standards. Some individual private entities have positioned themselves as commercializing IPR (intellectual property) from public R&D. There are a growing number of IPR brokers that offer their services to public R&D organizations. On top of that, there is a growing group of business development groups looking for existing technological solutions they can further develop within certain market areas. Generally, such organizations have limited success in leveraging the research population and research funds due to the difference in character and the limited alignment of interest. We see this as a strong drawback in commercializing public R&D, since a number of strong existing resources and networks are left unused. The market focus and business strategy of such organizations, on the other hand, are a clear advantage. In the private environment, the existence of a strong business case is the key element for success. In the past years, we have seen a number of new collaboration schemes that are set up by or are in cooperation with broader industrial associations. To give some examples: • Cooperation in facilities, where companies can grow their production facilities while keeping investment needs moderate. Such cooperation schemes can be found in Dortmund (MST-factory) and recently also in Twente. • Cooperation in a scheme where experienced entrepreneurs coach young entrepreneurs with an interesting promise for growth. In Twente, this is

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embedded in the so-called Mindshift program run by the Technology Circle (TKT), 150 technological enterprises with a link to the university. The Mindshift scheme couples coaching (TKT coaches and third-party coaches) with a inancial participation scheme. • Cooperation in a joint ofice and lab facility. In Twente this is becoming a key driver in the environment of the University campus: bringing equipment and people together to facilitate critical mass and exchange of know-how. In all of these examples, the relevance to the company’s bottom line is clearly visible. Such schemes tend to be strong and sustainable after a irst period of public support.

THE ROLE OF THE REGIONAL GOVERNMENT The discussion about the role of government organizations as partners in the innovation system mostly tends to focus on the role as a facilitator. As partners, national, regional, as well as international governing bodies can play an important facilitating role by developing support schemes or agencies that facilitate the spinning out of knowledge and the creation and growth of new irms. Regional authorities have interest in the creation of an environment that supports both job and wealth creation. In the Twente region, these interests make the regional partners (i.e., municipalities and provincial authorities) very inluential in relation to the support schemes underlying the commercialization of academic knowledge and, more speciically, the creation of new companies. The regional authorities do not play a central part in the commercialization process itself but are enablers of the whole process. They are an important vehicle to create a common agenda and to bond together parties who have in themselves diverging interests. Because they are interested in jobs and wealth creation, they should not just focus on new jobs and industrial turnover but rather think of regional success in terms of the economic cluster we have talked about. This focus automatically creates a broader horizon in which there is time, and hopefully a sense of urgency as well, that different parties should be involved in a long-term commitment to create this cluster. Since neither industrial partners nor public research organizations are very much inclined to take a proactive approach by individually investing in these schemes, regional authorities should take these support schemes not only as a chance to improve the success of certain parts of the innovation trajectory but also to use the support schemes to create longer lasting bonds among the different parties. Through this, one might be able to create the sense of a community (in which several parties are willing to give up their short-term individual goals and in return get a long-term strategic agenda that can be a basis for a vital economic cluster). The mechanisms regional authorities can use are plentiful. The investment in physical infrastructure such as facilities like science parks and cooperative research centers is a good way to establish collaboration between industrial partners and researchers. Another possibility is support networks or support schemes co-inanced by regional authorities and public research organizations. One interesting initiative in the Twente region in this regard is the Regional Innovation Platform. It gathers key people from the Triple Helix and across the most important economic sectors in the region. Based on the

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joint inancial commitment of all parties, a fund of 200 million euro has been made available (50 from the province, 50 from the municipalities, and 100 from industry) to support a regional innovation agenda, which was conceived in an intense interaction between the ield and the Innovation Platform. The result is an increased commitment, an improved vision on the development of the region, a stronger lobby, and a joint agenda coupled to relevant funds. The Twente region, as well as all other regions in the world, has the challenge not only to create vital economic clusters by intertwining commercialization and innovation activities of the different actors but also to create the boundary conditions for vital clusters. Creating a density of talent is one of the most important ones besides a good logistical as well as knowledge infrastructure. This density of talent relies in large part on the quality of life a region has to offer. Although the Twente region is not well known for its high-paid and high-vacancy rate of jobs, the region has the beneit of relatively cheap housing in relation to the more densely populated territory west of the Netherlands and has an excellent quality of the environment. A very distinct feature of authorities is their risk aversion mentality. Whereas risk is an intrinsic part of private enterprise and academic work, public authorities are pressed by the population not to waste taxes on risky support schemes or other instruments that have the potential to fail. There is a very moderate incentive for success but a very large negative incentive for failure. Considering the interests of regional governments in the creation of wealth and jobs, miniaturization technologies compete with other technologies and with policies and initiatives of a very different type, such as roads or business parks. Authorities will generally be reactive on a given subject: there will have to be a clearly expressed need or desire, especially including the industrial community, before policies will be deined. Regional authorities often have a more hands-on approach and can relate more closely to a certain application ield or technology. For the long-term sustainability of an initiative, the continued support of authorities is very important. This support in time should shift focus from inancial support for R&D or for commercialization policies towards general support initiative. For the public research organizations and the industry, this implies that there has to be a visible evolution towards a mature economic cluster to ensure further support. If there is no visible success on a relatively short term, say two to three years, governments will become very hesitant to invest further in innovation in certain areas. One reason for this hesitation to commit to these long-term processes is the nature of these democratic systems that are more inclined to doubt and subsequently to call off succeeding investment steps or change directions. Of course industrial partners and public research organizations have this as well, but the perseverance in certain activities can deteriorate very fast if no visible progress has been made. And one needs to develop strategies that take into account these needs of governmental partners if one wants the government to support certain schemes. In the text above, we have tried to stress the interrelatedness of commercialization activities by discussing the importance of collaboration in the commercialization of micro- and nanotechnology. We feel that parties should be aware of each others’ respective roles in the commercialization process and construct long-term shared strategic goals. Engagement in commercialization activities by every party,

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Private Primary Actor

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whether government, industry, or public research organization, means a long-term commitment process. Investors cannot expect immediate returns or that their investments will help solve issues on a long-term basis. Instead, it is a long-term commitment to each other, and a constructive attitude in this collaboration process should be the basis for a shared long-term and strategic goal. The success and sustainability of a commercialization effort requires an integrated approach that includes the Triple Helix stakeholders. Central in the system should be a focus on markets and opportunities as a balanced counterweight to the existing technology-push in the academic environment. A very strong linkage to the academic system is of crucial importance: the alignment of interest of the commercialization effort and the academic system mitigates risk and increases knowledge and information low. It allows some form of leverage of existing public funds in the very early stages. However, market orientation and business strategy should be the leading factors. Figure 5.2 below shows a simple indication of pros and cons of the various approaches we encounter on a number of key success elements related to the key players involved. Any choice for a commercialization approach should be aware of its weaknesses and create solutions to have a chance of success. From these schemes and activities that support and enable successful commercialization, the primary players should work together. The role of the government can be very productive in this situation as it is able to provide incentives to academic

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and industrial parties to overcome individualistic goals and to let the different interests converge on a collective level. The trick here, however, is to let the partners build towards these collective agendas, not to bend them in types of ways by forcing them to do things they would otherwise not do or are not particularly well equipped to execute. Below we will take some ideas to a more mundane level by putting forward a number of observations and suggestions based on experiences from MESA+. These observations and suggestions deal with structural and cultural aspects in the collaboration process as well as some remarks on the acceleration and the smoothening of the practice of commercialization in the micro-nanotechnology ield. Because the observations and suggestions originate from experiences at MESA+, most of the mentioned points will put forward MESA+ as a dominant entity in the support of collaboration among academia, industry, and government. This, however, should not persuade our readers to think that the academic community should have a dominant role in the support of collaboration. We once again would like to refer to Figure 5.2, this time to show that multiple types of partners can have a more or less leading role in building towards the other partners.

CREATING THE RIGHT STRUCTURES The creation of support schemes, incentive structures, and all kinds of other schemes and structures is the most obvious if one wants to improve the commercialization process. In the past two decades, MESA+ has created, helped with, and witnessed several initiatives to increase the success of commercialization activities. On a structural level, there are three types of initiatives that have contributed signiicantly to more successful commercialization around MESA+: • Initiatives that pertain to the internal organization of MESA+ to improve the performance in the commercialization process of the research institute itself • The creation of international, national, and regional networks that aim to join industrial, academic, and government actors on different levels • Initiatives that focus on facility sharing and more speciically collaboration through the use of facilities

ACCOMMODATING YOUR ORGANIZATION In recent years, the internal organization of MESA+ has undergone several changes to accommodate a successful commercialization of its knowledge. A set of processes and procedures is necessary to support the commercialization process from within the organization. Over the years, MESA+ has created standard agreements for knowledge transfer, facility sharing, participation in spin-off equity, and participation of MESA+ personnel in spin-off companies. Furthermore, the communication of all of these measures is equally important. For the personnel of MESA+, it is fairly clear what they can and cannot do when they want to work with or set up a new company and what the possible prospects are for the company. For the external

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parties, mainly industry, it should be clear as well what can be expected from the research institute. Often, a private enterprise wants more than described above. It would like some exclusive issues and guarantees that support its continuity or limitations for the research organization with respect to its relationship with other parties. Such items have a chance of exerting a considerable amount of stress on the relationship. Therefore, the basis of the relationship, as well as the reasons why the other partner is engaged in the relation, should be well understood by both sides. If so, the relationship can withstand a considerable amount of stress around these additional items. We have developed a participation procedure in which the research group takes a share in the starting company in return for patents, licenses, and other forms of rights with respect to R&D results in a certain technology-market intersection. Such an arrangement evens the way for fruitful communication and cooperation without interfering with the core tasks of each partner. As a basic rule, we make sure that a inancing partner is also involved as a shareholder. With all this we aim to create a stable environment in the early, vulnerable stages of a company. It also prevents the so-called transfer barrier, where people are very willing to assist the young entrepreneur, but from the moment a proit is made, researchers tend to guard new and interesting ideas and indings. “Why should the company make money with my ideas?” MESA+, in this case, uses different combinations of the following: • Transfer of a patent or a license, or the right to patent a certain invention. • Rights on publicly owned IPR on future developments. The private partner would like to prevent new indings in its core activity ield from going to others, perhaps even to competitors. In this issue, we usually use a right to bid on any future IPR (patents, licenses) owned by the public research organization, in the case it decides to sell. The arrangement forbids the organization to sell to a third party under the price offered by the private partner. • Preventing the public research organization to perform any competing activities in the development or production phase. In this arrangement, the public research organization acknowledges the private partner as its preferred partner in these activities. It will not become active in development or production itself. • Right to protect new knowledge generated by the public research organization, if this organization decides not to protect these results itself. This arrangement is always coupled with a share in the company, or an agreement on royalties, to ensure mutual beneit. • Acknowledging the private partner as the preferred partner for development and production in research contracts of the organization. • Agreeing on mutual commissions for acquiring customers or projects for the other party. In each element, a considerable effort has been made to minimize the possibility of stress and keep the core of the arrangement in place. Separating low-stress issues from high-stress issues is the most important aspect of building long-term

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relationships with your industrial partners. This allows both parties to keep a position of excellence in their own ields and concentrate on core competencies and processes. The new relationship should not constrain the core activities of the research institute or the industrial partner. Therefore, any combination of the elements mentioned above will form a relatively stress-free basis for cooperation. Parties can respect and assist each other on this basis. Potentially stressful additional items can be added on top of this basis to ine tune the relationship. Furthermore, organizations should keep all arrangements limited in time, topic, and personnel: • Restrict the agreement to an academic chair or a deined number of people. Inventions in a certain ield can, by chance, pop up at any place in the research organization. Especially in universities, it is crucial to make arrangements with the group in question. If other groups come up with interesting results, these are not included in the deal. • Restrict the agreement to a certain technology ield. Try to deine, as much as possible, which technological area is subject to the arrangements. • Restrict the agreement to a certain application or market ield. • Restrict the agreement in time. These basics will prevent “proliferation” of rights and will allow for restructuring the relationship in time. MESA+ usually uses 3-year periods. This also allows the public research organization to be a partner in a future inancing round. Alongside the points that are mentioned above, which concern the more processrelated improvements, the aspect of coordination has been very important in accommodating the research institute to acquire a more commercialization-aware stance. As we have emphasized before, low- and high-stress activities should be separated from each other, and commercialization activities should never compromise the core activities of researchers in a public research organization, since this will pose a threat to their excellence. This was a heavy weighing argument in the coordination of the commercialization activities throughout the MESA+ organization. MESA+ has concentrated the coordination and support around commercialization on a central level. The organization employs a technical commercial director who is responsible for commercialization and business venturing activities. Recently, a technology accelerator has been set up centrally by MESA+ to scout and implement new micro and nanotechnology business cases. One of its most important goals is to obtain commitment from governmental, academic, and industrial funding sources. This is one of the examples where commercialization activities are placed in close cooperation with, but organizationally outside, the core academic process so as not to compromise the research process. At the same time, these types of structures enable the organization to devise a central mission statement and structure that emphasize the commercialization of knowledge that is produced within the institute. The actual business development process is run in very close cooperation with the decentralized level (the work loor). It is the researchers who can see the potentials of new technologies as well as possible technological hurdles. The central staff (technical-commercial director, technology accelerator) will support the work loor in their

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ideas and plans to valorize a part of their research. This supports the commitment to the commercialization process and aligns strongly with the disruptive character of micro/nanotechnology commercialization processes, which require a strong mutual involvement of entrepreneurship and technology development (commercialization as a body contact sport). Through this organizational scheme, the whole chain of technology development through to commercialization and entrepreneurship remains strongly linked, from idea generation through to spin-out and growth. This decentralized approach is powerful, since it allows every single person in the organization to understand his or her added value and importance to the commercialization process, instead of the university’s technology transfer ofice alone. One way to accommodate this understanding is to devise processes and structures that support commercialization and are carried by the central organization and the research process. These efforts in turn will provide the organization with a framework to work from and consequently will contribute to a culture in which commercialization will become a more and more obvious part of the research process, not so much in the daily work of research but as a point of attention that one keeps in the back of the mind and the development of the skills to cooperate effectively. Cultural aspects will be discussed in more depth in the next paragraph.

CREATING FACILITIES WITH A COMMON/SHARED INTEREST Facilities are a powerful tool to create links between industry and the academic community. Since the lab facilities of MESA+ are the pivotal point of its operations, this has been a natural basis from which to attract industrial partners and help spinoff companies in their early years. On its own, MESA+ has developed the following facility sharing structures: • The use of MESA+’s existing R&D facilities for development and/or production. The user of the facilities pays a full-cost tariff per unit of time used. It is in the interest of both parties to increase the use of facilities. In their investment strategy, the public research organization will therefore take the interests of the private users into account. In normal operation, we will grant equal rights to a company user compared to a public researcher to prevent a double standard. In the exceptional situation that conlicts arise (e.g., breakdown of equipment, fully booked equipment), this principle will be maintained as long as possible. If this is impossible, the public users will prevail. • The use of technological facilities by company personnel is standardized and embedded as an integral part of the activities in the central labs of MESA+. This leads to a turnover in man hours of almost 30% by start-ups for the clean room labs. This number is still climbing. Also, dedicated clean room space and ofices for the companies themselves have been realized. This indicates the mutual dependency and trust that has been realized over the past 15 years. • Co-investment in equipment. This allows the exploitation of a wider equipment basis. We make sure that the equipment is owned by the most relevant

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party and will grant rights of use to the other party for a rent based on integral cost that takes the co-investment and the strategic cooperation into account. • Sharing of ofices and buildings. Being close together and meeting one another on a daily basis is a very strong catalyst for new ideas and mutual enrichment. By using the same physical environment, this closeness is supported. We observe a growth in information exchange and cooperation on different levels and an increase in new business ideas, to the beneit of both parties. • Keeping the channel of new publicly available knowledge and know-how open. Companies as well as research organizations have a variety of knowhow and knowledge that is, in principle, open to the public. Opening up communication on these issues in an early stage will help both sides to increase their general knowledge base. This process counteracts the competitive shielding of information between companies, or the “transfer barrier” within the academic workplace, discussed above. The highly frequent and unplanned encounters of researchers from academia and industry in the labs and at the coffee machine allow ideas to low more easily and problems to be solved faster. What we aim to avoid is a one-way, one-partner view on commercialization. Instead, talking to different persons of other types of organizations keeps you open to new ideas and invokes a joint vision on commercialization. Sharing valuable resources creates a common base of operation where people from industry and researchers can meet each other. From this perhaps mundane level of cooperation and shared interests, the different partners can build towards each other (e.g., by the acquisition of new equipment that is too expensive for individual parties). Since micro- and nanotechnology are mostly characterized by the presence of multiple technology/application domains, this results in a desired high level of contact, leading to faster commercialization processes. The creation of places where knowledge and entrepreneurship meet is relevant in this context. Facility sharing creates a great center of gravity for these encounters. Facilities, however, are not merely an issue of luring industry to your own facilities to have them in your proximity. The broader development of an environment in which industry can take up residence is signiicant as well, especially with regard to spin-off irms. It should be the job not only of the public research institute to look after these issues. Universities and regional authorities can be helpful and instrumental in the creation of such facilities. The campus of the University of Twente is an example where the university in collaboration with municipalities and other regional authorities has developed several schemes that facilitate the industry in its settlement in the vicinity around the university campus and the collaboration with the university. The university campus is being seen more and more as a shared facility in itself. This can be seen in the Kennispark concept, where next to joint R&D programs, a strong emphasis is put on the further development of the area around the university campus. One part of that development concerns a masterplan for the campus and the adjacent Business and Science Park, focusing on an optimized environment for knowledge transfer. Sections for joint labs, for high added value production, for

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services, etc., are identiied and deined for further development. This master plan is an important guideline for all future building developments and plays a central role in acquisition of new companies. The Business and Science Park was put in place 25 years ago to foster high-tech economic development around the university. In the Kennispark concept, it is integrated with the campus, which already houses some 100 small irms. The second part of that development is a 40,000 m2 joint facility for companies on the edge of the university campus and directly adjacent to the university’s core facilities, such as the clean room and the biomedical labs. This joint facility allows companies to build their joint labs and develop themselves in an optimal environment. The building is run by external parties and is developed as a project adjacent to the university, not as part of the university. This building is the core of all future facility sharing activities. The Kennispark concept already houses a number of incubator buildings run by the Business Technology Center (BTC), a private company owned by the regional development agency, a project developer, a bank, the municipal college Saxion, and the University of Twente. In its 25 years of existence, it has been extremely successful in fostering new business development.

NETWORKS Networks are another crucial addition to the regional environment. While emphasizing networks, we will again start with the organization itself and move on towards initiatives that are more externally structured, i.e., national and international networks. The networks that MESA+ focuses on are networks of experienced entrepreneurs, networks for inance, and networks that support crucial information and experience. In the area of experienced entrepreneurship, Kennispark, joining efforts for all commercialization activities in the area, has a number of partner networks. First of all, there are a number of company associations that create a relevant environment for starting and growing entrepreneurs. The Technology Circle Twente TKT, for instance, binds together some 150 technology companies that have a relation with the university, mostly as spin-offs. TKT offers joint interest groups, contact with experienced entrepreneurs, information on relevant technological ields, support for acquiring new personnel, etc. A new and interesting effort here is the Mindshift program that could be explained as “experienced entrepreneurs helping young entrepreneurs.” On certain relevant technology areas, we ind TIMP, a group of biomedical companies that offer a package in the market, or MINACned, the Dutch Micro/Nano Cluster, founded by MESA+ in the late 1990s. For MESA+, the Dutch National Nanotechnology Initiative NanoNed and the Microtechnology Initiative MicroNed are relevant networks that encompass many research groups next to large groups of active companies in the ield of MNT. All of these networks are linked into the regional system and actively supported. The network for inancing revolves around a number of key organizations and key persons. The most relevant organization is the Participation Fund East Netherlands, a public fund with a section, Innofund, devoted to seed inancing. This fund links

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into several other inancing parties and angel networks. Through some individuals and especially some of the Technology Accelerators (on-campus business developers), private persons from the inancing community are linked into the system. Kennispark and MESA+ actively support these relations. One of the reasons to do so is to make the various properties of the Twente system known to the inancing community. This lowers risk perception and increases deal low. This is done through various topical meetings and programs. Finally, MESA+ invests heavily in international networks that support both research and commercialization. The research network partly is oriented towards other large institutes that have a strong national role and combine research with commercialization. The most prominent network in this regard is based on the link with the National Institute for Nano Technology (NINT) in Canada and is linked with the California Nanosystems Institute, the University of Tokyo, and the Korean Institute for Machinery and Materials. This network focuses on the research community and helps deine regional and international programs that support multidisciplinary research and commercialization activities. A strong relation exists with MANCEF, the Micro and Nanotechnology Commercialization Education Foundation. MESA+ has always been a strong supporter of this foundation, for a number of reasons: increasing the speed of learning, increasing the value of international networks, and increasing the visibility of the MESA+ commercialization effort.

INSPIRING CULTURE One of the key ingredients of a strong commercialization community is the internal culture. The culture should support ambition, risk taking, and cooperation. It should enable all parties to recognize mutual added value and support respect and trust. These elements will form the basis of a strong, result-oriented culture for commercialization. Creating a culture in which parties can see the relevance of commercialization and can see the relevance of investing in relations that do not produce immediate yields can be quite challenging. In MESA+ this has been a long-term process in which developing support structures on a central level has been quite helpful. By supporting bottom-up initiatives and communicating possibilities of commercialization top-down, awareness can be created on the shop loor. Key components in creating such a culture have proven to be the following: • Show and celebrate success. Successful forms of cooperation, of business development, or of company success are the most convincing arguments for commercialization efforts. Success should be celebrated. It attracts attention of researchers, who recognize the success and will become more interested in creating such success in their own environment. It will also challenge other entrepreneurs to become focused and sharpen their plans. • Use convincing advocates. MESA+ is lucky to have its key scientists very active and successful in the area of commercialization. They show that commercialization is fun and that it can indeed contribute to scientiic quality, if played the right way. Commercialization effort doesn’t compromise

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scientiic quality. We have used a number of renowned international scientists to underline that message on the MESA+ yearly symposium throughout the years. People like George Whitesides, Fraser Stoddart, Jim Heath, and many others can provide an outside view of how great science and technology can align with great commercialization. A long-term relationship is the obvious and ultimate goal if one wants to build a vital cluster. Trust and courage in this respect play a signiicant role. Creating networks and collaboration structures among entrepreneurs, researcher organizations, and authorities is a question of trust. Without this trust nothing goes. This trust, however, is a long-term commitment process where small steps in initial stages lead to more and more trust over time. Only after a while, when trust has been established, will partners dare to have the courage to take the risk that is needed for progress. Showing courage within a larger organization also points towards the need for leadership commitment and the need for strong key persons in the organization. Entrepreneurs within an organization, backed by long-term and visionary support from upper management, are needed, especially on the side of academic institutions and authorities. The above-mentioned risk-averse nature of such organizations often prohibits such an attitude. The stronger the cooperation and joint vision that is in the Triple Helix cooperation, the bigger the space will become for entrepreneurship and courage in the process. Creating a culture on the university level is something that deinitely has played a role in the story of MESA+. In the 1980s, the term “entrepreneurial university” meant to focus more on external funds to create income for education and research, not commercialization per se. In the 1990s, MESA+ was mostly engaging in facility sharing as a form of entrepreneurial activity, which occasionally also saw the emergence of new companies. Facility sharing in these times was mostly seen as a way to earn some extra money to help carry the heavy load of cleanroom facilities. Around 1995, however, people began to see the importance of facility sharing beyond this very direct income beneit and saw the other advantages as well: knowhow exchange, inspiration for business cases or research programs, etc. Facility sharing contracts became increasingly bigger and took the interests of the companies involved more into account. Furthermore, not only did MESA+ rent equipment to others, sometimes equipment was hired by MESA+ from others. MESA+ started to rely on other party’s equipment instead of reinvesting itself. In the early 1990s, enterprises that were spun-out for the most part were based on creating interfaces between existing industry and the university for access to techniques and facilities. Twente MicroProducts for instance was a company that initially started as an interface-like foundation. By the year 2000, it had developed towards a mature and separate entity with a distinct business model and separate products. Since the mid 1990s, independent new businesses, based on products in growing markets with a solid inancing structure and business model, have become a central point of attention at MESA+. This step could only be taken after MESA+ found ways to understand the dynamics of such companies and ways to structure its relationship with these companies. Illustrative for this change in mindset is the European Membrane Institute that was established in 1995. The Institute’s main purpose is to “offer industry and public

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organizations a platform where short-term research and development projects in the ield of membrane science and technology can be carried out.” In addition to that, activities also include literature studies and marketing assessments. So far we have talked about culture only in the university and on the level of the academic researcher. We would like to conclude this paragraph by addressing the role of the authorities. This should be a role that includes thinking along with the universities and industry, acting supportively, and in the process being able to bear some risk yourself. The most important learning part for the industry is to appreciate the role of the government and universities and to learn to live with their restraints and limited ability to act in entrepreneurial fashion. They need to take time to understand the nature of academic and authoritative activities and implement this in their own business development strategies. In all, it is clear that focus is put on creating the right environment and culture to allow things to happen. Opportunities and initiatives arise through a bottom-up approach of people from R&D and companies meeting in the institute, the labs and buildings, and at coffee tables and bars. This culture helps people build successful relationships.

ACCELERATING THE COMMERCIALIZATION PROCESS Finally, we would like to make some brief comments on an important practical part of the commercialization process which thus far has not been addressed on a detailed level. Active business development is essential to speed up the process and increase quality of commercialization through existing or spin-out companies. The ways in which business development can take place are quite diverse and show, once again, that partners in the innovation process act from different perspectives based on their strong points but still are able to stretch their roles. At the University of Twente, every one of the four technological institutes has its own technical-commercial director, Next to Internal Affairs; these directors are responsible for business development on a decentralized level. They are the irst contact point for aspiring entrepreneurs in the Institute, for patents, for company networks, for facility sharing, and for business ideas. The technical-commercial directors each have a business developer to support this role, especially from a market perspective. The business developer at MESA+ has a role that is optimized towards the speciic nature of the MNT work ield. He constantly scans the MESA+ research activities, from his market networks and experience. Yearly, he deines 1 or 2 out of 50 or more business ideas to meet speciic criteria that could support spin-out in a later stage. He starts maturing the business case in question, making use of the existing research volume and adding development, IP policy, business model, inancing strategy, and market links. He then carries the business case further to spin-out. A number of strong private inancing parties are linked in to his activity, allowing a strong further development of the business case after spin-out. Such a model provides extra strength to the business development activity in MESA+, not only from the point of view of producing high-potential ventures but also from the point of increasing the speed of learning in MESA+. Already, the

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business development activity has shown a number of weaknesses in the rest of the system that could be improved to the beneit of many of the parties involved. Business developers can play a signiicant role in the early stages of spinning out ideas. These initiatives mostly do not rely solely on the proactiveness of individual researchers, but scouting new ideas is an important part of the activities. The MESA+ business developer has set the following goals: • Obtaining commitment from government, academia, and industrial funding sources. • Selecting candidate technology platforms potential for commercial beneit at an early stage. • Performing market analyses. • Supporting the development of proof of concept products. • Approaching potential clients and securing the necessary minimal intellectual property rights. • Pursuing non-diluting equity sources that will enable proof of concept technology platforms to cross the so-called “Valley of Death” to become manufacturable products. Thus it tries to offer strong process on inancial, market oriented, and technological feasibility aspects.

CONCLUSIONS Experiences at the MESA+ research institute illustrate that it is important to take into account the different natures of the three types of parties involved in the collaboration process. Different parties have different roles and natures, and other parties should understand these roles. On the other hand, parties should not indiscriminately persevere in sticking to their “natural” roles. Since their interdependence in the commercialization process and in the creation of a vital regional cluster is undeniable, building shared long-term agendas is, in our view, the most eficient and productive approach. Public research organizations as well as governmental partners can nevertheless initiate their own programs and support structures. They should, however, keep in mind how the next step can be made in the commercialization process towards viable business cases. The whole commercialization process for all the parties is one big learning experience that takes time, effort, trust, and courage. It is not only a learning process for the public research organization itself, which tries to commercialize its knowledge, but also a learning experience for the governmental bodies and industrial sector partners who can beneit from increasing collaborations and more optimized tuning of activities among different organizations.

REFERENCES 1. Leydesdorff, L. and Etzkowitz, H., Emergence of a triple helix of university-industrygovernment relations, Science and Public Policy 23, 279–286, 1996. 2. Clark, B.R., Creating Entrepreneurial Universities: Organizational Pathways of Transformation. International Association of Universities and Elsevier Science, Paris and Oxford, 1998.

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3. Benneworth, P., Academic Entrepreneurship and Long-Term Business Relationships: Understanding ‘Commercialization’ Activities. High Technology Small Firms Conference 2006, Enschede, The Netherlands. (URL: http://www.utwente.nl/nikos/htsf/ papers/benneworth.pdf). 4. Mensink, G.J., Groen, A.J. and Jenniskens, C.G.M., Monitor Technostarters Overijssel. Nikos, Dutch institute for knowledge intensive entrepreneurship, Enschede, The Netherlands, 2005. 5. Walsh, S.T., Kirchhoff, B.A. and Newbert, S., Differentiating market strategies for disruptive technologies. IEEE Transactions on Engineering Management, 49, 341–351, 2000. 6. Abernathy, W.J. and K.B. Clark, Innovation: mapping the winds of creative destruction. Research Policy 14, 3–22, 1995. 7. Leydesdorff, L. and Etzkowitz, H., Emergence of a triple helix of university-industrygovernment relations, Science and Public Policy, 23, 279–286, 1996. 8. Leydesdorff, L. and Etzkowitz, H., The dynamics of innovation: from national systems and “Mode 2” to a Triple Helix of university-industry-government relations. Research Policy, 29, 109–123, 2000. 9. Slaughter, S. and Leslie, L.L., Academic Capitalism: Politics, Policies, and the Entrepreneurial University, The Johns Hopkins University Press, Baltimore, 1997. 10. Etzkowitz, H., Research groups as ‘quasi-irms’: the invention of the entrepreneurial university, Research Policy, 32, 109–121, 2003.

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Market Analysis and Growth for Micro-Nano Products Jean-Christophe Eloy

CONTENTS Objectives and Deinitions ..................................................................................... 106 A $5.6 Billion Market in 2005 ............................................................................... 107 Evolution of MEMS Markets...................................................................... 109 Mobile Phone and Consumer Applications: The New Target for MEMS Devices ............................................................................................. 110 New Offers: From Device to Module Business .......................................... 112 New Industry Organization ................................................................................... 112 Examples of the Evolution of the MEMS Companies ........................................... 114 SiTime: After 25 years of R&D, now MEMS Oscillators are Entering the Market ........................................................................................ 114 SiTime History ................................................................................. 114 SiTime Facts and Figures................................................................. 115 SiTime Production Activities ........................................................... 115 SiTime Competitive Situation .......................................................... 117 Bosch: World Leader for MEMS Sensor Manufacturing, Expanding in Automotive and Consumer Markets ................................................ 117 Bosch History .................................................................................. 117 Bosch MEMS Business Facts and Figures ...................................... 119 Bosch Production Activities............................................................. 123 Bosch Competitive Situation............................................................ 124 Development of Foundries and Contract Manufacturers ........................... 125 Japanese Mems Markets ........................................................................................ 126 The Market for Equipment and Materials for the Development of Mems Devices. ....................................................................................................... 129 Analysis of the MEMS Equipment Market ................................................ 129 DRIE: A Key Process for MEMS Manufacturing — and IC Manufacturing ................................................................................. 130 An Overview .................................................................................... 130

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Deep Etching Mostly Used for Inertial MEMS Devices and Silicon Microphones .......................................................... 131 Analysis of the Nanomaterials Markets................................................................. 137 Applications of the Nanomaterials ............................................................. 139 Business with Nano Materials .................................................................... 140 Long-Term Vision .................................................................................................. 141 Reference ............................................................................................................... 142

OBJECTIVES AND DEFINITIONS MEMS devices have different deinitions and content in different countries worldwide; for example: • Microtechnique in Switzerland, Microsystem Technologies in Germany, MEMS in the U.S., Micromachine in Japan, ink-jet head business in HP (Hewlett Packard) • Is MEMS an industry, a part of the semiconductor world, a part of the micromechanical world, or a part of sensor world? Our goal in this chapter is to make more visible the MEMS/MST business and provide accurate data on MEMS and MNT markets, business trends, and industrial strategies. The MEMS ield is an industry with its own rules, technologies, roadmaps, equipment, and materials manufacturers. I am using the following deinitions in this chapter: • MEMS (Micro-ElectroMechanical Systems) • Only devices with moving parts in µm to mm range and using photolithography process for manufacturing. The methodology used for the market evaluation considers: • Only stand-alone MEMS components, not the global system that includes the MEMS devices. • Volumes and prices are for a packaged MEMS (including or not electronics according to the component technology). Information has been gathered directly from the following: a. System manufacturer: car equipment manufacturers, IT equipment, and medical devices manufacturers b. Devices manufacturers: key MEMS inertial sensor manufacturers worldwide c. Companies involved in the MEMS business: fabless, equipment manufacturers, material manufacturers d. Face-to-face meetings have been set up with the key persons in these companies in Europe, North America and Asia, which is part of the common, day-to-day work of YOLE Développement.

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Silicon Sensing Element Asic (hybrid approach)

Packaging Operations

First Level Packaged Devices = Component

Wire bonding of the die to a metal can

Integration Chip + ASIC Cointegrated (monolithic)

SMI (USA) Pressure Sensor

FIGURE 6.1 Deinition of the terms used in this report (1). Second and hird Level Packaging With Electronic

SIP

DIP

Without Electronic

TO-8

Transducers With Special Housing

Or with Long Distance Amplification = Transmitter

Surface Mount Package

FIGURE 6.2 Deinition of the terms used in this report (2).

Figures 6.1 and 6.2 give an explanation of the words we are using in the rest of this chapter. All our analyses are based on components (i.e., irst-level packaged device).

A $5.6 BILLION MARKET IN 2005 The MEMS market reached $5.1 billion in 2005.1 Figure 6.3 shows the latest YOLE Développement forecast on the MEMS market, 2005–2010, based on silicon; another strong MEMS market is based on polymer, mainly for drug delivery and in vitro

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12,000

µ-fuel cells RF MEMS

10,000

Microfluidics MOEMS (incl. DMD) Gyroscopes

Market in $M

8,000

Accelerometers Silicon microphones Pressure sensors Inkjet head

6,000

4,000

2,000

0

2005

2006

2007

2008

2009

2010

FIGURE 6.3 (See color insert following page 16.) Value of the MEMS markets.

TABLE 6.1 MEMS Markets 2005-2010 Ink-Jet Head Pressure sensors Silicon Microphones Accelerometers Gyroscopes MOEMS (incl. DMD) Microluidics RF MEMS µ-fuel cells Total

2005

2006

2007

2008

2009

2010

1,532 911 65 394 398 1,292 404 105 0 5,101

1,663 1,053 116 431 435 1,743 453 128 0 6,022

1,660 1,150 172 472 506 2,069 508 150 0 6,687

1,881 1,172 259 571 595 2,348 629 199 1 7,655

2,004 1,206 330 699 691 2,748 732 259 26 8,695

2,015 1,254 398 860 801 3,154 849 331 65 9,727

diagnostic, not reported here. We expect that the MEMS markets will reach $9.7 billion by 2010, representing a compound annual growth rate of almost 15%. The value of each of the major MEMS market is shown. Our forecast 2006 was little higher in 2005 (we estimated a 2005 market at $5.6 billion). The main difference comes from a decrease of Texas Instrument sales (8% decrease compared to a forecasted 20% growth) and an adjustment of the value of the industrial pressure sensor market. In recent years, the MEMS industry has seen several important evolutions: • Continuous growth of markets with applications that are booming (silicon microphone, TPMS, 2D and 3D accelerometer); > 100% growth since 2004.

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• Device manufacturers are more and more often proposing modules in order to add value (for example, TPMS compared to pressure sensor). • Enhanced development of consumer applications. • Strong development of contract manufacturers and foundry business, averaging more than 35% growth. • Strong M&A activities with creation of new important players (acquisition of BEI Technologies by Schneider Electric, including Systron Donner; acquisition of First Technology by Honeywell; and a series of acquisitions by measurement specialties). • Changes in the manufacturing policies of several key players (introduction of the new permanent ink-jet head by HP, for example).

EVOLUTION OF MEMS MARKETS In the different MEMS product family, the following trends can be seen: • Ink-jet head markets: growth of the market value will eventually reach saturation around $1.8 to $2 billion. However, the number of devices sold will decrease strongly due to manufacturing changes at HP with the introduction of the Scalable Printing Technology (SPT); the HP heads are not disposable, and the new head is big and helps create faster and more precise prints. • Pressure sensor: the growth of the medical and automotive business is stable (around 12%). New applications like the Tire Pressure Monitoring System for cars are boosting this market (and Inineon/Sensonor account for the majority of this growth). • Silicon Microphones: the market has seen almost 100% growth in volume. Knowles Acoustics, with 100 M units sold, is the only player producing in volume at the moment. SinionMems, Memstech in 2005 and Akustica in 2006 now have devices available, and 2006 was a year of price pressure with another 100% growth in volume. • Accelerometer: the acceleration sensor market has evolved considerably. The automotive business is increasing rapidly with the growth of the Electronic Stability Program (ESP) (main players are VTI Technologies and Bosch). Consumer applications have started to use MEMS sensors in volume applications, including mobile phones (human machine interface, activation of logos, etc.), GPS, and pedometers. The number of new systems using the accelerometer is very important, and we think the market has great potential. The ability of device manufacturers to make proit out of these applications is another story as price pressure is very high. • Gyroscopes: here also, there has been strong growth of the overall market, due to different applications. The ESP market is growing very fast, with adoption of the system in medium-end cars. Silicon and quartz devices are competing on this application. GPS is another growth area, both for automotive and autonomous systems (stand alone or within two years included in a mobile phone). We have also seen a strong development of silicon-based

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•

•

•

•

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military and security applications, with the introduction of new devices from Honeywell. Optical MEMS: this area is still dominated by the Texas Instruments DLP. Although in 2005 there was a small decrease in the DLP market (DLP business from Texas Instruments decreased by 8%, due to price reduction and inventory adjustments), 2006 and the following years will see a restart in growth. Other applications like IR image sensors (micro-bolometers) are also growing very fast for security applications (the automotive business will really not start before 2008). The optical telecommunications area is also restarting at a very low level (less than $70 million) and is expected to grow by a few percentage points each year. Several new products are close to commercialization, including bar code readers, head-up displays, and head-mounted displays. Microluidics: the microluidic ield is mainly a nonsilicon business (polymer is the key material for this application). But a few systems are using silicon to activate luids or for other speciic detection applications. This is a small business, with 8% growth anticipated. RF MEMS: despite several announcements, only two products are now on the market in volume: the FBAR (Agilent and Inineon are the main producers) for telecommunication applications (replacement of ceramic duplexer) and the RF switch for automatic test equipment (new devices launched by Teravicta and Panasonic). We do not see a strong growth of the RF applications for several reasons — MEMS-based RF switches still remain expensive and are not currently adapted for mobile phones. New interesting devices have been announced in 2005 for availability in 2006, including the replacement of quartz oscillator using a MEMS-based oscillator (SiTime). Micro fuel cell: several companies, including Hitachi, NEC, Fujitsu, and STM, have announced the launch of micro fuel cells for 2007 and 2008 (using methanol or hydrogen technology). We think that the start of the market will have a signiicant impact on MEMS business, starting in 2009 or 2010.

MOBILE PHONE AND CONSUMER APPLICATIONS: THE NEW TARGET FOR MEMS DEVICES Microelectronics has led to the explosion of consumer electronics sales. The key challenge for the industry now is to make complexity invisible, to make technology intuitive, and to make access natural. The drivers for this are wireless functionality and a need for increased portability. The killer convergence application is the mobile phone. It started life as a device to make voice calls, but now it is doing a lot more. The mobile phone is gradually assimilating the functions of the PDA, laptop, and digital camera. The mobile phone will become the logical consolidator for multimedia and gradually increase its broadcast functionality.

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Since 2004, a key event has happened. The mobile phone industry is looking at the use of MEMS devices and linked technologies in order to bring new functions and solve key problems. The MEMS applications range for mobile phones is quite large: • Silicon microphone: improves the manufacturability of microphones for similar performance compared to ECM • 2D and 3D accelerometers: adds functions for man-machine interface and silent mode activation • RF MEMS passive and active devices: provides better integration of passive devices for RF module and better frequency agility • Gyroscope for camera stabilization and GPS: enables real digital imaging and preserves the GPS signal • Microfuel cell: provides longer lifetime for the batteries The functions to be integrated in the mobile phone are very important, i.e., replacement of the ECM microphone, new human machine interface, RF module with more frequency agility, new optical and image capture functions, positioning systems, identiication, and new long lifetime batteries. At long last, MEMS devices are now methodically entering into the mobile phone business, offering key devices in order to leverage these new functions. The applications of these different devices are quite diverse and are enabling interesting technology features and, at times, are pure gadget. The applications and markets for MEMS in mobile phones were close to $2 million in 2004 and will go up to more than $250 million by 2008. The volume applications in 2005 were the 3D accelerometer for human-machine interface (volume sales at Analog Devices, MEMSIC, VTI Technologies, Freescale, and several other companies in North America, Europe, and Japan) and silicon microphones. There are several important considerations that MEMS devices still need to address in the consumer markets: • Standard package (especially CSP/WLP) • Package size : 1.2 mm ×5 mm × 5 mm max (to be included in mobile phone) • Small silicon die (less than 2 mm × 2 mm) in a 6’’ wafer (i.e., between 3500 to 5700 dies per 6” wafer) • Price between $1.5 to $2 max (less than $0.4 for Si microphone) • Digital output One of the key challenges for the mobile phone industry is price pressure. The price of MEMS devices has to be in the range of a few cents to two dollars maximum in order to be compatible with mobile phone pricing. One example: the use of gyroscopes for mobile phone camera stabilization will be only a solution for a three Mpixel sensor. Below this size of image sensor, a software solution will be suficient. Fortunately, compared to the automotive industry, MEMS manufacturers have the ability to decrease the speciications of devices (in terms of reliability, lifetime, and speciications) in order to reach price targets. The price target for MEMS devices in mobile phones is clearly an issue:

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• For microphones, the price of the ECM microphone is $0.3. • For 3D acceleration sensor, the price target is less than $2. • For RF MEMS, the challenge is to be included in SiP/SOC approach, with an adapted price. These price targets are very aggressive, and cost effectively manufacturing such devices will be a challenge. The next months and years will determine if MEMS will be key devices in mobile phones. Offering devices at a higher price is possible, but only if the functions of the new device are enabling the service providers (the wireless communication service providers) to sell new services to recover that cost, as was the case with the image sensor. This is one of the biggest challenges for MEMS in mobile phones. Device manufacturers considering these applications are talking with service providers in order to understand the potential service to support — such as using the sensing capability of MEMS, extended battery life, etc.

NEW OFFERS: FROM DEVICE TO MODULE BUSINESS One of the key trends of 2005 has been the evolution of several players changing their offer from MEMS-based devices to a MEMS-based module. We see this trend in several applications, including the silicon microphone (new product launch by Knowles Acoustics and SonionMEMS), inertial sensors (with the development of the Inertial Measurement Unit), chemical sensors (MICS has changed from device manufacturers to module manufacturers), and more than ten other products. This is a very strong trend and will impact heavily the way MEMS manufacturers are working (especially given increased cost pressures).

NEW INDUSTRY ORGANIZATION MEMS manufacturing activities have evolved rapidly over the last two years. MEMS manufacturers worldwide have basically seven different business models (see Figure 6.4). The differences between the different types of MEMS manufacturers are very important and include these different business models: • System manufacturers with internal fab: 200 companies worldwide use this business model, including world leaders like Bosch, Delphi, and Hewlett Packard, as well as large companies with small MEMS operations but suficient for their business (like Fujikura and Endevco). They have their own MEMS facilities for the captive market, and several companies are also serving external customers. • Off-the-shelf device manufacturers: this is the second biggest part of the MEMS business. Large device suppliers like VTI Technologies, Inineon/ Sensonor, Freescale, and Analog Devices are concentrating on MEMS devices and selling to all possible companies worldwide. • Fabless companies: this business model is growing. As MEMS foundry services and contract manufacturers become a real business, fabless

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Market Analysis and Growth for Micro-Nano Products There are currently 7 different business models for MEMS companies

Business Models

Components Manufacturers

System Manufacturers Design Companies

Foundries (Dalsa, APM, TMT, Neostones)

Contract Manufacturers Colibrys, Micralyne, Tronic’s, Memscap, Silex …

«Off-theshelf » MEMS Components (AD, STM, Freescale …)

Integrated Fab (HP, Bosch, Olympus, Honeywell ...) Fabless (Akustica, Knowles …)

External MEMS Fab with Internal R&D (bio Mérieux …)

Engineering & Design (Lionix …)

FIGURE 6.4

MEMS business models.

companies have been very active over the last three years. Akustica, Discera, Knowles, and Lightconnect are key examples of such business activities. The relationship between fabless and contract manufacturers is still very complex because the management of intellectual property is always a challenge. The model can lead to months of discussion on who owns what part of the process, low, and design. This is currently a key problem for this MEMS market. • Contract manufacturers: these companies are developing speciic processes for their customers and then using the developed processes to deliver devices to the customer. Such agreements are generally made with exclusive rights or at least lead time because the customer of the contract manufacturer has inanced the process development, paying the NRE cost. • Foundries: MEMS foundries use their available processes to manufacture MEMS devices for external customers. The design of the customer generally must be retargeted to the foundry processes in order to take into account the characteristics of the available process. Apart from the development of MEMS markets, the industry has entered a new phase with the recent industry consolidation in the past ten months. In 2002 and 2003, several MEMS companies disappeared due to a lack of business or dificulties with launching real products. The remaining companies (almost 350 MEMS manufacturers worldwide) are healthier, seeing a strong growth in their revenue and perhaps becoming proitable like HL Planar, Tronic’s Microsystems, and Silex. The important movement that started mid-2004 is industry consolidation — Colibrys (Switzerland) acquired Applied MEMS (U.S.A.), Schneider Electric (F) acquired Kavlico (U.S.A.), MSI (U.S.A.) acquired more than six companies in 2004, and Qualcomm (U.S.A.) acquired Iridigm Displays (U.S.A.).

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A few companies like Honeywell, GE, MSI, Schneider Electric, and Meggit Electronic have clearly announced their intention of important external acquisitions in order to gain access to key technologies and markets and ind growth opportunities in MEMS-related businesses. We will certainly see a continuation of this trend in 2007 and beyond. Another key driver in the industry is the opening of vital industrial companies to external customers such as Honeywell, Bosch, Sony, Olympus, and Omron, which are now opening their manufacturing facilities for external customers. For example, two years ago, in order to attract more business, Bosch created an external customers’ business unit, able to develop and sell devices for automotive system manufacturers (sometimes competing with Bosch) and more generally for industrial partners. New players are also appearing. Thailand now has a public company manufacturing MEMS devices (MEMStech, the former EG&G Heimann MEMS activities); there are more than ten MEMS manufacturers in Taiwan, working as a foundry, manufacturing ink-jet heads, pressure sensors, and silicon microphones. Japanese companies have also restarted the investment in MEMS. Yole Développement has identiied more than 90 companies developing and manufacturing MEMS devices. This year ten of them are launching new 3D accelerometers for consumer applications. The Japanese MEMS industry is characterized by a very strong presence of fab integrated in system manufacturers such as Olympus, Canon, or Fujikura, or device manufacturers (like MEW and Oki). On the other hand, there are few design houses; this function in the industrial food chain is mainly realized by R&D organizations and universities.

EXAMPLES OF THE EVOLUTION OF THE MEMS COMPANIES I will take two examples of companies showing the evolution of the MEMS industry: Bosch, the world leader for MEMS sensor, and SiTime, one of the new MEMS startups with strong potential.

SITIME: AFTER 25 YEARS OF R&D, NOW MEMS OSCILLATORS ARE ENTERING THE MARKET SiTime History SiTime was founded in December 2004 in order to industrialize and commercialize MEMS resonators. The technology has been licensed from Robert Bosch, using a speciic process developed by Bosch (Episeal and MEMS First process). The management of the company is led by Kurt Petersen, a MEMS pioneer and very successful founder of more than ive companies. Markus Lutz and Aaron Partridge, who invented the process at Bosch, have joined the company with Petersen in order to bring their technical and industrial expertise. Now the company has 50 full-time employees developing the business and the technology of the company. Some data on the quartz market are important. The Quartz resonator market is a ten billion unit business per year, with an average price of $0.35 per unit. The market is very fragmented, with 18 companies sharing 80% of the market and the remaining 20% in the hands of dozen of other companies, either involved in high-end or

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very low-end applications. In addition, the IC timing market is worth $2 billion and involves different companies, like Texas Instruments and Cypress. SiTime Facts and Figures SiTime generated $11.5 million in a irst venture round in 2004. The second venture round of $12 million was closed in April 2006 and a third round took place in May 2007, but the amount and the investors involved is conidential. The most interesting point of SiTime activity is its different business models. The company is providing the following offers: • For system designers, the company is selling MEMS oscillators, which are replacing quartz devices. This business is supported by a distribution network like Future Electronics in Europe. SiTime now has distributors in every industrialized country. The target here is to compete directly with quartz devices. • For IC manufacturers, SiTime is selling the resonator only, so the IC customer is able to develop its own PPL/ASIC in order to integrate the resonator and the MEMS resonator in its application, taking full beneit of the small size of the resonator. The market target here is system-in-package (SIP) and also multi-chip module solutions. • For quartz manufacturers, SiTime is proposing speciic projects in order to develop speciic resonators, assemble the MEMS resonator with the existing products of the quartz manufacturers. Here is the area of custom projects, with direct work with quartz manufacturers So SiTime is able to work with any kind of customer, including standard quartz customers and IC timing and quartz manufacturers, which were initially competitors. Therefore, the business models of the company are very smart. SiTime has already signed two agreements: one with Ecliptek (U.S.) and the other one with Micro Crystal (CH), the quartz crystal manufacturer of the Swatch Group. Ecliptek has already announced several products, included in the EMOtm family. The pricing in volume is announced at $0.7 per device. The main feature of the device proposed by Ecliptek is the QFN package of the device, using plastic injection molded packaging, allowing ultra-miniature footprint and low cost (see Figure 6.5). For this agreement, according to our analysis, SiTime is selling to Ecliptek a MEMS oscillator so that Ecliptek can build on top of it its own product. The agreement between Micro Crystal was made in the irst half of 2006. The details of the agreement have not been disclosed, but we can imagine that SiTime will also deliver the resonator to Micro Crystal. SiTime already has 5.5 million units that are ready to be shipped, and they expect to sell more than 1 million units before the end of 2007. SiTime Production Activities SiTime is a fabless company and uses the vast infrastructure of the semiconductor fabless model. In fact, SiTime has developed the design of its resonator and the

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Programmable PLL and Compensation Die

Standard QFN Lead Frame

SiRes MEMS Resonator

FIGURE 6.5 SiTime packaged device.

linked IC, but the company has also developed the process used to manufacture the Programmable PLL and compensation circuit. The resonator was developed with the understanding made at Bosch, with a collaboration from Stanford University and also the support of SVTC, and 8-inch 65 nanometer private facility. This work was transferred to Jazz Semiconductor, where the technology is in high volume production, and the ASIC is manufactured by TSMC, both on an eightinch line. SiTime has introduced in October 2006 a irst product of its type, the SiTO1OO™, a MEMS resonator that is the smallest in the world. This new device is shipped in the die format and provides a square wave signal in the megahertz range. It could be lip chipped on a substrate or another device or wire bonded on an MCM. The device is so small that 25 8-inch wafers are enough to produce 1,000,000 devices.

Infrared and Phase Contrast Visible Light Microscope Photos

FIGURE 6.6 SiTime resonator structure.

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The irst applications targeted by SiTime are notebooks, cell phones, and DSC. The automotive market will be serviced by the end of 2008. The MEMS resonator technology does not allow the company to target high-end quartz at this time, but this will come later. SiTime Competitive Situation SiTime has in front of its activities the following three types of competitors: • Quartz manufacturers like NDK, Epson, Kyocera, KDS, Vectron etc., which are directly competing with the MEMS oscillator of SiTime (the irst device of SiTime available is also compatible pin to pin with Epson and other device manufacturers). • Silicon oscillator manufacturers, like Linear Technology, Cypress, etc. • Other MEMS oscillator manufacturers like Discera, Silicon Clocks, and VTI Technologies; but here these different companies have a common target: make the MEMS oscillator credible in order to compete with quartz. SiTime is the most advanced company at the moment. So the competitive landscape is completely crowded, but, like Knowles Acoustics with the launch of the silicon microphone, the competitive advantage of a MEMSbased device is big enough to hit heavily the market. For SiTime, the business models are very smart.

BOSCH: WORLD LEADER FOR MEMS SENSOR MANUFACTURING, EXPANDING IN AUTOMOTIVE AND CONSUMER MARKETS Bosch History Robert Bosch GmbH was created in 1886 and now employs more than 240,000 people. Sales reached 41,461 billion euros in 2005, with R&D expenditures of 3073 million euros. The Bosch group is active in the automotive equipment market (world leader and 63% of the sales group in 2005), in industrial technologies (mobile hydraulics, etc.), and consumer goods (washing machines, etc.). MEMS activity at Bosch started in 1987 as a research area. The steps in the development of MEMS activity at Bosch can be analyzed in two different ways: product development and process development. Bosch’s development of both speciic processes and devices demonstrates its strategic approach and originality. Both steps are analyzed in the following timeline: Product development: • 1987: • 1989:

Start of MEMS R&D activity Creation of a MEMS development department

 The text on this page has been updated from the original by Mr. Joe Brown — the Co-founder of SiTime.)

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• 1993: • • • • •

1995: 1997: 1998: 2002: 2004:

• 2005:

Introduction of the irst MEMS product in volume production (pressure sensor) SOP micromachined mass low sensor SOP micromachined accelerometer Silicon gyro in volume production, irst generation Market introduction of second generation accelerometer Market introduction of second generation gyro (surface micromachined sensor) More than 100 million MEMS devices produced in one year

Process development: • • • •

1992: 1995: 1996: 1999:

• 2002: • 2003:

• 2004:

DRIE process developed (named the “Bosch” process) Release of silicon surface micromachining design rules First Multi-Project Wafer run Invention of the EpiPoly encapsulation enabling MEMS in standard low-cost IC packages Release of bulk micromachining design rules Invention of the EpiSeal process, enabling sealing of cavities within a MEMS process, avoiding the use of seal glass for inertial sensors, for example Development of a new process using porous silicon in order to create cavities inside a device, without using wafer bonders and enabling all silicon processes (APSM, Advanced Porous Silicon Membrane)

The last two processes have and will have an important impact on price reduction for pressure and inertial sensors. In parallel with the history of the R&D and product introduction schedule at Bosch, we can deine several steps in the Bosch involvement in MEMS ields: • 1987 to 1993: Development of a key MEMS process and of several products (pressure sensors, acceleration sensors mainly) • 1993 to 1998: Introduction of the silicon accelerometer and gyro families • 1995: Start of foundry activity • 1997: Start of component sales to external customers in the automotive ields • 2005: Creation of Bosch Sensortec in order to address nonautomotive business and the need for foundry services The organization of the Bosch group is quite complex. The MEMS activities are shared among different organizations within the group: • Corporate R&D is involved in new concepts and new sensor development. All the sensor activities are coordinated with the group in order to reuse products and development and maintain the leadership of Bosch in sensor markets.

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TABLE 6.2 Evolution of Sensor Size (Source Bosch) First Generation

Second Generation

Third Generation

6.6 mm² 8 mm²

4.2 mm² 6.5 mm²

2 mm² 5 mm²

1 axis accelerometer 2 axis accelerometer

• R&D activities are located in the Stuttgart and Reutlingen (Germany) area, but Bosch also has a Research and Technology Center in Palo Alto (California, U.S., founded in 1999). Bosch is also a long-term industry member of BSAC (Berkeley Sensor and Actuator Center). • MEMS design, development, and manufacturing is embedded in the Automotive Electronics Division of the Automotive Technology business section and is in charge of the development and manufacturing of MEMS devices for the group. Manufacturing activities are based in Reutlingen, Germany, for the front end. Back-end manufacturing is carried out in several Bosch plants (Germany, Spain, etc.) but also uses external subcontractors (organizations like Amkor, ASE, etc.). • Bosch subsidiary Bosch Sensortec is dedicated to the nonautomotive business (mainly for consumer applications) and is working as a fabless organization, developing MEMS devices that are manufactured in the Bosch manufacturing facility in Reutlingen. • Bosch is also involved with other MEMS companies. It is a key investor in SiTime (linked to a technology transfer).

Bosch MEMS Business Facts and Figures The family of Bosch products includes the following devices: Inertial sensors: • Accelerometers for airbag and ESP (see Figure 6.7) • Gyroscopes for airbag, electronic stability program (ESP), and navigation systems Pressure sensors: • • • • • •

Manifold air pressure Barometric air pressure (engine management and airbag) Engine monitoring (high pressure) Fuel tank pressure Diesel particle ilter pressure sensor Side airbag pressure sensor

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Chemical sensors: • Climate control sensors Bosch does not publish individual device sales, but according to our estimates, cumulative volume production since the beginning of Bosch production is as follows:

FIGURE 6.7

(See color insert following page 16.) Airbag module (Bosch source).

FIGURE 6.8 (See color insert following page 16.) Gyro sensor (Bosch source).

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Market Analysis and Growth for Micro-Nano Products

• Acceleration sensor: • Pressure sensor: • Gyroscope: • Mass low sensor:

121

250 million sensors for the accelerometer structure (see Figure 6.10) 170 million sensors 27 million sensors (see Figure 6.11 for the gyroscope structure) 60 million sensors

Figure 6.9 shows the evolution of Bosch’s sensor size. The number of units produced is increasing every year, but, in parallel, Bosch is decreasing the size of the device. Table 6.2 indicates decrease of die size from generation to generation. The decrease in dimension is a result of signiicant price pressure. There is no Moore’s law in the MEMS ield, but there is clearly a year-to-year size reduction due to customer price pressure. Several methodologies are used in order to decrease price:

FIGURE 6.9 Evolution of sensor size (Bosch source).

730 µm

813 µm 668 µm

FIGURE 6.10 Example of accelerometer structure (Chipworks source).

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× 300 #11

FIGURE 6.11

100 µm BOSCH RT

3.00 kV AE/QMM–S1

5 mm

Example of gyro structure (Bosch source).

TABLE 6.3 Evolution of Sensor Manufacturing and Sales Number of MEMS devices manufactured, in M units (Bosch data) Sales in MEuro (YOLE data)

1999

2000

2001

2002

2003

2004

2005

25

50

60

67

81

93

105

80

140

150

160

210

260

325

• • • •

Decrease in the size of the active element Change in the sensing element structures (for example, for the gyroscope) Integration of the electronic circuit very close to the MEMS device Development of new process steps in order to decrease the manufacturing price (for example, the porous silicon process) • Development of low-cost packaging in order to avoid ceramic packaging for inertial sensors For example, the manifold air pressure (MAP) sensor price has declined by more than 60% between 1994, the irst design, and 2004. The major price decrease can be attributed to the evolution of the packaging: Bosch was using metal can packaging at the beginning and then moved to hybrid substrate and inally, for the last generation, to premold packages.

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With the gyroscope, Bosch started with a ring comb drive structure, but the new generation uses a new coupled rectangular structure in order to obtain a better signal. From the irst “macro” mechanical design in 1995 to the last surface micromachining device in 2005, the price has decreased by more than 70%. Table 6.3 provides a YOLE evaluation of the MEMS business at Bosch. The leveraged effect of Bosch MEMS activity on Bosch business is very important; the electronic sales generated by the MEMS devices are multiplying MEMS sales by a minimum factor of four. So the MEMS business has always been considered a strategic ield at Bosch. Key growth applications for Bosch are ESP and engine management systems (especially diesel injection). Overall business is growing, but these two applications are by far the fastest growing ones. It is important to note that Bosch has changed its business model from that of internal fab for a system manufacturer to that of a sensor supplier for the automotive equipment manufacturers (a change made in 1997) and to the model of sensor manufacturer for consumer applications (a change made in 2005). We analyze these changes in more detail later in this chapter. We estimate at YOLE that in 2005 sales of Bosch devices outside the Bosch group accounted for approximately 17 to 20% of overall business. The nonautomotive business was just starting in 2005 and will be more signiicant in 2006 and in the coming years. The list of Bosch customers outside the Bosch group is clearly conidential, and no oficial data are available on the companies that are using Bosch as a sensor supplier. The applications where Bosch does external business are related to navigation systems (supplying gyroscopes), airbag systems (acceleration sensors, gyroscopes and pressure sensors), and engine control sensors (pressure sensors). These ields are also areas where Bosch is competing at the system level with its customers from the device level. This situation is accepted by the customers because of the performance, price, quality of Bosch products, and the fact that they value Bosch as a stable and reliable supplier. Competition with Bosch at equipment level could be an issue for several customers. Another important evolution in Bosch MEMS activity is the development of the cluster concept. Car manufacturers are increasingly interested in having a few “sensor clusters” that diffuse the information to the different pieces of equipment inside the car. Bosch has developed several sensor clusters, mainly for chassis control. Such clusters (like the MM3) integrate a gyroscope, acceleration sensors (used as premold sub modules), full digital processing, CAN interface, and more. The price impact of clusters is signiicant by enabling less wiring, centralized electronics, and sensing. Also, the signal can be reused by other equipment within the car. Bosch Production Activities The Bosch manufacturing facility, based in Reutlingen, operates with the following speciications:

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• 6’’ manufacturing line • 4000 m² of CMOS fab, where the MEMS front-end manufacturing is done • 3000 m² of MEMS back-end fab, where speciic MEMS processes are used and a 1200 m² of clean room expansion just opened in 2006 • 45,000 wafer starts per month • 100 million MEMS units produced in 2005 • Test center and assembly line for packaged MEMS products • 300 employees in MEMS production • 250 employees in MEMS R&D In addition to the Reutlingen fab, Bosch has a back-end facility in Madrid (mainly for accelerometers). But all silicon parts are manufactured in Reutlingen. Bosch only uses silicon wafers (no SOI production as far as we know). The manufacturing line is today a six-inch line. Bosch has announced it is investing in a new eight-inch line, both for IC and the MEMS manufacturing. The new fab will be operational in 2008 and will require an investment of 550 million euro. This investment is linked to semiconductor manufacturing, but it will heavily impact the MEMS business at Bosch. The unit production capacity will be multiplied by 2.5, also enabling cost savings in manufacturing (due to the effect on batch processing) and preparing Bosch in the development of consumer markets. As far as we know, the six-inch line will stay in Reutlingen. Bosch Competitive Situation Bosch is involved in a complex competitive situation. Competitors of Bosch are at different levels: a. System manufacturers: Conti Teves is the main competitor for ESP; Delphi, TRW, and Siemens VDO are all competing in one way or the other with Bosch. Several of these companies have internal MEMS fabs (like Delphi), and the others use sensor suppliers, including Bosch, to obtain MEMS devices. b. Automotive sensor manufacturers: VTI Technologies, Analog Devices, etc., for acceleration sensors; Systron Donner, Panasonic, Inineon/Sensonor, etc., for gyroscopes; and GE Novasensor, Freescale, etc., for pressure sensors are all competing with Bosch at the device level. c. Consumer sensor applications: MEW, Kionix, Analog Devices, etc., are also the main competitors for the consumer markets. Until now, Bosch Sensortec was only visible in the acceleration sensor market (with 2 axis and 3 axis sensors). The Bosch group is the world leader in automotive electronics, and the MEMS group at Bosch is by far the world leader in sensor manufacturing, with the broadest product range. The closest competitor is 35% smaller in size and has a limited growth rate.

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Market Analysis and Growth for Micro-Nano Products MEMS Foundries and Contract Manufacturer Revenue $700 $600

US$

$500 $400 $300 $200 $100 $0 2003

2004

2005

2006

2007

2008

2009

2010

FIGURE 6.12 MEMS contract manufacturers and foundries market estimation.

DEVELOPMENT OF FOUNDRIES AND CONTRACT MANUFACTURERS In 2004, the MEMS foundry and contract manufacturing business was $130 million, according to Yole Développement, with an anticipated 40% growth rate for at least the next three years. Compared to MEMS markets, the foundry and contract manufacturers market is roughly 3% of the total MEMS business — very low compared to the semiconductor industry. Today, most of the contract manufacturers have a full plate, both for development projects and production. We anticipate that the MEMS foundry and contract manufacturer markets will reach total revenues of more than $500 million by 2010 (a 3 × market increase over a six-year period). We can see that most MEMS foundries have grown 35% or more. This growth is due to two primary factors: a continuous increase in activity for existing companies like DALSA Semiconductor, IMT, Silex, Tronic’s, SMI and Micralyne, and increased activity of Taiwanese MEMS foundry activities, mainly linked to Taiwanese markets. New players are entering the market, targeting high-volume applications like silicon microphones, inertial sensors, and ink-jet heads. New players like Dai Nippon Printing (inertial sensors) and Sony (silicon microphones) are now producing large volumes of MEMS devices on an eight-inch line. The example of Sony is signiicant; in 2005 Sony produced 100 million units for Knowles Acoustics with a signiicant growth rate (more than 100% per year). A majority of the more traditional MEMS foundries and contract manufacturers have moved or are now moving from four-inch to six-inch manufacturing. In 2004, the MEMS foundries and contract manufacturers secured most of the top ten places for the highest growth companies. We forecast a two-phase evolution over the next ive years: • Strong growth of at least 35% between 2005 and 2008, due to new production of key growth applications linked to mobile phones and consumer applications. • Growth after 2009 will drop back to 15 to 20% per year.

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In addition to the introduction of new products, we will see over the next few years that today’s system manufacturers who have integrated manufacturing facilities will increasingly subcontract manufacturing to MEMS foundries/contract manufacturers. HP and Lexmark are clear examples of system manufacturers with internal facilities that also use external foundries in order to have access to extra capacity with strategic partners. Several other major companies with internal MEMS manufacturing are following the same model.

JAPANESE MEMS MARKETS The Micromachine Center (MMC) has published during the Micromachine exhibition its evaluation of the MEMS markets in Japan. MMC estimated MEMS market volume in 2002 and in 2010 expectations in Japan. According to MMC, the MEMS market in 2005 was 420 billion yen, or approximately 2.9 billion euro. The large volume applications were the following: a. Information processing and communication equipment, for 150 billion yen (or 1 billion euro): the main applications are linked to the hard disk drive industry and mobile phones b. Automotive, for 135 billion yen (or 900 million euro): it is mainly sensors for the automotive industry c. Precision equipment, for 91 billion yen (or 600 million euro): this part includes sensors for industrial applications but also small metal and plastic parts Those different ields are strong industry in Japan. The market size estimated by MMC is larger than the estimation done by YOLE Développement. It is mainly a matter of deinition. The YOLE Développement igures only include MEMS silicon and quartz devices (we are reviewing the metal and polymer parts in different ways) compared to the MMC estimation, which includes all type of microdevices. According the MMC, the next ields where the growth will be important are biotechnology, medical/social services, and society and culture. Those ields represent attractive markets expected to be high growth markets in response to future changes in society. MMC estimated that the market volume will be 1.36 trillion yen in 2010, or roughly 9 billion euro. According to their analysis, the large volume sectors (in the range of 200–400 billion yen) will be information and communications equipment, automotive applications, and culture (including sports). The MEMS market in these areas will expand and grow steadily. Development of low-cost MEMS sensors and RF MEMS enables signiicant growth in the society and culture sector because MEMS devices will be adopted in large numbers both in information-enabled home appliances and amusement products. The new game console WII from Nintendo is a good example of this trend. New markets for MEMS (in the 100 billion yen range) are new energy/energy saving, medical and social services, biotechnology, and aerospace. For realizing those applications, both new functions, enhanced precision and reliability will be

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Market Analysis and Growth for Micro-Nano Products MEMS Market in Japan 1,600

($16B)

Agriculture, forestry, and fisheries

1360B yen

1,400

Urban environment and infrastructure Society and culture Aerospace

1,200

Automotive

Billion Yen

1,000

($10B)

Environment Energy

800

Biotechnology Medical and social services and facilities

600 426B yen

Maintenance

400

Microfactories Measurement equipment

200

Precision equipment

0

2002

2010

Information processing and communication equipment

FIGURE 6.13 Evolution of the MEMS markets in Japan (source: MMC).

required. The key to the development of these markets will be the development of MEMS technologies based on new materials and new structures. Figure 6.13 shows the Japanese MEMS market trends according to MMC. Figure 6.14 presents the analysis of the evolution of the MEMS applications in Japan, according to MMC. The MEMS technologies and markets have been established in Japan as an industrial market since the mid-80s with the availability of silicon pressure sensors for medical, industrial, and automotive applications. Several Japanese companies have been involved in the MEMS ields since almost the beginning — Matsushita Electric Works (pressure sensors in the mid90s), Denso (pressure and acceleration sensors), and Mitshibishi Electric (pressure sensors), just to mention a few. Today MEMS activities in Japan are very strong: Yole Développement has identiied more than 70 Japanese companies involved in MEMS development and manufacturing, with their own clean rooms and production facilities. The Japanese MEMS industry is characterized by a very strong presence of fab integrated in a system manufacturer (like Olympus, Canon, or Fujikura) or device manufacturers (like MEW, Oki, etc.). On the other hand, there are very few design houses and fabless companies: this function in the industrial food chain is mainly realized by R&D organizations and universities. The foundries have been established for 2 years in a network of ten industrial and R&D organizations, under the management of the MicroMachine Centre. These different companies are proposing several services, from full development and production to CAD tools and engineering services. This initiative (including Oki Electric, Omron, Olympus Optical, Hitachi, Fujikura, Matsushita Electric Works, Fuji Research Institute Corp., Nano Device and System Research Institute, ULVAC, and Nihon Unisys Excelutions) is important

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Commercializing Micro-Nanotechnology Products MEMS Industrialization Strategy & Scenario 1.36 Trillion Yen, ‘10 (Domestic Market) Others Ecology Medical Home

Evolution of MEMS

he evolution of MEMS enables us to solve various kind of social needs 2nd Stage: Multifunction devices -Miniaturization -High Performance -High Reliability

Eco Energy

Automobile IT Security

Information Technology Automobile

430 billion Yen, ‘02 1st Stage:

Medical Care

Evolution of MEMS by hree Dimensional Fabrication Technology Combined with Nano-related Functions

e

ur

at

em

Pr

Now MEMS devices being developed Single-function MEMS devices: by utilizing micromachining Pressure Sensor, Accelerometer, and semiconductor process Scanner, Inkjet Head Bulk-micro machining, Surface micromachining 2005

2010

2015

2020

FIGURE 6.14 Scenario analysis of the MEMS markets (source: MMC).

in order to bridge the gap of MEMS development and manufacturing for companies having speciic needs and no ability to make their own development. What is missing at the moment in Japan is mainly contact manufacturers, i.e., companies able to develop speciic process and manufacture devices on this process. It will certainly happen in the next two to three years. Another very important point is the presence in Japan of capital equipment and material manufacturers, with strong involvement in MEMS. Some of the leading ones include the following: a. Capital equipment manufacturer: Sumitomo Precision Products, TEL, Samco, Ushio, Ulvac, Hitachi b. Materials manufacturer: Shin Etsu, Nippon Steel c. Packaging: Kyocera (strong leadership for MEMS packages) The Japanese companies are very active in all areas: • Automotive applications: Denso, Silicon Sensing Systems (joint venture between SPP and BAe), Mitsubishi Electric, etc. • Ink-jet head manufacturers: Canon, Seiko, Epson, etc. • Biochip and microluidics: Olympus, Enplas, Takara Bio, etc. • Instrumentation in industrial and medical applications: Omron, Terumo, Yokogawa, etc.

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• New innovative devices: Sony (micro mirror arrays), Olympus (AFM tips), Nippon Signal (bare code reader), etc. The Japanese companies are less involved in new areas like RF MEMS, tire pressure monitoring, silicon microphones, IR image sensors, etc., but the industrial involvement in key devices for consumer applications is very impressive with the growing position of Oki, Hitachi Metals, and MEW. Several Japanese companies, such as Silicon Sensing Systems for gyroscopes and Epson and Canon for ink-jet heads, are world leaders in their activities. In the top 30 world MEMS manufacturers, 7 companies are involved in the ranking. Foreign companies like Freescale (former Motorola Semiconductor) also have manufacturing facilities in Japan. Tohoku Semiconductor, for example, is manufacturing the entire silicon acceleration sensor for Freescale and is on the way to industrializing a new product based on SOI. All the ingredients are present in Japan in order to make available the key MEMS devices for system manufacturers. This R&D and industrial infrastructure is used and will be key for the development of innovative modules and systems. The evaluation of the MMC is just showing the healthy MEMS activities in Japan.

THE MARKET FOR EQUIPMENT AND MATERIALS FOR THE DEVELOPMENT OF MEMS DEVICES. ANALYSIS OF THE MEMS EQUIPMENT MARKET The MEMS equipment market was $631 million worldwide in 2005 and is expected to expand to $758 million in 2008 and $861 million in 2010. The 5-year CAGR forecast for MEMS equipment is 6%. MEMS materials can be divided into substrates and chemicals and other materials. Together these markets totalled $385 million in 2005 and are forecast to be $771 million in 2010. MEMS materials are expected to grow at a ive-year CAGR of 15% through 2010. The total worldwide MEMS equipment market is estimated at $631 million in 2005, of which $332 million is equipment used in front-end processing (52%), $199 million for back-end processing (assembly, packaging, and testing) (32%) and about $100 million is R&D tools (16%). The front-end equipment segment is expected to grow to more than $450 million by 2010, with a ive-year CAGR of nearly 7%. This category of MEMS equipment will represent about 58% of the total equipment market at the end of the forecast period. Assembly/Packaging and test equipment is forecast to reach more than $275 million in 2010, which is about one third of the total equipment market. The assembly/ packaging and test tool segment will grow at about a 7% CAGR through 2010. The global market for MEMS R&D tools is expected to reach $125 million in 2010, with a CAGR of 5% over the forecast period. At that time, R&D tools will represent about one seventh of the total MEMS equipment market. Within the front-end tool category, nearly one quarter of global sales are for etching equipment, including deep etching techniques (DRIE). Etching is a key

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Commercializing Micro-Nanotechnology Products 900

R&D equipment Test Assembly & Packaging Other front-end Wafer cleaning Inspection & Meas. hermal processing Bonding Deep etching Etching Lithography Deposition

800

Market in $M

700 600 500 400 300 200 100 0

2005

FIGURE 6.15

2006

2007

2008

2009

2010

MEMS equipment markets.

process technology for forming/releasing mechanical structures in MEMS devices. A detailed analysis of the DRIE market is provided later in this chapter. Another rapidly growing MEMS tool segment is wafer bonding. The bonding equipment market is forecast to experience 10% CAGR, growing from $26 million in 2005 to $43 million in 2010. The development of advanced WLP technology is driving this market. As new MEMS devices are becoming more sophisticated in their design, the equipment used to test, assemble, and package those devices also becomes more sophisticated. Back-end equipment for MEMS applications is expected to grow at about 7% CAGR through 2010. Proliferation of MEMS devices — and therefore increasing unit sales — is another key driver of the back-end equipment market. Relative to the MEMS device market, which is expected to grow at a CAGR of about 14% through 2010, and the MEMS materials market, which is expected to enjoy a ive-year CAGR of 15%, the MEMS equipment market is forecast to grow more slowly, with a CAGR of 6% through 2010. There is a strong market for retroitted or refurbished equipment in the MEMS space; about 30% of the equipment market is for used equipment. We now focus our analysis on the deep reactive ion etching applications (DRIE), which provide a key example of the introduction of MEMS production equipment on the market.

DRIE: A KEY PROCESS FOR MEMS MANUFACTURING — AND IC MANUFACTURING An Overview In 2010, equipment for MEMS manufacturing will be an $860 million market. Although this market is large enough to be shared by well-established players (STS, Alcatel MMS, EVG, Suss microTEC, etc.), the speciic requirements of some MEMS process steps (deep etching, thick coatings, sacriicial release, wafer bonding, etc.) could open opportunities for newcomers. This article reviews the technologies and market trends for speciic MEMS front-end equipment, deep reactive ion etching (DRIE).

© 2008 by Taylor & Francis Group, LLC

Market Analysis and Growth for Micro-Nano Products Chemical Dry Etching (CDE) Isotropic (non-directional) Lack of dimensional control

Deep Reactive Ion Etching (DRIE) Anisotropic (directional) Improved dimensional control

Fully Isotropic Etching

FIGURE 6.16

131

Anisotropic Etching

Comparison of DRIE process and wet processes.

Deep reactive ion etching was developed more than 14 years ago. The process was invented at Bosch in 1992 by F. Laermer. The irst company that bought the process license from Bosch was STS in 1994. The irst equipment release occurred in 1995 with the introduction of the Anisotopic Silicon Etching (ASE) process. DRIE is an anisotropic (directional) process, replacing the wet chemical process and enabling etching independent of crystal orientation structure, vertical etched structures and high aspect ratio structures. Figure 6.16 presents a comparison between wet etching and DRIE. Figure 6.17 shows a typical device made with DRIE equipment. According to YOLE Développement analysis, the installed base of DRIE equipment worldwide was about 700 at the end of 2006. Deep Etching Mostly Used for Inertial MEMS Devices and Silicon Microphones The main market today for deep etching equipment for MEMS is for inertial MEMS devices. Figure 6.18 shows the main applications for DRIE in MEMS but also in other areas of the semiconductor industry, including advanced packaging. We can identify two interests in the use of DRIE for MEMS manufacturing: • High accuracy etching for accelerometers, gyroscopes, RF MEMS, micromirrors, etc. • A high etch rate for microphones, ink-jet heads Today 70% of total accelerometer production is comb-drive accelerometers (which represented more than 170 million units in 2005). Some of the companies manufacturing comb-drive accelerometers are Delphi, Denso, Bosch, Analog Devices, Motorola, Panasonic, and Tronic’s Microsystems. For gyroscopes, we

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Commercializing Micro-Nanotechnology Products Inertial Sensors

FIGURE 6.17

Typical structures made with DRIE (source: Alcatel MMS).

estimate that more than 60% are silicon or quartz surface micromachined. The users of such equipment include Bosch and Panasonic. There are two competing DRIE process technologies: the Bosch process and the cryo process. A summary of both processes can be seen in Table 6.4. Although the cryo process has slightly better selectivity, it requires lower temperature baking. The Bosch process is the most widely used worldwide, and Bosch has licensed its process to the major equipment manufacturers. Figure 6.19 presents the evolution of the DRIE process at STS in MEMS manufacturing, with a visible evolution of the etch rate. The cryo process is well suited to large wafer sizes: this process helps provide better uniformity. The challenge here is to have temperature uniformity on the wafer

% of DRIE Use

>85%

Si µ-Phones

>70%

Accelerometers

~50%

Gyroscopes

RF-MEMS