Application of Knowledge Management for Research Commercialization
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1 Application of Knowledge Management for Research Jahangir Yadollahi Farsi, and Kambeiz Talebi Abstract In the knowledge based economy knowledge-based businesses are the main drivers of economic growth. In the new economy universities are encountering radical changes. Their roles are changed because of emerging new community needs. To cope with new missions universities made dramatic changes in their educational and research procedures. Entrepreneurial university is a good concept to introduce the transformed universities. In this university research commercialization and technology transfer are the core activities of an entrepreneurial university. To be effective in these processes universities needs an appropriate knowledge management. Knowledge management can be defined as the task of developing, shearing, and exploiting a university s tangible and intangible knowledge assets. Tangible assets include knowledge systems and the outputs of academic researches such as technologies, patents and market information. Intangible assets include the competencies and knowledge resources of human capital within the university. Knowledge management refers to the activities of university aimed at creating an intelligent enterprise, which is able to leverage upon its tangible and intangible assets, to learn from past experiences, act as a knowledge-based business. At the people level, KM centers on the competencies and learning abilities of faculty members and students. At the university level, KM puts emphasis on the creation, utilization and development of a university s business intelligence. In this paper our objective is to discuss commercialization issues in universities and propose an appropriate model of knowledge management which enables the university to be effective in commercialization opportunities. Based on the proposed model universities should develop their entrepreneurial capabilities. Keywords Knowledge based businesses, Knowledge management, Research commercialization, process, Academic entrepreneurship. I. INTRODUCTION NIVERSITIES experienced dramatic changes during 20 U century. They passed two revolutions until now. The First was from Education University to research University and the third was from research to Entrepreneurship University. In the third generation, the development and transmission of knowledge-based innovations has been seen as a central function and responsibility of universities. While many universities today still retain their role as the educational institution, the critical function of universities has increasingly taken on a more developmental role in terms of Jahangir Yadollahi Farsi, Ph.D, and Kambiz Talebi Ph.D are with University of Tehran, Faculty of Entrepreneurship, Tehran, Iran ( jfarsi@ut.ac.ir). staying adaptive in a rapidly evolving techno-economic environment. The push for higher education to become adaptive to the changing needs of society was highlighted by many authors. This call for higher education relevance arose out of various drivers and trends in the transition towards a knowledge-based economy. In this paper, we try to illustrate the applicability of knowledge management to higher education institutions with special reference to university research commercialization then argue that knowledge management concepts and tools can indeed benefit and have the potential to advance and promote research commercialization in the university. In the next section the concept of academic entrepreneurship introduced, then research commercialization process and application of knowledge management in research commercialization discussed and finally a knowledge management model for research commercialization proposed. II. ACADEMIC ENTREPRENEURSHIP In the knowledge-based economy, universities are encountering dramatic changes. Their missions and functions are changed because of emerging new expectations, new needs, competing markets for innovative knowledge and technology production and the assimilation of information technology into the university environment. The dynamics and conduct of university researches, in particular, has correspondingly become more sensitive to industry collaboration opportunities, commercial, and is increasingly inter disciplinary. The issue of university researches commercialization has received great attention over the past 3 decades. In the scholarly debate, there is an increasing interest in academic researches to analyze the process of academic involvement into commercialization and its economic and social consequences. A few studies document the success of academic entrepreneurs, both when they start their own businesses and when they collaborate with existing firms (Zucker and Darby 1995, Cockburn and Henderson 1998, Nerkar and Shane 2003, Rothaermel and Thursby 2005). Academic entrepreneurship activities includes: Industry-university collaborations, university-based venture funds, universitybased incubator firms, startup founding by academicians, double appointments of faculty members in firms and academic departments, technology transfer etc. This definition of entrepreneurial University is the same as of academic 451
2 entrepreneurship wnichused by authors, such as Henrekson and Rosenberg (2000) and Franklin et al. (2001). Other evidence shows that commercial ventures involving academic scientists are often not successful (Lerner 2004, Lowe and Ziedonis 2005). Despite the vast attention directed toward the issue, the state of the debate is still incomplete. This analysis helps reconciling the contrasting evidence on the outcomes of the commercialization of academic research, as well as the arguments in favor and against the academic involvement into commercial activities. We can define academic entrepreneurship as entrepreneurial activities in university which aims to more University participation in economic development, funding the university with its own activities such as research commercialization and technology transfer and enterprise development. III. THE COMMERCIALIZATION PROCESS Research commercialization is core in academic entrepreneurship and developmental roles of Universities. is the process of introducing a new product into the market (Wikipedia, the free encyclopedia). is often confused with sales, marketing or business development. The process has three key aspects: 1. The opportunity. It is essential to look at many ideas to get one or two products or business that can be sustained long-term. 2. The process. It is a stage-wise process and each stage has its own key goals and milestones. 3. The support community. It is vital to inform key stakeholders early, including customers. is an ongoing process from mind and creativity to innovation and then to market [Jolly]. A product will only be successful, if the following seven questions could be answered in advance: Why, what, when, where, to whom, how, who. Why, refers to the opportunity which is the target of commercialization. What, refers to the product idea that is suitable for the opportunity. When, refers to the time of introducing new product to market. Where, refers to the locations of new products launching. The university has to decide where to launch its products. It can be in a single location, one or several regions, a national or the international market. This decision will be strongly influenced by the university s resources, in terms of technology, capital, managerial confidence and operational capacities. To whom, refers to the target market segments. The university has to decide who their primary target consumers are. In this way it can concentrate its distribution and promotion resources. The primary target consumer group will have been identified earlier by research and test marketing. This primary consumer group should consist of innovators, early adopters, heavy users and/or opinion leaders. This will ensure adoption by buyers in the market place during the product growth period. How, refers to the operational processes. The university has to decide on an action plan for introducing the product by implementing the above decisions. It has to develop a viable marketing mix, create a respective marketing budget and prepare a good project plan. Who, refers to the human resources needed in each operation in each stage of the process. The university has to decide on a good organization and team building. In this decision multi disciplinary and inter disciplinary approach should be dominant. Universities involve in research commercialization in order to: Protect and license university-owned intellectual property? Enable and attract more sponsored research funding? Purely generate income by licensing and other IP commercialization? Gain reputation and recognition for the institution, faculty or administration? Attract new and more entrepreneurial faculty? Create jobs for graduates, consulting and research opportunities for faculty? Create new incentives for individual inventors? Facilitate the creation of new or start-up businesses and jobs based on University intellectual property? Stimulate cluster and regional economic growth? Develop science parks and incubators? Disseminate university expertise embodied in IP generation to society? process starts from entrepreneurial opportunity recognition then go to basic and applied research with creativity which result innovation. The innovation in products, processes, methods and etc. go to market entrepreneurially. Entrepreneurship and commercialization is the final stage in commercialization process. At this Final stage University should decide on the commercialization strategy. The main strategies are: start-up by University Members, Licensing or a combination of the two. In the commercialization process there are many players from university Faculty and research members to R&D centers, industries, Funding agencies and private sector. 452
3 IV. ACADEMIC ENTREPRENEURIALCAPABILITY The process from scientific research and technology development to product commercialization is, in essence, a wealth creation process. University research commercialization is a process to commercialize new knowledge and technologies. This process transforms research results into new products, goods and services that create value. This transformation requires an "Academic entrepreneurial capability" (AEC) that has three components: 1- Systems and process capabilities such as knowledge management system, human resources management system, commercialization system, educational and research processes. 2- Structural capabilities: units such as: market research, technology transfer, incubator, venture financing, intellectual property protection and environmental scanning. 3- Member's capabilities such as entrepreneurial skills, entrepreneurial attitudes, learning culture, entrepreneurial intention and entrepreneurial culture. These capabilities should enable the university in: - Entrepreneurial Opportunity recognition. - Innovation and new product development - New product commercialization Academic entrepreneurial capability classified as: Systems capability such as: knowledge management system, human resources management system and commercialization system. Structural capabilities such as: market research, technology transfer, incubator, venture financing and intellectual property protection. Member's capability such as: entrepreneurial skills, entrepreneurial attitudes, learning culture, entrepreneurial intention and entrepreneurial knowledge culture. Enhancing an Entrepreneurial-Knowledge Culture An effective knowledge culture is a key knowledge management enabler. While technology is important in facilitating knowledge management, it is the people who, if they are willing to share and participate in various knowledge exchanges, can create an ideal environment and culture for knowledge and innovation to thrive. An effective knowledge management process within the university revealed that engaging in knowledge sharing would help faculty members to avoid costly mistakes, make innovation easier, save time and make more informed decisions with the inputs from colleagues As universities thrive to stay relevant in a knowledge society characterized by the emergence of new knowledge markets and the entrance of new market players, knowledge management in higher education is becoming a vital competitive weapon. Besides the application of knowledge management to competitive strategy (Pornchulee 2001), the university s research process represents a key area which can be enhanced through the application of knowledge management (Kidwell, Linde & Johnson 2000). Knowledge management can be defined as the task of developing and exploiting a university s tangible and intangible knowledge resources. Tangible assets include the outputs of research teams, student s researches, strategic information about customers, suppliers, products, competitors and environmental trends. Intangible assets include the competencies and knowledge resources of human capital within the university. KM refers to the university strategies aimed at creating an intelligent enterprise, which is able to leverage upon its tangible and intangible assets, to learn from past experiences, whether successful or unsuccessful, create new knowledge and technologies and exploit market opportunities. At the people level, KM centers on the competencies and learning abilities of research teams, faculty members and students. At the university level, KM puts emphasis on structural capabilities and the creation, utilization and development of a university s business intelligence. In terms of technology, effective KM requires an efficiently organized and relevant communication and information infrastructure. Universities progress from simple KM activities such as capturing existing knowledge to more sophisticated and complex ones such as the continuous learning and creation of new knowledge. Core business driven knowledge processes of the KM include: capturing knowledge; sharing knowledge, creating new knowledge and innovative new product development or creating new technology. Knowledge management-commercialization interface Knowledge Management process and Research commercialization process are inter-related and have interactive, supportive and complimentary nature. The interaction between these two processes can be seen in Table I. Applying Knowledge Management in University Research Knowledge management (KM) practices and tools can support universities in addressing these demands. Universities can benefit from KM by creating and maintaining relevant knowledge repositories, improving knowledge access, enhancing the knowledge environment, valuing knowledge and applying knowledge in market oriented activities. 453
4 TABLE I THE INTERACTION BETWEEN KM PROCESS AND RC PROCESS Knowledge Related management process process Market research and opportunity recognition Opportunity assessment and selection Identification of need for knowledge Collection and storage, Organize, retrieve Retrieve, sharing and questions Why Why Idea processing creation What Feasibility study Prototyping Identification of needs, collection and Sharing and Where, How, What Market test Collection and storage To whom, What Business planning Start-up or transfer of technology / know how feedback Collection, sharing and Organize, retrieve, sharing and Identification of need for knowledge When, Where, How, Who To whom, How An Appropriate KM Model for Research To propose an appropriate KM model for research commercialization we should combine KM process with research commercialization process while take attention to academic entrepreneurial capability. In this model there are 5 components: Academic entrepreneurial capability, inputs, processes, outputs and Feedback loop. V. CONCLUSION Universities are the dominant players of the thriving knowledge business as their core activities. These activities are associated with knowledge creation, dissemination and learning. Like Former Authors such: Rowley (2000), Drucker and others who have predicted that the brick and mortar institutions of higher education will cease to exist in the future due to their inability to reinvent themselves and to catch up with more intelligent, knowledge-creating organizations such as professional consulting firms, we are confident that by academic entrepreneurship and research commercialization, universities will live up to the challenge and could become smart organizations with the help of KM. To become a KMenabled organization and to implement a KM-led research focus, following results will have to be achieved: First, universities should continue to promote and cultivate a knowledge-sharing culture among its members so as to enable and support the exchange of tacit knowledge between individuals and groups/teams. All University s supportive knowledge-sharing culture will allow its members to share information and knowledge openly, to learn from each other and the past, to act as mentors and to grow professionally. Ideally, internal knowledge-sharing should be proclaimed as an organizational value by universities. Barriers and challenges that need to be addressed in this area include faculty member's motivation to be a member of a knowledge system and how tacit knowledge can be captured and shared. Second universities should develop knowledge system and entrepreneurial capabilities in the university s structures, educational and research processes and it s members. To sum up, the university community and its major stakeholders stand to gain from research commercialization through effective knowledge management and the further development of entrepreneurial and knowledge sharing culture. Also support and allocation of sufficient resources, suitable organizational structures, and supportive human resources systems such as reward system is very important in commercialization effectiveness. REFERENCES [1] Bert L. Wolstein; written with Adam Synder (2005). Crossing the Road to Entrepreneurship. (Solon, OH: Heritage Development Company, 270 p.). Wolstein, Bert L.; Developers Diversified Realty [2] Evers, H. D. (2003) Transition towards a Knowledge Society: Malaysia and Indonesia in Comparative Perspective, Comparative Sociology, 2, 2, pp [3] Fuller, S. (2002) Knowledge Management Foundations. Boston & Oxford: Butterworth Heinemann. [4] Gibbons, M. (2000) Universities and the New Production of Knowledge: Some Policy Implications for Government, in: Kraak, A. (ed) Changing Modes. Cape Town: Human Sciences Research Council Publishing. [5] Kidwell, J., Linde, K. & Johnson, S. (2000) Applying Corporate Knowledge Management Practices in Higher Education, Educause Quarterly, 4, pp [6] Kotler, P. et al. (1996): Principles of Marketing; Fourth European Edition Prentice Hall; Harlow (UK) [7] Lester, R Universities, Innovations, and the Competitiveness of Local Economies. MIT Industrial Performance Center Working Paper , Cambridge, MA. [8] Liebowitz, J. (2000) Building Organizational Intelligence: A Knowledge Management Primer. Boca Raton: CRC Press. [9] Nabeshima, K University-Industry Linkages in Asia. World Bank,Washington, DC. [10] National Academy of Science USA (2005) Facilitating Interdisciplinary Research National Academies Press Washington USA [11] National Commission on Entrepreneurship (2001) Report on NCOE, Kennedy School Conference on Entrepreneurship and Public Policy: New growth strategies for the 21st Century. NCOE Update. No. 28. April. pp 1-4. [12] Mendes, T, Estabrook, L, Magelli, P., and Conlin, K. (2006) How academics really view entrepreneurship and Entrepreneurial behavior, University of Illinois USA [13] Menzies, T. V. and Gasse, Y. (1999) Entrepreneurship and Canadian Universities.Brock University and Universite Laval, Canada. [14] OECD (2000) Knowledge Management in the Learning Society. Paris: OECD [15] Rowley, J. (2000) Is Higher Education Ready for Knowledge Management?, The International Journal of Educational Management, 14, 7, pp [16] Wade, N. (1984) The Science Business. Report of the twentieth Century Fund Task Force on the Commercialisation of Scientific Research, Priority Press, New York 454
5 Academic entrepreneurial Systems and processes Structural capabilities Member's capability Inputs Information embedded in: Customers Macro environment Industry Market players Best practices performance Leader s expectations National law Community needs Stakeholders needs and wants Processes KM functions: Identification of needs Collection and storage Update Retrieve Sharing Creation Exploitation Commercializatio n: Opportunity recognition Feed Outputs Academic entrepreneurs hip: Entrepreneuri al capability Knowledge based enterprises New ideas New technologies New knowledge New know Jahangir Yadollahi Farsi Ph. D in Management, Dec, 2001 School of management, University of Tehran, Tehran, Iran Concentration: Systems Management Dissertation: Adaptive Goal Programming for Resources Allocation in Fuzzy Systems Chairman of Entrepreneurship department School of Management, university of Tehran, Tehran, Iran 2003-Present Specialist on Planning Teaching Entrepreneurship Research Methods School of Management U. O. T., Tehran, Iran, 2003-present. Business planning School of Management U. O. T., Tehran, Iran, 2003-present present Entrepreneurship Theories Kambeiz Talebi Assistant Professor, Dean s Senior Consultant in International Relations, Faculty of Entrepreneurship, University of Tehran, Tehran, Iran. Bs. in Physics, University of Pune,Pune, India. Ms. in Industrial Engineering, University of Pune. PhD. in Industrial Management (Entrepreneurship and Innovation) Two Publications on Entrepreneurship and Innovation. About 50 papers contributed to national and international conferences. 455
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