Challenges and Opportunities for Innovation in the Public Works ...

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To a substantial degree, the particular structure that is utilized to achieve commercialization affects the nature and degree of the risks and benefits to the institution. There are three general models for institutional involvement in the commercialization process: direct commercialization, commercialization through a related entity and commercialization through a joint venture, typically involving what are referred to as "spinoff' or "spin-out" companies. It is important to note that there do not exist clear distinctions between these models: commercialization through a related entity or direct commercialization may also involve joint ventures with other entities, as well as the involvement of outside sources of capital and debt. The relationship of the institution to the commercial venture, and to its partners and investors, significant affects the exposure of the institution to the attendant risks. The interposition of a subsidiary or related entity can to varying degree depending on the specific circumstances limit those risks, but they cannot be altogether eliminated: as stated in the introductory section, there is no free lunch. It is immutable that the price of an increased share in the value-added of the discovery is an increased share in the risks. However, the relationship is not linear: an institution can significantly increase its share of the benefits without an equal increase in its exposure through the use of sophisticated structuring of the transaction as well as the appropriate application of risk control and loss shifting techniques. Conversely, the failure to carefully structure the transaction, and to diligently apply risk control and loss shifting devices can easily result in a significant increase in institutional exposure without an attendant increase in benefit. In all cases, however, the nature of the transaction drives the risks and the benefits, which in turn requires that the entirety of the transaction be designed and implemented with both great care and an understanding of all of its implications. 1. Direct commercialization. An agency or institution can simply establish a manufacturing and marketing arm to bring a discovery into the stream of commerce. Such an approach certainly reduces any sharing of value with outside entities, except to the extent that the institution must go to the capital marketplace for financing and to outside entities for marketing and other services. However, it bears with it not only very substantial financial potential but also very significant risks. The obvious advantage is that all of the profits are retained by the institution and the investigator. The disadvantage is that the risks that ordinarily attend the commercialization of a discovery are firmly rooted within the institution. While most administrators express horror at the idea of engaging in direct commercialization activities, such efforts are in fact common, albeit on a limited scale: for example, research laboratories often fashion a limited number of pieces of sophisticated equipment and instrumentation developed by its researchers and sell them to other institutions, government agencies and commercial entities. Despite the limited number of production units, this is indeed direct commercialization, with all the attendant risks. There are many other examples of institutional "industries," some of the most venerable having been embedded within agriculture programs. 1 86
This approach has the following attributes: Value for capital formation:High. Commercialization flexibility: Very high. Benefit to the institution: Potentially very high. Benefit to the investigator: Varies, but usually high. Administrative burden: Extremely high. Institutional risk control: High. Institutional exposure to fiduciary liability: Very high. Institutional exposure to product liability: Very high. 2. Commercialization through a related entity. As an alternative to directly engaging in commercial activity, agencies and institutions have created related entities that assume the commercialization role. These entities are either wholly or substantially owned by the institution, and the net profits of the subsidiary are returned to the institution in , form of dividends or limited partnership distributions. Related entities may be taxable or tax-exempt, and they may be corporations or partnerships. One key advantage of using a related entity for commercialization lies in the greatly enhanced flexibility that operating outside of the institutional framework affords, an attribute that is particularly apparent among public institutions. Such an approach also allows the institution to better direct the flow of revenues and, if the structure is properly designed, to deflect risks from the institution itself. The degree and the effectiveness of the separation between the related entity and the institution will dictate the extent to which the entity actually affords protection against risk exposure. This approach has the following attributes: Value for capital formation: Very high. Commercialization flexibility: Very high. Benefit to the institution: Very high. Benefit to the investigator: Varies, but usually high. Administrative burden: Low to the institution; very high to the related entity. 187
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.. . AD-A281 083 ' US-m op fEomsA -
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CEWRC-IWR DEPARTMENT OF THE ARMY CO
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CONTENTS INTRODUCTION .............
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CHALLENGES AND OPPORTUNITIES FOR IN
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WORKSHOP PRESENTATIONS
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growing threat from major fires, an
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- provide the highest technological
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SEARCHING FOR THE INFRASTRUCTURE OF
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Because of the large investment emb
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Finally, the substantial public wor
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COST-EFFECTIVE INFRASTRUCTURE PERFO
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0 Infrastructure innovation will su
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REFERENCES Balzhiser, R. E. 1989. M
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highways based on this total govern
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important aspect of a nations infra
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Universities Universities face chal
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Table 3. Federal, State & Local - f
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C 0 > Ep - LII> 6- 322 El
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INTRODUCTIO Stone & Webster Enginee
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correct. Conduit is not usually mod
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the duct section. The design of the
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mechanical and structural design. T
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its| ISOC [ FAN OUTLET TO STACK BRE
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Figure 4. Construction Sequence Mod
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Arthur Baskin and Stephen C-Y Lu Ma
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Arthur Baskin and Stephen C-Y Lu 2.
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Arthur Baskin and Stephen C-Y Lu "*
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Arthur Baskin and Stephen C-Y Lu Ex
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Arthur Baskin and Stephen C-V Lu Di
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Arthur Baskin and Stephen C-Y Lu de
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Arthur BasiWn and Stephen C-Y Lu To
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Arthur Baskin and Stephen C-Y Lu Th
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Arthur Baskin and Stephen C-Y Lu co
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Arthur Baskin and Stephen C-Y Lu b-
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Arthur Baskin and Stephen C-Y Lu (1
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Arthur B"sWin and Stephen C-Y Lu (3
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But SHRP's success further undersco
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For all this new Research Activity,
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Technological Advances and Public W
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limits of existing technologies and
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through the formulation of visions
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proposed that it develop a soil com
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of each side, the time for completi
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compensation structure that not onl
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PSOCIETAL NEEDI ICONCEPT DEVELOPM:E
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JAPAN U.S.A. * REASONS FOR RESEARCH
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U.S. PRESSS PROGRAM Executive IwU.
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1. Information is lacking or scarce
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exist, offer explanations of these
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WORKSHOP CHALLENGES AND OPPORTUNITI
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Table 1, Ranking of Agencies or Gro
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From the overall study, three gener
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3. INTRODUCTION The Nation's infras
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A group of recognized experts on is
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abound to the point where I have op
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Is the bottom line that the first b
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SUPPLY DEMAND Provider of Public Wo
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The GFRC has assisted other federal
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Financial Sources - - The Intergove
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constraint upon state and local gov
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To understand the implications of t
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Intergovernmental Sources of Fundin
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Page 140 and 141: Table I Sources of Funds for State
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Page 144 and 145: equirements of construction; those
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Page 148 and 149: allocate known risks among themselv
Page 150 and 151: outine infrastructure project fully
Page 152 and 153: Innovation and Technology Transfer
Page 154 and 155: Technology Transfer Plan for Each P
Page 156 and 157: The ATLSS Integrated Buildings Syst
Page 158 and 159: Technology Transfer (T) as a Work-P
Page 160 and 161: In the end, one may find that there
Page 162 and 163: different evolutionary stages. Each
Page 164 and 165: References. 1. Bonnett, R. K., 1989
Page 166 and 167: The typical approach for the captur
Page 168 and 169: of loss does exist. Conversely, in
Page 170 and 171: B. LIABILITY ARISING OUT OF NEGLIGE
Page 172 and 173: (or a commercialization entity unde
Page 174 and 175: to properly manage and structure it
Page 176 and 177: While express disclaimers of warran
Page 178 and 179: Each question bears on the degree t
Page 180 and 181: ights to the discovery, indemnify t
Page 182 and 183: 2. Licensing of Discoveries Through
Page 186 and 187: Institutional risk control: High. I
Page 188 and 189: Implementation Innovation Through T
Page 190 and 191: evealing. When categorized into eig
Page 192 and 193: egin development in Fall of '92. Th
Page 194 and 195: Mission Implemrentation of Innovati
Page 196 and 197: Sampling of Products Active Task Fo
Page 198 and 199: Typical Company Product Catalog c P
Page 200 and 201: Cil Education Program Pilot Short C
Page 202 and 203: 10 May 1992 Technology Transfer and
Page 204 and 205: The risk in trying something new ma
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Page 208 and 209: development effort. Developing inno
Page 210 and 211: among potential users, 2) provide i
Page 212 and 213: Jeffrey J. Walaszek USACERL, Public
Page 214 and 215: "O&M Chiefs" fto,, Page i meeting o
Page 216 and 217: Technical Reports - Videos, cont'd
Page 218 and 219: Fort Harrison Expects Quick Payback
Page 220 and 221: Test Water Quality at Minimal Cost
Page 222 and 223: Noise Monitor Helps Installations R
Page 224 and 225: Trenchless Pipe Replacement PIM: Th
Page 226 and 227: PRR-4 Geotextile Applications PRR-1
Page 228 and 229: After addressing these initial matt
Page 230 and 231: Concluding thoughts The chairman as
Page 232 and 233: The APWA has been very successful i
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challenge these constraints for jus
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Group C: Enhancing Technology Trans
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A national catalyst must not be a b
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WORKSHOP AGENDA Tuesday March 3. 19
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Summary of Session C & Group Discus
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infrastructure. He also asserts tha
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alternatives available for funding
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BIOGRAPHICAL SKETCHES APPENDIX C Ar
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Publications include: "The Manageme
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concrete beams. From the American C
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William D. Michalerya William Micha
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Mr. Schilling graduated in 1963 as
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Dr. Walton has been involved in res
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REPORT DOCUMENTATION PAGE 1p Pubkc
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