L'analyse de l'évolution des modèles d'innovation, d'une perception comme processus linéaire (" le concept " chez Schumpeter, " le R&D chez Abernathy, Utterback, ou " la co-innovation " chez Shapiro), comme processus intégré et systémique (" coordination procès " chez Hardy, Jansiti, Chen, " management innovant" chez Tucker) vers une perception globale du total innovation management (les trois totalités de XU), permet de comprendre aussi l'évolution des pratiques et des acteurs de l'innovation. Ces travaux de recherche identifient l'importance de nouveaux outils pour favoriser le transfère de technologie. L'auteur introduit, grâce à ses recherches économiques sur les acteurs et les processus d'innovation ressourcés dans son expérience de travail avec les PME innovantes en France, le concept de "Demand Readiness Level " (DRL), une échelle complémentaire au TRL (Technology Readiness Level) qui sera capable d'identifier le dégrée de maturité de l'expression d'une demande d'innovation par un acteur du marché, y inclut les marchés de l'éco-innovation. Le cas des PME sera analysé en particulier avec l'identification des " asymétries des acteurs du processus d'innovation " (Paun, 2009) : asymétries de risque financier, asymétries culturelles, technologiques qui devront être gérées (réduites ou compensées) pour favoriser la création de valeur à travers l'innovation.Transfer de technologie, asymétries, innovation, éco-innovation, PME

Florin Paun

English

Research Papers in Economics

 
 © - Florin Paun, 2011 (Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.) 
 
"Demand Readiness Level" (DRL), a new tool to hybridize 
Market Pull and Technology Push approaches 
Introspective analysis of the new trends in Technology Transfer practices. 
 
PhD. Florin Paun, Deputy Director, DCV, ONERA 
Economiste,  expert  invité  et  membre  du  Laboratoire  de  recherche  sur  l’Industrie  et 
l’Innovation, France 
(Selected for publication in 2011 in Springer Encyclopedia)  
JEL Code : O14, O3, O44  
 
Abstract  
Analyzing the evolution of the innovation models, from the linear process (“concept” for Schumpeter, 
“R&D push” for Abernathy, Utterback, “co-innovation” for Shapiro), integrated and systemic process 
(“coordination  process”  for  Hardy,  Iansiti,  Chen,  “innovative  management”  for  Tucker)  to  total 
innovation management (3 totalities for XU) we could understand the evolution of the practices and 
actors of innovation. This paper identifies the importance of new tools in order to favor the technology 
transfer process. The author introduces the concept of "Demand Readiness Level", an additional scale 
to Technology Readiness Level, which will relate to the degree of maturity for the expression of a 
need by a potential innovation actor on a given market including the lead markets for eco-innovation. 
The case of SMEs it will be in particularly addressed with the identification of specific "asymmetries 
in  the  innovation  process"  (Paun,  F.,  2009):  risk  asymmetry,  cultural  asymmetry  and  technology 
asymmetry that need to be managed (reduced or compensated) in order to favor value creation through 
innovation. This research work has been presented during the ERA-Net Workshop on Eco-innovations 
and has been selected for publication in Springer Encyclopedia 2011.  
 
Technology transfer, Technology Readiness Level (TRL), asymmetries, innovation, Technology Push, 
Market Pull, IPR, eco-innovation  
 
 
 
Résumé en francais  
L’analyse de l’￩volution des mod￨les d’innovation, d’une perception comme processus lin￩aire (ﾫ le 
concept » chez Schumpeter, « le R&D chez Abernathy, Utterback, ou  « la co-innovation  » chez 
Shapiro), comme processus intégré et systémique (« coordination procès » chez Hardy, Jansiti, Chen, 
« management innovant» chez Tucker) vers une perception globale du total innovation management 
(les trois totalit￩s de XU), permet de comprendre aussi l’￩volution des pratiques et des acteurs de 
l’innovation. Ces travaux de recherche identifient l’importance de nouveaux outils pour favoriser le 
transfère de technologie. L’auteur introduit, gr￢ce ￠ ses recherches ￩conomiques sur les acteurs et les 
processus d’innovation ressourc￩s dans son exp￩rience de travail avec les PME innovantes en France, 
le concept de «Demand Readiness Level » (DRL), une échelle complémentaire au TRL (Technology 
Readiness Level) qui sera capable d’identifier le d￩gr￩e de maturit￩ de l’expression d’une demande 
d’innovation par un acteur du march￩, y inclut les march￩s de l’￩co-innovation. Le cas des PME sera 
analys￩ en particulier avec l’identification des « asymétries des acteurs du  processus d’innovation ﾻ 
(Paun, 2009) : asymétries de risque financier, asymétries culturelles, technologiques qui devront être 
g￩r￩es (r￩duites ou compens￩es) pour favoriser la cr￩ation de valeur ￠ travers l’innovation. 
Transfer de technologie, asymétries, innovation, éco-innovation, PME 
 
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 © - Florin Paun, 2011 (Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.) 
The  main  activities  of  the  Technology  Transfer  Offices  are  related  to  Technology  Push 
approaches. An important number of these offices either integrate or collaborate closely with 
business incubators ready to support start-up activities. The main discussions and interests of 
both Technology Transfer executives and economists trying to conceptualize the innovation 
practices (e.g. AUTM or T2S Annual Meeting) are also related to how to commercialize R&D 
results for the benefit of industrial partners. Detecting, promoting, identifying prospects and 
licensing are considered business as usual by all the TT officers.  
 
Indeed, all these considerations are focused on some central questions: how do I fit what my 
R&D colleagues developed into the market? How to find the appropriate market injection 
vector? Is it an industrial group, an SME or do I need to support my R&D colleagues in their 
attempting to create a successful start-up? Another important issue to be solved by the TT 
Officers is how to evaluate and negotiate with the industrial partner in order to recognize 
together the value of the transferred IP. How big the market will be? How big is the interest of 
the industrial partner I found on the market? All these questions are carrying their answers 
inside what economists called Information Asymmetry (Stiglitz) and thus increase the risk of 
failure  for  an  appropriate  Technology  transfer  deal  because  of  uncertainty  and  lack  of 
appropriate comprehension tools for the innovation process. Recent economic works suggest 
that other important asymmetries in addition to the above mentioned are highly influencing 
the  quality  of  the  deal  while  performing  Technology  Transfer;  the  Cultural  Asymmetry 
between entrepreneur and researcher, the Financial Risk Asymmetry and the Technological 
Capability Asymmetry.  
 
Current issues  
 
All of these, induce a generally acknowledgment inside TTO community that excepting the 
“lucky blockbusters” or some of the “big names” the Technology Transfer Offices are not 
financially  beneficial.  Important  discussions  where  carried  out  between  TT  executives 
informally at the AUTM and T2S last meetings related to the Industrial Groups roaring on 
Universities “expensive” IP rights and their newly engaged R&D activities with emerging 
countries Universities.  
 
Professor Chris Hill from George Mason University gave a memorable talk, related to this 
question, at the 2010 T2S Annual Meeting, with the occasion of his Keynote Lecture. He gave 
a  significant  and  unanimous  acknowledge  pledge  on  the  importance  to  introduce  the 
Technology Transfer activities inside the Core Activities expected from an University and 
thus accepting the fact that this activity has not necessary to be beneficial while inducing 
economic value in the region.  
 
Following his lecture, Florin Paun publicly suggested, based on his experience at Onera and 
further to his economic research works on innovation actors’ asymmetries and “hybridization 
tendency of the innovation system”, that as one of the Core Expectations from an University 
is to induce economic value in the region, not only the Technology Transfer activity must be 
recognized like one of the Core Activities of the University (as he just suggested) but also it 
must be reshaped from a Technology Push priority to an appropriate “equilibrium between 
Technology Push and Market Pull trough a hybridized approach»: «We need to change our 
jobs from “Look how nice is my technology baby” to  “I’m here to listen to  you, to co-
conceive solutions and to support you with my knowledge in your technology development 
project”.  TTO  actually  tend  to  identify  the  need  to  take  more  into  consideration  the 
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 © - Florin Paun, 2011 (Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.) 
technology needs of the regional SMEs without replacing their complementary technology 
push activities” 
i 
 
 
Onera’s Technology Transfer Experience  
 
Starting with 2005, Onera adopted a voluntary strategy towards SMEs. It was based on the 
assumption made that the SMEs are the most adapted vectors for technology demonstration 
out  of  the  aerospace  domain.  The  experience  proved  that  the  straight  Technology  Push 
approach was not the most appropriate to put our newly developed technologies on different 
other market domains. ONERA needed to adapt our relationship on a win-win basis. 
 
Onera  starts  to  promote  not  its  newly  developed  technologies  but  its  competencies.  It 
conceived, promoted and signed in 2007 with more then 40 SME, at that time, an ONERA-
SME collaboration Charter. This Charter, signed by more then 80 partners nowadays, is based 
on well defined and agreed role between the parties. The SME cluster around Onera became 
“eyes and ears” on the Market for the perceived technological needs while Onera became 
knowledge provider to the SMEs for their innovative development projects;… and it works.  
Previously to this new orientation, ONERA signed about one technology transfer agreement 
each 2 years in technology push. We signed about 10 per year during last 2 years, 8 induced 
by  Market  Pull  approach  and  2  by  Technology  Push.  This  multiplication  effect  on  the 
Technology Push deal flow was rather unexpected. But, with the experience ONERA got and 
by  institutionalizing  its  approach  (with  internal  and  external  recognition),  this  positive 
demultiplication effect turned to recognize that the better comprehension and understanding 
between ONERA scientists and the industrial representatives was partial obtained also trough 
their previously carried Market Pull innovation projects.  
 
The fundamental generally observed fact on each of the technology transfer agreement signed 
was that none of the obtained deals could be classified in a pure Technology Push or Market 
Pull approach. Indeed, all the agreements were obtained around a particularly given moment 
when a Technology Push approach meet an existing Market Pull approach made in parallel by 
the industrial partner.  
 
We have hardly tried to identify and well define the conditions making feasible a license 
agreement deal; conditions aimed to predict the particularly given moment for the junction of 
the two types of approaches.  
We  thus  tried  to  understand  and  arrange  these  conditions  by  relating  them  to  specific 
processes perception while referring at the TRLs scale. Something was missing and it didn’t 
work. We could not identify generally valid conditions or definitions and we accepted this 
particularity of adapted solutions “any time is case by case” different from the standardized 
approach of TRLs 
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 © - Florin Paun, 2011 (Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.) 
 
Introduction  of  a  new  concept  for  understanding  and  measuring  the  Market  Pull 
approach :  
 
We observed that the innovation process was subordinated to the reference adopted system. 
Indeed, all the actors involved in Technology Transfer process have their attention “glued” to 
the TRL scale. In practice, even speaking about the Customer Voice we still ask (or are asked) 
about “what is the TRL level” for the appropriate technology sensed to tackle the Expressed 
Need by an industrial who’s addressing our R&D Commercialization Office.  
 
Why continuing to refuse the evidence? : Even the Customer Voice is sunk inside the TRL 
scale and our minds are thus Technology Push driven. Why not referring from now on, when 
facing an industrial expressing to the R&D Commercialization Office to a new scale related 
this time to what we call the Demand Readiness Level (DLR) identified by a customer on a 
given market? 
It actually means that it is the right timing to define an additional scale and plot it in a reverse 
manner related to the classic TRL scale in order to have the appropriate comprehension of the 
Market  pull  process.  The  author  is  proposing  this  schematic  further  for  a  better 
comprehension. 
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 © - Florin Paun, 2011 (Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.) 
©  Copyright  -  Florin  PAUN;  Source:  (Paun.  F.,  2011)  Demand  Readiness  Level  as 
equilibrium tool for the hybridization between Technology Push et Market Pull approaches: 
ANR - ERANET Workshop, 8th of February 2011, Paris 
For example, if an industrial partner has a DRL on 8, he will be able to identify and speak 
with the appropriate scientist to launch a collaborative R&D program for developing a new 
product or service. Some type of matching between different levels could be observed at each 
line of the previous table.  
 
This is now better understood why “each case is a specific one”. Looking in two references 
systems,  one  for  the  Technology  Push  approach  and  the  other  one  for  the  Market  Pull 
approach,  we  could  predict  the  given  particularly  timing  when  an  technology  transfer 
agreement is ready for signature. Further research are on the process to Postulate that the 
Technology Transfer Agreements between R&D laboratories and Industrials are only possible 
if the sum DLR+TRL is at least equal to 10..  
 
 
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 © - Florin Paun, 2011 (Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.) 
 
© Copyright - Florin PAUN & Philippe RICHARD, 2011 
 
The  “Demand  Readiness  Level”  is  a  new  measure  to  assess  the  maturity  of  evolving 
demands  identified  by  potential  innovation  actors  towards  an  appropriate  stage  of 
conceptualization of the need in the market allowing a matching point with scientific research 
teams capable to either propose as solution an existing scientific result through technology 
transfer process or translate the demand in new R&D projects.  
 
In the context of the sustainable development, the DRL offers also the opportunity to orient 
part  of  the  research  and  innovation  investments  towards  sustainable  solutions  as  the 
DEMAND  integrates  ex  ante  the  newly  regulations  concerning  compatibility  with 
environmental and social values. Thus, the sustainability effect on R&D projects through their 
valorization by DRL could place this new tool as levier for generalizing eco-innovation in the 
“Hybridization” strategy of Technology Push and Market Pull approaches (Paun, F, 2010). 
 
 
 
© Copyright - Florin PAUN, 2011 
 
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 © - Florin Paun, 2011 (Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.) 
 
 
Conclusion  
 
Since many  years the TRL scale allowed various  analysis of the technology transfer and 
technological innovation processes by positioning the various stakeholders along this scale. 
TRL scale allowed the identification of various asymmetries between the actors and thus 
suggested the introduction of various reduction or compensation tools at Onera (and not only). 
Trough  this  contribution,  we  proposed  a  new  reference  system  for  better  addressing  the 
Market  Pull  approach  while  doing  technology  transfer  and  technological  innovation.  The 
DLR scale could also be the object of the same dynamic exchanges and analysis that the TRL 
scale induced among the academics or practitioners communities. The aim is that this new 
tools for a hybridized approach will significantly improve the innovation and TT practices 
trough a better understanding of the different factors and staging allowing the agreements 
signatures  to  creating  value.  For  a  TT  Officer  or  a  Strategy  Industrial  Director  will  be 
important to survey the matching of the levels on the 2 scales while placing the participating 
actors,  identifying  the  existing  asymmetries  between  them  and  activate  compensation  or 
reduction tools for dealing with these asymmetries. When the sum of the 2 indicators will 
equalize 10 the deal between the Industrial and the R&D laboratory becomes feasible and will 
interest  all  the  stakeholders  of  the  innovation  project,  including  the  investors  (private  or 
public).With  a  better  understanding  and  control  of  the  hybridization  strategy  between 
Technology Push and Market Pull approaches the innovation system tends to evolve towards 
a better compatibility with the social and environmental requirements inevitably market pull 
driven as in the case of eco-innovation. 
                                                           
i (Note: This intervention was also publicly acknowledged and encouraged for publication by the community. These 3 pages 
are the result of these suggestions to share this specific hybridized approach with the TT community. PhD Florin Paun 
experience is based, as Deputy Director in charge with Industrial Innovation, on a 5-year relationship between 2006 and 
2010, with more then 80 SME partners, on the drivers and barriers perceived inside this relationship and on more then 40 
interviews with scientists and industrial representatives involved in direct collaborations linked to technology or knowledge 
transfer.)  
 
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"Demand Readiness Level" (DRL), a new tool to hybridize Market Pull and Technology Push approaches. Introspective analysis of the new trends in Technology Transfer practices.

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"Demand Readiness Level" (DRL), a new tool to hybridize Market Pull and Technology Push approaches. Introspective analysis of the new trends in Technology Transfer practices.

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Research Papers in Economics