What has not been done that needs to be done

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We need to get into specifics. In 1986, a drying workshop of research project leaders prepared a checklist of information needed to design a system dryer. The checklist is reproduced here to indicate the coverage as well as details of what is needed for a systems study.

I. Elements of a drying system

A. Technical considerations

B. Socioeconomic factors

C. Support infrastracture

D. Environmental and other factors

II. Information necessary for estimating drying load

III. Information necessary for developing strategies to provide the drying capability of the system

- two-stage drying (farm and plant drying)
- sun drying in combination with artificial dryers
- in-store drying

- after-sales service
- technical support and upgrading program

- harvesting
- threshing
- milling
- storage
- handling
- marketing

- solar
- crop biomass
- petroleum-based fuel

IV. Parameters for evaluation of dryer performance

A. Financial profitability of investment

Profitability of investment

= F(Q, C) > (e.g. 25%1) where Q = quality of end product.

Technical indicators of quality:

C = cost

Economic indicators:

I = investment
B. Technical performance

1. Quality of product

moisture content
impurity
initial cracked grains ratio
varietal mixture
immature grains

uniformity of drying
total and head rice recovery
viability (for seeds)
colour, off odours

C. Information for cost-benefit analysis

D. Benefits

E. Social benefits

References

Habito, C.F. 1986. A stochastic evaluation of mechanized rice postharvest technology through systems simulation modelling. (Will reduced risk and uncertainty sell paddy dryers?) In: de Mesa, B.M., ea., Proceedings of 9th Technical Seminar on Grain Post-Harvest Technology, ASEAN Grains PostHarvest Programme. August 1986, Singapore. 253271. Lorenzana, J.J. 1986. Isabela Post Harvest System Project 11 (Philippines EP82 0081), Final Report to IDRC. June 1986. Philippines.


Commercial utilisation of research results

A.A. Gomez
Director, Southeast Asian Regional
Center for Graduate Study and Research in Agriculture (SEARCA),
Los Baņos, Philippines

and

A.G. Abejuela

Leader of SEARCA Research Utilization Project

Abstract

Although science and technology is known to be indispensable to sustained growth and development, it is also common knowledge that many useful technologies remain unused by potential beneficiaries. This paper attempts to identify the problems responsible for the slow adoption of research innovations, the steps that could be taken to reduce these problems, and finally a strategy for ensuring that the most promising research results arc used by potential beneficiaries.

Research results that have the best potential for commercial utilisation are those that have a large market, are easy to mass produce, have a wide diversity of uses, have a large edge over existing technologies, can be manufactured cheaply and have a high rate of profitability. For research that is already complete, the results must be evaluated on the basis of the above criteria in order to identify those with the highest potential for commercial use. For research that is yet to be done, an ex-ante analysis focusing on the above criteria must be conducted before any funds are provided to support the research

To hasten commercial utilisation of research results, three immediate tasks are identified. First, fund donors must incorporate utilisation potential as an important criterion for funding research proposals. This should ensure that future applied research will produce results that are easy to commercialise. Second, concerted efforts must be made to evaluate completed research for innovation that has good potential for commercial we. This involves the difficult task of reevaluating past research results against the proposed criteria for research utilisation so that the most promising can be repackaged and reprocessed for possible commercial use commercialisation. Third, the private sector must be encouraged and educated to participate in the actual commercialisation of research results. By showing this sector the potential profitability of some selected innovations, it is expected that promising research results will be their own engine for enhancing commercial utilisation.

Introduction

Science and technology are indispensable instruments for national development. No country in this modern time can prosper without giving due consideration to research and development

Scientific information is the key to sustained economic and social development. Through research, people and society are continuously provided with numerous alternatives to many technological problems.

However, it is common knowledge that a new technology generated by research is not necessarily adopted and used by the intended beneficiaries. Low productivity, in spite of numerous research breakthroughs, indicates a severe weakness in the overall process linking technology generation and technology utilisation.

The strategic nature of technology has received increasing attention in recent years. One of the earliest and most extensively studied areas is the role of technological change in economic growth. Despite difficulties in measurement and differences among studies, economists generally agree that technological advances have been a significant contributor to the rapid advancement of the industrialised countries.

There is a growing concern for research to produce results that can be applied commercially, especially in the developing countries where meagre resources have to be allocated to pursue modest research activities. It is now clear that the utilisation and application of research results should be treated as an integral part of the research process itself

To be of value, research must contribute to technology that could positively affect the social and economic lives of people. Thus, the ultimate test of the value of any research activity is the extent to which its results have been utilised on a sustained basis.

In this paper, we define research results as a product that embodies an innovation whose commercialisation is said to have happened when the number of users adopting the innovation is large enough to have a significant impact on the well-being of the target users. We divide the paper into four sections, namely; current experience in commercial utilisation of research; common problems in utilising research; evaluation of research results for commercial utilisation; and a proposed plan of action.

Experiences in research result utilisation

There have been several business ventures designed to commercialise research results. We describe two of these in an attempt to learn from their experiences.

The EVSA Experience

Several years ago, EVSA Corporation-a development management organisation with the cooperation of Filipinas Foundation, a non profit/non- stock organization of the Ayal a Corporation-set up a company with the sole purpose of commercialising research results or 'new technologies' and inventions. They started with a million pesos initial capital for these activities. What they did first was to make an inventory of research results gathered from institutions are involved in science and technology. From the hundreds of results they were able to gather, they only found less than ten to be more or less marketable (about 7-8 new technologies). Their criterion for short listing was the marketability of the technology. If there was a market for it, then it was counted 'in'. Of this short list of seven, according to a managing associate of EVSA, none was marketed at that time of the company's existence. He cited several reasons for this:

1. More capital was needed. After one year of operations, a review was done on the company's performance and the result was that, at that time, prospects of successfully marketing the new technologies were dim so the financiers decided to minimise their losses and did not give the required additional funds for operations.

2. Problems with scientist/inventors involved. Some scientists/inventors did not want to modify their products to suit the demands of the marketplace. Compensation problems were also encountered. An agreement on how much these scientists/inventors were to be compensated for their discoveries or inventions could not be reached-thus hindering their full utilisation.

3. Secrecy of research results. Scientists tended not to reveal all of their 'secret' formulas to the marketers-a corollary to problem (2).

4. Mass production capability problems. Some technologies though marketable could not be mass produced to meet demand.

5. More time was needed. The timetable of one or two years was too short to fully package and launch an entirely new technology or product on the market.

The company never had a formal systematic evaluation of the research results it gathered. For them, the most critical factor was the market-if there was no demand for the product or technology then they dropped it from the list.

The above problems were not insurmountable: as the managing associate of EVSA said, more time and money were all they needed.

The PABCO Experience

PABCO is the acronym for Philippine Agricultural Biotechnology Company. It is a fairly new company whose sole thrust is to package and market, as the name suggests, agricultural biotechnologies.

While EVSA worked on all types of research results, PABCO is working exclusively on research results on agricultural biotechnology. In all its activities, it works closely with scientists from the BIOTECH Center of the

University of the Philippines at Los Baņos. From talks with the officials of both organisations, one can surmise a close cooperative effort between the marketer(PABCO) and the scientists in the packaging of the technology. There seems to be no problem in their relationship.

PABCO does project conceptualisations on selected 'matured' technologies. Again, it stressed the importance of a market study as well as the role of the BIOTECH Center in the perfection of the technical process in the production of the technology. PABCO gets the recommendation from the Institute on whether the technology is ready for packaging or not. How does it arrive at this conclusion? The Center director has three criteria: there is a market for the product; the technological process of production has been perfected; and the technology can be produced economically. Only when these criteria are met will the Center pass on the research result to interested parties such as PABCO.

A very recent case is that of a product with the brand name Mycogroe. Mycogroe contains ectomycorrhiza, a naturally occurring soil fungus that increases the growth and survival rates of pine and eucalyptus species. It is a natural product beneficial to both plant and soil. The Center developed this technology and the end form is a pella designed for easy application and substantially cheaper than chemical fertiliser.

This technology, according to the Center, was five years in the making before it was picked up by the PABCO group. Intensive pilot testing was done (3 years) for verification of consistent results. As soon as the Center gave the go-ahead for the product to be packaged and marketed, PABCO did an intensive market study and when the study revealed a positive conclusion, the group went on to do market development for the product. Market development entails product packaging, price determination, sales materials, client scanning, product presentation to potential users, and introductory offers. When market feedback was again positive, production contracts were made with users, and the company went into full production. The Philippine Department of Environment and Natural Resources (DENR) has endorsed utilisation of Mycogroe to all implementing agencies of the government's reforestation program as well as timber and logging companies all over the country. These are PABCO's current clients.

PABCO is also actively evaluating the packaging and marketing feasibility for two other biotechnological research results and as a PABCO official said, 'Our activities are systematically done from the product development OR BIOTECH Center's side to the marketing aspect which PABCO does'. He said further that the very open relationship they have with the scientists in the Center has helped them enormously. So far, no major problems have been encountered.

Lessons can indeed be learned from these two experiences. Lessons why EVSA and the Ayala group did not succeed in this venture and why PABCO is doing fine right now and is preparing itself to package more technologies and market them. PABCO's experience gives us confidence that, as in any business venture, packaging and marketing of research results can be successful as well as profitable.

Research result evaluation

After two months of research and interviews, our Research Utilization group at SEARCA identified three major requirements for a new technology to be judged ready for commercial utilization. These are:

Marketability

The issue of 'is there a demand for this technology' is the heart of market evaluation. There has to be a demand or a market for the technology before it can be utilised. Evaluating all other aspects such as mass production or profitability is meaningless if demand does not exist.

There are three components of marketability, namely:

Substantial demand and potential market share are defined by such determinants as population, income, prices, substitution possibilities, changes in user's taste, rate of investments, and government policies and budget. The supply situation, on the other hand, relates to the availability of products that have similar uses and users.

A product or technology is said to have an excellent market potential if its demand and market share is judged to be high while the current supply status is low.

Technical Feasibility

An innovation is said to be technically feasible if it has competitive edge over other technologies, can be readily mass produced, and has diversity of uses. A new process must be technologically perfect so as to guarantee mass production when demands call for it. In addition, the product must be versatile enough to be used and applied in several ways.

Competitive edge means that a new product can be produced at a cost that is lower than that of existing products in the market. Thus, a project can be considered technically feasible if it can be mass produced cheaply to satisfy a wide range of demand.

Profitability

Profitability refers to the comparison of costs with benefits. A technology is said to be profitable if the benefit is much higher than the costs.

There are two main considerations to profitability; financial and economic. Financial profitability is concerned with the income that a business venture could generate from a new technology, while economic profitability refers to the added productivity that is generated for the country and society. We are initially examining the usefulness of income statements, cash flow statements, and balance sheets as potential indices for evaluating profitability.

Our research group is currently working to define a rating system for each of the three requirements for commercial utilization. There are two main tasks required. First, we need to define the relative importance of each of the three requirements and we are initially using the percentages given in Table 1. Second, we need to define a reliable index rating for each component. Here we specify all the factors affecting the component, the data required to quantify each factor and finally the formula for defining the index. This process of developing an objective rating for each component will be done whenever possible. If not, a subjective rating based on expert opinion will be used.

As shown in Table 1, the column specifying the relative importance of each index will be multiplied by the rating to give the overall value accorded to the technology. The technology with the largest overall value is the most attractive for commercial utilization.

Problems in commercialisation

The experiences cited in the previous section identify several key hindrances to the commercial utilisation of research results. These and other problems that we have observed are discussed in this section.

1. Commercial utilisation of research results is not the main criterion for rewarding academic activity. In academe, where a significant amount of research is being conducted, success is measured in terms of such accomplishments as numbers of published papers, numbers of research projects completed, numbers of research grants, etc. Only in very rare instances are research staff rewarded or recognised on the basis of widespread use or adoption of the innovations they have produced. It is probably a consequence of this rarity that some observers claim that research is mainly concerned with collection of sets of data rather than production of viable technologies or contributions to national development goals (Cuyno 1986).

2. The procedure for dividing the financial reward of commercial use is not easy to specify. How does the researcher or the host institution share in the benefits of commercialisation? It is not easy to devise a formal procedure on compensation for the researcher and the host institution. Because of the vagueness of this process, many researchers feel short-changed when their findings are commercialised and in some instances they tend to withhold information from others, especially those who intend to commercialise their findings.

3. Criteria for granting research support do not highlight potential for commercialization. Many granting agencies follow traditional criteria for evaluating research. In this evaluation process, commercialisation potential is either low on the list of requirements or not required at all. Consequently, the results of research funded by such grants are seldom utilised commercially.

Table 1. Criteria for evaluating the potential of research results.

Criteria Weight x rating* = value
A. Marketing (30%)
1 . Substantial demand 0.20
2. Supply situation 0.05
3. Potential market share 0.05
B. Technical (30%)
1. Technical soundness of technology 0.10
2. Mass production capability 0.10
3. Diversity of uses 0.05
4. Competitive edge over alternative technologies 0.05
C. Profitability (40%)
1. Financial 0.30
2. Economic 0.10
Total 1.00

*As described in the text, the rating can be obtained objectively through data or subjectively trough expert opinion.

4. The poorest sector of society, which stands to benefit most from research, is usually the best attractive target for commercialisation. Most public research institutions focus their activities on technologies that benefit the poorest sector of society, on the premise that this is the sector that usually does not benefit from private investment. Unfortunately, the same sector usually cannot afford to pay for the cost of new innovations so that commercialisation becomes difficult Because of the low purchasing power of this sector, therefore, it becomes very difficult to produce innovations that can give attractive financial and economic returns.

5. Good researchers are usually poor communicators. Some of the problems in utilisation are caused simply by lack of information about the technology and/or its potential consequences. This may be due to the purposeful isolation of research. Because of this isolation, there is no flow of information from the users to the researchers and vice versa. Researchers are often cloistered in their laboratories, shielded from commercial pressures, and research projects usually produce results that are not directed towards solving problems of commercial significance.


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