Recognized challenges and suggested solutions

However, Thursby (2016) argues that incumbent companies seldom have strong incentive to partner with market entrants, because new entrants often threaten existing leadership positions with their technological innovations. If entrants have clear rights to their intellectual property, it can help them have stronger ground in partnership negotiations. The stronger the IPR the stronger the cooperation and the more the incumbents are willing to consent to the entrant. Therefore, well-implemented IPR- strategy is also connected to networks and partnerships.

The process of commercialization varies depending on the industry and the company and therefore it should be studied in its own context, but the mentioned studies also indicate that it has common characteristics, phases, and success factors despite being scrutinized from different perspectives (Gbadegeshin 2019). The external dimension of the process is affiliated with innovation theories through open innovation as addressed in Chapter 2.1.3. Nowadays it is important to consider the process as nonlinear, involve customers and stakeholders from the first stages of the process and consider the changes that digitalization has made. The next chapter addresses some recognized problem areas of high technology commercialization.

2.2.4. Recognized challenges and suggested solutions

property, insufficient entrepreneurial skills, regulation issues, and legal issues. Other challenges are small and scattered markets, supply chain management, lack of adequate or available infrastructure, technology validation and certification, after-sales services, technical development, government regulations, and customer awareness (Al Natsheh et al. 2015). The biggest challenges can vary to an extend depending on the industry, but one of the shared main challenges nowadays is change. All the high technology industries undergo rapid changes of government policies, technologies, digitalization, and customers’ needs which requires a flexible commercialization team and model (Gbadegeshin 2019). Inability to react to changing needs seems to be a major cause of the problems faced during commercialization (Pellikka 2014).

Internationalization is one of the main problem areas for small technology firms. According to Pellikka and Virtanen (2009) the most challenging part in the process is the “bridges”, in which existing resources must be mobilized to facilitate the progress of the process from one phase to the next one.

In overall, obtaining resources is a major challenge and lack of business know-how generally a notable deficiency. The problems stem from limited experience of internationalization, failure to acquire appropriate resources, insufficient information regarding international markets and customer preferences, and failure to establish international sales and distribution channels.

This is directly related to management. The management of commercialization and the role of management is a complex entity in which several factors need to be handled simultaneously. Limited managerial experience and skills affect the success of commercialization. The availability and allocation of resources is difficult, and some major challenges are often caused by the misalignment of activities and resources. For example, allocating too many resources on technological development might lead to acute resource deficiency on marketing sector. Furthermore, many small companies do not have enough traction to gain interest from external funders and hence have turn to internal sources of funding. Venture capitalists are often unwilling to take apparent risks regarding technology funding (Pellikka & Virtanen 2009; Pellikka 2014).

Additionally, Kriz and Welch (2018) debate about tensions that emerge in companies during commercialization as firms simultaneously aim to advance in internationalization activities and technological innovations. Companies unavoidably encounter unforeseen variations in tensions because of the uncertainty fundamentally inherent to internationalization and innovation activities.

Therefore, balance in internationalization is seldom very long-lasting and trajectories of such projects are volatile, non-cumulative and susceptible to drawbacks and crisis. Success during one internationalization or commercialization operation does not automatically warrant succeeding in the subsequent operations.

New technologies face several problems in the beginning of their life cycle because of being new to end users and due to lack of third-party certification and standardization (Al Natsheh et al. 2015).

Often the marketing of a new product is started too late during the commercialization process which results in too scarce interest from consumers and leads to the failure of the commercialization (Jolly 1997). Companies producing high technology might also be overly focused on R&D and fail to place enough emphasis on meeting customers’ more functional and technically less demanding needs (Lowe & Marriott 2012). Moreover, there is a lot of uncertainty related to buying decisions of late adopters. That is why the significance of new primary users and their recommendations to their peers are crucial regarding the diffusion of new technology. Negative post-purchase attitude of early adopters towards radical high technology innovations can be a critical determinant for market failure because it can significantly limit later customer acceptance. Radical high technology innovations are also more likely to fail on the market than incremental innovations because of negative attitude of early adopters (Chiesa & Frattini 2011).

Suggested solutions

The scholars have made suggested solutions to the mentioned problems. The key activities and problems should be defined in detail before attempting to clarify possible defects in the commercialization process (Pellikka 2014). To improve overall competence companies should network and have active interaction during commercialization process with partners such as

customers, suppliers, universities, and public agencies. Company managers should concentrate enough resources in marketing and internationalization of the business and reinforce the team with members with complementary skillsets (Pellikka & Virtanen 2009). Effective pre-planning activities, better utilization of resources and internal commercialization training of key staff can compensate for the lack of systematic model, time, and know-how (Al Natsheh et al. 2015).

Entrepreneurs and key staff should assess and acquire relevant skills such as presentation or pitching, negotiation, regulation, and information analysis. The commercialization team must familiarize with rules and upcoming policies. Digitalization has made information easily available so selecting and analyzing the information carefully is crucial. It is also important to define possible infrastructure challenges and changes (Gbadegeshin 2019). Entrepreneurs should develop their skills to anticipate changes that will occur and to make required adjustments. In order to predict future developments in the market and modifications that need to be made companies should monitor the technological products that are currently in use and under development as discussed in innovation theory Chapter 2.1.2. (Pellikka 2014). Technicalities of the new high technology should be evaluated and protected (Gbadegeshin 2019). For anticipating technological changes and trends Dekkers (2018) suggests several tools which can be divided to three categories according to scope of time. Tools for the long run are Delphi-studies and scenario planning. Tools for medium term are citations of patents and publications, simulations, experience curves, conferences, technology roadmaps, expert panels, and flexible expert interviews. Tools for the short run are frequency of patents and publications, portfolios, benchmarking, strategic options, lead users, and key accounts.

The external dimension of the commercialization process plays a crucial role in the amelioration of the overall process. For example, universities can mediate knowledge creation and transfer, and local policymakers should network among small technology firms and ensure the availability of skilled resources in the area by supporting universities and education institutions which should educate and train skilled employees. The background of the entrepreneur and characteristics of the company should be identified when planning and developing innovation support services. The lack of necessary business knowledge regarding company’s management could be compensated by supporting the

development of entrepreneurial teams with different backgrounds. Open innovation approach and close collaboration with customers and stakeholders can provide real-time feedback that can be used in R&D and marketing. Moreover, it would be beneficial to have innovation support services that address the process of commercialization holistically and recognize the importance of the bridges between the commercialization stages. Marketing and building connections must be as well started at the first stage of the commercialization. The interest of stakeholders and adoption intention of consumers must be raised early on (Pellikka & Virtanen 2009; Pellikka 2014). If the early adopters of a new high technology product demonstrate significant benefits in using a new technology, then it is more likely to be adopted also by the early and late majority of consumers (Hallam & Flannery 2018).

Innovation ecosystems

A central element regarding external dimension of the commercialization process are innovation ecosystems that facilitate open innovation. Innovation ecosystems are networks of linkages in which commercial companies and non-firm organizations interact and work together to create and capture value (Pellikka & Ali-Vehmas 2016). Developing innovations that sustain competitive advantage in markets is a fundamental problem in technology management and nowadays a single company’s innovation commercialization capabilities and business performance are increasingly reliant on its capabilities to handle resources and assets outside its direct control (Coccia 2017; Pellikka & Ali- Vehmas 2016). Companies need to access external knowledge due to being unable to generate all required knowledge on their own. Therefore, innovation ecosystem strategies (e.g., networking, interaction with innovation ecosystem partners and co-creation) are crucial. Such strategies can help firms develop new business opportunities and markets for several innovations and provide early signals of considerable industrial and technical reconfiguration (Pellikka & Ali-Vehmas 2016).

Therefore, innovation ecosystem strategies closely relate to knowledge spillovers (Mohr et al. 2010) described in Chapter 2.1.1. and opportunity recognition within networks (Groen et al. 2015) in Chapter 2.2.2.

Engaging in innovation ecosystems holds matters that need to be carefully addressed. To engage in an appropriate ecosystem company executives should systematically recognize the organization with which the industry future is most closely connected and define the network of dependencies that will contribute to business advancement (Pellikka & Ali-Vehmas 2016). The scholars continue that the ecosystem participants must share a common vision which leads to alignments with goal settings, and the shared resource allocations must meet the actual expectations of all the participants. The ecosystem leader must develop and promote a shared vision for the innovation ecosystem, create a sufficiently open innovation work architecture and carefully manage the mutually beneficial ecosystem relationships of the participants (Pellikka and Ali-Vehmas 2016).

The suggested solutions for commercialization challenges are somewhat comprehensive but could be more specific and therefore leave room for further research. The empirical research of the thesis intends to discover further understanding of the solutions to the challenges (Chapter 4). However, because commercialization process of high technology is related to international markets the next chapter discusses central internationalization theories.