Commercialization Of Innovative Researches.docx

AMBIDEXTROUS CAPABILITY OF CBSUA ON COMMERCIALIZATION OF INNOVATIVE RESEARCHES

EMILIO OLIVEROS IBARBIA

AN UNDERGRADUATE THESIS SUBMITTED TO THE FACULTY OF THE DEPARTMENT OF AGRIBISUNESS – COLLEGE OF ECONOMICS AND MANAGEMENT-CENTRAL BICOL STATE UNIVERSITY OF AGRICULTURE, SAN JOSE, PILI, CAMARINES SUR IN PARTIAL FULLFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF

BACHELOR OF SCIENCE IN AGRIBUSINESS

AUGUST 2018

TABLE

OF CONTENTS PAGE

I. INTRODUCTION

1

Statement of the Problem

7

Objectives

8

Significance of the Study

9

Scope and Limitations

9

Definitions of Terms

10

II.

REVIEW OF RELATED LITERATURE

III. METHODOLOGY

11 18

Time and Place

18

Respondents of the Study

18

Data Collection

18

Data Analysis

19

IV.

REFERENCE

20

ii

INTRODUCTION

In terms of definition, commercialization is a term that bounds

up

with

the

word

“commerce.”

This

shows

that

commercialization activities and the products produce from those

activities

Commercialization

are

being

involves

the

the

subject

basic

of

commerce.

assumption

that

an

entity which is the product exists and that it is possible to design and manufacture that particular entity. This entity then needs to be made tradable, for example, subject to buying and selling. The activities that make it happen are called commercialization

(Simula,

2012;

Joly

and

Dove,

2012).

Commercialization is an essential component of the innovation process that captures the value of innovation. In other words, commercialization is a process that turns the innovation or idea into a marketable product or service to realize a positive return from the investment in R&D. Indeed, a valuable invention or idea must have some commercial potential in which such innovative ideas can be brought to market in the form of products or services that satisfy consumers’ needs and/or solve their problems (Toneguzzo, 2008). Commercialization of innovation refers to the activities required for introducing an innovation to market (Keirn et 1

aL, 1995; Narayanan et aL, 2000; Kwak, 2002; Andrew and Sirkin, 2003; Nambisan and Sawhney, 2007; Nerkar and Shane, 2007). Nerkar and Shane (2007) measured commercialization of innovation as the early

indication of commercialization,

operationalized as the first sale of the target product or service. Innovation involves changes and improvements to technologies,

products,

processes,

and

services

(Rainey,

2005) that bring direct benefits to customers and firms as well as externalities or spill-over benefits to society and rivals. According to Andrew, Sirkin and Butman (2006), innovation is the process of developing ideas to realize payback and consists

of

three

commercialization, commercialization innovators

phases and phase

because

of

activity:

realization. is

during

the

this

idea Of

most phase

generation, these,

challenging the

company

the for must

evaluate the potential payback it could generate from its innovative idea and make important decisions with respect to the

innovation

business

model,

investment,

management,

company organization, etc. They note that besides generating a cash payback, the innovation process also brings indirect benefits that affect the company’s ability to generate cash later. These indirect benefits can be knowledge acquisition, brand

enhancement,

strengthened

partners

and

associated 2

organizations, and the organization’s prestige. Although the importance of innovation is widely recognized (McKinsey, 2010), many companies still find it hard to commercialize matured

concepts

into

a

successful

new

products(Edwin

Grobbink, 2012). Nowadays, research commercialization has been receiving significant attention from scholars due to its capability in promoting the growth of a nation economy and in playing a role as future investment of the nation (Chandran, 2010; Low at

al,

2011).

Abreu

and

Grenevich

(2013)

agreed

that,

commercialization of university research products has been receiving much attention due to the ability to help in the growth of the nation’s economy. In the past years has seen an increasing emphasis on the generation of commercial outcomes from university-based research. At the policy level, the commercialization of university research has been viewed as a

key

driver

of

national

competitiveness,

and

been

consequently supported by a range of initiatives seeking to promote

the

(Henderson

et

links al.,

between 1998;

universities

Mowery

et

al.,

and

industry

2002).

Many

universities have taken great strides in pushing commercial agendas to generate more financial value from their research, by creating new structures and encouraging entrepreneurial activities (Hackett, 2001a; Phan and Siegel, 2006). Some 3

scholars have suggested that these changes are bringing about an

‘academic

revolution’

towards

more

entrepreneurial

universities, in which commercial outputs become the norm rather than an optional side activity (Etzkowitz et al., 2000; Owen-Smith, 2003). In the current competitive world, the university research commercialization process is remembered as one of the important factor in the technological innovation process and effective factors in development of knowledge economy (Meigounpoory and Ahmadi, 2012). Why do some research generate commercial output while others

are

not?

A

Canadian

panel

of

experts

on

commercialization proposed that people and excellence are two main elements of commercialization (Industry Canada, 2006). In

fact,

without

people

no

activity

takes

place

while

excellence refers to who wins in the face of emerging market opportunities through his/her commitment to building a highly skilled

workforce,

undertaking

outstanding

research,

and

making far-sighted investments. They also point out that successful commercialization has two sides: the supply of ideas and talented people and the demand from the marketplace for new products and processes. The panel believes that Canada has focused more on the supply side by increasing funding for the university research that results in knowledge and the talented people needed for commercialization. However, it has 4

not paid much attention to the demand side to encourage businesses to engage in commercialization through reducing barriers and perceived risks. Generally, the panel identified three areas, namely talent, research, and capital on which the government of Canada needs to focus by preparing talented people, enhancing public and private research, and ensuring effective functioning of capital markets. Commercialization requires access to the necessary complementary assets. This can be done through integration, collaboration with network partners or through licensing contracts. The choice for a certain commercialization strategy depends on the speed of imitation

in

the

market,

the

importance

of

first

mover

advantages, and the transaction costs of the complementary assets. Organizations should proactively search for network partners to create a diverse network(Edwin Grobbink, 2012). Commercialization (Adams,

Bessant

perspective

on

was et

seen

al.

as

2006).

an

after

The

commercialization

launch

difficulty is

that

practice with

this

innovations,

projects after the launch, had no connection with the market. Innovations have a remarkable failure rate of 40–50%,and this performance has not changed much over the past 20 years(Chiesa and Frattini 2011). What

is

the

role

of

ambidexterity

in

the

commercialization of university research? Commercialization 5

of innovations is a critical entrepreneurial activity that leads to economic development and growth, but remains underresearched and is therefore not as well understood as other aspects of innovation. Datta, Reed and Jessup (2013) believe that

the

reasons

for

this

are

twofold.

First,

commercialization of innovation requires research expertise from

a

multitude

strategy,

of

disciplines

entrepreneurship,

including

economics,

and

management, marketing.

Second, most of the work has been focused on one specific area of commercialization of innovation, such as sources of innovation,

protection

forth,

identification

and

of

intellectual of

common

property,

themes

and

across

so

these

diverse disciplines seemed to be the most prudent next step with this work in order to help move the research agenda forward(A.Datta et al. 2013).

6

Statement of the Problem Commercialization

is

crucial

as

it

has

cost

huge

spending of the public funds. The government obligates high expectation to the universities to take this prospect to commercialize

their

commercialization

research

activities

in

products.

However,

universities

were

the below

satisfactory level and very limited (Chandran et al, 2009; Kamisah et al, 2011). The extraordinary challenge here is that universities and their faculty are not simply required to switch from one (single-handed) activity to another, but to develop the simultaneous

capacity

for

two

activities

commercialization). Thus, tensions

(academic

arise at the

rigor

and

level of the

organization as a whole as it strives to manage these two sets of activities at the same time, and also at the level of the individual who has to work out how to balance his or her time between competing demands.

As

we

know

from

the

significant

literature

on

ambidexterity in the wider domain of organization theory,this dual focus is very hard to manage (Duncan, 1976; Gibson and Birkinshaw, 2004; Tushman and O’Reilly, 1997).

7

Objectives This study mainly aims to measure the ambidexterity of CBSUA

on

managing

the

commercialization

of

innovative

researches but at the same time able to perform its main purpose which is producing academic researches. Specifically: 1. To

evaluate

the

existing

innovative

researches

for

possible commercialization; 2. To determine the ambidexterity level of the academic units in CBSAU that produces innovative researches; and 3. To identify the areas for improvements for an effective commercialization outcomes.

8

Significance of the Study The study maybe useful and beneficial to the following sectors and/or agency: To the University. It may serve as benchmark for opportunities

for

both

aspect

on

may

provide

research

and

commemoration. To

the

Government.

It

a

potential

innovative technologies that maybe helpful on the current and/or future necessities. To the Prospective Entrepreneurs. It may serve as a guide on discovering innovative technologies for future business venture. To the Researchers. The study would serve as an instrument or a useful guide to identify new possible research gaps which can be use as future research agenda and

a

material

for

future

research

relative

to

Commercializing Innovative Researches.

9

Scope and Limitations The study will focus on the different academic units in CBSUA that produces innovative researches. These innovative researches are limited on the scope of applicability on Agriculture or Agribusiness.

Definitions of Terms Ambidexterity is used to explain the capability to change in an organization and includes the balance and linkage of exploration and exploitation. Exploitation can be described as the use, replication and refinement of existing knowledge, whereas exploration is concerned with innovation and the development of new knowledge (Turner et al., 2013). Innovative

Research

is

the

implementation

of

a

new

or

significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business

practices,

workplace

organization

or

external

relations (OECD/Eurostat, 2005). Commercialization is a process that turns the innovation or idea into a marketable product or service to realize a positive return from the investment in R&D (Toneguzzo, 2008).

10

REVIEW OF RELATED LITERATURE According to Raisch and Birkinshaw (2008), Duncan (1976) has been

identified

as

the

first

researcher

to

use

the

term

“organizational ambidexterity” to explain the extent that a firm adopts

different

organizational

designs

to

engage

in

various

innovation processes (i.e., incremental, radical). Over the past three decades, organizational ambidexterity has been increasingly used to explain the firm’s ability to engage in dual activities simultaneously (i.e., exploitation and exploration, distal search and

proximal

alignment

and

search,

radical

adaptability)

and

to

incremental

achieve

innovation,

superior

or

performance-

outcomes (i.e., firm performance, business-unit performance, new product performance) (Gupta et al., 2006; Raisch & Birkinshaw, 2008; Raisch et al., 2009; Simsek, 2009; Lavie et al., 2010).

Ambidexterity of the organization is a research focus of the management science in recent years and becoming widely used in strategic alliances, technological innovation, new product development, market development and other research areas. This theory is paradigm

(Raiseh,

likely to become a main research

2008).

Some

scholars

have

studied

the

nature, content, building mechanisms, consequences and the adjust variables of the ambidexterity (Raiseh, 2008; Zeki, 2009). Ismail et al. (2012) said that, “university researcher are facing problem to commercialize their research because they are having much responsibility such as teaching various subject at various

levels

(undergraduate

students,

postgraduate

students) 11

researching, students,

consulting,

writing

supervision

research

article

of for

postgraduate publication,

research holding

administrative position, working in government committees and as well trying to innovate and manage spin off venture.”

With having

much responsibility, time to focus in commercialization is also being reduced. Ambidexterity theory suggests that organizations modify

their

structures

to

deal

with

conflicting

objectives

(Duncan, 1976; Tushman and O’Reilly, 1996). The study of Heirati (2012

)

opens

a

new

perspective

about

the

extent

that

organizational ambidexterity provides the capacity to resolve the innovator’s dilemma, particularly tensions related to the product range extension. This study shows that organizational ambidexterity is stemmed from the interactions between senior managers,

who

formulate

corporate-level

exploratory

and

exploitative strategies, and mid-level managers and employees, who develop and deploy specific routines to translate corporate strategies into superior performance outcomes (i.e., new product and established product success). A firm becomes ambidextrous when it has the ability to effectively manage tensions created from such simultaneous engagement in two different activities (Smith & Tushman, 2005; Jansen et al., 2008; Andriopoulos & Lewis, 2009).

The

model of Datta (2011)suggests that for a firm to remain

competitive it must do a number of things well. First, creation of an environment that fosters knowledge sharing and diffusion of knowledge through deployment of a number of

12

internal

mechanisms

is

crucial.

Second,

alliances

with

external partners are needed to access and direct resources towards

commercialization

activities

lead

to

an

of

ability

innovations. to

Both

increase

these

absorptive

capacity, and the ability to explore new areas and exploit current

opportunities.

innovation

engines

organizations,

and

Third,

such

alliances

universities

leveraging

these

can and

include research

relationships

can

increase absorptive capacity. Lastly, an understanding of nature of the environment within which the firm operates and how that affect the ability to commercialize innovations also is crucial for success(Datta, 2011). Realizing

the

market

potential

of

an

innovation

is

fundamental to commercialization of innovations, and such, it is contingent a firm’s absorptive capacity. Further, the antecedents to both ambidexterity and absorptive capacity can be found in networks within a firm, between firms, and between firms and innovation engines. These networks directly affect a firm’s ability to commercialize innovations, not only by helping in recognizing market opportunities for innovations, but also by helping in accessing resources required for manufacturing

and

distribution.

In

addition,

the

relationships that networks have with absorptive capacity and ambidexterity

are

moderated

by

environmental

turbulence, 13

munificence and complexity(Datta, 2011). Universities or the institutions have high complementary with industries on the resources and capabilities, and they all need the relationship of symbiotic (Si Shangqi, 2009). The

organization

could

be

an

university,

a

research

institution or an enterprise, will establish a relatively strong competitive advantage in some particular areas but it may not do so well in other areas. The universities and the institutions are good at research activities based on their existing knowledge but they are weak on the commercialization of their research achievement (Tina, 2008). Ambidexterity can be realized through the organizing the organization structure and

arranging

the

situation

inner

the

organization,

and

ambidexterity can also realized between the organizations through using complementary advantages(F.Feng et al, 2012). Universities show evidence that they are able to manage the tensions between academic and commercial demands, through for example their creation of ‘dual structures’. At the individual level, on the other hand, the tensions are more acute, so that the people who deliver commercial outcomes tend to be rather different to those who are accustomed to producing

academic

Furthermore,

T.

C.

outcomes(T. Ambos

et

C. al,

Ambos (2008)

et

al,

shows

2008). that

on

14

organizational level, it is possible to achieve ambidexterity at the level of the university through the combination of excellence in scientific research and the provision of a dual structure to facilitate the commercialization of academic inventions. Adding to that T. C. Ambos et al, (2008) also suggest

that,

it

is

possible

for

individuals

to

be

ambidextrous that is, the projects with younger, less senior, and higher-cited principal investigators produce the highest proportion of commercial outputs. Also, consistent with the dominant point of view in the ambidexterity literature, T. C. Ambos et al. (2008) showed that universities reconcile the tensions between conflicting demands through the creation of dual structures at the level of the university or research department.

15

Conceptual Framework The conceptual framework is developed for the assessment of ambidexterity of the selected academic unit. Presented in the Figure 1.

Conceptual Framework the variables necessarily

for the analysis and answering the objective of the study. The antecedents are the independent variables that can affect the capability of an entity (individual and academic unit) to be ambidextrous. Wherein the university is dependent on the outcomes whether

of

that

entity

how

well

they

(individual

are

on

and

handling

academic the

unit)

aspects

of

exploration and exploitation.

Antecedents: TMT heterogeneity; vision; R&D intensity; continuous improvement

16

ANTECEDENTS

EXPLORATION

INDIVIDUAL

ACADEMIC

AMBIDEXTROUS

LEVEL

UNIT

UNIVERSITY

EXPLOITATION

Figure 1. Conceptual Framework

17

METHODOLOGY Time and Place The study will be started by November 2018 until February 2019 at the selected academic units in Central Bicol State University of Agriculture, Pili, Camarines Sur. Respondents of the Study The respondents of the study are the faculties of the different academic unit in CBSUA particularly, those who handle research. Data Collection The relevant data for this study will be gathered from primary and secondary sources. The primary data will be gather through direct survey and

personal

interview

with

the

respondents.

First-hand

information will be taken by an actual survey and with the use

of

pretested

questionnaires

through

direct

personal

interview with the respondents. For the secondary data, manuscripts will be analysis a filter the relevant researches to the side study.

18

Data Analysis The

study

will

employed

the

Structure-Conduct-

Performance (SCP) analysis that involves the collection of both

primary

ambidexterity

and

secondary

relies

heavily

data. on

The

analysis

primary

data,

of

the

whereas

innovative research analysis relies mainly on secondary data.

19

REFERENCE Ambos, T. C., Mäkelä, K., Birkinshaw, J. and D’Este, P. (2008). ‘When does university research get commercialized? Creating ambidexterity in research institutions’. Journal of Management Studies Datta, A., Reed, R., Jessup, L. (2013). Commercialization of Innovations: An Overarching Framework and Research Agenda. American Journal of Business Ronald Holzleitner (2013). A comprehensive framework for successful commercialization of technology push innovations Nur Syahira Abd Latif, Azizan Abdullah, Nawawi Mohd Jan, and Ahmad Shazeeer Mohamed Thaheer (2016). Market Orientation Conception on Commercialization of University Research Products with Moderating Effects of Organizational Culture Forouzandeh Dehkordi Lotfollah, Jovkar Ali Akbar, Rahmani Zeynol Abedin and Abbasi Esfanjani, Hossein (2013). The Conceptual Framework for Commercialization of Research Findings in Iranian Universities Undrakh Ganbaatar (2011). An Economic Analysis of Commercialization of Innovation in Small Saskatchewan Agribusinesses. University of Saskatchewan Saskatoon Sarah Cheah and Christopher Yu (2016). Assessing economic impact of research and innovation originating from public research institutions and universities—case of Singapore PRIs David Roessner, Jennifer Bond, Sumiye Okubo and Mark Planting (2009). The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007

Nordicity, September 2012. The Economic Impact of the Centre for Commercialization of Research Dirk Czarnitzki, Katrin Hussinger, and Cédric Schneider (2008).Commercializing Academic Research: The Quality of Faculty Patenting Joel West (2008). Commercializing Open Science: Deep Space Communications as the Lead Market for Shannon Theory, 1960-1973. Journal of Management Studies Gideon D. Markman, Donald S. Siegel and Research and Technology Commercialization

Mike

Wright

(2008).

Nima Heirati (2012). Achieving Ambidexterity across Multiple Organisational Levels and Functional Areas: Synchronising the Development and Marketing of Firms’ New and Established Products 20