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 customer 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.Eco-innovation, TRL, Technology transfer, SME, Demand

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.) Page 1 
 
"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 
 
 
Florin Paun, Onera-The French Aerospace Lab, Chatillon, France 
Economiste, expert invité et membre du Laboratoire de recherche sur l’Industrie et l’Innovation 
 
(Selected for publication in 2011 in Springer Encyclopedia)  
 
 
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 
customer 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. 
 
Introduction to TTO practices 
 
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 
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Author manuscript, published in "ANR - ERANET WORKSHOP, Paris : France (2011)"© - 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.) Page 2 
 
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  “hybridisation  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 
technology  needs  of  the  regional  SMEs  without  replacing  their  complementary  technology  push 
activities” 
 
(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.) 
 
 
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 meat 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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1© - 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.) Page 3 
 
 
 
 
 
 
 
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. 
 
DMEN 
Level 
“Demand Readiness Level” (Paun, F., 2011)  Description  Technology 
Readiness Level 
TRL 
Level 
1  Occurrence of a Feeling “something is missing”  Market  certification  and 
sales authorisation 
9 
2  Identification of a specific need  Product Industrialisation  8 
3  Identification  of  the  expected  functionalities  for 
the new Product/Service 
Industrial Prototype  7 
4  Quantification of the expected functionalities  Field demonstration for the 
whole system 
6 
5  Identification  of  the  systemic  capabilities 
(including the project leadership) 
Technology development  5 
6  Translation  of  the  expected  functionalities  into 
needed capabilities to build the response 
Laboratory demonstration  4 
7  Definition  of  the  necessary  and  sufficient 
competencies and resources 
Research  to  prove 
feasibility 
3 
8  Identification  of  the  Experts  possessing  the 
competencies 
Applied research  2 
9  Building the adapted answer to the expressed need 
on the market 
Fundamental research  1 
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1© - 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.) Page 4 
 
 
Source: (Paun. F., 2011) Demand Readiness Level as equilibrium tool for the hybridization between Technology 
Push et Market Pull approaches: ANR - ERANET Workshop, 8
th 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. 
 
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 conceptualisation 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 oriente 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  valorisation  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).  
 
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. 
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"Demand Readiness Level" (DRL), a new tool to hybridize Market Pull and Technology Push approaches

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"Demand Readiness Level" (DRL), a new tool to hybridize Market Pull and Technology Push approaches

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