ellen lutz ceo, clean markets llc september 28-october 1, 2010
TRANSCRIPT
• NASEO and ASERTTI jointly sponsored study• Purpose:
– To provide State Energy Offices with best practices & key success factors in energy technology innovation
– To minimize risk in funding innovative R&D– Develop recommendations for State Energy Officials when
evaluating higher risk technology innovation projects
• Status: study undergoing participant review
• Literature review of technology innovation• Twenty-one in-depth interviews with organizations
who have created clean energy technology breakthroughs
• Data analyzed by stage of development
Stage of Development
Number of Interviewees
Sectors
R&D 6 projects Universities, National Labs Research institutions, Innovation Centers,State Energy Offices, Non-profits, Private companies, other State partners
Demonstration 5 projects
Deployment 10 projects
INNOVATION MODELS TRADITIONAL RDD&D MODELS
“Ideation” stage precedes start of R&D activity
R&D direction generally based upon research to date
Intention: to discover completely new ways of addressing problems
Intention: to achieve incremental progress in technology performance
Requires multidisciplinary teams to act as one
Clean lines of separation exist between organizations and their responsibilities
Market “pull” – integrates market analysis early in research planning
Market “push” – research “pushed” into development with minimal market input
Significant overlap between phases – faster prototype and testing
Uses “phase gated” approach – stages of RDD&D treated as sequenced efforts
Assemble project & transfer to end user site
Activate project at end user site
Solicit end user feedback
Install O&M processes & procedures
Execute manufacturing plans to create economy of scale
Work with partnerships
Conduct basic and applied research
Investigate existing materials
Synthesize new materials
Model devices & approaches
Analyze technologies, market, policies, environmental issues
Develop partnerships
Develop & deploy working prototypes
Monitor & evaluate performance
Solicit peer/end user feedback
Make adaptations
Connect/simulate prototype with networked infrastructure
Develop & work with partnerships
R&D DEMONSTRATION DEPLOYMENT
Execute: ramp up for commercial success
Understand end user behavior and competitive set
Determine competitive advantage
Create long range forecasts
Execute business, marketing & operations plans
Continuously assess gaps & evaluate resources & partnerships
Create new ideas
Review ideas methodically
Evaluate market trends and technologies
Assess internal capabilities
Identify opportunities & focus RD&D
Find the right partnerships
Transform ideas into business opportunities
Mitigate technical & operational risk
Transfer & integrate technology
Rapid prototyping: Create real world pilots
Evaluate past failures and develop lessons learned
Develop business plan based upon end user feedback
IDEATION INCUBATION COMMERCIALIZATION
GOALS AND
STRATEGY
RESOURCES PROCESSES
TEAM ENVIRONMENT
INNOVATIONSUCCESS
EnvironmentEconomy
Project Management Intellectual Property
DiversityExperienceCommitment
ChampionMarket-FacingInnovation Culture
Partnerships CapabilitiesFunding
TechnologyAdvancement
Broad reaching goals:– Solve environmental or economic problems– Improve existing technology performance
Focused on:– technology performance – bottlenecks to achieve larger R&D goal
Incorporate market performance indicators:– Expedite market adoption– Deploy commercial application
R&DR&D
DEMONSTRATIONDEMONSTRATION
DEPLOYMENTDEPLOYMENT
• Team Qualities: Experienced, passionate, committed, talented leader and team
• Diversity: Multidisciplinary; involve R&D, commercialization, end users early
• Project Champion: Provides long term vision, networking, belief in project’s success
• Market Expertise: Understanding of market and ability to position in marketplace
• Culture: Allow time for creativity and innovation
PROJECT MANAGEMENT
• Provides clear direction & touchstone for evaluation
• Needs flexibility to adapt to changing conditions
• Many R&D organizations had rigorous metrics
• Routine meetings & regular reporting
• Majority had exit strategy in place
INTELLECTUAL PROPERTY
• Majority had IP process
• Major concern, especially R&D
• Private sector funders often require first right of refusal
• Manufacturers often want exclusive rights at demonstration stage
• IP rights well defined by private commercialization partners
PARTNERSHIPS
• One of most critical success factors
• Most effective & expeditious way to fill gaps
• Eliminates need to develop from scratch
• Goal to round out experience & skills of team: often R&D partnered with business acumen or vice versa
FUNDING
• R&D: Multiyear budgets 1-10 years; consistency reduces waste & keeps momentum
• Demonstration: 1 ½-3 years; $400k- $10.3M
• Deployment: $3M-$130M over multiple years
• Some exceptions:– smaller budgets create
greater sense urgency– Early success with small
budget attracts more resources
• Traditional RDD&D process can be adjusted to accommodate faster pace, flexibility & simultaneous development of innovation
• Best Practice areas involve: Goals, Team Environment, Processes and Resources
• State Energy Offices are in unique position to be an innovation catalyst within their states & create new categories of manufacturing jobs
• State Energy Offices can minimize risk of funding innovation by designing selection criteria for projects around best practices identified in this study
• Strive for game changers: Identify gaps in the state’s clean energy supply chain and challenge universities and industry to fill those gaps with innovative solutions.
• Reward good behavior: Develop project selection criteria that rewards innovation best practices and methodologies
• Require structure: States should require project management plans for high- risk projects, and have protocols in place for managing intellectual property arising from R&D projects.
• Look for an innovative environment: Look beyond the project to the culture within the project team itself.
• Encourage external funding. There is still value in soliciting projects that states cannot fund alone, and requiring external partners to contribute the needed cost share.
Ellen Lutz
Ellen Lutz President and CEOClean Markets, LLC
www.cleanmarketswork.com