Many inventions resulting from academia are not aligned with customers’ wants and needs, are too difficult or costly to manufacture or distribute, or are limited to small market opportunities. As a result, industry partners are unwilling to invest in product development until the invention is de-risked – in other words, more advanced on the TRL scale and there is evidence of strong market demand. Essentially, industry wants to adopt inventions that solve validated problems and work well in the real world under simulated or actual customer conditions, and often at an industrial scale. Industry adopters don’t want inventions that are only proven to work in the lab under very artificial, small-scale conditions.
Much can go wrong when technology is transferred for the lab to the market, and these risks can be costly. If market demand has been validated, then the next step is to “de-risk” inventions by advancing them closer to a final product. In looking to de-risk an academic invention, researchers often have difficulty securing funding (often called gap funding), industry partners to participate in collaborative research, and pilot plant testing facilities.
Once adequately de-risked, the university or academic entrepreneur (depending on who owns the invention), will negotiate a license or sale agreement to transfer it to an industry partner for commercial product development. The partner now takes on the responsibility to convert the invention, often with a patent pending, into a usable product that can be brought to market. Once a product is sold to and used by customers, then the invention has started to become an innovation. Not all new products are innovations – but those that are first to market and based on leading edge research, usually are.
To further innovation, the industry partner (licensee) often hires graduate students that were involved in the creation of the invention. In this way their creativity and deep knowledge beyond what might be described in a patent application can be transferred and used by the partner to advance further innovation. These newly hired graduate students, who turn into seasoned employees, often return to the same research institute or university as the industrial partner in a future collaborative research project and the cycle repeats.
The process of converting an invention into an innovation can take much longer than the time to create the original invention in the lab. Product optimization is often a slow, detailed, and arduous path to find the product-market fit that will survive long enough in the market and generate a profit. Many good inventions never make it to market or are quickly abandoned by companies because they were unable to generate a reasonable profit.