November 2002

Different Timelines

for Different Technologies:

Evidence from the

Advanced Technology Program

ADVANCED TECHNOLOGY PROGRAM ADVANCED TECHNOLOGY PROGRAM

NISTIR 6917

National Institute of Standards and Technology • Technology Administration • U.S. Department of Commerce

 0 1 2 3 4 5 6 7 8 9 10 or more Years

R&D and

Business Planning

Beta

Test

Release

First

Product

Increase

Production

Levels

Broad 

Economic Impact

Percent of Applications, cumulative

All Technology Areas

Information Technology

Electronics/Photonics

Biotechnology

Manufacturing

Materials/Chemistry

During

ATP

<1 year

after ATP

<2 years

after ATP

<3 years

after ATP

<4 years

after ATP

<5 years

after ATP

5 or more

years

after ATP

Never

100

90

80

70

60

50

40

30

20

10

0

When can we expect to see revenues?
Different Timelines for

Different Technologies

Jeanne Powell

Economic Assessment Office

Advanced Technology Program

Francisco Moris

National Science Foundation

(formerly with the Economic Assessment Office, 

Advanced Technology Program)

November 2002

U.S. DEPARTMENT OF COMMERCE

Donald L. Evans, Secretary

TECHNOLOGY ADMINISTRATION

Phillip J. Bond, Under Secretary of Commerce for Technology

NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY

Arden L. Bement, Jr., Director

NISTIR 6917
ii Different Timelines for Different Technologies

Case studies of the first completed ATP projects have shown considerable

variation in commercialization patterns of ATP-funded technologies. These

variations were apparent in the timing of initial revenues, commercialization

in more mature and multiple applications, and diffusion of ATP

technologies relative to the period of ATP funding of R&D. This study

analyzes differences in commercialization patterns for different ATP-funded

technologies in a systematic way. To do this, the following questions are

addressed:

• How do expected commercialization patterns differ for ATP projects in

different technology areas? 

• What factors appear to account for at least some of the differences?

• To what extent are actual commercialization patterns mapping to plans?

This study uses data collected through ATP’s Business Reporting System

from 558 participants in 299 ATP projects funded between 1993 and

1998. Business expectations and strategies for nearly 1,200 commercial

applications of participants’ ATP-funded technologies are described.

Technology differences are examined within a broader innovation life-cycle

framework in order to provide a greater understanding of the broader

technological and industry environments underlying commercialization

patterns.

Using the timing of initial revenues for individual commercial applications

to indicate commercialization patterns, the study observed the following:

• Across all technologies and commercial applications, revenues are

expected:

– for one out of six applications by the end of ATP funding.

– for two out of five applications within a year after ATP funding ends.

Abstract
– for four out of five applications within three years after ATP funding

ends.

• Technology affects timing:

– Information technology (IT) applications are anticipated to earn

revenues very quickly.

– Materials-chemistry and manufacturing applications are anticipated to

be the slowest to earn revenues. These are expected to lag IT by about

a year.

– Early biotechnology applications follow the overall average in the

early years for small-volume research users, but there is a noticeable

second spurt in activity five or more years out, when regulatory

requirements are expected to be met for health-care applications.

– Electronics applications show a steep rise in activity in the second year

after ATP, followed by a rapid fall-off in activity.

• Factors suggested by the innovation life-cycle model in the economics of

innovation literature appear to account for differences by technology

area.

• Preliminary assessment of actual commercialization activity compared

with expectations shows the following:

– More applications had been commercialized by the end of the ATPfunding period than expected—in first-generation products or

services—in nearly all technology areas.

– A large portion of the projects that will ultimately achieve

commercialization will do so, for their initial applications, within 

2 to 3 years after ATP. 

Further work and additional data for the post-ATP period are needed to

examine actual commercialization patterns over longer time periods. 

Keywords

• Advanced Technology Program (ATP)

• commercialization

• innovation life-cycle

• technology development

• timeline

Abstract iii
This report was made possible through the cooperation of hundreds of

ATP-funded organizations that are providing information through ATP’s

Business Reporting System in support of program evaluation and project

monitoring efforts. Many individuals in ATP and NIST contributed to the

report. Stephanie Shipp provided insightful comments. John Nail

performed analysis of actual commercialization experience using Postproject Survey data. Many ATP staff participated in the review process.

Richard (Chuck) Bartholomew and Linda Beth Schilling provided helpful

comments in the ATP review process, and Hayden Brown, Building and

Fire Research Laboratory, provided additional assistance during the WERB

process.

Francisco Moris, currently an economist with the National Science

Foundation, performed the major part of his work on this study while

serving in the Economic Assessment Office, ATP. The views expressed in

this document do not necessarily reflect the views of the National Science

Foundation.

iv Different Timelines for Different Technologies

Acknowledgments
Case studies of the first completed ATP projects have shown considerable

variation in commercialization patterns of ATP-funded technologies. These

variations were apparent in the timing of initial revenues, commercialization

in more mature and multiple applications, and diffusion of ATP

technologies relative to the period of ATP funding of R&D. This study is

an effort to address the differences in commercialization patterns for

different technologies in a systematic way. It seeks answers to the following

questions:

• How do expected commercialization patterns differ for ATP projects in

different technology areas? 

• What factors appear to account for at least some of the differences?

• To what extent are actual commercialization patterns mapping to plans?

An understanding of technology differences as they affect commercialization

is critical to proper evaluation of proposals for ATP project funding and to

assessment of performance of individual projects as they unfold. By

examining the different commercialization patterns for different technologies

within a broader innovation life-cycle framework, we hope to provide a

greater understanding of the broader technological and industry

environments underlying these patterns. This study demonstrates that in

some highly innovative technology areas, important technology differences

cause commercialization and impact to happen relatively quickly; however,

other technologies require much more time.

ATP’s Business Reporting System (BRS) provides a comprehensive picture

of business planning and progress towards commercialization of projects

funded since 1993. Over the course of ATP funding, award participants lay

out business plans and strategies for different commercial applications of

their ATP-funded technologies, provide an expected commercialization

timeline, and describe early commercialization activity. Additional surveys

Executive Summary v

Executive Summary
track projects into the post-ATP period. Although most projects are still

“young” relative to their complete timeline for commercialization and

economic impact, they are beginning to generate a body of information

about actual commercialization patterns that affords a preliminary

comparison of actual commercialization progress with earlier expectations. 

This study focuses on business reports from 558 participants in 299 ATP

projects funded from 1993 to 1998 that indicated business expectations

and strategies for nearly 1,200 commercial applications of their ATPfunded technologies. The study observed the following commercialization

patterns:

1. Across all technologies and commercial applications, revenues are

expected:

• for one out of six applications by the end of ATP funding

• for two out of five applications within a year after ATP funding

ends; and

• for four out of five applications within three years after ATP funding

ends.

2. Technology affects timing:

• Information technology (IT) applications are anticipated to earn

revenues very quickly:

– 28% by the end of ATP funding, and

– 64% within another year.

• Materials-chemistry and manufacturing applications are anticipated

to be the slowest to earn revenues. These are expected to lag IT by

about a year:

– 8% of materials-chemistry applications are expected to earn

revenues by the end of ATP funding and 54% within two years

after ATP funding ends, and

– 12% of manufacturing applications are expected to earn revenues

by the end of ATP funding and 57% within two years after ATP

funding ends.

• Early biotechnology applications follow the overall averages in the

early years, but there is a noticeable second spurt of activity five or

more years out, when regulatory requirements are expected to be

met for health-care applications.

• Electronics applications show a steep rise in activity in the second

year of ATP, followed by a rapid fall-off in activity:

– 71% of electronics applications are expected to earn revenues

within two years after ATP funding ends.

3. Expectations about when commercialization and revenues will occur

tend to mirror the expected market windows of opportunity.

vi Different Timelines for Different Technologies
4. Preliminary assessment of actual commercialization activity compared

with expectations shows:

• More applications had been commercialized by the end of the ATPfunding period than expected—in nearly all technology areas. Many

companies introduced first-generation products and services at the

earliest opportunity. Higher-volume, higher-value applications would

come later.

• A large portion of the projects that will ultimately achieve

commercialization will do so for their initial applications within 

2 to 3 years after ATP.

An innovation life-cycle model provides the framework for examining

technology differences for such characteristics as firm size, project

structure, commercialization strategy, technological advantage, and

availability of capital that contribute to differences in commercialization

patterns. Many economists have published evolutionary models. Our

adaptation follows most closely J. M. Utterback, Mastering the Dynamics

of Innovation: How Companies Can Seize Opportunities in the Face of

Technological Change (1994) and extensions to collaborative R&D in N.

S. Vonortas, Cooperation in Research and Development (1997). 

The following is a summary of findings:

• Information technologies and biotechnologies support a host of “newto-the-world” applications in a number of industries, and they support

formation of new industries. 

– Information technologies enter the market quickly. This is consistent

with the rapid pace of the early phase of the innovation life cycle. In

that phase, small firms compete to open and capture new markets,

and barriers to market entry are relatively low. Service applications

can offer a mechanism for fast, initial market entry to end users in

many industries, a primary mechanism for technology advancement

in mature manufacturing industries, and a permanent strategy for

addressing newer sectors such as health care and telecommunications. 

– Biotechnology projects have a number of early opportunities for

service applications (for instance, research and testing services) that

are useful for market conditioning and validation even if these

applications do not generate large cash flows. Economic impact

from applications for therapeutic markets may be anticipated only in

the longer run. For many health-care applications, regulatory

requirements prohibit fast market entry. The market is expected to

remain open for major applications for more than five years after

ATP funding ends. 

– Innovation focuses on achieving basic functionality and performance

of new-to-the-world products.

Executive Summary vii
– Investment capital flow suggests investors envision the broad future

potential of the markets expected to emerge. 

– The precise nature of the larger markets and distribution

mechanisms is still blurred.

– Technology-based competition is keen, and dominance changes

rapidly in new/emerging markets. 

• Manufacturing and materials-chemistry projects more typically are

developing new process technologies for existing classes of products in

mature, commodity-oriented industries. However, manufacturing

technologies and materials-chemistry technologies commercialize

slowly. Opportunities are expected to peak about two years after ATP

funding ends and then to decline relatively slowly compared with other

technologies.

– The focus is on manufacturability and cost to gain advantage in

cents-per-pound, high-volume markets, as well as on higher

performance products.

– Capital investment and validation requirements are costly and

lengthy. Financing is typically from retained earnings.

– Product life cycles and market windows are longer than for IT or

electronics projects. Technological change occurs more slowly than

in new product areas, particularly for commodity types of products.

– Joint ventures are an important vehicle for sharing risks and

technological uncertainties, particularly in addressing

interdisciplinary issues, for instance in areas where different

technologies converge, such as information technology, electronics,

and/or manufacturing. 

• Electronics (and related materials) projects tend to involve a mix of

new and established firms in transitional, rapid-growth stages of

innovation and company and industry development.

– Product applications are more common than process applications.

– Cost and manufacturability are critical objectives.

– Electronics product markets are extremely competitive; product life

cycles are short; and capital requirements for high-volume

production remain steep barriers to market entry.

– Nearly three-fourths of applications are expected to earn revenues

within two years after ATP funding ends. After two years, windows

of market opportunity are expected to diminish quickly. 

Both expected and actual commercialization patterns observed in ATP

projects appear consistent with the innovation life-cycle framework. This

study suggests that this framework may prove useful in the future for

assessing the credibility of business plans in ATP project proposals from

viii Different Timelines for Different Technologies
different technology areas, and for assessing the economic performance 

of funded projects. Further work and additional data for the post-ATP

period are needed to examine actual commercialization patterns over the

long run. 

Executive Summary ix

Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ii

Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iv

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .v

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

A. Justification, Objective, and Scope of the Study . . . . . . . . . . . . .2

B. Related Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

C. Organization of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

II. Data and Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

A. Overview of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

B. Methodology of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

III. Industry and Firm Differences in Innovation: Analytical Models in 

the Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

A. The Innovation Life-Cycle Model . . . . . . . . . . . . . . . . . . . . . . .7

B. Extensions of the Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

C. Applications to the ATP Portfolio . . . . . . . . . . . . . . . . . . . . . .11

IV. Summary Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

A. Overview of Technology Areas and Targeted Industrial 

Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Biotechnology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Advanced Materials-Chemistry . . . . . . . . . . . . . . . . . . . . . . . .14

Electronics Computer Hardware, and Communications . . . . . .15

Information Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

B. Profile of Participants, Projects, and Applications . . . . . . . . . .15

V. Observed Variations in Timelines for Commercialization . . . . . . .19

A. Expectations about the Timeline for Commercialization . . . . . .19

When Can We Expect to See Revenues? . . . . . . . . . . . . . . . . .19

B. Expected Market Window of Opportunity . . . . . . . . . . . . . . .21

Contents xi

Contents
xii Different Timelines for Different Technologies

VI. Factors behind Observed Trends . . . . . . . . . . . . . . . . . . . . . . . . .23

A. Firm Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

B. Project Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

C. Strategy for Commercialization . . . . . . . . . . . . . . . . . . . . . . . .25

D. Competitive Advantage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

E. Availability of Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

VII. Summary of Findings by Technology Area, Conclusion, and 

Future Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

A. Summary of Findings by Technology Area, Conclusion, and

Future Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

Biotechnologies and Information Technologies . . . . . . . . . . . . .35

Manufacturing and Materials-Chemistry Projects . . . . . . . . . . .36

Electronics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36

B. Conclusion and Policy Implications . . . . . . . . . . . . . . . . . . . . .37

C. Future Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

Appendix. Actual versus Expected Commercialization Timeline . . . . . . .39

A. Very Early Commercialization—During ATP . . . . . . . . . . . . . .40

Profile of Matched Commercial Applications . . . . . . . . . . . . . .40

Baseline Expectations versus Close-out Performance . . . . . . . .41

B. Longer-Term Commercialization Activity—Two to Three Years

after ATP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44

Profile of Matched Project Participants . . . . . . . . . . . . . . . . . .44

C. Post-project Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . .45

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51

List of Tables

Table 1. Significant Characteristics of Three Phases of Industrial

Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Table 2. Sectoral Technology Trajectories . . . . . . . . . . . . . . . . . . . . . . .9

Table 3. Summary of Projects, Participants, and Applications, by 

Report Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Table 4. Distribution of Participants and Projects, by Technology 

Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Table 5. Distribution of Project Participants in Each Technology Area, 

by Organization Type/Size and Project Type . . . . . . . . . . . . . .17

Table 6. Distribution of Commercial Applications, by Technology 

Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Table 7. External Funding Activity . . . . . . . . . . . . . . . . . . . . . . . . . . .32

Table A.1. Profile of Commercial Applications in Matched Close-out 

and Baseline Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40

Table A.2. Expectations versus Actual Commercialization Results from

Matched Baseline and Close-out Reports, by Technology 

Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42

xii Different Timelines for Different Technologies
Table A.3. Distribution of Participants and Projects . . . . . . . . . . . . . . .45

Table A.4. Actual and Expected Commercialization Activity as of Two to

Three Years after ATP, by Technology Area . . . . . . . . . . . . .46

List of Figures

Figure 1. When Can We Expect To See Revenues? . . . . . . . . . . . . . . . .20

Figure 2. How Long Will the Window of Market Opportunity 

Stay Open? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

Figure 3. Applications Profile: Manufactured Products, Manufacturing

Processes, and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

Figure 4. When Revenue Is Expected: By Commercialization Strategy . .27

Figure 5. Commercialization Strategy: By Firm Size . . . . . . . . . . . . . . .28

Figure 6. Business Advantage: By Technology Area . . . . . . . . . . . . . . . .30

Figure A.1. Comparison of Actual Revenue Activity at Project Close-out

with Expectations at Baseline . . . . . . . . . . . . . . . . . . . . . . .42

Contents xiii

The Advanced Technology Program (ATP) is a public-private partnership

program aimed at bringing new civilian technologies closer to

commercialization. It emphasizes the development of risky but enabling

technological capabilities with multi-industry and economy-wide 

benefits.1 These benefits include increased productivity and competitiveness

of U.S. firms, new and better products, and increased high-wage

employment. Project proposals address specific business and economic

criteria established by the program. The proposals are submitted to

rigorous peer review by scientific, engineering, and business experts.

Awards are made on a cost-share basis for both single applicants and joint

ventures. Single-company awards have a maximum allowable length of

three years. ATP funding is limited to $2 million for single applicants and

may cover up to 100% of direct project costs for small and medium-sized

companies. However, all indirect costs are the responsibility of the single

applicant. ATP funding may cover up to 40% of total project costs (direct

plus indirect costs) for large, single-applicant Fortune 500 companies. Joint

venture (JV) projects can last for up to five years and there is no mandated

limit on the award amount. JVs must cost share more than 50% of the

yearly total project costs. 

The ATP’s Economic Assessment Office (EAO) performs a variety of

evaluation studies, including data collection and analysis, case studies,

econometric studies, and modeling. This study will use data collected

through ATP’s Business Reporting System (BRS) to assess the status and

nature of the path to commercialization across the different technology

areas funded by the program. The BRS is an internal database of

information reported by ATP project participants to ATP on a routine and

Introduction 1

I.

Introduction

1. See Ruegg (1996) for more discussion of enabling technologies and ATP program

objectives. For a related concept from the macroeconomic perspective see Helpman (1998).
systematic basis. The database contains technical and business data on

project progress, including R&D status, business status, collaboration, and

commercialization activities. 

A. Justification, Objective, and Scope of the Study

The study addresses the following research questions:

1. How do expected commercialization patterns differ for ATP projects in

different technology areas?

2. What factors appear to account for at least some of the differences? 

3. To what extent are actual commercialization patterns mapping to

plans?

By legislative mandate, a key objective of ATP is acceleration of R&D and

commercialization of risky technologies for broad national economic

benefit. Does the program meet this mandate? This study provides some

direct evidence to answer that question. It has the additional policy value

of providing technology-specific data that might inform ATP policy design

and proposal evaluation, and aid prospective participants in future ATP

competitions. The time frame covered by the data is from 1993 (the

beginning of the BRS) to early 2002. This is the first study to use BRS data

to track a given group of projects over time. 

ATP does not fund commercialization activities or product development.

Rather, it funds high-risk, early-stage R&D. Nevertheless, parallel conduct

of R&D and planning for commercialization is a cornerstone of the

program’s strategy for achieving acceleration in technology development

and commercialization. Many technology-development projects have early

spin-off applications that offer initial commercial potential, even though the

major benefits will occur later. This study illuminates the patterns of

commercialization associated with different technologies over their life cycle. 

The present study differs from studies based on more general R&D

expenditure data in at least two ways. Studies based on R&D expenditures

tend to underestimate innovative activities related to production done by

companies’ departments other than corporate labs, such as production

engineering departments. This activity may or may not be recognized by

formal R&D accounting. Another drawback to such R&D expenditure

studies is their limited coverage of small firms and firms in the service

sector (Patel and Pavitt, 1995).

ATP’s BRS, on the other hand, reflects the high proportion of start-up and

other small firms funded by the ATP, while also capturing the participation

of leading industrial laboratories across America. ATP activity likely

2 Different Timelines for Different Technologies
overemphasizes innovation by companies in the highest-risk, earliest-stage

technology sectors relative to national data sources. ATP excludes funding

product development costs, such as incremental adaptations and imitation

of existing technologies, which typically comprise the bulk of industry

R&D. In this sense, the BRS is a picture of the innovation process, and its

parallel commercialization activity, for the subset of leading-edge R&D.

Nevertheless, the data is rich in information about the innovation

process—from prototype and design, to product planning and strategies,

collaborative activity, and financing—for a broad spectrum of advanced

technology development. Analyzing this rich field of data provides an

insight into the role of the ATP program in the national innovation

process, and also grants a perspective not afforded by more standard

measurements of technological activity in the United States.

B. Related Studies

The present study follows a series of case-study status reports of ATP’s

completed projects by Long (1999) and ATP (2001) and statistical studies

by Powell (1999) and Powell and Lellock (2000). The status report

volumes were the first ATP studies to examine technical and

commercialization performance by technology area. Both found differences

in the time-to-market of completed projects across the different

technologies for ATP’s first 50 completed projects. However, the status

reports were based on short case studies, not on more comprehensive BRS

data. The present study partially updates the earlier statistical studies by

Powell and Lellock (2000) and Powell (1999) and also extends those

analyses to examine variation by technology area. Powell and Lellock

(2000) is a general report on commercialization progress of ATP projects

based on the BRS database through 1997. Powell (1999) focused on small

firms in comparison with larger firms. 

A number of non-ATP empirical studies in the time-to-market literature

attempt to quantify key factors in commercialization progress. For

example, Cooper (1994) found that project organization, up-front planning

(pre-development activities), and marketing activities were the most

significant drivers of timeliness in a study of chemical engineering firms.2

ATP’s project selection criteria and project management guidelines reflect

these findings by emphasizing that early identification of commercialization

channels and collaboration partners may contribute significantly to

timeliness. Ultimately, the ATP seeks broad diffusion of the technologies it

funds. Profitability at some level will be a necessary but not sufficient

indication of broad impact.

Introduction 3

2. See also McDonough (2000).
C. Organization of the Study

Section two describes the methodology and ATP project data used in the

study. Section three draws on the economics of innovation literature to

establish a framework for data analysis. Section four provides an overview

of technology areas and targeted industrial sectors, with a statistical profile

of projects, participants, and commercial applications by technology area.

Section five examines revenue expectations of project participants and

compares those expectations with expected windows of market

opportunity. Section six then discusses several technology-specific features

that may lie behind the observed trends. Applying factors cited in the

literature to data collected in the BRS, the analysis considers different

strategies for commercializing ATP-funded technologies, different types of

competitive advantage, and capital availability, as well as embedded

characteristics of firm size and R&D project structure. Section seven

summarizes the findings and policy relevance. An Appendix provides

preliminary data that compares expectations about timing of

commercialization with actual performance for a subset of companies

using Close-out Reports and Post-project Surveys. 

4 Different Timelines for Different Technologies
Section II provides an overview of the data source drawn upon for this

study and outlines the analytical framework used.

A. Overview of Data

The study draws on data collected through ATP’s Business Reporting

System (BRS) from 1993, when the BRS was established, through

September 30, 1999, from firms receiving awards in competitions

conducted 1993–1998 and still in their ATP-funding phase. An Appendix

includes data from post-ATP funding interviews conducted in 2000

through early 2002 for a matched set of companies. Specific variables 

used and coverage are discussed in each section. 

ATP’s Business Reporting System (BRS) consists of information collected

systematically from the start of ATP funding, in a Baseline Report,

annually over the course of ATP funding, in Anniversary Reports, in a

project Close-out Report, and subsequently every two years for six years

after ATP funding ends, in Post-project Surveys. The system tracks the

progress of projects in pursuing their business plans and achieving the

anticipated economic benefits outlined in project proposals. The surveys

are electronically administered over the course of ATP funding; then

telephone interviews are subsequently carried out three times over the six

following years. This survey system has been implemented for projects

funded since 1993, from their inception. 

B. Methodology of the Study

The study follows a set of sequential steps: 

• Step 1: A synthesis of selected studies in the literature is used to cast an

innovation life-cycle framework for studying the variation in

commercialization patterns for different types of technologies. 

Data and Methodology 5

II.

Data and Methodology
• Step 2: ATP-funded projects covered by the study are classified by core

technology being developed and mapped to their target applications, by

industry, and by type of application (product, process, service). 

• Step 3: Expectations about timelines for revenues from ATP-funded

technologies are examined and compared with expected windows of

opportunity for all planned commercial applications, by technology area.

These expectations about timing serve as the major indicator of

commercialization patterns. 

• Step 4: Through application of the innovation life-cycle model,

differences in firm size, project structure, and other project

characteristics, taken together with the underlying technological and

economic environment, help explain commercialization patterns

identified in Step 3.

• Step 5: Completed projects, companies, and commercial applications for

which a matched set of data is available are used to compare

expectations about timing of commercialization with actual experience.

This step is extended to two to three years after ATP funding with the

analysis of Post-project Survey information. This analysis seeks to

determine whether actual commercialization patterns will meet

expectations and thus whether patterns described in project proposals

are credible. The evidence of actual progress the analysis provides may

serve as feedback to ATP project management and to the selection

processes. Given the preliminary and limited nature of the data available,

this analysis is presented in the Appendix. 

6 Different Timelines for Different Technologies
Section III describes the models drawn from the economics literature that

serve as the framework for the study.

A. The Innovation Life-Cycle Model

Over the past few decades, several variations of the industrial innovation

life-cycle model have evolved in the literature of evolutionary economics

and the economics of innovation. In the context of evolutionary

economics, innovation is a key force in economic competition.1 Patterns of

innovation are characterized by the degree of technological opportunities

and the ability to obtain appropriate returns from R&D, as well as

characteristics of the knowledge base. Innovation life-cycle models shed

light on differences in the rate of innovation activity and type of

commercialization strategies commonly observed for different technologies

and sectors and different innovation stages. As will be apparent in this

study, these distinctions are useful in assessing commercialization patterns

and progress of ATP-funded projects. 

Drawing on Abernathy and Utterback (1978) and Utterback (1994), we

describe three phases of industrial innovation that correspond to major

transformations in characteristics of industrial innovation, market structure,

and competition over time. Radically new product lines and emerging

industrial sectors accompany the early (fluid) stages of the innovation cycle.

In this early, fluid phase, innovation is intense, driven by the rapid entry of

new, small, science-based, entrepreneurial entrants who are ready to

experiment with highly uncertain new business opportunities. Such firms

initially compete by delivering highly customized, essentially service

products to a small group of customers. Then in the intermediate stage (the

growth phase), output expands, aided by less technical uncertainty and the

emergence of standards. The number of firms diminishes. In the third,

Industry and Firm Differences in Innovation: Analytical Models in the Literature 7

III.

Industry and Firm Differences in

Innovation: Analytical Models in

the Literature

1. For example, see Breschi et al. (2000).
8 Different Timelines for Different Technologies

mature stage, capital intensity and investment requirements increase,

becoming significant barriers to the entry of new firms. Competition is now

driven mostly by cost reductions, aided by process innovation, technical

standards, and economies of scale. In this mature phase, a few companies

dominate major markets; innovation aims at new processes; volume and

cost are key drivers; and process changes and disruptive new technologies

are costly, ultimately causing the pace of change to slow. 

Table 1 summarizes the significant characteristics of innovation and market

competition as they evolve over the three phases.

Type of innovation

Product life cycle

Resource requirements

and barriers to entry

Number of competitors

Type of competition

Organizational control

Financing

Table 1. Significant Characteristics of Three Phases of Industrial

Innovation

Fluid, Emerging Transitional, Maturity 

Phase Growth Phase Phase

Radically new products,

with frequent major

changes; high technical

uncertainty but broad

R&D focus

Short R&D-to-market

cycle; diverse, highly

customized products

and services; frequent

product changes;

inefficient production

processes

Relatively low barriers;

small-scale plants

located near R&D and

general-purpose

equipment; high scientist/

engineer content

Initially few competitors,

but rapid entry in

response to market

opportunities; frequent

changes in market share

Technical performance

Informal and

entrepreneurial

“Family/friends,” angel,

seed capital; research

grants.

Gradual increase in

process innovation; at

least one stable, highvolume product design

emerges

Longer development

periods and product life;

increase in standards

and output level; R&D

focuses on specific

product features

Medium barriers;

some automation and

specialized equipment;

increasing facilities

investment required

Declining number of

competitors after

emergence of dominant

design

Product differentiation 

Growth of hierarchical

features (project and

task subgroups)

Venture capital

Mostly process

innovation, aimed at cost

reduction; incremental

product innovations

Long R&D-to-market

cycle; process change is

costly and slow; standard,

or commodity-like

products

High barriers; specialpurpose equipment,

mostly automated

processes; less labor

content

Few dominant firms;

stable market shares

Price/cost

Division structure; rules,

and goals; enterprise

diversification

Retained earnings, equity,

debt 

Source: Adapted from Utterback (1994).
Utterback (1994) notes that the mature phase is not the end of an

industry’s history. Evolution often continues in the form of waves of

innovation and change. Radically new innovations may emerge from

within or from outside the industry—or perhaps through collaborative

activity across industries. Nevertheless, the base of firms may be smaller in

subsequent waves of innovation in a given industry than it is in brand-new

industries. In the subsequent waves, markets become better defined, and

established firms have distribution channels in place that provide

significant barriers to radical innovation or reform of the industry. 

Pavitt’s taxonomy of industry trajectories complements the life-cycle

approach. Pavitt (1984) identifies four types of technology trajectories,

shown in Table 2.

Pavitt’s model suggests that early-stage, science-based industrial sectors,

such as biotechnology and software/information systems, are characterized

by an emphasis on new products with improved performance, few

industry-wide standards, and high entry of small innovative firms. For

example, biotechnology companies target emerging or as yet practically

non-existent markets. Many biotechnology companies firms operate as

adjuncts to universities. Information technology companies face different

market constraints, but also have wider opportunities to serve a more

diverse set of customers and industries. 

Intermediate-stage science-based sectors, such as electronics and chemicals

(for instance, pharmaceuticals), have entered their growth phase. Product

Industry and Firm Differences in Innovation: Analytical Models in the Literature 9

Table 2. Sectoral Technology Trajectories

Category of Firm Innovative activity Industry sectors

Mostly process Non-durable consumer 

innovation by goods, textiles, printing,

Supplier dominated suppliers of agriculture, construction

equipment and 

materials

Production Specialized Mostly product innovations Instruments, machine tools

intensive—Large- suppliers from in-house R&D

scale fabrication,

assembly and 

continuous Scale-intensive Process innovations Consumer durable goods,

processes producers in house and by suppliers steel, autos, bulk materials

Science based R&D intensive firms; mixed Electronics, chemicals,

product and process biotech, information

innovation technologies

Source: Adapted from Pavitt (1984).
innovation is still prevalent in the more science-based, large chemicals and

electronics firms, with an evolving emphasis towards cost as well as

performance.

Supplier-dominated and scale-intensive sectors have passed beyond a

science-based innovation to production intensity. Firms in these sectors

often have a price-sensitive end user, so the focus of innovation turns to

cost cutting. In production-intensive industries such as automobile and

aircraft manufacturing and petroleum refining, innovation places more

emphasis on process and cost; larger, older firms primarily emphasize

incremental innovation. One perceives a reluctance to pursue new markets.

Industries based on assembly or fabrication (such as manufacturing) or

other continuous processes (such as steel) aim at process technologies.

Nevertheless, radical innovations may still emerge from outside the

industry or from developers of new process tools. Multi-disciplinary, interindustry consortia provide a mechanism for introducing new technologies

to older companies and sectors.

B. Extensions of the Model

The life-cycle model of industry evolution illuminates broad economic and

policy issues facing R&D-performing firms. For example, a better

understanding of the technology and market environments at different

stages of the innovation cycle has been useful in devising theories that

describe different financing, investment, and organizational features at each

stage (Auster, 1992). Of particular interest to ATP is the role of

collaborative R&D as a key organizational and financing tool. 

Cooperative activities offer opportunities to overcome limitations in

resources (human resources, financial, fixed capital, managerial, technical

and marketing) as needed at any stage of the innovation life cycle

(Rothwell and Dogson, 1991). They include subcontracting, licensing, and

R&D alliances and joint ventures, all features of ATP projects. (In some

studies, the term “joint ventures” refers exclusively to equity-based

alliances, rather than to more flexible agreements based on contracts or

more informal arrangements. The official ATP definition of a joint venture

does not involve any equity structure, but rather a simple contractual

agreement for the purposes of accomplishing R&D goals.)2

The motives, structure, and performance of these linkages and

collaborations are expected to differ over time and over the life-cycle of a

10 Different Timelines for Different Technologies

2. For an introduction to the literature on research partnerships, see Hagerdoon et al.

(2000).
given firm or industry, as well as across technology sectors.3 Vertical

partnerships of users and suppliers and horizontal alliances that involve

organizations in the same industry, potentially even competitors, tend to

have different business objectives for their R&D collaborations. 

Vonortas (1997) and Audretsch (2001) both note the strong incentives for

small firms, in the fluid phase of the innovation life cycle, to seek R&D

partners as a means of dealing with technological risks and with market

access to rapidly changing markets. Vonortas suggests this might be more

common with smaller, vertically structured joint ventures, where individual

members can protect their own intellectual property in their component

product innovations, rather than with horizontal R&D ventures aimed at

process innovations, which are difficult to protect. For relatively mature

firms, Vonortas notes, consortia are more suited to cost-reducing process

innovations of generic use to a variety of member firms than they are to

product innovations—and are especially suited to industries with a slow

pace of technological change. Alternatively, strategic partnerships between

small/new firms and larger/mature firms bring together the complementary

resources needed for mature industries to innovate and diversify.

The innovation life-cycle literature focuses on the traditional assembly-line

view of U.S. industry (Vonortas, 1997). Nevertheless, there are linkages to

service applications as a strategy for commercializing technologies at an

early stage through highly customized products. 

C. Applications to the ATP Portfolio

The life-cycle framework serves as a roadmap for empirically examining

the actual process of innovation for high-risk, enabling technologies such

as ATP funds within their technological, business, and economic

environments. Analysis of actual data helps untangle the effects of different

markets and technological environments. For example, given the rapid

pace of innovation in biotechnology and information technology firms, it is

apparent that these are science-based firms addressing emerging industries.

However, even these two technology areas differ in the way their target

markets operate. Many biotechnology projects target markets that are still

nearly non-existent, although many of these potential markets will involve

delivery of health care services. These biotech projects also face major

regulatory hurdles. Information technologies, on the other hand, target

somewhat more established, less treacherous but highly diversified markets.

Many IT applications involve delivery of fast-to-market service

applications to varied service sectors. In general, we expect

commercialization to be slower for a process innovation in a mature

Industry and Firm Differences in Innovation: Analytical Models in the Literature 11

3. For example, see Hagerdoon (1993).
manufacturing industry. However, cooperative activity with different

technology suppliers, and the right combination of financial and

organizational backing from key customers, could speed it up.

The stylized models are presented in terms of firms and industries, not

individual plants or company locations. The BRS database, on the other

hand, is comprised of data from establishments directly involved in 

ATP-funded projects. Nevertheless, R&D projects are affected by

company-wide strategic and resource considerations. The distinction

between establishments and firms is not relevant for the large proportion

of small firms and start-ups funded by the ATP. 

12 Different Timelines for Different Technologies
Section IV provides a detailed profile of the projects and organizations

included in the study to establish linkages between the analytical models

and technology and business goals and characteristics of ATP-funded

companies. 

A. Overview of Technology Areas and Targeted Industrial

Sectors

ATP classifies projects according to the core technology being developed.

The five major categories used in recent years are biotechnology,

electronics, information technology, advanced materials-chemistry, and

manufacturing. The life-cycle model tends to merge technology with firm

and industry, consistent with Utterback’s evolution of his model from its

early focus on innovation and firms to its later focus on industries. In some

cases, a technology emerges from one industry to ultimately address

another industry, or it provides the nucleus for a new industry. Pavitt and

others have elaborated on the relationship between technology-based

suppliers and more mature industries.

Many ATP projects involve interdisciplinary technologies. For example,

ATP’s Microelectronics Manufacturing Infrastructure and Photonics

Manufacturing Focused Programs develop both manufacturing and

electronics capabilities, while Materials Processing for Heavy

Manufacturing advances R&D supporting applications in materials

structure and manufacturing processing. 

The technology platforms funded by ATP enable commercial activity across

multiple industry and market sectors, even though initially they tend to

target a particular industry. A cross-section of technologies under

development and target industries (by 2 to 3 digit SIC) yields the following

Summary Profile 13

IV.

Summary Profile
thumbnail sketches of the projects covered in this study. (For projects

funded through 1998, the BRS used the Standard Industrial Classification

(SIC) system to classify use sectors for commercial applications of ATPfunded technologies.)

Biotechnology

Biotechnologies potentially form the foundation for new health-carerelated markets not yet encompassed by Bureau of the Census classification

systems. Many projects with health-care applications will ultimately benefit

Pharmaceuticals (SIC 283) through new drug discovery and delivery

methods. In addition, ATP’s biotechnology projects target industry sectors

as diverse as medical and laboratory instruments (SIC 382), food products,

and aquaculture. ATP has made targeted investments in Tissue Engineering

and Tools for DNA Diagnostics through focused programs. 

Manufacturing

ATP-funded manufacturing technologies support automobile and aircraft

manufacturing, machine tools, intelligent control and manufacturing, and

other discrete and flexible manufacturing systems. Most of the applications

from this technology area have been classified by the companies as

industrial machinery (SIC 35), transportation equipment (SIC 37),

fabricated metals (SIC 34), or instruments (SIC 38). ATP has made

investments in motor vehicle manufacturing technologies through its

focused programs. Many other projects classified by core technology as

information technology or advanced materials or electronics will result in

manufactured products and involve manufacturing process issues.

Advanced Materials-Chemistry 

This technology sector is perhaps the most heterogeneous in ATP’s

classification system. The materials subcategories include

abrasives/coatings/composites (the subcategory with the highest frequency),

metals/alloys, and construction materials. The chemicals subsection

includes separation technologies, catalysis, food processing, as well as

energy and environmental technologies. Materials and chemistry projects

typically target the chemicals (SIC 28), industrial machinery (SIC 35),

electrical equipment (SIC 36) for energy applications, motor vehicles (SIC

37), and oil and gas drilling (SIC 13) industries, as well as others. These

target industries reflect ATP’s focused programs in Manufacturing

Composite Structures, Premium Power, Catalysis/Biocatalysis, and Selective

Membrane Platforms.1

14 Different Timelines for Different Technologies

1. For a historical, business, and R&D overview of industrial chemicals, see Arora and

Gambarella (1999).
Electronics Computer Hardware, and Communications

This area includes semiconductors, other computer hardware,

microelectronic fabrication technology, communication for data, voice, and

video, and optics and photonics. Many of the projects interface with

manufacturing processes; for example, components of electronics systems

interface with particular applications in photonics and microelectronics

manufacturing. These projects most typically have target applications in

electrical and electronic equipment (SIC 36) or instruments (SIC 38). 

Information Technology

Projects in this area typically target applications in business services, health

care, or manufacturing. Specialized technologies include pattern

recognition, image processing, and security systems based in biometrics

capabilities. Information technologies are an acknowledged vehicle for

radical process innovation in a number of mature manufacturing industries

as well as a platform for a wide range of potential new businesses. 

ATP has targeted a number of different industry sectors and types of IT

solutions with its IT-related focused programs. Projects funded in ATP’s

Component-Based Software Focused Program develop technologies needed

to enable multi-use software components that can be sold to systems

integrators and custom builders to create custom manufacturing

applications. Projects funded in ATP’s Manufacturing Integration Focused

Program support critical efficiency and quality issues in manufacturing and

services. The program in Information Infrastructure for Healthcare fosters

underlying technologies such as digital libraries, knowledge-based systems,

and natural language processing used in information processing and

management. Medical software systems are used, for example, in patient

monitoring, medical procedures management and analysis, and overall care

integration. ATP-supported information technologies have typically

targeted service industries such as business services (SIC 73) and health

services (SIC 80). Many support telecommunications or broadcasting (SIC

366). A smaller focused program developed information technologies

targeted at video information networking. 

B. Profile of Participants, Projects, and Applications

The study draws primarily upon BRS data for ATP project participants and

projects funded by the program since 1993 and reporting through

September 1999. The complete data set includes 669 project participants in

336 projects. These project participants reported on 1,172 planned

commercial applications of their ATP-funded technologies. Not all 669

participants or projects provided information on commercial applications.

(Some organizations in joint-venture projects, particularly universities, have

a pure research or support role and do not have direct or immediate plans

Summary Profile 15
to commercialize the results of their efforts. Rather, they are building

infrastructure and expertise that will support subsequent R&D efforts or

other contract research.) Therefore, we reduced our dataset to the data

records from 558 organizations in 299 projects that reported the plans for

the 1,172 commercial applications. The data from the 558 organizations

form the basis for the analyses in Steps 2–4. In Step 5, we used reduced

sets for which matched Baseline and Close-out Reports were available, and

separately for which Post-project Surveys were available. Table 3

summarizes this spectrum of data by report type. 

16 Different Timelines for Different Technologies

Table 3. Summary of Projects, Participants, and Applications, by 

Report Type

Number of Number of

Number of project commercial

projects participants applications

All 299 558 1172

Matched Baseline Reports and Close-out Reports 147 176 301

Matched Post-project Surveys 134* 173* 104

* Includes participants that discontinued plans to commercialize their ATP-funded

technologies, as discussed in the Appendix.

Source: Data are from the ATP Business Reporting System for projects funded between

1993 and 1998.

The dataset for the 558 participants in 299 projects reflects 81% of all

ATP awards and 63% of all project participants in awards 

made 1993–1998. Some participants of very large ATP joint ventures are

relieved from the ATP business reporting responsibility, and non-profit

organizations without R&D responsibility or commercialization plans are

likewise exempt from ATP’s business reporting requirement. The major

reduction in coverage is due to failure to comply with the reporting

requirement at all (approximately 15% of participants) or failure to

provide information about commercialization plans (approximately 15%

of participants, including universities and others in joint ventures with little

commercialization intent).

Table 4 provides a profile of projects and participants by technology 

area. Materials-chemistry and IT have the largest number of both

participants and projects. Participants/project, a density measure, shows

that manufacturing and electronics/photonics have the highest average

number of participants per project. Many of these projects are organized as

joint ventures, with manufacturing technology–based joint ventures having

more participants, on average, than others. 
Table 5 further profiles project participants for each technology area by

type of ATP project and size/type of organization. The distributions vary

considerably across technology areas. For example, two-thirds of

biotechnology participants are single applicants (SAs), by far the largest

proportion across any of the technologies, but 62% or more of

participants in projects developing the other four technologies are members

of a joint venture. Furthermore, biotechnology participants involve the

largest proportion (71%) of small companies. For other technology areas,

27–46% of project participants are small firms.

Summary Profile 17

Table 4. Distribution of Participants and Projects, by Technology Area

Number Number

of project of Participants

Technology participants % Projects % per project

Biotechnology 83 15 67 22 1.2

Electronics/

photonics 97 17 44 15 2.2

IT 140 25 73 24 1.9

Manufacturing 96 17 39 13 2.5

Materials-chemistry 142 26 76 26 1.9

Total 558 100 299 100 1.9

Source: Data are from the ATP Business Reporting System for projects funded between

1993 and 1998.

With the exception of the biotechnology projects, most of the projects in

each technology area are joint ventures. ATP-funded biotechnology firms

Table 5. Distribution of Project Participants in Each Technology Area, by

Organization Type/Size and Project Type

Firm size Project type 

Number

(% of participants) (% of participants)

of project Medium/

Technology participants Small large Other* SA JV

Biotechnology 83 71 24 5 66 34

Electronics/photonics 97 38 58 4 18 82

Information technology 140 46 38 16 38 62

Manufacturing 96 38 60 2 23 77

Materials-chemistry 142 27 68 5 31 69

All 558 42 51 7 34 66

* “Other” includes universities, nonprofits, and government. 

Source: Data are from the ATP Business Reporting System for projects funded between

1993 and 1998.
have tended to use subcontracting mechanisms rather than a joint-venture

structure to perform collaborative R&D. Many have subcontractor

relationships with universities or other small firms. Many are also engaged

in joint research and marketing agreements with larger biotech,

pharmaceutical, or chemicals firms. The absence of joint ventures and the

large number of relationships with universities likely reflect the very earlystage R&D being conducted in biotechnology and the preponderance of

small firms.2

Table 6 shows the distribution of commercial applications by technology

area. Averages per participant and project are based on the 558

participants in 299 projects; that is, no assumptions are made about

projects for which no applications had yet been reported. Sixty-one percent

of applications come from joint venture members and 39% from Single

Applicants. The larger number of applications per project for

manufacturing technologies likely reflects the larger dollar size of these

projects (mainly joint ventures) and the large number of participants in

many. Biotechnology projects, on the other hand, had the lowest number

18 Different Timelines for Different Technologies

Table 6. Distribution of Commercial Applications, by Technology Area

Applications per Applications

Applications % of all participant per project

Biotechnology 176 15 2.1 2.6

Electronics/Photonics 181 15 1.9 4.1

IT 307 26 2.2 4.2

Manufacturing 185 16 1.9 4.7

Materials-Chemistry 323 28 2.3 4.3

All 1,172 100 2.1 3.9

Source: Data are from the ATP Business Reporting System for projects funded between

1993 and 1998.

2. Audretsch (2001) and others have noted the important role of university scientists in

biotechnology companies and the strong ties to universities.

of planned applications per project, apparently reflecting the small number

of joint ventures and the long time to market for most applications

(discussed in later sections of the study). More than half of the applications

came from projects developing IT or materials–chemistry technologies. 

Most ATP projects involve development of technology platforms that

support a number of different commercial applications. Participants in

joint ventures often pursue a mix of their own applications and joint

applications with others. 
In Section V, expectations about timelines for revenues are examined and

compared with expected windows of opportunity, by technology area.

A. Expectations about the Timeline for Commercialization

This subsection addresses directly the question, “Are differences in

commercialization patterns observed for different technologies?” Using

expected timing to initial revenues as a key indicator, we provide graphical

timelines for each technology area. 

When can we expect to see revenues?

Figure 1 shows a year-by-year picture of responses provided by all project

participants together and by those from each technology area about their

1,172 planned commercial applications. Participants responded to the

following question. 

When is revenue anticipated? 

Response choices:

• During ATP

• < 1 Year after ATP

• 1 – <2 years after

• 2 – <3 years after

• 3 – <4 years after

• 4 – <5 years after

• 5 or more years after

• Never

Revenues are anticipated for 17% of all commercial applications 

by the end of ATP funding, for 40% of applications by a year later, and for

Observed Variations in Timelines for Commercialization 19

V.

Observed Variations in Timelines

for Commercialization
66% within two years after ATP funding ends (counted cumulatively). The

peak number of new applications expecting revenues occurs about two

years after ATP funding ends. 

But there is considerable variation across the entire time period. For IT

applications, revenues are expected for 28% of applications during the

20 Different Timelines for Different Technologies

Figure 1. When Can We Expect To See Revenues?

Percent of applications, cumulative

During 

ATP

<1 year 

after ATP

<2 years 

after ATP

<3 years 

after ATP

<4 years 

after ATP

<5 years 

after ATP

5 or more 

years after 

ATP

Never

12

32

60

76

83

91

100

100

19

40

71

85

93

97

99

28

64

83

94

97 98

13

31

58

76

87

91

95

9

25

54

76

85

92

97

17

40

66

83

91

96

100

98

0

10

20

30

40

50

60

70

80

90

100

Biotech

Electronics-photonics

IT

Manufacturing

Materials-chemistry

All

N = 1,169 applications

Source: Data are from the ATP Business Reporting System for projects funded between 1993 and 1998.
period of ATP funding and for 64% of applications by a year after ATP

funding ends, the highest proportion for any technology area. Only 25%

of materials-chemistry applications and 32% of biotech applications are

expected to generate revenues by a year after ATP funding ends.

When we examine the underlying data, we see that while the activity for IT

peaks a year after ATP funding ends, the expected peak in new applications

reaching the market for other technology areas appears a year later. 

Electronics technologies have some early applications, but then they

experience a steep rise in activity in the second year after ATP, followed by

a fall-off more rapid than in any other technology area except IT. 

Materials-chemistry and manufacturing-based applications build up

somewhat more slowly and tail off more slowly than electronics and IT. 

Biotechnologies have an initial spurt of activity in the second year after

ATP funding ends, then another spurt five or more years later.

B. Expected Market Window of Opportunity

If commercialization plans are credible, we expect the window of market

opportunity to shadow the expected timing of revenues. This window’s

timing will pose a constraint on commercial viability of the technologies in

their planned applications. 

Figure 2 shows responses to the following question:

What is the window of market opportunity?

Response choices:

• A year after ATP

• 2 years after ATP

• 5 years after ATP

• More than 5 years after ATP

The expected windows of opportunity mirror expectations about the

timeline to commercialization, with about a one-year lag. For IT, this is

especially true. While 35% of applications across all technologies expect a

market window of just one year after ATP funding ends, the proportion

within IT is 52%, the highest such proportion for any technology area. As

seen above, this is consistent with expectations of the timing of revenues

for this technology group. 

Observed Variations in Timelines for Commercialization 21
Figure 2. How Long Will the Window of Market Opportunity Stay Open?

22 Different Timelines for Different Technologies

1 year 

after ATP

2 years 

after ATP

5 years

after ATP

>5 years 

years after 

ATP

Percent of applications, cumulative

26

63

84

100

40

76

94

52

89

100 100

32

81

92

100

24

64

89

35

74

91

0

10

20

30

40

50

60

70

80

90

100

Biotech

Electronics-photonics

IT

Manufacturing

Materials-chemistry

All

N = 1,170 applications

Most electronics applications are under pressure to reach the market

within about two years after ATP. 

Only a few applications—largely in biotechnology—are expected to see the

market opportunity window open longer than five years after ATP. 

Source: Data are from the ATP Business Reporting System for projects funded between 1993 and

1998.
We use the framework suggested by the industrial innovation life-cycle

model in Section III to address the second research question: what factors

appear to account for commercial timeline differences among technologies?

We assess ATP project and company characteristics by technology area

against hypotheses derived from the model. 

A. Firm Size

The life-cycle model naturally leads us to expect small or younger firms to

be associated with the rapidly changing products and short R&D cycles of

emerging industries. We also expect to see larger firms associated with

more mature industries, and characterized by longer product cycles and

less frequent major product changes. 

Company size does indeed seem to affect expectations about the speed of

commercialization; the effect also seems to be especially associated with

certain technologies. Even though BRS data is closer to establishment or

plant-level data than to firm-level data, overall firm characteristics should

affect the project. For example, the division of a large firm participating in

the ATP project may easily draw on the resources of the whole enterprise,

depending on the relative priorities of the project vis a vis the overall

business goals of the firm. 

Indeed, across all for-profit firms, small companies report a shorter

expected period of time to the first project revenues than do larger

participants. Forty-eight percent of small-firm applications are expected to

generate some revenues by a year after ATP funding ends, compared to

29% of larger-firm applications. (Data are not shown.) 

Factors behind Observed Trends 23

VI.

Factors behind Observed Trends
This relationship holds for each technology area. The differences between

small and larger firms expecting revenue by a year after ATP are greatest

for materials-chemistry (40% of small-firm applications, compared with

17% of larger-firm applications), IT (72% of small-firm applications

compared with 52% of larger-firm applications), and manufacturing (41%

of small-firm applications compared with 22% of larger-firm applications). 

In general, small companies see market entry as more urgent for cash-flow

reasons. They may be under pressure to satisfy outside investors, and

therefore may be more eager to launch early products whether or not these

embody the full technological potential (Powell, 1999). These firms are

also more likely to be in the fluid, early stage of the innovation life cycle,

where the pace of change and shifts in market dominance are most rapid. 

Following Pavitt, firms developing manufacturing technologies may be

specialized suppliers to production-intensive large companies, and therefore

may operate somewhat more like science-based firms than like larger firms.

Another possibility is that they may be more optimistic and have less

experience in what it takes to get to market. Or they may seek to provide

the disruptive technology that challenges larger firms. In any event, smallfirm suppliers to larger firms will face a barrier in overcoming larger-firm

reluctance for costly product or process changes, and the ATP joint-venture

structure may provide some assistance.

When we examined the window of market opportunity, the firm-size

relationship was less clear. Slightly more small firms have a one-year and

two-year market window after ATP than do larger companies. However,

this overall result held for IT and materials-chemistry technologies but not

the other three technology areas. For materials-chemistry, 82% of

applications developed by small firms have a market window of at most

two years, compared to 54% of materials-chemistry applications of larger

firms. For IT, the difference is smaller—95% for small firms versus 85%

for larger firms. In the opposite direction, 75% of larger biotechnology

firm applications had a market window of at most two years compared

with 59% for small biotechnology firm applications. 

For manufacturing, 87% of larger-firm applications had a market window

of at most two years after ATP compared with 72% of smaller-firm

applications. The greater proportion of larger-firm manufacturing

applications with shorter market windows is consistent with their use of

collaborative R&D to advance and accelerate innovative R&D even within

relatively technologically mature industries. The size effect may reflect the

joint-venture structure of these manufacturing projects, rather than firm

size per se.

24 Different Timelines for Different Technologies
B. Project Structure

As discussed earlier, collaborative R&D and research joint ventures are an

organizational, technical, and financing strategy with different objectives

along the innovation life-cycle. In the first stage of the life cycle,

collaboration can leverage resources and capabilities. At more mature

stages, partnerships between new and larger or established firms provide a

mechanism for a renewed level of innovative activity and product

diversification. ATP-funded joint ventures often include a mix of small and

larger firms. Many involve a vertical series of players across a supply

chain. Some involve a more horizontal structure or are a hybrid of vertical

and horizontal characteristics.

Looking at the differences in commercialization timelines for ATP’s singlecompany with joint-venture projects, 38% of commercial applications

developed by joint-venture participants have a market window of just one

year after ATP, compared to 31% of those developed by single applicants. 

The relative urgency shown by joint ventures holds in each technology

area, with a wider margin for some technologies. For example, more IT

and electronics applications being developed by joint ventures (57% IT,

44% electronics) report a one-year market window compared with their

respective single applicants peers (47% IT, 26% electronics). 

R&D collaborations seem to be viewed consistently as a vehicle for

acceleration of R&D towards entry to markets with short windows of

opportunity. ATP-funded larger firms, in particular, seem to find

collaborative R&D the best mechanism for addressing competitive

markets. This is particularly important in addressing fast-paced IT and

electronics product markets, where technologies change rapidly even into

the growth phase of the innovation cycle. 

C. Strategy for Commercialization

We refer to commercialization strategy as the selection of a product,

process, or service platform for market entry of an ATP-funded technology.

Sixty-six percent of all the 1,168 applications reported for this question,

across all technologies, involve a specific manufactured product, 24%

involve a manufacturing process, and 10% involve delivery of a service.

Figure 3 shows the distribution by technology area. 

The product life-cycle model suggests service and low-volume product

applications will enter the market quickly, but will have a short product

Factors behind Observed Trends 25
life and will most commonly be associated with early-stage technologies

and young businesses and industries. At the other end of the spectrum,

process technologies with cost-reduction objectives will have the longest

life cycles and typically will be more associated with larger, mature firms.

Product-focused applications with an emphasis on performance will be

associated with firms in earlier stages of the growth phase, in rapidlychanging markets, seeking opportunities to make their product the

standard, dominant design. We examined commercialization strategies of

ATP-funded technologies against this framework. 

Although service applications constitute only 10% of all applications, they

represent 25% of IT applications and 14% of biotechnology applications

respectively. One is tempted to associate service applications with small

firms. However, given that electronics technologies also involve a large

proportion of small firms but almost no service applications, size is not the

only factor. Biotechnologies and information technologies are clearly

addressing earlier-stage, newer markets, many in the service sectors.

26 Different Timelines for Different Technologies

Figure 3. Applications Profile: Manufactured Products, Manufacturing Processes,

and Services

Percent of applications

78

74

64

61

50

24

8

1

33

36

47

10

14

25

3 3 3

66

0

10

20

30

40

50

60

70

80

90

100

All Biotech IT ElectronicsphotonicsMaterialschemistryManufacturing

Manufacturing processes

Manufactured products

Services

N = 1,168 applications

Source: Data are from the ATP Business Reporting System for projects funded between 1993 and 1998.
Virtually all applications in electronics, materials-chemistry, and

manufacturing are either manufacturing products or manufacturing

processes. Manufacturing processes comprise nearly half the applications

of manufacturing technologies and over one-third of the applications of

electronics and materials-chemistry technologies. 

Figure 4 compares the timelines for expected revenues for the different

types of commercialization strategies reported for 1,165 applications.

Results are consistent with expectations.

Factors behind Observed Trends 27

Figure 4. When Revenue Is Expected: By Commercialization Strategy

Percent of applications, cumulative

During 

ATP

<1 year 

after ATP

<2 years 

after ATP

<3 years 

after ATP

<4 years 

after ATP

<5 years 

after ATP

5 or more 

years after 

ATP

Never

16

35

58

78

85

93

98

100

14

38

67

83

91

95

99

33

59

72

84

90

92 92

17

40

66

83

91

96

100

0

10

20

30

40

50

60

70

80

90

100

Manufactured products 

Manufacturing processes

Services 

All 

N = 1,165 applications

Source: Data are from the ATP Business Reporting System for projects funded between 1993 and 1998.
Service applications show the fastest time to market, with revenue expected

during ATP for 33% of them and for a cumulative total of 59% a year

after ATP. 

Manufacturing processes have the slowest time to commercialization, with

only 16% expected to generate revenue or reduced production costs by the

end of ATP funding and a cumulative total of 35% by a year after ATP

funding. For manufacturing technologies, a similar level of activity was

expected for product and process applications during the earliest time

period; after ATP funding ended, product applications were expected to

commercialize more quickly than process applications. 

Figure 5 provides additional evidence supporting the relationship between

firm size and commercialization strategy. Small firms pursue service

applications more frequently than do larger firms. Among service

applications, 49% are being developed by small firms, 30% by larger

firms, and the remaining 21% (not illustrated) by universities and not-forprofits. Larger firms are pursuing manufacturing process applications 

more frequently than small firms. Lastly, among all process applications,

66% are being developed by larger firms compared with 29% by small

28 Different Timelines for Different Technologies

Figure 5. Commercialization Strategy: By Firm Size

66

43

30 29

51 49

5 6

21

0

10

20

30

40

50

60

70

80

90

100

Manufacturing processes Manufactured products Services

Percent of applications

Large and medium-sized firms

Small firms

Other

N = 1,168 applications

Source: Data are from the ATP Business Reporting System for projects funded between 1993 and 1998.
firms. Manufacturing product applications are somewhat more common

for small firms. 

At early stages of technology development, customized services and lowvolume products provide an early opportunity for relatively low-cost

market entry of breakthrough technologies. They generate cash flow and

name recognition in the aggressive competition for market share in

emerging markets. Further capital investment, completion of the

technology goals, and market distribution connections enable highervolume products and help them reach a broader base of customers. It is

important to note that ultimately most ATP technologies are expected to be

diffused broadly and to generate their major economic benefits not through

customized service relationships but through new products and the

implementation of new production processes. 

D. Competitive Advantage 

This section examines the expected competitive advantage of ATP-funded

technologies in terms of improved performance, cost reduction, and other

business objectives. The life-cycle model has implications for the nature of

the competitive advantage of different ATP-funded technologies. In

particular, market competition typically shifts away from introduction 

of new-to-the-world, radically innovative products, to performance

improvements, and then to cost/price considerations over time, as 

discussed in Section III. To assess whether business objectives of ATP

projects are consistent with this component of the life-cycle model, we

examined responses to the following question:

What is your major advantage over the competition or other approaches to

meeting the customer need?

Response choices:

• Higher performance

• Lower cost

• Both higher performance and lower cost

• New solution

• Other

Figure 6 shows the results by technology area.

Most revealing for our purposes is that information technologies and

biotechnologies have the largest percentage of applications considered to

be new solutions to a market problem (62% for IT and 44% for

biotechnologies). Other technologies (electronics, manufacturing, and

Factors behind Observed Trends 29
materials-chemistry) most frequently target a combination of both cost and

performance objectives, although large numbers of electronics and

materials-chemistry applications are clearly focused on performance. 

These results provide additional evidence that ATP-funded IT and

biotechnologies are often in an early, fluid phase of the innovation life

cycle, while electronics and materials-chemistry technologies—and even

manufacturing technologies—tend to be in the transitional, growth phase,

paying considerable attention to both performance and cost objectives. It

should be also noted that a large number of applications offered

advantages other than those listed in the response choices. 

E. Availability of Capital

ATP funding tends to be relatively small compared with what will be

needed subsequently to complete the R&D cycle and bring new products

to market. The availability of private capital for ATP-project cost share

and for the post-ATP product development phase may affect expectations

about the timing of commercialization. 

30 Different Timelines for Different Technologies

Figure 6. Business Advantage: By Technology Area

1

4 2

8 9

5

14

32

9

22 20 18

40

37

20

44

40

35

44

25

62

26 28

39

0 0 2 1 1 0 1 2 4

0 3 2

0

10

20

30

40

50

60

70

80

90

100

Biotech ElectronicsphotonicsIT Manufacturing MaterialschemistryAll

Percent of applications

Lower cost

Higher performance

Both lower cost/higher performance

New solution

Enables other technology

Other

N = 1,156 applications

Source: Data are from the ATP Business Reporting System for projects funded between 1993 and 1998.
To consider whether capital availability might affect the timing of

commercialization by technology area, we examined responses to two

different questions. First, we asked whether ATP funding itself helped build

credibility with investors.1 Second, we looked at differences in the ability to

raise external capital. 

To address these issues, we examined responses of the for-profit companies

represented in the analyses reported in Section V and Section VI above

who also responded to questions in the BRS about financing issues. Since

these questions are primarily relevant to for-profit companies and to

projects that have been underway for some time, we used information

provided by for-profit respondents in Anniversary and Close-out Reports.

Of the 588 project participants included in the analyses above, 392

provided information about their experience in raising capital and/or their

credibility with investors following their ATP award. 

To assess the halo effect with outside investors, we examined the 388

responses to the following question:

How has the ATP award affected your credibility with investors?

Response choices:

• Positively

• Negatively

• Not at all

• Not sure

Most notably, 82% of biotechnology companies reported a positive effect

in their relationship with investors, compared with only 34% of

manufacturing-technology companies and 36% of materials-chemistry

companies. A large percentage of the companies in earlier stages of

evolution, particularly biotechnology companies, said they felt they were

making progress in building relationships to acquire financial resources. 

We assessed the level of activity in raising capital by examining responses

of the group of 387 for-profit project participants to the question: 

Have you received new EXTERNAL funding for the ATP-funded

technology or its commercialization since the ATP award was announced? 

Factors behind Observed Trends 31

1. See Powell (1999) and Feldman and Kelley (2001) for earlier evidence and a discussion

of the halo effect of ATP funding.
Response choices:

• Yes

• No

• Uncertain

The group was also asked a follow-up question to determine the sources of

that new external funding. Participants could choose from this list:

• Owner/angel investors

• Stock issue: venture capital

• Stock issue: public offering

• Long-term debt financing

• Federal program: SBIR

• Federal program: Other

• State or local government

• Other

We expected to see that companies with technologies in relatively early

stages of the innovation life cycle would be more active in the capital

markets if they were to achieve their aggressive commercialization

timelines for early applications. Results are shown in Table 7.

32 Different Timelines for Different Technologies

Table 7. External Funding Activity

Materials- Electronics/

All Biotech Manufacturing IT chemistry photonics

Percent receiving 

external funding 26 46 9 33 16 37

Percent receiving 

each type of 

external funding

Public 

stock issue 3 8 0 1 2 5

Other federal sources 11 32 3 6 7 16

State/local governments 4 10 0 4 5 5

Venture capital 7 12 0 14 4 9

Owner/angle investors 10 19 1 13 6 16

Other (mostly corporate) 10 14 5 10 11 9

N = 387 companies responding to the question about external funding.

Source: Data are from the ATP Business Reporting System for projects funded between 1993

and 1998.
Among 387 companies responding to the first question, 26% reported

receiving some form of external funding since receiving their ATP award.

The range was substantial: from 46% for biotechnology participants to

only 9% of participants developing manufacturing technologies. A higher

percentage of biotechnology participants than any other technology’s

participants received every type of funding, except venture capital. 

For example, 8% of biotech participants receiving external funding

through a public stock issue, compared with 0% of manufacturing and 1%

of IT participants. (Note that the cutoff date for the data was September

1999, before the turmoil in the stock markets in 2000–2002). 

Over 30% of biotech participants received funding from non-ATP federal

sources, compared with 16% of electronics/photonics participants, and 7%

of materials-chemistry participants. 

Funding from owner/angel sources was somewhat frequent for electronics

and IT participants as well as biotech participants (16%, 13%, and 19%

respectively), and lowest for manufacturing (1%). 

Participants from all technologies received funding from other sources than

those listed. Most of these "other" sources involved strategic alliances and

joint development agreements with other companies. 

Biotechnology companies appear to be particularly successful in raising the

capital from a variety of sources needed to achieve their goals for

commercialization in some early applications. This ability to raise capital

strengthens their reports of "increased credibility with investors". Together,

the evidence supports the conclusion that ATP funding is a positive factor

in providing firms the name recognition and credibility for building

partnerships to help fund applications that require long regulatory periods

of clinical testing. 

Biotechnology participants were slightly less successful than information

technology participants in raising funds from venture capital, which

typically insists on short investment recovery periods. Funding from

venture capital was most frequent in IT: 14% of IT companies, compared

to 12% of biotechnology companies, 9% of electronics companies, and

none of the manufacturing companies. 

Manufacturing participants were more likely to receive funds from

corporate partners than other sources, although external financing was

rare for this group. Small companies involved in manufacturing projects

likely considered financial relationships with potential customers more

Factors behind Observed Trends 33
useful than financing alone, and many were involved in ATP joint ventures

that included potential customers. 

Together with the analysis of other factors, the information on financing

provides additional evidence supporting the life-cycle framework and

enhances the credibility of the expected patterns of commercialization.

34 Different Timelines for Different Technologies
A summary of findings presents the results of the factor analysis presented

in Section VI in the context of the life-cycle framework. We conclude with

policy implications and plans for future work.

A. Summary of Findings by Technology Area, Conclusion,

and Future Work

Some of the key findings, by technology area, are as follows:

Biotechnologies and Information Technologies

Biotechnologies and information technologies support a host of new-tothe-world applications in a number of industries. They support formation

of new industries. 

Information technologies enter the market quickly, with a significant

percentage of applications expecting commercialization during the period

of ATP funding, and with nearly two-thirds expecting commercialization

by a year later. For half of IT applications, the window of market

opportunity is expected to close within a year after ATP funding ends. This

timeline is consistent with the rapid pace of the early phase of the

innovation life cycle for small firms competing to open and capture new

markets. Service applications can be important commercialization

strategies as an initial point of market entry to end users in many

industries, as a more primary mechanism for technology advancement in

mature manufacturing industries, and as a strategy for addressing growth

industries like health care and telecommunications services. 

Biotechnology projects have a number of early opportunities for service

applications (for example, research and testing services) that are useful for

Summary of Findings by Technology Area, Conclusion, and Future Work 35

VII.

Summary of Findings by

Technology Area, Conclusion, 

and Future Work
market conditioning and validation. That is the case even if biotech

applications do not generate large cash flows or economic impact in

therapeutic markets until much later. Regulatory requirements prohibit fast

market entry for many health care applications. The market is expected to

remain open for major applications for more than five years after ATP

funding ends. 

• The innovation focus is on achieving basic functionality and

performance of new-to-the-world products.

• The flow of investment capital suggests investors envision the broad

future potential of the markets expected to emerge. 

• The precise nature of the larger markets and distribution mechanisms is

still blurred.

• Technology-based competition is keen, and dominance changes rapidly

in new and emerging markets. 

Manufacturing and Materials-Chemistry Projects

Manufacturing and materials-chemistry projects more typically are

developing new process technologies for existing classes of products in

mature, commodity-oriented industries. Manufacturing technologies and

materials-chemistry technologies commercialize slowly; however,

opportunities are expected to accelerate about two years after ATP funding

ends and then to decline relatively slowly compared with other

technologies.

• The focus is on manufacturability and cost to gain advantage in “cents

per pound,” high-volume markets, as well as on higher performance

products.

• Capital investment and validation requirements are costly and lengthy.

Financing typically comes from retained earnings.

• Product life cycles and market windows are longer than for IT or

electronics projects. Technological change occurs more slowly than in

new product areas, particularly for commodity types of products.

• Joint ventures are an important vehicle for sharing risks and

technological uncertainties, particularly in addressing interdisciplinary

issues where different technologies converge, such as information

technology for manufacturing or healthcare applications or many

electronics/photonics projects that involve a mix of materials, electronics,

and manufacturing issues. 

Electronics

Electronics (and related materials) projects tend to involve a mix of new

and established firms in transitional, rapid-growth stages of innovation,

company, and industry development.

36 Different Timelines for Different Technologies
• Product applications are more common than process applications.

• Cost and manufacturability are critical objectives.

• Electronics product markets are extremely competitive; product life

cycles are short; and capital requirements for high-volume production

remain steep barriers to market entry.

• Nearly three-fourths of applications are expected to earn revenues within

two years after ATP funding ends. Windows of market opportunity are

expected to diminish quickly after two years. 

B. Conclusion and Policy Implications

The innovation life-cycle model provides a useful framework for

illuminating differences in commercialization patterns across ATP-funded

technology areas. Our analysis shows that characteristics such as speed to

market, size of firm, project structure, commercialization strategy, and

technology area map to most features and stages of the innovation life

cycle summarized in Table 1. This innovation life-cycle framework

provides a general trajectory of what to expect when and under what

circumstances for future use in project selection and assessment of project

performance. For example, credible and appropriate commercialization

plans and expectations about revenue must be expected to vary by

technology area, consistent with the analysis presented in this study.

Project proposals that indicate pathways to markets with major deviations

from this analytical framework need to be examined before funding is

committed. 

C. Future Work

The data on timing of commercialization and windows of market

opportunity used in the body of the study reflect expectations at the time

of the last report on file from each ATP project participant, rather than

actual commercialization history. This study initiated a further effort to

compare actual commercialization histories of ATP-funded technologies

against expectations. These analyses are presented in the Appendix.

Data presented in the Appendix from Close-out Reports for a large portion

of the project participants covered in the body of the study suggest that

ATP projects are meeting or exceeding expectations for their earliest

commercial applications. Data from Post-project Surveys conducted two to

three years after the end of ATP funding suggest that the commercialization

pace may have slowed down relative to expectations by that time. 

Given the small number of Close-out and Post-project reports available

from each technology area, their analysis must be judged to be preliminary.

Summary of Findings by Technology Area, Conclusion, and Future Work 37
Additional data and analysis by type of commercial application, by

technology area, and by type of ATP project and role within the project are

needed to document the longer-term history and to identify characteristics

of success and failure to meet expectations. 

This study is the first of many anticipated studies that characterize the

differences in commercialization patterns of different ATP-funded

technologies. The growing number of Post-project Surveys provide

substantial data documenting the actual performance of projects against

plans over longer portions of the technology life cycle. Future studies will

analyze ATP-funded innovation by specific industry-use sectors and areas

of technology impact as well as core technology area. 

38 Different Timelines for Different Technologies
Expectations alone are an incomplete indicator of the timeline for

commercialization—particularly given the risky R&D projects ATP funds.

Early on there are considerable uncertainties about achieving the technical

goals. Technical hurdles, and additional capital requirements, may delay

the projects beyond the window of opportunity. ATP does not seek to fund

projects with high business risks, but some risks are unavoidable. 

ATP’s objective is to fund breakthrough, enabling technologies, some of

which will serve as platforms for emerging industries. Many projects target

markets that are just emerging or are almost non-existent. Business risk is

an inherent characteristic of such projects. Moreover, technologies may be

already ahead of the market or ahead of critical complementary

technologies and products. Unexpected competition may arise. 

Enough ATP projects have now been completed to begin comparing actual

commercialization activity with expectations. Here, we take a small step

forward. This Appendix provides a preliminary assessment of the question:

To what extent is actual commercialization mapping to plans? Data are

still very limited. This is the first study to use BRS data to track a given

group of projects over time, from the beginning of the ATP funding into

the post-ATP funding period. Some initial observations are possible. Given

its preliminary nature, this analysis seems most suited to an Appendix.

More in-depth analysis will follow as more data become available.

We identified Close-out Reports to match Baseline Reports for

approximately one-third of all the applications analyzed in the body of the

study. (See discussion of these reports in Section II A.) We used these

paired reports to compare actual commercialization experience (as of the

end of ATP funding) with expectations at the start of the projects. 

Similarly, we had Post-project Surveys to match approximately one-third of

the project participants whose reports are analyzed in the body of the

Appendix. Actual versus Expected Commercialization Timeline: Preliminary Results 39

Appendix. Actual versus

Expected Commercialization

Timelines: Preliminary Results
study. The Post-project Surveys were conducted two to three years after the

end of ATP funding. They enabled comparison of actual commercialization

experience as of two to three years after the end of ATP funding with

expectations in the ATP-funding period. 

A. Very Early Commercialization—During ATP

Our reduced data set of matched Close-out and Baseline Report data

covered 301 commercial applications reported by 176 organizations in 147

projects. We compared the characteristics of the matched Close-out and

Baseline Reports and compared actual business progress reported in the

Close-out Reports with expectations about the timing of commercialization

reported in the Baseline Reports.

Profile of Matched Commercial Applications

The distributions by size of firm, technology, project structure, and type of

application are shown in Table A.1. 

40 Different Timelines for Different Technologies

Table A.1. Profile of Commercial Applications in Matched Close-out 

and Baseline Reports

1. By Organization Type/Size and Project Type 

Firm size Project type 

Number of

(% of applications) (% of applications)

Applications Small Medium/large Other* SA JV

All 1,172 46 47 7 39 61

Matched Baseline 

and Close-out 

Applications 301 51 49 0 68 32

* “Other” includes universities, nonprofits, and government. 

2. By Technology Area

Applications %

Technology All/Close-out All/Close-out

Biotechnology 176/56 15/19

Electronics/photonics 181/30 15/10

IT 307/76 26/25

Manufacturing 185/41 16/14

Materials-chemistry 323/98 28/32

Total 1,172/301 100/100

Source: Data are from the ATP Business Reporting System for projects funded between

1993 and 1998.
The distributions for this reduced, matched set of Baseline and Close-out

reports can be summarized and compared with the full set, as follows:

• These 301 applications are about equally divided between small and

medium-large-sized firms. Just over half the applications were reported

by small companies, approximately the same percentage as for the full

group analyzed in Section IV. 

• Nearly one-third are applications of materials-chemistry technologies,

while a quarter of the applications involve information technologies.

Proportions of biotech and materials-chemistry applications were

somewhat higher, and proportions of electronics/photonics and

manufacturing were somewhat lower than for the larger group of

applications analyzed in Section IV.

• Over two-thirds (68%) of these applications come from single-company

projects. Applications from participants in joint-venture projects are

poorly represented given that applications from single-company projects

represent only 39% of the 1,172 applications analyzed in Section IV, but

68% of the smaller, matched group of Close-out and Baseline reports.

Baseline Expectations versus Close-out Performance

For evidence of commercialization as of the end of the ATP project, we

used responses to the following questions in the Close-out Reports: 

• Have you earned revenues from products/services to date? (Y/N?)

• Have you to date begun production (of a new product or in a new

process)? (Y/N?) 

The results are shown in Table A.2 and Figure A.1. These results show that

at the beginning of ATP funding, revenues were expected for only 14% of

the 301 matched applications during the ATP-funding period, ranging from

a high of 29% for IT technologies to a low of 5% for biotechnology

applications. By the project Close-outs, 22% of the matched set of

applications had generated some revenue from their initial, first-generation

applications. 

All technology areas except manufacturing had earned revenue for more

applications than expected at this early stage. IT and electronics-based

applications showed the most commercial activity, with 33% of IT-based

applications and 31% of electronics-photonics-based applications reporting

some revenue. 

A few caveats are in order. It is evident from the information provided in

Close-out Reports about actual amounts of revenue to date that much of

the activity was at a low level. The applications for which revenue was

reported represented the earliest opportunities to commercialize early

Appendix. Actual versus Expected Commercialization Timeline: Preliminary Results 41
42 Different Timelines for Different Technologies

Figure A.1. Comparison of Actual Revenue Activity at Project Close-out with

Expectations at Baseline

5

10

29

10 11

14 14

31 33

10

20 22

18 17

24

7

16 17

0

10

20

30

40

50

60

70

80

90

100

Biotech ElectronicsphotonicsIT Manufacturing MaterialschemistryAll

Percent of applications

Revenue is expected during ATP

(Baseline)

Yes, have earned revenue.

(Close-out)

Yes, production has begun.

(Close-out)

N = 301 applications from 

for-profit participants

Table A.2. Expectations versus Actual Commercialization Results from

Matched Baseline and Close-out Reports, by Technology Area

% of applications*

Revenue is

expected Yes, have Yes, production

during ATP earned revenue has begun

Application (Baseline) (Close-out) (Close-out)

Biotechnology 5 14 18

Electronics/Photonics 10 31 17

IT 29 33 24

Manufacturing 10 10 7

Materials-chemistry 11 20 16

All 14 22 17

* N =301 applications.

Source: Data are from the ATP Business Reporting System for projects funded between 1993

and 1998.

Source: Data are from the ATP Business Reporting System for projects funded between 1993 and 1998.
stages of the technology. Almost no company reported more than one

application with revenues (data not shown). On the other hand, the results

may undercount actual commercial activity because the revenue question is

not directly applicable to (or posed for) process applications that may have

been implemented.

Early revenues sometimes derive from sales of samples or relatively early

prototypes, rather than actual commercial production. To compensate for

limitations in the earned revenue variable, we examined responses to the

question “Has production begun?” This question applies to process as well

as product applications, but not to service applications. In general, the

production results shown in Table A.2 are consistent with the revenue

earned results, but show somewhat lower levels of activity.

Across all applications, actual production appeared to be occurring ahead

of baseline expectations of revenue. Production activity was reported for

17% of applications, compared with baseline expectations of 14%. 

Biotechnologies showed much more early production activity than any

other technology area. This early biotech activity was likely associated with

the fluid stages of innovation, highly customized products, and new

markets being served. Perhaps the vigorous venture capital activity in the

late 1990s facilitated this early activity. 

Production results for manufacturing technologies and information

technologies showed somewhat fewer applications in actual production

than baseline expectations suggested.

The omission of service applications in this variable may account for the IT

result. The manufacturing applications that had earned revenues as of the

end of ATP funding were likely only in pilot production. 

Biotechnology companies were in production for some applications that

had not yet actually generated revenues. One would expect this of process

applications, but not of the product applications that are more typical of

biotech firms. More investigation is needed, but the early production using

biotechnologies may simply reflect different definitions biotech and

manufacturing-based companies apply to “production” in the early stages

of their product cycles. 

The key result is that when these matched applications are considered as a

whole, at least as many applications as was expected resulted in actual

commercial activity at ATP-project closeout—for each technology area.

The many small companies were seeking to raise market awareness for

very early generations of their products and to increase cash flow. There is

Appendix. Actual versus Expected Commercialization Timeline: Preliminary Results 43
considerable competitive pressure to be first to market in new or emerging

markets. Larger-volume, higher-value applications would come later.

B. Longer-Term Commercialization Activity—Two to Three

Years after ATP 

Post-project Surveys generate considerable detail about commercial activity

after ATP funding ends. Among the 558 ATP-project participants covered

in the body of the study, we identified 173 companies (from 135 projects)

that were covered in the Post-project Surveys completed as of early 2002.

These surveys covered participants in ATP projects that were completed by

the end of 1998 and thus were eligible for their first Post-project Survey by

2001. Survey results were available from approximately 95% of single and

joint-venture project participants in the eligible group. We used the Postproject Survey data to perform a longer-term comparison of actual

commercialization with plans. 

Profile of Matched Project Participants

Table A.3 compares the distribution of participants in these Post-project

Survey data with the 558 participants whose commercialization plans are

analyzed in the body of the study. 

The similarities and differences in portfolio characteristics in the total set

of 558 participants and the reduced set of 173 post-project participants

can be summarized as follows:

• The entire group of 558 and the post-project group were both about

equally divided between small and medium-sized firms. A very small

number of non-profit organizations were included in each.

• Two-thirds of the post-project group were single-company awardees, but

only one third of the larger group were single-company awardees. The

Post-project Surveys reflected a much larger percentage of singlecompany projects because those projects and participants were a larger

fraction of the first completed ATP projects and thus the first to become

eligible for Post-project Surveys. The average number of participants per

project was considerably smaller for the post-project group because there

were relatively few joint ventures.

• Percentage distributions by technology area were quite similar for the

larger group and the post-project group. The major differences were that

there was a smaller percentage of manufacturing participants in the postproject group and a larger percentage of materials-chemistry

participants. This difference disappeared in looking at the project

distribution by technology area. It likely had little impact on the

comparability of the post-project and earlier data.

44 Different Timelines for Different Technologies
C. Post-project Performance 

For evidence of commercialization in the post-ATP period, we used

responses to these questions in the Post-project Survey:

• Has your organization earned any revenue (or experienced reduced costs

of production of goods for sale) to date as a result of its ATP project?

(Y/N)

For those who said NO:

• In the next two years, does your organization anticipate earning revenue

from its ATP-funded technology? (Yes, No, Don’t Know)

For those who said NO:

• In the next 2 to 10 years, does your organization plan to introduce

product/license, or introduce a process in house that incorporates ATPfunded technology? (Yes, No, Don’t Know)

Appendix. Actual versus Expected Commercialization Timeline: Preliminary Results 45

Table A.3. Distribution of Participants and Projects

1. By Organization Type/Size and Project Type

Number

Firm size Project type 

of project

(% of participants) (% of participants)

participants Small Medium/large Other* SA JV

All 558 42 51 7 34 66

Post-project survey 173 48 50 2 66 34

* “Other” includes universities, nonprofits, and government. 

2. By Technology Area

Number Number

of project of Participants

participants % Projects % per project

Technology All/PPS All/PPS All/PPS All/PPS All/PPS

Biotechnology 83/32 15/18 67/29 22/21 1.2/1.1

Electronics/photonics 97/22 17/13 44/17 15/13 2.2/1.3

IT 140/46 25/27 73/37 24/27 1.9/1.2

Manufacturing 96/18 17/10 39/16 13/12 2.5/1.1

Materials-chemistry 142/55 26/32 76/36 26/27 1.9/1.5

Total 558/173 100/100 299/135 100/100 1.9/1.3

Source: Data are from the ATP Business Reporting System for projects funded between 1993

and 1998.
The following is a summary of the responses from the 173 organizations:

• 46% reported they had received revenues (or cost reductions from new

processes) from 104 applications in their first Post-project Survey. 

• 14% expected to launch products in the next two years, and 12%

planned to introduce a product in the subsequent 2 to 10 years. 

• 28% no longer anticipated revenues from their ATP-funded technology

or were very uncertain about it. 

• 78% of the applications that have earned revenues to date involve new

products or services; the rest are about evenly split between

manufacturing processes and patent licensing. 

Table A.4 provides a detailed breakdown by technology area. Given the

small number of participants in each area, the results must be considered

preliminary. Nevertheless, it appears that the major portion of the

companies reporting who will commercialize their ATP-funded

technologies have done so, at least for their first applications. 

46 Different Timelines for Different Technologies

Table A.4. Actual and Expected Commercialization Activity as of Two to

Three Years after ATP, by Technology Area

Do Not 

Expect Expect Expect

Have Earned Revenues Revenues Revenues

Technology Revenues, within 2 in 2–10 or Are Total,

Area % Years, % Years, % Uncertain, % %

Biotechnology 44 12 22 22 100

Electronics/

Photonics 41 23 0 36 100

Information

Technology 61 9 0 30 100

Manufacturing 44 22 6 38 100

MaterialsChemistry 36 13 24 27 100

All 46 14 12 28 100

Note: Revenue activity includes use of new manufacturing processes for reducing

production costs.

Source: Data are from the ATP Business Reporting System for projects funded between 1993

and 1998.

This preliminary analysis strongly suggests that a large portion of the

commercialization activity in all technology areas occurs, or at least begins,

by two to three years after ATP funding ends. Nearly nine out of ten

Information Technology participants who still expected to commercialize

their ATP-funded technology had already done it. Two out of three

electronics/photonics participants who still expected to commercialize had
done it. In both areas, no further new commercialization was expected

after the next two years. Biotechnology and materials-chemistry

participants, on the other hand, expected considerable new activity in the

next two to ten years. Over one in three electronics/photonics and

manufacturing participants no longer expected any revenues at all or were

very uncertain as to their timing. 

In general, the pattern is consistent with the results presented in the body

of the study. Information technologies and electronics/photonics

technologies either commercialized quickly or not at all. Biotechnologies

had considerable early commercialization activity for at least some types of

applications, but many companies saw a long window of opportunity and

commercialization timeline. The number of data points was small for

manufacturing participants; however, it appears that there were a large

number who had cancelled plans to commercialize. Additional

investigation is needed to determine the reasons, but it may be that the cost

targets were not met or had shifted so that the technologies developed with

ATP funding were not deemed commercially viable.

Note that this analysis was conducted by summarizing activity by project

participant rather than by individual commercial applications, as was done

in the Baseline-Close-out comparisons. By two to three years after ATP

funding ends, markets have changed substantially since Baseline reports

were submitted. Therefore, the Post-project Surveys do not specifically

relate applications reported in the Post-project Survey with those reported

at the start of the ATP project. Nevertheless, the distribution of

applications by type (product, service, or process) was similar for the Postproject, Close-out, and larger body of data. Considerable application-level

information is available in the Post-project Surveys and should become

part of future analyses.

Finally, we considered whether the ATP project participants were satisfied

with their progress towards commercialization—that is, to what extent

they felt progress had met their expectations at that point in time. We

examined responses to the following question:

• Overall, to what degree have your organization’s business goals for the

ATP project at this point in time been achieved? Would you say you have:

Response choices:

• Achieved beyond your goals?

• Achieved your goals?

• Achieved less than your goals?

• Don’t know.

Appendix. Actual versus Expected Commercialization Timeline: Preliminary Results 47
Results can be summarized as follows:

• 11% had exceeded their business goals.

• 24% had achieved their business goals.

• 65% had failed to achieve their goals.

Reasons for failure to acheive goals were quite evenly spread across a

variety of business and technical factors.

Although the Close-out Reports had indicated that the timing of initial

revenue activity had exceeded expectations, the pace seemed to slow down

after ATP funding ended. Cumulative commercial activity for most project

participants was somewhat less than expected by two to three years after

ATP funding ended. Looking at the data from the ATP-funding period

(Section IV) together with the Post-project data, 66% of companies

expected revenues from at least one application within two years after

ATP; however, only about 54% of the companies in the Post-project group

had achieved commercialization by two to three years after ATP. Of the

remainder, half still expected to earn revenue (most in the next two years);

the other half apparently had largely given up hope. Sixty-five percent

reported they had failed to achieve their goals for this point in time.

Are expectations about commercialization patterns of ATP projects being

met? Significantly more data are needed, both aggregate and by technology

area, to answer this question. For example, the Post-project data available

reflected a much larger percentage of smaller, single-company projects than

the data set used in the body of the study. Furthermore, the data presented

in this study do not address the magnitude of commercialization efforts or

actual benefits to the ATP-funded organizations or the nation. 

Given the risky nature of ATP projects, and the relatively long timelines to

commercialization, not all projects will be successful in accomplishing the

technical goals needed to achieve maximum economic impact. For many,

substantial technical barriers remain after ATP funding ends. Those that do

meet their technical goals will face business hazards during the long

planning and development period—hazards that may force them to miss

the market window of opportunity. 

The early data suggests that a large proportion of the projects that will

ultimately achieve commercialization will do so, for their initial

applications, within two to three years after ATP funding ends. The

momentum of some project participants will continue along longer time

paths. Two to three years after ATP funding ends, a significant number will

have dropped plans for their ATP-funded technologies or are highly

uncertain about them. 

48 Different Timelines for Different Technologies
Overall, the emerging patterns of actual commercialization are consistent

with expectations about timing of commercialization presented in the body

of the study. Further studies will examine whether the different trajectories

for different technologies, and associated commercialization strategies and

objectives, remain consistent with the innovation life-cycle model over the

longer term. 

Appendix. Actual versus Expected Commercialization Timeline: Preliminary Results 49

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References 53

ABOUT THE ADVANCED TECHNOLOGY PROGRAM

The Advanced Technology Program (ATP) is a partnership between government and private industry

to conduct high-risk research to develop enabling technologies that promise significant commercial

payoffs and widespread benefits for the economy. The ATP provides a mechanism for industry to

extend its technological reach and push the envelope beyond what it otherwise would attempt. 

Promising future technologies are the domain of ATP:

• Enabling technologies that are essential to the development of future new and substantially

improved projects, processes, and services across diverse application areas;

• Technologies for which there are challenging technical issues standing in the way of success;

• Technologies where the development often involves complex “systems” problems requiring a

collaborative effort by multiple organizations; and

• Technologies that would go undeveloped and/or proceed too slowly to be competitive in global

markets without ATP.

The ATP funds technical research, but it does not fund product development. That is the domain of

the company partners. The ATP is industry driven, and that keeps it grounded in real-world needs.

For-profit companies conceive, propose, cofund, and execute all of the projects cost-shared by ATP. 

Smaller companies working on single-company projects pay a minimum of all the indirect costs

associated with the project. Large Fortune 500 companies participating as a single firm pay at least

60% of total project costs. Joint ventures pay at least half of total project costs. Single-company

projects can last up to three years, and joint venture projects can last as long as five years.

Companies of all sizes participate in ATP-funded projects. To date, more than half of the ATP

awards have gone to individual small businesses or to joint ventures led by a small business. 

Each project has specific goals, funding allocations, and completion dates established at the outset.

Projects are monitored and can be terminated for cause before completion. All projects are selected

in rigorous competitions that use peer review to identify those that score highest against technical

and economic criteria. Contact ATP for more information:

• On the Internet: www.atp.nist.gov

• By e-mail: atp@nist.gov

• By phone: 1-800-ATP-FUND (1-800-287-3863)

• By writing: Advanced Technology Program, National Institute of Standards and Technology, 

100 Bureau Drive, Stop 4701, Gaithersburg, MD 20899-4701

ABOUT THE AUTHORS

Jeanne Powell is Senior Economist and Group Leader in the Economic Assessment Office, ATP,

where she develops and implements data collection and metrics systems for ATP’s program

evaluation plan. She developed ATP’s Business Reporting System and has published a number of

reports of ATP progress, including Development, Commercialization, and Diffusion of Enabling

Technologies: Progress Report (2000), and Business Planning and Progress of Small Firms Engaged

in Technology Development Through the Advanced Technology Program (1999). Her previous

experience includes private practice as a Certified Public Accountant (CPA), Professor of Economics,

Business Statistics, and Accounting at Montgomery College, and government economics positions. 

Francisco Moris is currently an economist with the Division of Science Resources Statistics,

National Science Foundation, where he supports NSF’s statistical and analytical efforts, including

the biennial Science and Engineering Indicator’s Report. Prior to joining NSF, he was a member of

the staff of the Economic Assessment Office, ATP, where he performed the work contained in this

study. Previous to that he was an economist with the Congressional Research Service and Bureau of

Labor Statistics. In addition to degrees in Chemistry and Economics, he is currently completing

graduate work in the International Science and Technology Policy Program at George Washington

University.