The commercialisation environment of advanced materials ventures

Advanced materials have been hailed as the third wave of revolutionary innovation after IT and biotech, but have been poorly studied in the management literature to date. Similarities and differences in commercialisation incentives and challenges have not been adequately addressed. What role do start-up ventures play in the advanced materials sector? How does an advanced materials venture differ from any other emerging technology venture? To address these questions, we first present longitudinal data on firm size, suggesting that smaller and newer firms are playing an increasing role in the advanced materials sector. We then develop an open system model of the transaction environment of advanced materials ventures and present evidence from two advanced materials ventures which reveals the distinctive potential and challenges of emerging firms in this sector. Whereas emerging technology ventures share many commercialisation challenges, this analysis reveals sector specific levels of complexity in these challenges and the resultant commercialisation processes. Proposed policy recommendations focus on the distinctive challenges facing advanced materials ventures. 1.0 Introduction There is increasing emphasis by regional and national policy groups on the need to foster growth in the areas of information technology, biotechnology, and advanced materials. These science-based industries are widely viewed as engines of growth for a knowledge based economy. Advanced materials innovations hold the promise of a unique impact on the economy through their potential to transform a broad range of industries (OECD, 1998; Oliver, 1999; Maine, 2000). When using the term “advanced materials innovations,” we refer to the commercialisation of new functional materials together with product and process innovations which significantly improve the cost-functional frontier of these advanced materials. In this paper, the industry attributes and firm level interactions that characterise the commercialisation of advanced materials innovations are examined. The paper starts with an overview of related prior work which emphasises the