Take a portfolio view of CRADAs: a study of one U.S. government laboratory suggests that technology transfer should encompass a new view of Cooperative R&D Agreements

Research-Technology Management, July-August, 2006 by J. Michael Munson, W. Austin Spivey

Technology transfer remains a critical issue for new product development, and public policy makers have spent the last two decades establishing a system to facilitate cooperation between commercial enterprises and federal laboratories with new and emerging technology (1). Cooperative Research and Development Agreements (CRADAs) represent one important way for a technology manager to add value to the development process, at any stage. (See "Overview of CRADA Agreements," p. 41).

Unfortunately, the flexibility of these agreements opens the door to dissatisfaction unless the partners adopt a portfolio perspective. The situation is made even more complex because market factors influence collaboration. In addition, federal laboratories must simultaneously pursue a mission of basic R&D.

This conundrum drives the search for a productive portfolio of allies. If CRADAs are managed by using a two-dimensional taxonomy, including both the type of agreement and the stage in the technology life cycle, the portfolio can reflect not only a commercial enterprise's strategic approach to achieving sustainable competitive advantage and creating customer value, but also a federal laboratory's need for successful partnerships to enhance transfer (the key message in Table 1). If these agreements are written to reflect not only the emergence of dominant design, but also the key issue involved in the prospective alliance, satisfaction among all partners is more likely (the key message in Table 2). Success in developing a portfolio and engendering satisfaction among all parties depends on remaining mindful of the emergence of a dominant design and thinking broadly about portfolio structure.

Portfolio Taxonomy for CRADAs

Table 1 characterizes the portfolio of CRADAs for one particular federal facility known as a center of excellence for its R&D. The entries are generalized from the entire set of 124. Of particular interest is the characterization of the portfolio not only by type of agreement, but also by stage of the technology life cycle. Whether or not this represents an ideal set of allies remains to be seen. Nonetheless, most of the agreements involve technologies later in their life cycles with partners who are prospective users of the research outcomes.

In this table, technology life cycle is captured by dominant design (2). The emphasis is on whether or not the "market had spoken" about the relevant technology (as embodied by the particular idea, good or service). Nearly one-half of the CRADAs (47.3 percent) are characterized as embodying R&D relevant to a situation where no particular design had yet to win the allegiance of the marketplace. These CRADAs are characterized as being early in the technology life cycle, before the marketplace had identified a dominant design.

Regarding type of agreement, the emphasis moves from the marketplace to the partner, per se. Two different perspectives emerge. First, some of the agreements were signed with entities that could be considered potential competitors; second, other agreements could be signed with those involved in some aspect of the value chain of the particular innovation. For example, an agreement could be signed with an enterprise that might develop a competing standard for a person's ability to survive exposure to electromagnetic radiation. Or, an agreement could be signed to perform R&D with a "supplier" working to develop improved components for a miniature infusion pump (a design early in its technology life cycle).

Three different labels emerge for the different types of agreements: constellation, for the competitors; process, for the suppliers; and exchange, for the prospective users or customers. The rationale for the constellation label comes from Utterback and Strebel who have argued for some time that technologists often define their world so narrowly that they miss significant changes that redefine the essence of the product class (2,3). Christensen endorses this perspective with his emphasis on "disruptive technology" (4). The threat of such new technological solutions is omnipresent. Competition has many faces, as new ways appear to solve old problems (5).

The rationale for the process label comes from advocates of supply chains. Often these chains are viewed in terms of links among enterprises. Sometimes the jargon is used within an enterprise, referring to interactions either between individuals carrying out processes or between departments. Some make a distinction between lean supply and supply chain management. Others disagree, arguing that lean supply is merely good supply chain management (6).

The rationale for the exchange label comes from scholars such as Meyers and Athaide who emphasize relationships between producers and buyers; technological innovators benefit from a commitment not only to educate users, but also to learn from them (7). Athaide and Stump note that the interactions between buyers and sellers of technology-based, industrial innovations have many of the characteristics of a collaborative relationship (8). Success depends as much on capabilities in relationship building as it does on technological prowess (9). Speakman, Forbes, Isabella, and MacAvoy argue for a more complex paradigm beyond the dyad, believing that relationships extend as well to groups, not merely individual entities (10).