The Way to Regional Economic Success
Updated: Sep 13, 2021
by Michael Crowley | February 27, 2019
It is plainly clear to every 21st century manufacturer and technology service provider that globalization has radically accelerated the pace of advanced technology innovation, its adoption and acceptance of new products in the marketplace. Industry giants, like Kodak, and a vast array of small and medium-sized enterprises have been uprooted by a combination of tech-related factors.
Among the most common, and readily identifiable, threads running through nearly all these failures have been mishandled commercialization attempts,mistimed product launches and completely missed advanced technology, sometimes called AT, trends. These fast-moving market trends are often driven by Santa Ana katabatic-like winds that eventually sweep all existing technology away like so many other tumbleweeds blown away in the technology desert.
In Western New York, we have borne silent (and often not so silent) witness to changes to our economy that at one time would have seemed so unlikely as to be impossible. The gradual decline of many of our major industries has been a source of constant worry for large segments of our population. We watched as our leading job creators melted away like giant blacktop-encrusted snow piles in the parking lots of local shopping centers in early spring.
At summer picnics, local watering holes and family gatherings, one of the hottest topics of conversation deals with the never-ending question: Who can we blame? Who really is at fault for the economic malaise that has hit our region harder than most?
There is obviously no one simple answer. Economic analysis on a local, regional or national basis is often more hit-and-miss than anything approaching an exact science.
For the past 15 years, I have spent most of my professional career consulting with global clients, most particularly those in China, seeking new ways to create economic growth and prosperity through the commercialization of advanced technologies. I believe that the commercialization of advanced manufacturing technologies, and advanced technology-related services, is the pathway to regional economic success. This success in commercializing advanced technology was, in fact, the foundation of the Greater Rochester economy. George Eastman built his Kodak empire on the back of multiple commercialization success stories in consumer photography and motion picture film manufacturing. Chester Carlson’s brilliant advanced tech inventions, when combined with John Dessauer’s research team at Haloid, led to Xerox being founded in Rochester. John Jacob Bausch and Henry Lomb and their inventor successors stayed at the forefront of technological innovation for optical products for more than a century.
Creating Economic Vitality
Advanced technology manufacturing creates great companies that pay high wages. This is a simple fact that has gotten completely lost in the conversations involving the Blame Game that has replaced Scrabble as our region’s favorite party game.
Why does advanced technology manufacturing create economic vitality versus “regular” manufacturing that dominates much of our business landscape? Advanced tech creates breakthroughs in industries and product categories that can lead to significant profit margins that generally come only from technology advances protected by patents.
High-profit margins allow for greater operational efficiencies that can provide for higher pay and benefits at all employment levels, global product reach, more funds devoted to new research, and stable companies capable of competing in our newly globalized marketplace.
The questions that you might ask: Well, if economic prosperity requires the commercialization of advanced technology, isn’t our region known for its great research universities, government labs and research centers? And don’t we grow intellectual property in our region like Iowans grow corn?
The answer to both of the above questions is: Yes!
We have a wealth of advanced technologies bursting out of our research centers. However, once the research becomes available for commercialization, our region misses several key components needed to turn these innovations into marketplace winners.
The first missing component is a large team (or army) of individuals who are highly trained in technical entrepreneurship, licensing and commercialization. Technology entrepreneurship skill sets required to move any AT product from the lab to the market are very different than traditional entrepreneurial skills or managerial skills.
Technology entrepreneurship requires a specialized team of individuals who are laser focused on an identified newly advanced technology venture creation investment at the outset. This advanced technology invention almost always evolves from a patent being licensed or sold by a research institution. This patent, in turn, provides the IP protection for the venture’s assets that can carve out a sustained first-mover advantage in the marketplace for up to 20 years.
The technology entrepreneur assembles the initial team of five or six specialized individuals and heterogeneous assets to create and capture long-term value for the firm. Throughout the process of commercialization, the tech venture firm is constantly accelerating and growing the original IP value transferred to their new firm.
Our regional technology entrepreneurs would have an easier job than they do now. However, in Western New York we are also missing our rightful regional share of capital that we should have available to us to launch a large number of advanced tech startups or to commercialize AT in our existing manufacturing base. But this is a topic for later discussion and consideration.
Launch of ATVentureCenter
My late father, Bus Crowley, a Kodak research scientist, who commercialized many breakthrough products while at Kodak, used to tell me that his field of innovation was like the Nike slogan: “Just do it.”
Recently I took my dad’s advice to heart and opened an advanced technology venture creation and commercialization center with my daughter, Erin Crowley. Our new firm is called ATVenture Center. We have worked closely in cooperation with the team at RIT’s College of Engineering Technology in an effort to reexamine the ways that universities can work more closely with the private and public business sectors to help tear down the “silo walls” that may have contributed to the fact that 95 percent of America’s patents die in the technology desert.
At ATVC we found that America’s failure to maintain a high rate of investment in basic and applied research as a percent of GDP, combined with our failure to convert our patents to successful manufacturing products, has significantly stunted both our regional growth and national economic growth.
The most obvious reason for our shockingly low national commercialization rate is the failure of potential entrepreneurs and existing manufacturers to understand that incredible AT opportunities are being missed every single day. Relatively few manufacturers are even aware that breakthrough innovations are currently sitting in technology licensing offices in America’s government-funded research labs, research centers and universities simply waiting for ready, willing and able technology entrepreneurs to seize their opportunity to “own the future.”
The essential first step is to have a clear understanding of the entire process of the art and science of AT entrepreneurship and commercialization. My own approach to teaching the tricks of the commercialization trade is called Techtrepreneurship.
To start manufacturers down this pathway to the future, our team at ATVC has created a series of day-long lectures that will be presented at the ATVenture Center in the Legacy Tower Building in downtown Rochester. These lectures will cover every step in the process and will also demystify the seemingly complex commercialization maze that has served as an unnecessary informational barrier to America’s manufacturing and technology success for so many years. (More information about the lecture series is available here.)
Knowledge is Power
For a manufacturer, knowing how the technology commercialization system works could make the difference between success and failure. Understanding what it takes to build a lean technology entrepreneurship commercialization team within an existing firm (or how to create a technology entrepreneurship startup) may be the key to truly moving ahead of domestic and global competition.
In Robert Frost’s poem “The Road Not Taken,” he tells of a traveler faced with a choice as he looked as far as he could down the road to where it bent in the undergrowth. The poem ends with the traveler uttering one of the nation’s most famous closing passages of poetry.
I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I –
I took the one less traveled by,
And that has made all the difference.
America’s less-traveled road has been our collective failure to commercialize our remarkable array of advanced technology innovations. Let’s change the paths we travel and move aggressively to build a new technology entrepreneurship ecosystem in Western New York.
Michael Crowley is co-founder of ATVentureCenter in downtown Rochester and founder of US-China Center for Advanced Technology Venture Creation LLC. A serial entrepreneur, he is currently a research professor for innovation and entrepreneurship at Rochester Institute of Technology.
Published on The Rochester Beacon :