ATP-MEP TECHNOLOGY DIFFUSION PILOT PROJECT

Final Report

Prepared for
Susannah Schiller
Advanced Technology Program
National Institute of Standards and Technology

Prepared by
Bob Weinstein, Ph. D.
Project Director
Illinois Manufacturing Extension Center

February 1, 2002

Table of Contents

• Acknowledgements    
• Executive Summary  
• Introduction 
• Project Objectives
• Project Organization    
• Project Limitations  
• Summary of Project Phases
• Technology Screening Process  
• Overview of Diffusion Pilots    
• Key Findings 
• Recommendations 
• References  
• Appendix A:  Project tasks and Timelines
• Appendix B: Screening Questions:  ATP Awardee Participation in ATP-MEP Technology Diffusion Pilot Study

  ACKNOWLEDGEMENTS
  

  This project is the result of the efforts of many individuals over a period spanning over three  years.   The initial idea for this project was the result of a working group meeting sponsored by NIST in 1998 involving representatives from the Advanced Technology Program and the Manufacturing Extension Partnership. John Gudas and George Gillespie of the ATP program played an important role in the formation of this project.   Although John and George left NIST prior to the initiation of the project, their contributions were important to the initial development of the project.

  From 1999 to 2001, the work of completing the project design and overseeing its implementation fell to the Project Management Team members including: 

  • Charlie Alter, EISC, Inc./Lake Erie MEP
  • David Cranmer, NIST-MEP
  • Joe Houldin, Delaware Valley Industrial Resource Center
  • Bob Martin, Western New York Technology Development Center, Inc.
  • John Redman, NIST-MEP
  • Susannah Schiller, NIST-ATP
  • Elliot Schulman, CONN/STEP (CTA)
  • Dennis Thompson, South Pennsylvania Industrial Resource Center
  • Bob Weinstein, Illinois Manufacturing Extension Center

  
  The dedication and many contributions of the project management team’s members were a key to success of the project. 

  Each of the three diffusion pilots were performed by a cross-function team that included participants from MEP centers and from technology developer companies.  In addition to their efforts to faithfully implement their diffusion plans, these teams provided valuable reports and other feedback that contributed to the evaluation of the project.   The efforts of the three Diffusion Pilot Team leaders—Mark Laurenzo, Bob Martin, and Shelly Dolinger—were instrumental to the effective implementation of the pilots. 

  An important part of this project was the documentation of effective practices and lessons learned.  Many thanks are due to Charlie Alter and John Redman, who worked with the evaluation consultant, Robert Yin of COSMOS Corporation, on the development of evaluation reports on both the technology screening process and the diffusion pilots. 

  Finally, I want to thank Susannah Schiller, who served as grant manager for ATP for this project.  Throughout the project, Susannah maintained a high level of personal involvement and interest, providing valuable comments and suggestions to improve the project’s overall effectiveness.  Thanks also to Amit Bagchi and Robert Fireovid of ATP for reviewing this report and providing insightful comments.

  Please note that the content of this report, including its recommendations, does not necessarily represent the views of the National Institute of Standards Technology, Advanced Technology Program.    Any errors in the content of this report are, of course, the responsibility of its author. 

  Bob Weinstein, Chairman
  Project Management Team
  

   

  ATP-MEP TECHNOLOGY DIFFUSION PILOT PROJECT

  EXECUTIVE SUMMARY

  PURPOSE OF THE PROJECT

  The primary goal of this project was to evaluate the feasibility of the National Institute of Standards and Technology (NIST) Manufacturing Extension Partnership (MEP) centers serving as a vehicle to accelerate the diffusion of Advanced Technology Program (ATP) technologies to smaller manufacturing enterprises (SMEs).  For purposes of this project, technology diffusion was defined as the process by which technologies are introduced to potential user organizations, evaluated by those organizations, and ultimately adopted.  By developing and implementing pilot diffusion plans for three selected ATP-funded technologies, the project was designed to accomplish the following objectives:

  • Develop a screening process to identify advanced technologies that may be suitable for diffusion to SMEs,
  • Evaluate the utility of cross-functional teams selected from multiple MEP centers and ATP technology developers in the technology diffusion process, and
  • Identify key success factors and significant obstacles to effective diffusion of selected ATP technologies to SMEs through the MEP system.

  
  TECHNOLOGIES SELECTED FOR DIFFUSION PILOTS

  The project management team recognized at the start of the project that one of the most important phases would involve screening and selection of three technologies that would be the focus of the diffusion pilots.   A systematic approach was used in the screening process, based on the “stage-gate” process.  Thirty candidate technologies were screened for the applicability of the technology to SMEs, the cost of adoption, and the willingness of the technology owner to participate in the diffusion process.  As a result, the following three technologies were selected for diffusion pilots: 

  • 4DI System, developed by Intelligent Automation Systems, a non-contact system that employs sensors to extract three-dimensional information from objects in real time,
  • Terfenol-DŽ Ultrasonic Transducers, developed by ETREMA, can operate 24 hours a day, 7 days a week, at higher power levels in comparison with competitive systems, and
  • Dylyn Diamond-Like Coatings, developed by Advanced Refractory Technologies, Inc. (ART) and acquired by Bekaert Corporation, a hard, amorphous carbon thin film that can provide thin, hard, low-friction coating with a broad range of characteristics.

  
  KEY FINDINGS AND RECOMMENDATIONS

  Key success factors for screening advanced technologies to identify those with potential for diffusion to SMEs

  It is critical that MEP centers’ efforts to diffuse advanced technologies be focused on those technologies most likely to generate significant improvements in SME productivity and competitiveness. Given the broad scope of the mission and services provided by MEP centers, limited resources are available for involvement in the diffusion of advanced technologies.  Substantial costs are involved in testing and evaluating technologies for specific SME applications, and in training MEP center staff on the nature of the technology and its applications.  Therefore, an effective technology screening process is essential if these efforts are to be efficiently undertaken.

  • A phased process, such as the “stage-gate” approach used for this project, is needed to ensure systematic screening of alternative technologies.  Investing time and resources to gather more information in the earlier stages will help improve the quality of screening decisions and should simplify the decision process in later phases of the selection process.
    
    
  • Commitment on part of the technology developer must be confirmed during the screening process. All expectations of the technology owner should be clearly defined at the outset of the diffusion process.
    
    
  • Technologies should have strong evidence of their competitive advantage in specific applications appropriate to SME markets to be selected for diffusion through MEP centers.  For technologies that are not quite ready for diffusion within SME markets, a process for testing and verifying the cost-effectiveness of specific applications is needed.

  
  Cross-functional teams selected from multiple MEP centers and ATP technology developers in the technology diffusion process are valuable for screening technologies, identifying applications, and designing diffusion plans.

  The project involved cross-functional teams in the technology screening and selection process as well as in the diffusion pilot planning and implementation process.  Cross-functional teams were effective in screening and selecting technologies for diffusion efforts.  They were also valuable in the design of the diffusion plans, in the identification of potential new applications for the selected technologies, and in validating their cost-effectiveness.  However, cross-functional teams were of less value in efforts to diffuse specific technology applications to individual SMEs.  Once an application of a new technology has been tested and its cost effectiveness has been verified, communicating with companies regarding the potential for applying the technology within their operations can be accomplished by trained, individual field specialists.

  Obstacles to the diffusion of advanced technologies to SMEs

  Obstacles to SME adoption of new advanced technologies include lack of information, lack of expertise, lack of funds, and risk-averse attitudes. In addition, SME participation in the diffusion process is inhibited by factors related to both technology developers and SMEs.  In most cases, technology developers are primarily focused on large manufacturers as the target for transfer and eventual commercialization of their technologies.   While in some cases, the technology developers were themselves small companies, they tended to focus on large companies because of the more significant economic benefits that they would obtain from larger firms and the perceived lower cost of sales in relation to total potential benefits.  Working to develop relationships with a large number of small manufacturers was typically not preferred to working with a few large manufacturers.

  For SMEs, the key obstacles to early adoption of new advanced technologies include lack of available internal expertise to evaluate the potential benefits that would be obtained from alternative technologies, availability of financial resources to “experiment” with new technologies that had not already been proven to be superior and cost-effective, and an aversion to taking on the risks associated with new technologies and their related costs.  These costs include not only costs associated with acquiring the technology, but also costs associated with adapting the technology to the SME’s existing systems and training employees in their use.  Because of the limited internal capital base of many SMEs they would need to depend on external financing to acquire some new technologies.   Before making any significant investment, most SMEs want to minimize the risk that the investment will not generate a satisfactory rate of return. 

  MEP involvement can accelerate the diffusion of advanced technologies to SMEs

  MEP centers can contribute to accelerating the diffusion of advanced technologies and helping SMEs overcome obstacles to adoption of new technologies.   The centers can help identify SMEs that are willing to participate in initial (Phase 1) trials of advanced technologies.   Centers can help identify new applications that are particularly appropriate for implementation by SMEs.   Once the competitive advantages of new advanced technologies are verified, MEP centers can help disseminate information and case studies that illustrate the economic advantages of the technologies.  The technical experts working in MEP centers and affiliated organizations can then help fill the “expertise” gap that often prevents SMEs from adopting new technologies.  Throughout the diffusion process, MEP centers can help SMEs disseminate information regarding new technologies through workshops (conducted in cooperation with technology developers), publications, and through direct discussions with SMEs that would be likely adopters of the technology.    Finally, MEP centers can help SMEs evaluate the benefits of new technologies and make optimal decisions to enhance their productivity and competitiveness.

  RECOMMENDATIONS

  In order to fully realize the potential of the MEP system to accelerate technology diffusion, a number of actions are recommended:

  1. Expanded technology testing and evaluation resources, and a systematic process for identifying the most cost-effective technology options, should be established.  These resources need to have extensive expertise in technology assessment and in quantifying the costs and benefits associated with new technologies in particular industrial applications. Lack of good, unbiased information on the competitive advantages of new advanced technologies will otherwise inhibit efforts of centers to encourage the adoption of such technologies.
     
     
  2. An effective “business model” should be developed that would enable MEP centers to participate in technology diffusion efforts on a fee for service basis, without adversely affecting their ability to meet MEP performance and matching funds requirements.  The model needs to identify sources of revenue to support assistance to SMEs, appropriate business relationships that can be formed with technology developers without compromising the independence and reputation of the center and MEP, and effective strategies for developing service engagements with SMEs.  The resources needed to enable MEP centers to participate in this process can come from a variety of sources, including technology developers, federal stakeholders, and state technology and economic development agencies.
     
     
  3. Centers should review and modify the performance objectives assigned to field staff in order to provide incentives for field staff involvement in technology diffusion activities.  As was demonstrated in all three diffusion pilots, the time frames required for diffusion of advanced technologies are lengthy.   Efforts undertaken by center staff in working with technology developers and SMEs can yield valuable benefits to SME competitiveness, but will often require substantial investments of time and many personal contacts with technology developers and SMEs.  Staff performance metrics may need to recognize the multi-year nature of technology diffusion projects and not discourage staff from these extensive time commitments so long as they eventually contribute to the center’s operational and financial objectives. 

  
  If technology developers are willing to make financial commitments to the involvement of MEP centers in technology diffusion efforts and if federal and state stakeholders are willing to recognize and encourage MEP centers to deliver technology diffusion services, MEP centers will be able to make valuable contributions to accelerating the rate of diffusion of new advanced technologies and maximizing the competitive advantages that these technologies will provide to U.S. manufacturers. 

  INTRODUCTION

  The development of new technologies is the foundation for U.S. economic growth and prosperity.  New technologies contribute to our economic well being both by creating new products and services and by enabling more efficient ways of producing and distributing existing products and services.  Invention of new technologies, however, is only a necessary condition for economic progress.  In order for the benefits of new technology to be realized, they must be broadly adopted in different applications and organizations.  This process of identifying applications of new technology, testing and verifying their competitive advantages, and commercializing them so that they are adopted throughout industry--the technology diffusion process--is the sufficient condition for economic progress.  

  Changing Trends in Technology Diffusion

  Prior to WWII, new technology invented within a particular country was diffused initially by companies located in that country, giving the originating country valuable comparative economic advantages.  Over time, diffusion would then spread to other countries that would purchase the products of the new technology, resulting in growth in employment within the originating country.  Only over a long period of time would the use of the new technologies in product and the development of new applications spread to other countries. 

  However, the advent of new communications technologies and the broad access to the results of technology related research and development since WWII have facilitated changes in the pattern of technology diffusion.  Particularly in the past 30 years, many new technologies created within the U.S. have been diffused rapidly to other countries, with the benefits of enhanced comparative, competitive advantage accruing to these other countries, and with consequent decline in U.S. exports and declining relative rates of productivity growth in the U.S.  

  A second major concern regards the involvement of smaller manufacturers in adopting new more advanced technologies.  According to the results of U.S. Census data research conducted by NIST-MEP in the U.S., over the past 30 years, the extent of manufacturing output and employment in smaller manufacturing enterprises (SMEs) has been growing in relation to larger manufacturers.  During this same period, productivity of SMEs has declined relative to larger manufacturers.⁽¹⁾ A lower rate of adoption of new technologies and improved manufacturing practices by SMEs have contributed to these trends.  Currently, more than 50% of U.S. manufacturing output comes from SMEs.  In order to maximize the benefits of new technologies for the U.S. economy, these technologies need to be adopted more rapidly by SMEs.

  Thus, being a leader in research and invention of new technology is not sufficient. In order for the benefits of new technology to be realized in the U.S., these technologies must be diffused rapidly throughout industry, not only to large manufacturers, but also to smaller producers and suppliers.  A number of obstacles affect the pace of this diffusion process to and within smaller companies. 

  Obstacles to Adoption of Advanced Technologies by SMEs

  First, these firms often lack internal expertise needed to verify which new technologies are most relevant to their operations.  New technologies are continually being developed.  Understanding which ones offer the greatest competitive advantage is difficult and often requires extensive technical understanding of the technology and its application. 

  Second, these technologies also often require applied research to enable their successful implementation by specific companies.  Most smaller companies do not have internal research and development capabilities needed and must rely on either resources of companies that are selling the new technologies or independent third party organizations. 

  Third, the risk to smaller companies associated with adopting new technologies is significant, due to the scale of their operations.  Larger firms can more easily implement and test new technologies without significantly affecting their productive capacity.  Also, the financial risk of failure of new technologies to generate the necessary benefits to recover investments is less for larger companies that have greater internal capital resources.  Smaller firms typically lack access to capital required for “early stage” technology applications.  For these and many other reasons, the risk of being involved in the diffusion of new technologies for smaller companies is significant.   

  In order to accelerate the diffusion of new technologies within the U.S., federal and state governments have established programs to enable greater access to the funding and technical expertise.  Federal programs established to help accelerate the diffusion of new technologies include the Advanced Technology Program (ATP)⁽²⁾ and the Manufacturing Extension Partnership (MEP) programs of the National Institute of Standards and Technology (NIST).⁽³⁾

  Both ATP and MEP programs operate on the basis of public-private partnerships in which private sector companies play an active leadership role in efforts to develop and/or implement new technologies. Although these two programs are complementary, they have significantly different approaches to technology diffusion.   ATP provides matching, seed capital to companies of all sizes for the development of new “high risk” technologies that have potential for broad applications and/or improvements in productivity across multiple industries.  MEP does not provide grants to manufacturers, but rather MEP centers provide smaller manufacturers with affordable access to technical expertise. This helps them to evaluate new technology applications, shop-floor and business process improvements and assists in their implementation within their operations.  Over the past 10 years, both ATP and MEP programs have generated significant economic benefits, contributing to the development of new technologies and improving the competitiveness and productivity of U.S. industry.

  PROJECT OBJECTIVES

  The primary goal of this project was to evaluate the feasibility of the National Institute of Standards and Technology (NIST) Manufacturing Extension Partnership (MEP) centers serving as a vehicle to accelerate the diffusion of Advanced Technology Program (ATP) technologies to smaller manufacturing enterprises (SMEs).  For purposes of this project, technology diffusion was defined as the process by which technologies are introduced to potential user organizations, evaluated by those organizations, and ultimately adopted.  By developing and implementing pilot diffusion plans for selected ATP-funded technologies, the project was designed to accomplish the following objectives:

  • Develop a screening process to identify advanced technologies that may be suitable for diffusion to SMEs,
  • Evaluate the utility of cross-functional teams selected from multiple MEP centers and ATP technology developers in the technology diffusion process;
  • Identify key success factors and significant obstacles to effective diffusion of selected ATP technologies to SMEs through the MEP system;
  • Develop a report for use by NIST to disseminate project results to MEP system centers and other interested organizations, so that the lessons learned through the project can be utilized in future efforts to involve small manufacturers in the diffusion of advanced technologies.

  
  PROJECT ORGANIZATION

  The Project Director and Chair of the Project Management Team was Bob Weinstein, Ph. D., President of the Illinois Manufacturing Extension Center (IMEC).  IMEC served as fiscal agent for the project.   Susannah Schiller, of the Advanced Technology Program, served as the NIST-ATP Contract Manager.  The Project Management Team included the following additional individuals: 

  • Charlie Alter, EISC, Inc./Lake Erie MEP
  • Joe Houldin, Delaware Valley Industrial Resource Center
  • Bob Martin, Western New York Technology Development Center, Inc.
  • Elliot Schulman, CONN/STEP (CTA)
  • Dennis Thompson, South Pennsylvania Industrial Resource Center
  • John Redman, NIST-MEP
  • David Cranmer, NIST-MEP

  
  The project management team was responsible for developing the project plan, the technology selection phase of the project, oversight for the three pilot diffusion teams, and review of the project’s reports.  To provide an independent evaluation of the technology screening and pilot implementation phases of the project, NIST-MEP contracted with Robert Yin of COSMOS Corporation to conduct interviews and prepare reports on the evaluation of the project.   Mr. Yin worked with the project’s evaluation team members Charlie Alter (team leader), John Redman, and Bob Weinstein.

  PROJECT LIMITATIONS

  The diffusion process involves many different activities ranging from identifying potential applications of new technologies, testing and demonstrating their effectiveness, to efforts to “commercialize” the technologies and market them to users without need for significant modification.  This project was performed using funding provided by NIST ATP.  This funding is limited to assisting in diffusing technologies and not to commercializing or marketing them.   This affected the selection of technologies and the types of activities undertaken as part of project’s pilots.  Technologies that had progressed into the “commercialization” or “marketing” phases of the diffusion process were not selected for the three pilots.  Rather, the project was limited to technologies that were not being sold to SMEs but that were likely to have feasible applications for these manufacturing markets.  As a result, the focus of the diffusion pilots was on (1) developing relationships between technology developers and SMEs that were interested in early trials of the technology, (2) identifying new applications of the technology relevant to SME markets, and (3) validating the potential of the technologies to improve SME productivity and competitiveness.

  A second limitation was the amount of funding.  After allowing for costs associated with project management, technology selection, and evaluation of project activities, funding availability was limited to three diffusion pilots.  As a result of this restriction, the technology screening process was focused not only on identifying ATP technologies that might have applications within SME markets, but also on “filtering” these technologies down to the three that would be the focus of the diffusion pilots. 

  A final restriction concerned the period of the project.  The project management team decided to limit funding for use within about two years.  The first 8 months were used in project design, technology selection, and diffusion team development.  The last 18 months were used for diffusion pilot implementation and evaluation.  While this time period was sufficient for the development and implementation of many diffusion activities, it was understood that the timeframe would not be sufficient to identify the longer-term impacts of the diffusion pilots.   As will be shown later in this report, in many cases, diffusion efforts were on going at the conclusion of the project.  As a result, some potential benefits are still to be determined.

  SUMMARY OF PROJECT PHASES

  The project was approved in September, 1999 and was completed at the end of November, 2001.  The performance of this project involved five phases.  Appendix A provides an overview of each project phase and its component tasks.  Phase 1 concerned the identification, screening, and selection of ATP technologies.  In this phase a modified “stage-gate” process was used to select three technologies.⁽⁴⁾  In Phase 2, diffusion teams were established for each technology and each team developed a technology diffusion plan.  Phases 1 and 2 were completed by June, 2000.  Phase 3 involved the implementation of the three pilot diffusion plans.  This phase was completed by August, 2001.  Phase 4 concerned the evaluation of the project.   The COSMOS Corporation prepared two separate evaluation reports.   The first concerned the technology selection and diffusion team development process (Phases 1 and 2).  The second concerned the implementation and results of the three diffusion pilots.  Finally, in Phase 5, the results of the project were developed into a final report and the results were presented at the 2001 NIST-MEP National Conference on November 5, 2001.

  TECHNOLOGY SCREENING PROCESS

  The project management team recognized at the start of the project that one of the most important phases would involve screening and selection of three technologies that would be the focus of the diffusion pilots.   A systematic approach was used in the screening process, based on the “stage-gate” process.  This process has been successfully employed by companies seeking to develop new technologies and products. 

  In the first stage of the process, technologies that were developed with support from ATP were reviewed to identify those “ready” for diffusion.  Because of limitations regarding use of ATP funding, technologies that were already being commercialized and used by SMEs were excluded from consideration.  At the other end of the diffusion continuum, technologies that still required significant research and development for commercial application were also excluded from consideration.  ATP project managers identified 30 ATP supported technologies as potential candidates for the three diffusion pilots. 

  In the second stage, using a standard interview format (see Appendix B), telephone contact was made with the developers of each of these technologies to help assess the potential applicability of the ATP technologies to small manufacturers.   As a result of these interviews, nine technologies were selected to proceed to the second phase of the screening process.   This stage involved collection and more in-depth review of information on each of the screened technologies in order to identify six “semi-finalists.”  Criteria used to select the 6 technologies at this stage included the following:

  • Whether the technology developer had identified applications appropriate to SMEs
  • Willingness of technology owners to work as part of the pilot to develop a diffusion strategy for SMEs involving the MEP system
  • Capital requirements for transferring the technology to smaller manufacturers are affordable
  • Minimal additional research and development expenditures are required for application of the technology within smaller manufacturers
  • Existing diffusion strategies have not been effective in penetrating small manufacturer application markets
  • Willingness of the technology developer/owner to enter into mutually beneficial arrangements with SMEs for the diffusion of the technology

  
  The six technologies that passed to the third stage of the screening process were then evaluated through on-site visits to the facilities of the technology developer.  A sub-committee of the project management team conducted the site visit in order to obtain greater depth of information related to the selection criteria and also address specific questions that were raised by the screening committee (project management team).  Results obtained from site visits were ranked, resulting in the selection of two technologies and the identification of two additional technologies that required further information prior to selecting the third technology that would be piloted.  Members of the selection committee conducted telephone interviews with the developers of these two technologies to obtain responses to specific questions unique to each of these technologies and verified the commitment of the technology developer to participate in a diffusion pilot.   As a result, the following three technologies were selected for diffusion pilots: 

  • 4DI System, developed by Intelligent Automation Systems
  • Terfenol D Ultrasonic Transducers, developed by ETREMA
  • Dylyn Diamond-Like Coatings, developed by Advanced Refractory Technologies, Inc. (ART) and acquired by Bekaert Corporation

  
  OVERVIEW OF DIFFUSION PILOTS

  The project was designed to encourage independent efforts by each of the diffusion pilot teams.   The project management team provided guidelines for the selection of team members and for the development of the diffusion plans.   Prior to the implementation of the pilots, the qualifications of diffusion pilot team members and each of the three diffusion plans were reviewed and approved by the Project Management Team.  Because of differences in the nature of the three selected technologies and differences in their stage of development, each of the diffusion plans involved distinctive diffusion strategies. 

  The following sections provide a brief overview of each of the three diffusion pilots.   Due to the requirements to maintain the confidentiality of information, the detailed reports of the results obtained from these pilots are not available. 

  Rapid Agile Metrology for Manufacturing Pilot ⁽⁵⁾

  The 4DI system is a non-contact system that employs sensors to extract three-dimensional information from objects in real time  The 4DI system is capable of being used in a wide range of manufacturing processes, with a focus on online quality inspection and non-contact dimensional gauging.  It processes images of objects instantly, measuring complex shapes of both opaque as well as reflective surfaces.  The technology was developed by Intelligent Automation Systems, Inc (IAS) of Cambridge, MA.  The 4DI system is capable of being used in a wide range of manufacturing processes.  A principal competitive advantage is its ability to be applied to moving objects in real time.

  MEP centers and affiliated organizations involved in this diffusion pilot included

  • CONN/STEP, the MEP center for the state of Connecticut, and
  • MEP Management Services, Inc. (MEPMSI), the MEP center for Maine, New Hampshire, Massachusetts, Arizona, New Mexico, and Hawaii

  
  The technology owner, Intelligent Automation Systems, Inc. (IAS), viewed participation in the Pilot as an opportunity to determine the feasibility of using the 4DI technology within smaller manufacturing companies and ultimately to expanding the potential market for the technology.  IAS participated as a full partner in the Pilot, assigning a staff member as an interface throughout the Pilot.  IAS provided briefings and demonstrations to MEP staff and conducted tests and evaluations of applications.  In addition, IAS provided financial support for an SME client workshop.

  Sheldon Dolinger of Connecticut Technology Associates was the diffusion team leader.  Several different approaches were implemented and their effectiveness evaluated for engaging the Manufacturing Extension Partnership network in diffusion of ATP-developed technologies to smaller manufacturing enterprises (SMEs).  The following mechanisms were used by the pilot to diffuse the 4DI technology to SMEs: 

  1. MEP Field Engineers in Connecticut (CONN/STEP) and other New England states (through MEPMSI) identified SMEs with potential to apply the 4DI  technology and helped introduce the technology to these companies.
  2. Information on the technology was directly disseminated to 41 MEP Centers in 34 states through mailings, phone and e-mail communication.
  3. Several MEP centers used newsletters to provide information to SMEs on 4DI  technology applications.
  4. Workshops were held for SMEs in Connecticut and Massachusetts
  5. MEP centers encouraged SMEs to attend Trade Shows where the 4DI  technology was exhibited. 

  
  Of these mechanisms, workshops were found to be the most effective mechanism in creating awareness of the technology and increasing the likelihood for diffusion.  In a workshop the technology owner interfaces directly with the SME user without any intermediaries. However, the cost and effort to create a workshop is high and an intermediary is needed to perform this function. Use of newsletters to promote awareness of the technology was also found to be effective.  However, the cost of this approach was increased by the need for individual follow-up by MEP staff and diffusion team members with companies responding to newsletters.  Broad direct mail distribution of information to MEP centers was not found to be highly effective.  Without personal contact and incentives to build interest within the MEP community, direct mail of technology information did not result in the identification of diffusion opportunities. 

  Efforts to diffuse the 4DI System technology were continuing at the conclusion of the diffusion pilot.  The time frame required for diffusion was found to be lengthy for the 4DI System technology.  In part this reflects the significant cost of the technology and the need for applied research to customize 4DI systems and software to each unique application, and in part it reflects the bad macro-economic conditions at the time of the pilot.  At the conclusion of the pilot, 16 SMEs had been identified that expressed interest in applying the technology within their operations and three were in the process of formalizing relationships with the technology developer to integrate the 4DI System technology into their operations.  

  Terfenol D Utrasonic Transducers Pilot ⁽⁶⁾

  Terfenol-DŽ is a "magnetostrictive" material, meaning it changes shape in a magnetic field, converts electrical power to mechanical power, and vice versa. Advantages of Terfenol-D based ultrasonic transducers are their ability to operate 24 hours a day, 7 days a week, at higher power levels in comparison with competitive systems.    ETREMA Corporation, located in Ames, Iowa, provides design and manufacturing of Terfenol-DŽ driven products.

  The Terfenol-DŽ based ultrasonic technologies diffusion plan was developed and implemented by a cross-functional team that included individuals with technical, industrial, and technology transfer backgrounds from the following MEP centers:

  • Ben Franklin Technology Partners (associated with Pennsylvania’s MEP centers)
  • EISC, Inc. / Lake Erie MEP in Toledo Ohio
  • Iowa State University, Center For Advanced Technology  Development, affiliated with the Iowa MEP
  • Minnesota Technology, Inc., the MEP center for the state of Minnesota.

  
  The pilot attempted to diffuse Terfenol-DŽ technology through the following strategies:

  1. The Diffusion Team developed an understanding of the Terfenol-DŽ technology and identified its high potential applications, targeted industrial sectors, and SMEs most likely to be interested in adopting the technology.
     
     
  2. The Diffusion Team worked through the MEP system to identify specific SME companies that had potential interest in the technology for product and process development.
     
     
  3. The Diffusion Team implemented a proactive technology diffusion process that:
  • Provided demonstrations of the technology, either at the ETREMA Corporation site or at another location proximate to the locations of potential adopters.
  • Conducted workshops for potential adopters of the technology regarding its applications.
  • Disseminated short articles describing the technology and SME application opportunities through MEP Center newsletters and other appropriate publications.
  • Identified business agreements and other strategies to provide for the diffusion of the technology.
  • Identified critical adoption success factors and created strategies to overcome significant obstacles prohibiting the effective diffusion of ETREMA technologies to SMEs.

  
  To focus the diffusion plan’s activities and maximize potential for technology diffusion, these strategies were employed for technology applications in food processing, sonochemistry, and wastewater treatment.  A total of 248 companies (166 sonochemistry, 37 wastewater treatment, and 45 food processing companies) were targeted for diffusion efforts. Thirty-two more contacts introducing the ETREMA 6kW technology were made by Diffusion Team members to MEP client customers in Ohio and Minnesota, as well as from attendance at regional conferences and trade shows. 

  Targeted SMEs were contacted by telephone to determine how they made technology adoption decisions, and whether they were interested in learning more about ETREMA’S 6kW ultrasonic technology. A total of 47 interviewed companies (representing sonochemistry, wastewater treatment, and food processing) expressed interest in the technology. 

  Follow-up with these companies found that most of them were looking for integrated solutions to their process or product development.  In addition, many of the SME companies did not have the internal resources (R&D budget and engineering staff) to develop the process for their application. In order to reach SMEs, this required ETREMA to focus on technology providers (integrators) that can develop process equipment and applications to meet a market need. 

  Therefore, the pilot team became committed to finding a technology demonstration event that would showcase an applied demonstration platform for the food processing industry. The negotiations with Richter, a technology consultant to major food processors, were unsuccessful, so ETREMA, the pilot team, and ISU researchers then worked together to develop a research and development project and application demonstration for the ultrasonic treatment of Escherichia coli experimentally inoculated into ground beef. ISU conducted two experiments with ETREMA’S “in-line” sonication system, and found no effect of the process. The results for both total microbial populations and Escherichia coli for the processed samples were not statistically different from the control, untreated samples. Further testing of the system design and optimization of the process parameters are needed to determine the impact of ultrasonic treatment of Escherichia coli experimentally inoculated into ground beef. 

  ETREMA has also pursued relationships with some SMEs idenfied through this pilot.  The updated status of on-going technology development diffusion application projects with potential technology adopters is:

  • 27 companies have on-going discussions regarding the ETREMA technology
  • 5 companies have undergone proof of concept testing
  • 3 are in the process of deciding whether to proceed with prototype development

  
  DYLYN Diamond-Like Coating Pilot Results ⁽⁷⁾

  Dylyn technology is a unique family of diamond-like coatings.  Dylyn is a hard, amorphous carbon thin film deposited from readily available hydrocarbons.  The properties of the material are fully tailorable through doping and can provide thin, hard, low-friction coating with a broad range of characteristics. It is considered a platform technology, because it has potential applications in many industries. The coating is currently being commercially used in the U.S. semiconductor market.   

  For this diffusion pilot, the plastics industry was chosen as the target.  Plastics industry SMEs are widely scattered throughout the country and the MEP system has a successful history of working with them.  Also, Bekaert had some early success providing Dylyn coatings to plastics applications in Europe.  This technology diffusion pilot investigated the potential competitive advantages that could be provided to SMEs in the U.S. plastics industry through the use of Dylyn technology.  The participants in the project included:

  • Advanced Refractory Technologies, Inc. (ART) and Bekaert Corporation, the technology owners
  • Plastics Technology Deployment Center (PTDC), an MEP specialty center, a technical resource
  • Western New York Technology Development Center (TDC), an MEP center, the project leader. 

  
  The principal tasks in the project included:

  • Introducing Dylyn to SMEs in the plastics industry through the MEP system,
  • Testing and evaluating Dylyn in a broad range of commercial applications at SMEs,
  • Developing a plan for ART/Bekaert to continue to diffuse Dylyn technology,
  • Attempting to diffuse Dylyn through involvement of the MEP system.

  
  Of the 139 plastics companies initially targeted for participation in the project, 12 companies with 14 commercial applications completed pilot tests.  The tests focused on three primary objectives: decreasing mold wear, improving mold release, and reducing wear in parts other than molds (e.g., injector pins).  Although Dylyn demonstrated some performance advantage compared to existing technologies in three of the applications, these tests demonstrated no overwhelming competitive advantage for Dylyn. 

  Bekaert designs and prices each coating to the specifications of the customer.  In this pilot diffusion project Bekaert had not developed pricing, and without it, participants were unable to compare the cost of Dylyn to currently available technologies.  Because of uncertainties associated with cost and performance, none of the participating SMEs were willing to commit to using the technology.   

  The results of the testing phase of this diffusion pilot project are inconclusive.  The fact that Dylyn demonstrated no clear performance advantage is puzzling, because strong market acceptance for Dylyn is reported among European SMEs.  In attempting to understand this puzzle, the diffusion team identified two critical questions that the pilot did not answer.  Were the specific applications studied the best applications for the coatings?  Were the coatings applied under optimal conditions?  In the project, both of these issues were the responsibility of ART/Bekaert, the technology owner, whose U.S. team had limited commercial coating experience and used a deposition chamber that had not been qualified for production coatings.  The inconclusive results of the pilot may be a function of the art of coating rather than the technology.  Additional testing is needed.   Unless tests can show a conclusive competitive advantage for Dylyn, the MEP system should be unwilling to use its resources to help diffuse Dylyn to U.S. SMEs. 

  Development of a plan for continuing diffusion of Dylyn was also part of the project, although the implementation of the plan was outside the project’s scope.  In the plan, Bekaert will continue to test and diffuse Dylyn technology through the following activities:

  • Establishing commercial coating operations,
  • Transferring technology from Bekaert operations in Europe,
  • Conducting additional analysis,
  • Conducting tests and analysis for new applications of Dylyn.

  
  Each of these continuing diffusion activities is underway.  A measure of Bekaert’s continuing commitment to the diffusion of Dylyn is their new commercial coating facility that opened near Buffalo, NY, in August 2001; it is currently operating at full capacity.  Also, Bekaert has expressed an interest in continuing its work with NIST MEP to evaluate the use of Dylyn by SMEs in the stamping and electronics industries.  

  KEY FINDINGS

  A careful review and evaluation of the technology screening process and the diffusion pilot development and implementation process were part of the project design.  The evaluation studies were conducted by COSMOS Corporation.⁽⁸⁾   This section of the report provides key findings and recommendations related to the three primary project objectives:  (1) developing a process for screening advanced technologies that could be diffused into SME markets, (2) evaluating the utility of using cross-functional teams, and (3) identifying obstacles and effective strategies for involving MEP centers in the technology diffusion process. 

  Screening advanced technologies to identify those with potential for diffusion to SMEs is critical

  It is critical that MEP centers’ efforts to diffuse advanced technologies be focused on those technologies most likely to generate significant improvements in SME productivity and competitiveness. Given the broad scope of the mission and services provided by MEP centers, limited resources are available for involvement in the diffusion of advanced technologies.  Substantial costs are involved in testing and evaluating technologies for specific SME applications, and in training MEP center staff on the nature of the technology and its applications.  Therefore, an effective technology screening process is essential if these efforts are to be efficiently undertaken.

  The project demonstrated that screening advanced technologies is not a simple process.  Because of the early stage of development of these technologies, many require significant additional research and development, despite the claims made by their developers.  In the cases of the DYLYN and Terfenol D diffusion pilots, despite efforts to ensure that the technologies were appropriate for diffusion, significant gaps were identified in research and verification of the cost-effectiveness of technology applications.  These gaps resulted in the need to devote funding to testing and evaluation phase of the diffusion process, leaving less time and resources for the application phase of the process. 

  The following are recommendations to develop a more robust and generalizable technology screening process:

  • A phased process, such as the “stage-gate” approach used for this project, is needed to ensure systematic screening of technologies.  Investing time and resources to gather more information in the earlier stages will help improve the quality of screening decisions and will simplify the decision process in later phases of the selection process.  The cost associated with adopting a technology should be factored into the technology selection process.  If these costs are relatively high, many small- and medium-size manufacturers are less likely to have the necessary resources or be willing to commit the necessary resources to adopt the technology.  If these costs are not known, the likelihood of SME interest in the technology will be significantly reduced.
    
    
  • Commitment on part of technology developer must be confirmed during the screening process. All expectations of the technology owner should be clearly defined at the outset of the diffusion process.  Efforts on the part of MEP centers should be contingent on the willingness of the technology developer to provide both financial and other resources to support diffusion efforts undertaken by the centers.  The willingness to provide these resources is a key test of the interest on the part of the technology developer in the diffusion of the technology to SMEs. 
    
    
  • Technologies should have strong evidence of their competitive advantage in specific applications appropriate to SME markets to be selected for diffusion through MEP centers  For technologies that are not quite ready for diffusion within SME markets, a process for testing and verifying the cost-effectiveness of specific applications is needed.  Because of the diversity and the complexity of technical issues associated with different new “advanced” technologies, it is not likely that a single center could be effective in performing this critical role for all new/emerging technologies.  NIST may wish to consider developing efficient programs for testing and evaluating new technologies rather than relying on individual centers to perform this essential function.  Such efforts might be developed in dialogue with other federal programs, as well as with the state science and technology community.  

  
  Cross-functional teams selected from multiple MEP centers and ATP technology developers in the technology diffusion process are valuable for screening technologies, identifying applications, and designing diffusion plans.

  The project involved cross-functional teams in the technology screening and selection process as well as in the diffusion pilot planning and implementation process.  Cross-functional teams were effective in screening and selecting technologies for diffusion efforts.   The diversity of the expertise of members of the project management team and their experience in working both with technology and smaller manufacturers were important for effective screening of technologies.  

  Cross-functional teams were also valuable in the design of the diffusion plans, in the identification of potential new applications for the selected technologies, and in validating their cost-effectiveness. Such teams need members who are experienced in technology and marketing, as well as in the financial and legal issues related to the specific technology. 

  Cross-functional teams were of less value in efforts to diffuse specific technology applications to individual SMEs.  Once an application of new technology has been tested and its cost effectiveness has been validated, communicating with companies regarding the technology’s potential within their operations can accomplished by trained, individual MEP field specialists.    Also at this stage, diffusion involves on-site extensive meetings and personal contact with individual SMEs.  While a team approach would no doubt provide some additional value in initial meetings with SMEs, a team approach to this phase of diffusion is less critical.  For example, in the case of the Terfenol D diffusion pilot, one MEP center staff member was able to effectively communicate the potential of this technology to many individual SMEs.  However, once an SME has been identified as interested in applying the technology, a team approach may once again be needed to fully assess the technical and market feasibility of its application.  

  Key success factors and significant obstacles to effective diffusion of selected ATP technologies to SMEs through the MEP system.        

  In order to provide a framework for discussing the role of the MEP system in the diffusion of advanced technologies, it is helpful to consider the involvement of SMEs at each of the four stages of the diffusion process, as illustrated in Figure 1.   The line illustrates the normal process of diffusion of a new technology from zero to 100% of its potential market penetration.  The “bars” illustrate the extent of SME participation in each stage of the diffusion process measured as a percent of total SME involvement.  An explanation of the stages is provided below. 

  FIGURE 1- An Illustration of SME Involvement in the
  Technology Diffusion Process

Note:  Bars illustrate extent of SME involvement

Stage 1:  Technology application development and trial implementation

• Smaller manufacturers can be initial developers of new advanced technologies either individually or as part of consortia with larger companies
• Trials within smaller facilities are easier to implement, enhancing potential SME involvement

Stage 2:  Early adoption of the technology for commercial applications

• Smaller manufacturers are typically not targeted by technology developers for early adoption
• Large manufacturers generate more revenues and have lower cost of sales (transaction cost)
• Large manufacturers are seen as industry leaders and have more influence on future technology adoption trends
  
  
• Smaller manufacturers are usually not interested in being early adopters
• SMEs are more concerned with “downside” risk of adoption due to limited access to capital
• Many SMEs lack internal expertise to evaluate and successfully implement new technologies
• Many SMEs underestimate the potential economic/competitive benefits of new “advanced” technology due to lack of knowledge and ability to fully evaluate them

Stage 3:  Rapid commercialization of the technology and market penetration

• As the effectiveness of the technology is proven, some SMEs and most larger manufacturers become users
• While SME adoption of new technologies is greater in this stage, the extent of participation remains relatively low.  Lack of expertise to evaluate new technologies, underestimation of benefits, and risk aversion contribute to slower adoption of new technologies in Stage 3.

Stage 4:  Late adopters acquire the technology as it saturates the market

• Once the technology’s competitive advantage is well known, “late adopters” acquire the technology in order to remain competitive.
• SME’s are over-represented in Stage 4 adoptions of the new technology. 

Results obtained from the three diffusion pilots demonstrated that the MEP system and its affiliated resources can contribute to expanded involvement of SMEs in the diffusion process.  The potential impact of MEP centers on the diffusion process is illustrated in Figure 2 below.    Stage 1 activities were the primary focus of the three diffusion pilots.  The diffusion pilots resulted in increased involvement of SMEs in trial implementations of the technologies.  

Stage 1 Obstacle: 
Cost of research and development related to these applications   Stage 1 Success Factors: the ability of MEP centers to help identify a source of funding for initial trials.   The pilots also demonstrated the potential of the MEP system to help technology developers identify new applications of the technologies that would be appropriate to SME markets.

Stage 2 Obstacle:  
Resistance on the part of technology developers to focus their efforts on smaller manufacturers.  In the case of all three advanced technologies, the developers were themselves small companies with limited resources available to introduce their technologies to potential users.  The developers were predisposed to focus their efforts on larger companies as early adopters in order to reduce the “transactions cost” in relation to the economic benefits that they would derive from successful adoption of their technologies.  

Stage 2 Success Factor:
MEP centers can expand the focus of the technology developers to applications involving smaller manufacturers given available funding.   Even after the conclusion of the pilots, the technology developers were continuing their efforts to work with smaller manufacturers in the development and early adoption of specific technology applications.  These results demonstrated the ability of MEP centers to be effective catalysts for the diffusion of advanced technologies to SMEs. 

None of the efforts undertaken as part of the pilots focused on expanding SME involvement in Stage 3 of the diffusion process.   As was noted in the study limitations section of this report, technologies that were ready for commercialization and broad implementation were not considered for inclusion in the project.   However, given the nature of the resources of MEP centers and their mission, this is the stage of diffusion that is most likely to have potential for the centers to make significant value-added contributions to accelerating technology diffusion.   MEP centers have a primary focus on helping SMEs evaluate new technologies including not only equipment, but also software and improved operational systems.  The key to accelerating SME involvement in Stage 3 of the diffusion process will be the establishment of mechanisms for careful initial testing and evaluation of new technologies to identify those that offer significant competitive advantages to the manufacturers that adopt them.  The creation of a systematic mechanism for the conduct of initial evaluation and testing, as was recommended in the preceding section, would provide a reliable basis for MEP centers to encourage SMEs to adopt technologies.  Lacking evidence of a technology’s competitive advantages, it would not be appropriate for MEP centers to encourage its adoption by SMEs. 

Finally, with respect to Stage 4 of the diffusion process, if MEP centers are successful in accelerating SME involvement in Stages 2 and 3, fewer SMEs will be expected to be involved in Stage 4 adoptions.  In addition, MEP centers can play a role in identifying SMEs that have lagged in the adoption of superior technologies and assist in the dissemination of information regarding successes experienced by SMEs that are using them within their operations.  Ultimately, however, the market system will provide the pressure needed to encourage “late adopters” to acquire new technology.   Faced with competitive pressure from smaller and larger manufacturers that have benefited from adopting these technologies, these lagging companies will either adopt the technologies or lose market share. 

Cumulatively, the potential impact of MEP centers on the rate of diffusion of new technologies could be substantial.  Expanded participation of smaller manufacturers will result in an upward shift in the diffusion curve, reflecting the more rapid pace of technology diffusion.  Figure 2 below illustrates these impacts and the potential for increased SME involvement in the technology diffusion process. 

 

Note:  Bars illustrate extent of SME involvement

MEP involvement can accelerate the diffusion of advanced technologies to SMEs

MEP centers can contribute to accelerating the diffusion of advanced technologies and helping SMEs overcome obstacles to their adoption of new technologies.   The centers can help screen advanced technologies ready for evaluation/adoption by SMEs as well as identify SMEs that are willing to participate in initial (Stage 1) trials of advanced technologies.   Centers can help identify new applications that are particularly needed by SMEs.   Once the competitive advantages of new advanced technologies are verified, MEP centers can help disseminate information and case studies that illustrate the economic advantages of the technologies.  The technical experts working in MEP centers and affiliated organizations can then help fill the “expertise” gap that often prevents SMEs from adopting new technologies in Stages 2 and 3 of the diffusion process.  MEPs can help reduce the risk of early adoption by working with the SMEs to fully evaluate the technologies and their competitive advantages.  MEP services are most likely to be effective in Stage 3. Risks associated with Stage 3 adoptions by SMEs are much lower than compared with Stage 2.  MEPs can use case studies regarding the economic benefits obtained by Stage 2 SME adopters to help SMEs more accurately evaluate the benefits of the new technology. Finally, throughout the diffusion process, MEP centers can work in cooperation with technology developers to understand the requirements for applications of the technology within SME markets.  Regardless of the stage, MEPs can help SMEs evaluate costs and benefits of new technologies and make optimal decisions to enhance their productivity and competitiveness.

RECOMMENDATIONS

In order to fully realize the potential of the MEP system to accelerate technology diffusion, a number of actions are recommended:

1. Expanded technology testing and evaluation resources, and a systematic process for identifying the most cost-effective technology options, must be established.  These resources need to have extensive expertise in technology assessment and in quantifying the costs and benefits associated with new technologies in particular industrial applications. Lack of good, unbiased information on the competitive advantages of new advanced technologies will otherwise inhibit efforts of centers to encourage the adoption of such technologies.
   
   
2. An effective “business model” needs to be developed that would enable MEP centers to participate in technology diffusion efforts on a fee for service basis, without adversely affecting their ability to meet MEP performance and matching funds requirements.  The model needs to identify sources of revenue to support assistance to SMEs, appropriate business relationships that can be formed with technology developers without compromising the independence and reputation of the center and MEP, and effective strategies for developing service engagements with SMEs.  The resources needed to enable MEP centers to participate in this process can come from a variety of sources, including technology developers, federal stakeholders, and state technology and economic development agencies.
   
   
3. Centers need to review and modify the performance objectives assigned to field staff in order to provide incentives for field staff involvement in technology diffusion activities.  As was demonstrated in all three diffusion pilots, the time frames required for diffusion of advanced technologies are lengthy.   Efforts undertaken by center staff in working with technology developers and SMEs can yield valuable benefits to SME competitiveness, but will often require substantial investments of time and many personal contacts with technology developers and SMEs.  Staff performance metrics in some cases may need to recognize the mulit-year nature of technology diffusion projects and not discourage staff from these extensive time commitments so long as they eventually contribute to the center’s operational and financial objectives.

If technology developers are willing to make financial commitments to the involvement of MEP centers in technology diffusion efforts and if federal and state stakeholders are willing to recognize and encourage MEP centers to deliver technology diffusion services, MEP centers will be able to make valuable contributions to accelerating the rate of diffusion of new advanced technologies and maximizing the competitive advantages that these technologies will provide to U.S. manufacturers. 

REFERENCES

1. “Review of Mission and Operations of Regional Centers of the Manufacturing Extension Partnership,” National Institute of Standards and Technology, Technology Administration, U.S. Department of Commerce, February 1998.

2. The ATP program was originally established under the Omnibus Trade and Competitiveness Act of 1988 (Public Law 100-418, 15 U.S.C. 278n). ATP’s authorization was amended by the American Technology Preeminence Act of 1991 (Public Law 102-245).  For additional information regarding the ATP program see “Overview of ATP,” ATP website, www.atp.nist.gov, December 2001. 

3. The MEP program was originally established under the Omnibus Trade and Competitiveness Act of 1988 (Public Law 100-418, 15 U.S.C. 278n).  For additional information regarding the MEP program, see “Review of Mission and Operations of Regional Centers of the Manufacturing Extension Partnership,” National Institute of Standards and Technology, Technology Administration, U.S. Department of Commerce, February 1998.

4. R. G. Cooper, “Winning at New Products,” 2^nd Edition, September, 1993. 

5. “ATP-MEP Diffusion Pilot Final Report:  3D Imager for Rapid Agile Metrology for Manufacturing,”  Sheldon Dolinger, Connecticut Technology Associates, Inc., March 2001.

6. “ATP-MEP Diffusion Pilot Final Report:  The ETREMA 6 kW Ultrasonic Transducer System,”  Mark Laurenzo, IOWA Manufacturing Extension Partnership, September, 2001. 

7. “ATP-MEP Diffusion Pilot Final Report:  Diffusion of Dylyn Technology into the U.S. Mold Market,”  Robert Martin, Western New York Technology Development Center, August, 2001. 

8. “ATP-MEP Technology Diffusion Pilot Project:  Technology Diffusion Case Studies.” Robert Yin, COSMOS Corporation, September, 2001 and “ATP-MEP Technology Diffusion Pilot Project: Case Study of the Technology Selection Process.” Robert Yin, COSMOS Corporation, September, 2000. 

APPENDIX A
DESCRIPTION OF EACH PROJECT TASK

PHASE 1:  ATP Technology Identification and Selection

Task 1:  Identify Candidate ATP Technologies

A multi-center team from the MEP system worked with the ATP Contract Manager to refine criteria for use in screening ATP technologies to identify those with potential for diffusion to smaller manufacturers.  The criteria were used to identify 10 candidate technologies for inclusion in the pilot project.  To facilitate the rapid implementation of the project, the following criteria were used in screening ATP technologies for inclusion in the project:

• Whether the technology developer had identified applications appropriate to SMEs
• Willingness of technology owners to work as part of the pilot to develop a diffusion strategy for SMEs involving the MEP system
• Capital requirements for transferring the technology to smaller manufacturers are affordable
• Minimal additional research and development expenditures are required for application of the technology within smaller manufacturers
• Existing diffusion strategies have not been effective in penetrating small manufacturer application markets
• Willingness of the technology developer/owner to enter into mutually beneficial arrangements with SMEs for the diffusion of the technology

Task 1 Milestone: 

• Identification of 10 ATP technology options that satisfy all screening criteria.

Task 2:  Evaluate ATP technology candidates and select specific technologies for pilot project implementation

The ATP Contract Manager provided a report on nine technologies including responses to screening survey questions, information regarding the technology developed from materials submitted to ATP by the technology developers, and information regarding successful and unsuccessful diffusion efforts for each specific technology. 

The Project Management Team reviewed submitted materials and select 5 technologies for further consideration.  The Project Management Team also developed an interview format for meetings with the selected technology developers/owners.

Owners of the selected technologies were contacted by members of the project management team to discuss the pilot project, benefits associated with their participation in the pilot, and their role in its implementation in the event that their technology was selected. 

The Project Management Team and ATP Contract Manager members reviewed the results of the interviews and select three technologies for inclusion in the project.

Task 2 Milestones:

• Meetings with ATP technology developers of each of the 6 selected technologies.
• Selection of up to 3 ATP technologies for inclusion in the pilot project.

PHASE 2:  DEVELOPMENT OF TECHNOLOGY DIFFUSION TEAMS AND DIFFUSION PLANS FOR EACH SELECTED TECHNOLOGY

Task 3:  Selection of pilot diffusion teams for each of the three selected technologies

Based on the characteristics of the three selected technologies and staff qualifications from the involved MEP centers, the Project Management team selected cross-functional teams.  Depending on the requirements of each of the ATP technologies, these teams were selected to have experience in the followings areas:  (1) the industrial sector(s) to which the technology was applicable, (2) technologies/systems relevant to the adaptation of the technology to small manufacturing environments, (3) market analysis, and (4) financial analysis.  Additional expertise was added to the team through the use of subcontractors as required.  In addition, the ATP technology developers/owners selected one or more individuals to be an active participant on the diffusion team. 

Each Pilot Diffusion Team had a leader selected from the staff of an MEP center located in proximity to the technology developer.  The team leader was responsible for managing the pilot project, ensuring completion of tasks on schedule and within budget, and communication/reporting with the Project Management team. 

Each Pilot Diffusion Team was briefed by the technology developer members of the Diffusion team regarding the nature of the selected technology,  and was provided with the results of all previous screening analyses relevant to their respective technology. The Pilot Diffusion Team developed questions regarding issues and obstacles affecting diffusion of the technology to small manufacturing environments including estimates of the amount of investment costs required to adapt the technology to SME operations.  The Teams also identified the anticipated benefits that smaller manufacturers and the ATP technology developers/owners would result from the “diffusion” of the technologies.  Each team met with representatives of the ATP technology developer to discuss the identified issues and obstacles. 

Working together with the ATP technology developer, each team developed their respective Pilot Diffusion Plans.  These plans included items from the following elements and diffusion strategies that best fit the nature of the selected technology and were most likely to result in success of the pilot:

• Work with ATP technology developers/owners to identify potential application of the technology within smaller manufacturing enterprises (SMEs)
• Profile the characteristics of SMEs most likely to be interested in adopting the pilot technology.
• Work through the MEP system to identify specific companies that have potential interest in the pilot technology.
• Identify contractual terms and conditions and other strategies to provide for the transfer of intellectual property rights necessary for diffusion of the technology to take place
• Disseminate information regarding the pilot technology to SMEs meeting profile characteristics.
• Provide technology demonstrations of the technology, either at the ATP technology developer’s company site or at another location proximate to the locations of target customers.
• Conduct workshops to brief potential customers on the strategy, using the same logic as the demonstrations. 
• Disseminate short articles describing the technology and SME application opportunities through targeted industry publications and MEP Center newsletters and other publications.

The Diffusion Team Leaders submitted their diffusion plans to the Project Director.  The plans included a description of each primary activity to be completed, assigned responsibilities, line-item and activity based budgets (not to exceed $45,000), and detailed timelines and milestones for implementation of the plan over a 12 month period of time.  The Project Management Team and ATP Contract Manager reviewed and approve the Pilot Diffusion Plans. In order to enable completion of some diffusion tasks, the time period for completion was extended to 16 months. 

Task 3 Milestones: 

• Selection of members of each of the Pilot Diffusion Teams.
• Submission of diffusion plans by each Diffusion Team Leader.
• Approval of diffusion plans by the Project Management Team and ATP Contract Manager

PHASE 3:  IMPLEMENTATION OF DIFFUSION PLANS

Task 4:   Implementation of Pilot Diffusion Projects for each of the three selected technologies

Each of the three Pilot Diffusion Teams implemented their respective diffusion plans.  In addition to other responsibilities established as part of these plans, each Diffusion Team leader provided the following reports to the Project Evaluation Team: 

• Quarterly reports regarding progress toward completion of Diffusion Pilot tasks and milestones
• A list of SMEs contacted regarding the selected ATP technology for the purpose of follow-up evaluation
• Information on the number of SME representatives (firms and participants) at all workshops and technology demonstration events
• Information on SMEs and primary contacts for those SMEs adopting the selected ATP technology for the purpose of follow-up evaluation. 

With input from the Project Evaluation Team, participating MEP centers contacted SMEs indicating an interest in the pilot technology who decide not to proceed with its adoption to identify the obstacles to technology diffusion.

Task 4 Milestones: 

• Specific Milestones were established as part of each Project Diffusion Plan.

PHASE 4:  PROJECT EVALUATION AND DISSEMINATION OF PROJECT RESULTS

Task 5:  Project Evaluation

The key element of Task 5 was the development and implementation of the project evaluation plan.  Because the primary focus of this project was to evaluate the feasibility of diffusion of ATP technologies to smaller manufacturer through the efforts of MEP centers, the primary focus of this evaluation plan was to understand the obstacles to successful technology diffusion through MEP centers, the types of activities that were successful in overcoming these obstacles, and the types of technologies most likely to be applicable for diffusion to smaller manufacturers.   

Task 5 Milestones:

• Completion of the Project Evaluation Plan and approval by the NIST Project Manager.
• Preparation of the Evaluation Report on the Technology Selection and Diffusion Team Development Process
• Preparation of the Evaluation Report of implementation and results of the Technology Diffusion Pilots

Task 6:  Dissemination of Project Results

The Project Director, working with the Management Team, prepared the Project Final Report.

It was presented at the November 5, 2001 MEP National Conference.

Task 6 Milestones:

• Preparation of the Project Final Report (including evaluation results) and submission to the NIST Project Manager.
• Presentation of Project Results at MEP National Conference
• Dissemination of Case Study Reports on Each Diffusion Pilot

APPENDIX B
Screening Questions:  ATP Awardee Participation in ATP-MEP Technology Diffusion Pilot Study

ATP Company/Joint Venture Name(s):    

Project Title:                            

Primary Company Contact:

Award Period: 

ATP Point of Contact: 

Do you envision any opportunities to diffuse your ATP-funded technology to small manufacturing enterprises? 

Describe the technology and its potential applications.

Are you willing to disseminate your intellectual property to smaller manufacturers, through licensing arrangements, joint ventures, product development, or other appropriate avenues?  (we are NOT suggesting that anything be given away)

Are you interested in participating in this pilot effort, understanding that it will involve commitment on your part?

• You would have to support your participation in the diffusion activities with the MEP centers.
• If smaller manufacturers turn out to be interested in an application of your technology, what would it take for you to be willing to pursue the transfer of IP through the appropriate mechanism?
• From whom in your organization would we get official commitment  for your participation in this pilot?
• If it appears that there will be sufficient benefit to your company, would you be willing to make a financial commitment to the project?

How many dollars of additional investment are required before this technology is ready to be transferred to smaller manufacturers?

Date created: February 1, 2002
Last updated: April 22, 2003