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ISSN : 1598-7248 (Print)
ISSN : 2234-6473 (Online)
Industrial Engineering & Management Systems Vol.17 No.3 pp.454-463
DOI : https://doi.org/10.7232/iems.2018.17.3.454

# Commercialization of Public Sector Technology: The Case of a Respirator for Disaster

Cheolhan Kim, Janghyeok Yoon*
Department of Computer Engineering, Daejon University, Daejon, Republic of Korea
Department of Industrial Engineering, Konkuk University, Seoul, Republic of Korea
Corresponding Author, E-mail: janghyoon@konkuk.ac.kr
August 18, 2017 October 27, 2017 December 27, 2017

## ABSTRACT

A technology motivated for a product is the most necessary component for the product’s development, but there are many other considerations throughout the product development for the market, in particular, in the case of public sector technology. Despite existing technology commercialization models, they may not work well for the public sector technologies in a low level of technology readiness. In this paper, we show a practical technology commercialization process of a respirator for disaster. The idea of our target product introduced in this paper comes from a public research institute’s patented technology which generates oxygen from chemical reaction without heat and toxic. Despite hardships for technology commercialization, this product was successfully launched with the help of various R&D programs funded by the government or research institutes. In this paper, we describe the process of technology commercialization of a respirator for disaster and the issues and considerations raised in that process. This paper provides a practical case about technology commercialization of a public sector technology and would be beneficial to the firms which attempt to commercialize the public sector’s technologies.

## 1. INTRODUCTION

As globalization increases competition among firms, new product development through technology innovation is becoming more important for firms’ survival (Schilling and Hill, 1998). However, success of new product development is unguaranteed as well as unusual (Cummings and Teng, 2003), due to the difficulties of designing a viable business model for a product and finding a technology with proper technology readiness level (TRL) and manufacturing readiness level (MRL) for the product (Cooper and Edgett, 2006; Cooper, 2013). In addition, an overall roadmap of technology commercialization and the detail plans required at each phase of the roadmap must be prepared for new product development (Park et al., 2011).

TRLs are a measurement system with 9 levels to assess the maturity level of a particular technology; for example, TRL 4 is “component and/or breadboard validation in laboratory environment and TRL6 is “system/subsystem model or prototype demonstration in a relevant environment (ground or space)” (US DoD, 2011). Even though TRL is not clearly defined and understood between stakeholders in Korea, the research results of the public sector, including government institutes, can be generally treated as “research to prove feasibility” phase and “technology development” phase which is classified as the exploratory development level (Park et al., 2011; Kassicieh and Radosevich, 2013). From the viewpoint of commercialization, the public sector’s technologies in the exploratory development level has many difficulties in bringing them to market, in particular when they are transferred to the private sector for commercialization (Park, 2011). This is be-cause companies must have a technology of at least TRL 6 to launch new products the market wants, but the public sector mostly develops and provides technologies of TRL 4 (Belz, 2010).

There are well-known models for commercialization (Cooper, 1990; Goldsmith, 1995; Jolly, 1997; Trezona, 2007), but startup companies which are interested in public sector technologies are suffering from implementing and practicing their transferred technology. This is because existing technology commercialization models describe what kinds of functionalities are provided but do not provide sufficient details to address technologies in a low level TRL, such as public sector technology. In general, a technology is one of the product components that implement functions to meet customer requirements. For this reason, even though a new technology is developed and a new product based on this new technology is designed, many other tasks, such as related parts, resources, competitors and business models, should be considered and prepared for successful technology commercialization.

In this paper, we show a case study of new product commercialization based on a technology transferred from the public sector and discuss various issues and considerations raised in the process. We believe that this paper will clarify what detailed activities and considerations are required in technology commercialization from the case study, and therefore it would be a good aid to the companies which try to commercialize a new product with public sector technology.

The rest of this paper is organized as follows. This paper overviews the literature of commercialization models, followed by a technology commercialization flow which we performed through trial and error. Finally, we conclude the paper with discussions derived from our case study.

## 2. LITERATURE REVIEW

Most of the technology commercialization models have several stages or phases, which include operational procedures, decision making points, or stakeholder’s views. This section reviews prior works for technology commercialization, followed by several concepts, such as technology readiness and business model development, to frame our case study.

Cooper (1990) proposed Stage-Gate model as an idea-to-launch system to increase the efficiency of product development and its success possibility (Cooper, 1990). The Stage-Gate model includes a conceptual and operational map from idea screening to product launching (Figure 1) (Cooper and Edgett, 2006). Procedures for new product development are assigned to the stages each of which consists of a set of concurrent, cross-functional, proven and prescribed activities. Because each gate contains input, criteria and output, it determines Go/Kill and prioritization with input information: each gate decides whether or not projects or alternatives are suitable for the new product under consideration (Cooper et al., 2002). Decision making that requires ‘Go’ or ‘Kill’ decision for alternatives is processed by Gate Keepers which require cross-functional team staffing from marketing, financial, development and production departments.

Jolly’s model includes five major segments: Imaging, Incubating, Demonstrating, Promoting and Sustaining (Figure 2) (Jolly, 1997). These segments are the main elements of product innovation process, and four bridges are needed to mobilize stakeholders’ endorsement. Jolly’s model well addresses commercialization processes, while its complexity of moving from a prototype to a product has the possibility of causing an unclear understanding among the stakeholders.

Trezona (2007) specified a technology innovation model that is composed of four journeys (technology, company, market and regulation journeys) (Trezona, 2007). Among the four journeys, technology journey can be considered a general commercialization model from the view of technology development (Figure 4). The study suggested that firms should overcome barriers addressed in each journey for successful technology commercialization, and it also put stress on the interactions between the journeys for value creation.

TRLs were developed to help making decisions concerning technology development and transfer and to provide a common understanding of technology maturity (US DoD, 2011). TRLs are a set of management metrics that enable the maturity assessment of a particular technology and consistent maturity comparison between different types of technologies in the context of specific system, application and operational environment (Mankins, 2009).

United States Department of Defense (US DoD) and Automotive Council described Manufacturability and Producibility for how to successfully communicate their accomplished or expected stages of technology development and readiness for manufacture (MRL-Working-Group, 2011). Manufacturability means the characteristics considered in the design cycle and it focuses on the process capabilities, machine or facility flexibility and overall ability to consistently produce at the required level of cost and quality. Producibility means the relative ease of producing an item that meets engineering, quality and affordability requirements.

A business model is a design at the initial stage of product design and development. Although the compo-nents of business models vary according to researchers (Timmers, 1998; Osterwalder and Pigneur, 2010; Amit and Zott, 2012), customer value proposition is a common component. Thus, product development must start with finding customers’ needs or proposing a new value to target customers (Osterwalder et al., 2014). The procedure of technology commercialization must consider business models as well as product development activities, and it then addresses value positioning between customers’ requirements and a product that meets the requirements. Based on this value positioning, the product can be finally developed with proper costs.

## 3. CASE STUDY OF TECHNOLOGY COMMERCIALIZATION

In this chapter, we discuss the technology commer-cialization process we performed and customized during the project of developing a portable respirator. At first, we tried to follow traditional technology commercialization processes introduced in the previous section, but we found that there were many obstacles that we had to over overcome to produce a commercial product with our technology transferred from the public sector. During the four years journey to commercialize our transferred technology, we had faced with various unexpected issues about the transferred technology’s stability, manufacturability, funding, market situation and customers, and distribution channels definition. In addition, we were able to conclude that although a new product is perfectly developed, its commercialization would be failed if a business model, which defines a value chain from proposition of customer value to capture of the value, was not well-established. Therefore, we were able to obtain the following concep-tual definition of technology commercialization success:(1)

$Technology commercialization ≈ new product development × business model$
(1)

Figure 5 shows the technology commercialization flow which we went through by trial and error. Our prod-uct development was supported by various government organizations, so our commercialization case included stakeholders in the product development process and defined decision making criteria in the decision table to move forward the next step; the decision table is similar to the gates of the Stage-Gate model suggested by Cooper (2013). In addition, the stakeholder table shows the supporting agencies or funding sources which are involved in the product development (Figure 5 and Table 1). Each funding agency had its own decision points in its project support; for example, KIMM focused on field test and prototype development, and KISTI was interested in the product simulation and feasibility test using supercomputer. In order to increase production manufacturability and to reduce the number of assembly parts through recursive improvement, the parts were redesigned and tested through simulation and field tests. This flow for product commercialization was very iterative and thus it reminded us of the importance of manufacturability which was not considered during the design phase.

### 3.1. Technology Search and Selection

One of the programs of INNOPOLIS Foundation in South Korea is to transfer the research result of the public sector, such as national research institutes and universities of DAEDUK Science Park, to the private sector for the purpose of technology commercialization. To select the technology transferred from the public sector, the following criteria of technology were considered:

• - Future promise of the technology: how much possibility does the technology has to be developed further as a new or emerging technology?

• - Maturity of the technology: how much possible is it to realize a target product with the technology?

• - Compliance of the technology: how much is the tech-nology compliant with other existing technologies?

• - Applicability of the technology: how widely is the technology used to develop diverse products?

Our transferred technology was a portable chemical oxygen generator without releasing heat and toxic substances, and this technology was developed by KRIBB (Korean Research Institute of Bioscience and Biotechnology), which is a public research institute. However, this technology was found to be only TRL 3 and the oxygen generation ratio was relatively lower than other existing methods. Thus, we had to find an alternative technology with higher TRL which is available for our product, and finally we selected a technology that uses a compressed oxygen bombe as a source of oxygen. These decision making points affected our product specification and design in the later steps.

### 3.2. Product Definition, Product Portfolio Definition and Market Analysis

These three steps (product definition, product portfolio definition and market analysis) are iterative until a new product and its market are finally decided upon. Although Quality Function Deployment (QFD) could be used to define the concept of product (Cohen, 1995), QFD has limitations unless all requirements of the product are clearly defined. Thus we assumed several situation ideas where our product can be used according to time, place and occasion (Figure 6).

We extracted primary functions and secondary functions of the product from various situation ideas, and the specifications of Minimum Viable Product (MVP) were then determined. The primary function of MVP is to provide pure oxygen to keep people from toxic gas and subsequently product portfolios then could be defined based on the combination of secondary functions. The important requirements of target customers (factory workers) were “wearable” or “portable” and “providing 10 minutes of duration time to escape from disaster sites. Building on these requirements, the configuration and performance of the product were able to be defined.

For the analysis of target market, we tried two ap-proaches. The first one is to search prior business cases and the other is to define customer value proposition. Products using oxygen was classified into gas masks and respirators. In the case of gas masks, filters are the key technology and oxygen tanks are generally used to secure escape time. Respirators are used in the medical industry to maintain and help patents’ breathing using an electric oxygen generator. We found that 111 existing products were positioned in the market (Figure 7). Based on the result of market analysis, a new product definition within the market could be made as a personal portable respirator for emergency such as fire or gas leakage.

Because this niche market for our product was not defined yet, there were no products similar to what we tried to release. Therefore, we needed to propose new customer value proposition to the market. For this reason, business situations and scenarios used for product definition were reused and evaluated. Table 2 shows the general characteristics of gas masks and oxygen respirators.

The ideal solution of gas masks and respirators is to provide pure oxygen in any situations. A gas mask provides oxygen through gas filtering, while a respirator provides oxygen generated from electric or chemical reaction. Thus, customer value proposition of our new product was defined as providing pure oxygen without heat and toxic to prevent suffocation by gas or smog generated from a conflagration in a plant. Therefore, the requirements of the new product were defined as the following:

• - Should provide pure oxygen during the golden time in any places

• - Should be easy to carry and usable

• - Should have a simple structure

• - Should not be expensive

• - Should be integrated with other information and communication technologies

Nine blocks of business model was discussed before designing our new product. Business canvas as shown in Figure 8 is a tool used to give stakeholders business insights (Osterwalder and Pigneur, 2010). Once the target customers and the customer value proposition of a product are derived through market analysis, an initial business model canvas can be designed. After then, this business model canvas can be revised and updated whenever the relationship between channels and target customers changes during product development. Finally, customer value proposition was redefined according to a target customer segment and the channel to approach the target customer was also redesigned. Figure 8 shows details for key factors for business model generation. For example, our target customer was set to workers under dangerous environment, purchase managers and safety managers in multiuse facilities. Key channels for product sales were considered safety-related exhibitions, web sites and sales agents. In addition we defined value proposition to customers as the functions that provide pure oxygen and help safe escape from disaster areas.

### 3.4. Product Design and Simulation

To develop a physical product, geometric design and functional interaction design should be considered simultaneously. Functional interaction design shows function structures and the interactions between functions to identify useful functions and harmful functions based on TRIZ (the Russian acronym of the theory of inventive problem solving) method (Savransky, 2000), while geometric design shows product configurations and geometric features to appeal to customers. First, based on the TRIZ functional interaction diagram analysis, we found that elimination of exhaust gas caused by breathing was necessary to remove the harmful functions. Next, as the geometric design and the functional interaction design are interrelated each other, we introduced supercomputer simulation for feasibility analysis of various product designs and their fluid volume fraction with the help of KISTI Supercomputing Center (Figure 9).

Because only one technology cannot compose the whole of a product, other supplementary technologies related to the primary function must be defined for the complete product. We were able to define a product architecture of the target product with various functions and their structure (Figure 10). Each system is composed of functional elements, which are then translated into Bill of Technology (BoT), which is similar to the concept of Bill of Materials (BoM). Each functional element in a BoT can be replaced into other potential technologies that provides the same function, taking into consideration technology level, implementation cost or relevance with other technology. Therefore, a product portfolio can be easily defined by mixing alternative technologies of BoT according to customer needs or product costs.

### 3.5. Prototype Development and Field Test

Product architecture is the scheme by which the functional elements of the product are arranged into physical chunks and by which the chunks interact each other. In this step, performance specification must be defined though the customer’s work environment and the performance, operability and durability of the prototype must be tested through field tests. The critical performance factors were to keep a constant emission ratio and for workers to easily use the product under dangerous situations. Therefore, several types of design mock-ups and molds were designed based on the field test results. Then, some of the prototypes were dropped from the final alternatives.

### 3.6. Design Production Process and Mass Production

Important things in this step are productivity and quality control of the final product. However, there are many hidden problems for mass production. A regulator is very important assembly of our product, as it allows pressure control of the oxygen that comes out of the bombe. However, complicated regulator structures made it difficult to assemble parts and increased the assembling time and costs and thereby affected the quality of the final product. Unfortunately, these kinds of manufacturing issues during the prototype design were not found. Thus, we had to redesign the structure of the regulator and perform field tests for the newly designed prototypes.

## 4. CONCLUDING REMARKS

A technology which is motivated for a product is the most necessary component for product development, but there are many other considerations throughout the product development for the market, in particular, in the case of public sector technology. In addition, successful product release to the market cannot be guaranteed without designing a proper business model for a product and finding a technology with proper technology readiness. Therefore, technology commercialization processes as a product development roadmap should be prepared for new product development. Prior models for technology commercialization have been proposed, but they did not work well for our technology, which is transferred from a public research institute, in a low TRL. Through the new product development for four years, we were able to release a respirator for disaster into the market. This paper traced a case of new product development and commercialization process based on a patented technology transferred from a public research institute, and described various issues and considerations raised in that process. From an academic standpoint, this research contributes to providing academia with a practical example that utilizes and extends existing technology commercialization models to commercialize a public sector technology. From an industrial perspective, our practical case study can be a useful reference to startup firms or those who attempt to commercialize a new technology of the public sector.

Next, we were able to conclude from this case study that several considerations should be cross-checked whenever a new technology is adopted for product development. First, assessment of TRL should be conducted by a third party organization. As TRL is known as an important factor used to predict the possibility of success of technology commercialization, specialized agencies should evaluate technology independently and fairly. This is because if a new technology with low TRL is transferred, it has the possibility of increasing the costs to reach a complete product level (Belz, 2010). Second, a product devel-opment team should monitor and match customer needs throughout the process of technology commercialization. This provides new chances to find out and enter new markets. Third, field test should be carried out over long periods and under tough conditions that are very similar to those in actual situations. This assures robustness of product and provides customer satisfaction which leads to survival in the market at the initial stage of product launching. Fourth, business use cases and early adopter groups should be secured, because it is hard to obtain references with a new product. Finally, we conclude that business models should be presented and shared among stakeholders to align the business goal of a new product.

## ACKNOWLEDGEMENTS

This research was supported by Regional University Supporting Program of National Research Foundation of Korea (2013R1A1A4A01008903) and by Basic Science Research Program through the National Research Foundation of Korea(NRF) funded by the Ministry of Education (NRF-2018R1D1A1B07045768).

## Figure

Stage-Gate model (Cooper and Edgett, 2006).

Jolly’s model for the commercialization of new technology (Jolly, 1997)

Goldsmith’s commercialization model (Goldsmith, 1995).

Technology journey (Trezona, 2007).

Technology commercialization flow for Respirators.

Example of satiation idea.

Market analysis for respirators and gas masks.

Business model canvas for the new product.

Examples of product simulation by supercomputer.

Product architecture of the target product.

## Table

R&D fund for technology commercialization

Comparison between gas mask and oxygen respirator

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