Innovative materials, components, and systems based on micro and nanotechnologies are recognized as promising growth innovators. The coming years the commercialization of micro and nanotechnology will be extended, but in order to commercialize micro and nanotechnology successfully, besides exploration a parallel focus should be aimed at exploitation. This paper presents in a brief and non-exhaustive manor a theoretical introduction and two company introductions related to exploitation and exploration focus embedded in the innovation development process to commercialize customer-oriented applications. A balanced approach between exploration and exploitation within organizations business, technological, and scientific domain could sharpen micro and nanotechnology companies into sustainable competitive market-driven enterprises.

WHC Knol

English

Research Papers in Economics

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Micro and nanotechnology commercialization: 
balance between exploration and exploitation 
 
W.H.C. Knol 
Qeam 
Vierde Binnenvestgracht 19 - 2311 NT - Leiden - the Netherlands 
Erik.Knol@Qeam.com - www.Qeam.com 
 
Presented paper published in the proceedings of  
the MANCEF COMS2004 conference, 
Edmonton, Canada, 2004, August 29 - September 2, pp. 215 – 220
1 
 
ABSTRACT 
Innovative materials, components, and systems based on micro and nanotechnologies are 
recognized as promising growth innovators. The coming years the commercialization of 
micro and nanotechnology will be extended, but in order to commercialize micro and 
nanotechnology successfully, besides exploration a parallel focus should be aimed at 
exploitation. This paper presents in a brief and non-exhaustive manor a theoretical 
introduction and two company introductions related to exploitation and exploration focus 
embedded in the innovation development process to commercialize customer-oriented 
applications. A balanced approach between exploration and exploitation within organizations 
business, technological, and scientific domain could sharpen micro and nanotechnology 
companies into sustainable competitive market-driven enterprises. 
1. INTRODUCTION 
Innovative materials, components, and systems based on micro and nanotechnologies are 
recognized as promising growth innovators for the years to come. A variety of industries, for 
instance aerospace, electronics, fashion, instrumentation or life sciences, (will) adopt and 
embed micro and nanotechnology-based materials, components, and systems. Examples are 
airbag accelerometers in automobiles, programmable DNA-array for the biotech industry, or 
organic light-emitting diode technology for portable electronic displays. These technologies 
have the ability to stimulate innovation processes concerning new or enhanced market-driven 
products and/or services. Nanotechnology compared with microtechnology is for a substantial 
part in the research and development phase. Eventually, micro and nanotechnologies will 
merge to a technology cluster offering complete range of functionalities in information, 
energy, construction, surfaces, biomedical, and catalysis domains. 
From a macro economic growth perspective it is important to facilitate the ability to exploit 
the innovative and added value of micro and nanotechnology into applications. This means 
that micro and nanotechnology knowledge generated in knowledge intensive organizations 
needs to be transformed and/or transferred in order to design, produce, sell, adopt and 
                                                 
1 Citation suggestion: Knol, W.H.C. (2004), Micro and nanotechnology commercialization: balance between exploration and 
exploitation. Presented paper published in the proceedings of the MANCEF COMS2004 conference, Edmonton, Canada, 
2004, August 29 - September 2, pp. 215 - 220. Page 2 out of 5 - copyright Qeam - www.Qeam.com 
implement customer-oriented applications. This trajectory should be an interactive process of 
value creation and realization, including serious attention for the societal theme of responsible 
innovation. A complete palette of competencies and actor interactions between knowledge 
institutions, companies, and others (e.g. interest groups, industry organizations, and 
governmental organizations) are necessary to fully walk through this value adding process. 
This paper discusses in a brief and non-exhaustive manor from theoretical and practical 
perspectives the exploitation and exploration aspects related to the innovation development 
process of micro and nanotechnology-based applications. First, the paper describes the 
innovation development process. Next, exploitation and exploration with respect to several 
domains are introduced. Finally, exploitation and exploration are linked to two companies. 
The conclusion focuses on the outline presented. 
2. INNOVATION DEVELOPMENT PROCESS 
The innovation development process on (inter)organizational level from research & 
development to (high-tech) invention to market-ready applications is not linear, but a cyclic 
process with parallel and iterative loops (e.g. Tidd et al., 2001). With respect to enabling 
technologies like micro and nanotechnology, Walsh (2004) presents an innovation process 
related infrastructure model that points out the dynamics between technology-push side and 
market-pull side. Micro and nanotechnology as enabling technologies can lead to next 
generation (enhanced or new) applications, but also has the characteristics to create and 
facilitate next generation (initially unknown) markets. Referring to Christensen (1997), this 
gives additional dimensions and challenges to innovation processes concerning development 
and commercialization of micro and nanotechnology. From technological point of view, the 
up-scaling from laboratory production to full production is a fundamental challenge. Example 
is the purity level of specific single wall carbon nanotubes production. 
In successful technology commercialization knowledge plays a key role; the innovation 
development process needs to incorporate knowledge from a variety of disciplines and 
sources. The commercialization process starts off with the seizure or creation of the needed 
scientific, technological, and market knowledge. Next, this knowledge is integrated, 
combined and applied to generate commercially viable micro or nanotechnology-based 
applications. Nowadays, due to intense market dynamics and complex engineering trajectories 
related to micro and nanotechnology, this process needs to be an open process in order to be 
flexible and adaptable to interact with (knowledge oriented) processes of external actors like 
customers, partners, suppliers and knowledge institutions. Jolly (1997) identifies five key 
subprocesses in the technology commercialization process: imagining, incubating, 
demonstrating, promoting, and sustaining. Each of the subprocesses involves solving 
problems and taking challenges of scientific, technological and/or business nature and  
requires  a  multifunctional  approach.  
3. BALANCE BETWEEN EXPLORATION AND EXPLOITATION 
In terms of March (1991), maintaining an appropriate balance between exploration and 
exploitation is a primary factor in organization survival and prosperity. March links 
exploration to terms like search, variation, risk taking, experimentation, flexibility, discovery; 
exploitation includes things such as refinement, production, efficiency, selection, 
implementation, execution. The essence of exploitation is the refinement and extension of 
existing competencies, technologies and paradigms. Its returns are positive, proximate, and 
predictable. Experimentation of new alternatives is the essence of exploration and its returns 
are uncertain, distant, and often negative. In order to commercialize innovative materials, Page 3 out of 5 - copyright Qeam - www.Qeam.com 
components, and systems based on micro and nanotechnologies successfully in time, besides 
exploration, a parallel focus should be aimed at exploitation.  
Looking at the research and development activities on micro and nanotechnology within 
organizations (e.g. universities and laboratories of companies), they are strongly related to 
exploration. An open culture of discovery and creativity is desirable to foster new 
fundamental insight via triggering experiments. On the other hand, explorative mentality is 
also desirable within organization’s business domain, in order to let marketers define and 
tackle new and promising markets. Scenario method form an instrument to support 
organizations with a broader focus on micro and nanotechnology business opportunities 
(Knol, 2004). Exploitative scientific and technological activities focus substantially on the 
engineering and production up-scaling aspects of science-based customer-oriented materials, 
components, or systems. Exploitative business attitude of micro and nanotechnology oriented 
companies is essential to actually serve customers with value adding applications and to 
generate cash-flows.  
4. EXPLORATION AND EXPLOITATION FOCUS WITHIN TWO COMPANIES 
Two companies and their innovation approach in relation with exploration and exploitation 
are briefly discussed. On a general level DSM’s venturing and business development 
approach is introduced. The nanotechnology company Mo6 is introduced on a more specific 
level. 
DSM Venturing & Business Development 
DSM - a multinational with approximately 25,000 employees world-wide and annual sales of  
approximately Euro 8 billion (www.dsm.com) - creates innovative products that help improve 
the quality of life. DSM transformed from a petro-chemicals bulk supplier to a supplier of 
specialized products in the field of industrial chemicals, performance materials and life 
sciences.  
DSM’s business unit Venturing & Business Development is specifically aimed at commercial 
oriented innovation development processes of DSM. This unit contributes the value creation 
process of DSM through innovative initiatives via license in, license out, spin in, spin out, 
acquire, and divest. Examples of innovative initiatives are projects on advanced coatings (e.g. 
anti-relflective coatings and hydrophobic coatings) and size-selective nanofiltration, start-ups 
like Micabs (laser marking technology), and grown-ups like is DSM Solutech (producer of the 
specialty film Solupor). The approach shows high-level flexibility to balance exploitation and 
exploration within DSM’s scientific, technological, and business domains. 
Mo6 
Last decade, the Slovenian Jozef Stefan Institute performed breakthrough research in the field 
of transition metal chalcogenide nano-materials like MoS2 and MoS2I1/3 nanotubes. These 
nano-materials show properties very similar to single wall carbon nanotubes (e.g. Baughman 
et al. 2002; Vrbanic et al., 2004), but from a production point of view they require - just like 
carbon nanotubes - delicate production processes. Lately, the institute discovered and 
patented the nano-material Mo6S3I6; these transition metal chalcogenide nanotubes can be 
synthesised in a single step. It is composed of identical small-diameter nanowires, weakly 
bound in bundles, which can be handled in the same way as carbon nanotubes. The Mo6S3I6 
material exhibit excellent field emission properties, a large capacity for lithium storage, great 
mechanical strength, a low shear modulus implying good tribological properties, and large 
paramagnetic susceptibility characteristics.  Page 4 out of 5 - copyright Qeam - www.Qeam.com 
The small and independent company Mo6 (www.mo6.com) closed a deal with the Slovenian 
institute to own the rights with respect to production and commercialization of the Mo6S3I6 
nano-material.. The business model of Mo6 is focused on the commercialization of the 
patented Mo6S3I6 technology via licenses and/or royalties. Typical customers are those who 
orient intensively on carbon nanotubes properties usage in specific applications and could use 
the nano-material as a value adding substitute for carbon nanotubes in their applications. 
With respect to exploitation and exploration focus (explicit or implicit) within the business, 
technological, and scientific domains of the company, a qualitative interview-based overview 
is constructed (see table 1). Summarizing, the commercial character of Mo6 can be seen 
within all three domains: substantial part of the activities within all domains have an 
exploitative character to support business development actions to interact with and to close 
deals with specific targeted prospects. Additional explorative actions are less relevant for the 
moment: a scientific knowledge base is buildup, scientific research is naturally ongoing 
within the Slovenian institute and new business development activities on non carbon 
nanotubes-oriented segments are currently deliberately out-of-scope. Due to the current 
business stage of Mo6, it is clear that the balance between exploitation and exploration is for 
the moment in favor for exploitative activities. 
  Business domain  Technology domain  Science domain 
E
x
p
l
o
i
t
a
t
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n
 
f
o
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Mo6 is primarily focused on 
prospects who are interested in the 
nano-material as a value adding 
substitute for carbon nanotubes in 
specific applications, due to the 
characteristics of the nano-material, 
the single step production method, 
the purity level and usage possibility 
of prospects’ carbon nanotubes 
knowledge base. More specific, 
targeted prospects are primarily 
operating in  the field of carbon 
nanotubes-based field emission 
devices (displays), semiconductors 
(chips), and sensors (water-based 
solutions). Competencies in the field 
of business development and 
business contracts are available 
within the company. 
Based on specific prospect 
questions, Mo6 and/or the related 
Slovenian institute do perform 
minor technology analysis related to 
nano-material usage in certain 
applications and/or production up-
scaling of the nano-material. Most 
of the technology aspects are 
researched by potential customers, 
due to the fact that they have (or 
should have) the key knowledge 
concerning the application, carbon 
nanotubes usage, and application 
production. Mo6 do want to perform 
independently minor exploitative 
technology research via their own 
laboratory facilities. Competencies 
in the field of exploitative 
technology research are to be 
extended within the company. 
The Mo6 related Slovenian institute 
performs exploitative scientific 
research on the nano-material. New 
fundamental insights on 
characteristics are available for the 
company Mo6. Mo6, the institute 
and (temporary) involved Slovenian 
university departments do have the 
ability to make agreements on 
laboratory usage to perform prospect 
focused scientific research on 
specific characteristics of the nano-
material. Mo6 do want to perform 
independently minor exploitative 
scientific research via their own 
laboratory facilities. Competencies 
in the field of commercial-oriented 
scientific research are available 
within the company. 
E
x
p
l
o
r
a
t
i
o
n
 
f
o
c
u
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Mo6 is not focused on nano-material 
license exploitation in segments 
other than the specific defined 
carbon nanotubes-based applications 
segments (see above). Serving other 
segments requires huge investments 
in fundamental, application-
oriented, and production-oriented 
research, with as-for-now relative 
unknown chances of commercial 
success. 
Mo6 is primarily focused on license 
exploitation in specific segments. 
Due to this business model, the 
company and the related Slovenian 
institute are not specific focused on 
explorative technology aspects 
related to nano-material usage in a 
broad range of applications or 
production up-scaling processes. 
Therefore, competencies in the field 
of nanotubes-based application 
design, analysis and engineering are 
not needed and not (extensive) 
available within the company. 
The Slovenian institute performs 
naturally ongoing explorative 
scientific research to further 
discover and understand 
characteristics of the nano-material. 
Mo6 and the institute do have the 
ability to make agreements on the 
publication level and timing with 
respect to commercial sensitive 
scientific information. 
Competencies in the field of 
explorative scientific research are 
available within the company. 
Table 1: Qualitative overview of exploitation and exploration focus within Mo6 Page 5 out of 5 - copyright Qeam - www.Qeam.com 
5.  CONCLUSION 
Commercialization of micro and nanotechnology-based materials, components, and systems 
puts pressure on the innovation development process in order to balance exploration and 
exploitation. From scientific and technological point of view an explorative focus is desirable 
to discover and understand new phenomena. On the other hand, an exploitation attitude linked 
to scientific and technological activities is crucial to funnel knowledge in order to define and 
develop applications. With respect to the organizations’ business domain, exploitation is the 
key element to serve customers with micro and nanotechnology-based applications and to 
generate cash flows. An explorative business mindset is essential to trigger and tackle new 
markets. A business model and business stage related balanced approach between exploration 
and exploitation within organizations’ business, technological, and scientific domain is 
important to sharpen micro and nanotechnology companies into sustainable competitive 
market-driven enterprises. 
REFERENCES 
Baughman, R.H., Zakhidov, A.A. and Heer, W.A. de (2002), Carbon nanotubes - The route toward applications, Science, 
Vol. 297, pp. 787 - 792. 
Christensen, C.M. (1997), The innovator’s dilemma: When new technologies cause great firms to fail, Harvard Business 
School Press, Boston, MA. 
Jolly, V. (1997), Commercializing new technologies: Getting from mind to market, Harvard Business School Press, Boston, 
Massachusetts. 
Knol, W.H.C. (2004), Nanotechnology and business opportunities: Scenarios as awareness instrument, presented paper 
published in the proceedings of the 12
th international conference High Tech Small Firms, Enschede, 24 - 25 May, pp. 609 - 
621. 
March, J.G. (1991), Exploration and exploitation in organizational learning, Organizational Science, Vol. 2 (1), pp. 71 - 87. 
Tidd, J., Bessant, J. and Pavitt, K. (2001),  Management innovation: Integrating technological, market and organizational 
change, Second edition, John Wiley & Sons Ltd. Chichester. 
Vrbanic, D., Remskar, M., Jesih, A. Mrzel, A., Umek, P., Ponikvar, M., Jancar, B., Meden, A., Novosel, B., Pejovnik, S., 
Venturini, P., Coleman, J. and Mihailovic, D. (2004), Air-stable monodispersed Mo6S3I6 nanowires, Nanotechnology, Vol. 
15, pp. 635 - 638. 
Walsh, S.T. (2004), Roadmapping a disruptive technology: A case study; the emerging microsystems and top-down 
nanosystems industry, Technological Forecasting & Social Change, Vol. 71, pp. 161 - 185. 

Carbon nanotubes - The route toward applications,

Commercializing new technologies: Getting from mind to market,

Exploration and exploitation in organizational learning,

Management innovation: Integrating technological, market and organizational change, Second edition,

Nanotechnology and business opportunities: Scenarios as awareness instrument, presented paper published

Roadmapping a disruptive technology: A case study; the emerging microsystems and top-down nanosystems industry,

The innovator’s dilemma: When new technologies cause great firms to fail,

Micro and nanotechnology commercialization: balance between exploration and exploitation

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Micro and nanotechnology commercialization: balance between exploration and exploitation

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