Direct and Spillover Effects of ATP-Funded Photonics Technologies

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percent thereafter. The pattern suggests that the net social value employment effect of bothfirms is in the same order of magnitude, with a two-year lag for Uniax.Because Uniax technology has not yet entered mass commercial markets, lacking efficientcomplementary manufacturing equipment technologies, and because of the existing fiercecompetition among the 100 or so firms in those markets, there is little additional economicsurplus yet from either price or quantity effects directly stemming from Uniax activities.Future economic surplus directly in these markets, however, may be significant if thepotential discussed above is ever realized, particularly for radical product categories thatflexible displays could enable. We address the broader knowledge spillover effects belowwhile discussing the patent and publication citation analysis.Comparing the two cases, then, both Uniax and Displaytech have created roughly the sameorder of magnitude (low tens of millions of dollars) in total direct economic value from theirtechnologies, well in excess of the federal investments, resulting in similar magnitude NPVs(mid-millions). In both cases, the time-to-mass-market horizon was eight or more years,consistent with ATP’s stated high-risk, long-term mission. ATP investment in Displaytech,based on a proposal from the same award competition as Uniax, accelerated Displaytech’smarket entry by about two years, attracted venture capital, and, along with other federalcontracts in our view, allowed the firm to weather the technology downturn. Uniax survivedwith private equity investments and licensing revenue from large firms and non-ATP federalcontracts. Yet even now, despite DuPont’s resources, mass-market entry for the technologyproposed to ATP remains elusive and lags at least two years behind Displaytech. As acounterfactual exercise, it is difficult to know whether an ATP award would have furtheraccelerated Uniax’s learning curve to commercialization or whether Uniax would have beenable to attract additional equity earlier or in greater volumes.PATENT CITATION ANALYSISCounterfactual problems notwithstanding, a similar time lag between the two cases ariseswhen we turn to patent citations. As shown in Figures 20 and 21, the timing of Uniaxpatents and patent citations follows a remarkably parallel course to Displaytech’s, with abouta two-year delay. The graphs show cumulative patent counts (by patent issue date) andpatent citation counts (by filing date) over time. The rate of Displaytech patenting picks upsignificantly around the time of the 1994 $1.75 million ATP award, and Uniax patentingaccelerates around the time of the 1996 $3 million equity investments by Hoechst andPhilips. Because of the delay between patent filing and issue, in both cases it appears that theinvestments followed successful early technological progress.Turning to the timing of the citations to each firm’s patents, a similar two-year lag appears,as does the pattern of investment following technical progress. With striking similarity inboth cases, the rate of citation picks up well in advance of the cash infusions. Thetechnologies of both firms began attracting notice as revealed through citation by others,which indicates a growing interest in their commercial potential. The revealed technicalsuccess and increasing notoriety precedes (and it seems reasonable to assume is causally58 DIRECT AND SPILLOVER EFFECTS OF ATP-FUNDED PHOTONICS TECHNOLOGIES
FIGURE 20.Timing of Displaytech and Uniax Patents35 35Patent CountPatent Count30252015Post-Post-ATPATPAward AwardPre-Pre-ATPATPAwardDisplaytechDisplaytechUniax1050Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02Patent Issued DatePatent Issued DateFIGURE 21.Timing of Citations to Displaytech and Uniax PatentsCitation Count Count1401201008060Post-ATPAwardAwardPre-ATPAwardAwardDisplaytechDisplaytechUniaxUniax40200Jan-88 Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00Citing PatentFiledDateCiting Patent Filed DateComparison of Displaytech and Uniax 59
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NIST GCR 06-893Direct and Spillover
Page 5 and 6:
AbstractTo evaluate the impact of t
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AcknowledgmentsThis research would
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This report presents the findings f
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6. This case study suggests that ke
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3. Comparison of Displaytech and Un
Page 17 and 18:
1. Introduction and BackgroundThe A
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the Department of Defense (DOD), Na
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Hence, we consider two additional s
Page 23 and 24: area because many photonics technol
Page 25 and 26: FIGURE 2Worldwide Photonics Compone
Page 27 and 28: TABLE 3.Matched Case Study Firms by
Page 29 and 30: 2. DisplaytechINTRODUCTIONIn June 1
Page 31 and 32: significant interest worldwide. The
Page 33 and 34: FIGURE 3Cross-Section of a Ferroele
Page 35 and 36: TABLE 4.Crowded Display Competition
Page 37 and 38: FIGURE 4.Competing Electronic Displ
Page 39 and 40: wafer. For FLC-on-silicon microdisp
Page 41 and 42: FIGURE 5.Within-Market Increase in
Page 43 and 44: FIGURE 6.Estimated ATP Employment E
Page 45 and 46: subtracted the opportunity value of
Page 47 and 48: FIGURE 8.Historic Display Price-Qua
Page 49 and 50: TABLE 6.Estimated Consumer Surplus
Page 51 and 52: TABLE 7.Organizations and Groups Mo
Page 53 and 54: FIGURE 12.Patent Citations to Displ
Page 55 and 56: ColorLink’s pi-cell color switche
Page 57 and 58: FIGURE 14.Geographic Distribution o
Page 59 and 60: competitors, were added by patent e
Page 61 and 62: FIGURE 16.Citations to Displaytech
Page 63 and 64: TABLE 9.Top Organizations and Indiv
Page 65 and 66: FIGURE 19.Corporate Citations to Di
Page 67 and 68: TABLE 10.Corporations Citing Post-1
Page 69 and 70: 3. Comparison ofDisplaytech and Uni
Page 71 and 72: acklights of LCDs; and they are bri
Page 73: which was to give DuPont access to
Page 77 and 78: Table 11. Organizations and Groups
Page 79 and 80: FIGURE 23.Patent Citations to Uniax
Page 81 and 82: In summary, together with Uniax ear
Page 83 and 84: TABLE 12.OLS Regression Results on
Page 85 and 86: FIGURE 26.Corporate Citations to Un
Page 87 and 88: TABLE 13.ContinuedTop 25 Individual
Page 89 and 90: FIGURE 28.Corporate Citations to Un
Page 91 and 92: 4. Findings and ObservationsFINDING
Page 93 and 94: microdisplays. We cannot fully dise
Page 95 and 96: TABLE 15.Publication and Citation R
Page 97 and 98: social ties, distance in the sense
Page 99 and 100: FIGURE 30.Flowchart of ATP Technolo
Page 101: government policies, which establis
Page 104 and 105: • ATP goals inherently involve se
Page 106 and 107: iv. Suppliers. Three or four on who
Page 108 and 109: Business Journal of Phoenix, The (2
Page 110 and 111: Paul, J. (2000), A Brief History of
Page 113: ABOUT THE AUTHORSTodd A. Watkins is
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Direct and Spillover Effects of ATP-Funded Photonics Technologies

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