Innovation and Commercialization

Recently in one of the classroom sessions, we had a wonderful discussion on innovation vs. commercialization of technology. By its virtue of being an MBA classroom, it's more than obvious which one of the two was called to be more important than the other, hence no points in guessing it. The interesting parts were the aspects of commercialization that we came to know during the enriching discussion in the classroom. At the end of the discussion our take away from the session was that innovation without commercialization is like a diamond in a coal mine - hidden beneath the black coal with good intrinsic value but much more potential value. Once the diamond is dug out, polished and put in the market, it’s worth much more than the intrinsic value. In this small piece of writing I would throw some light on the aspects of commercialization that makes it possible.

By innovation we mean a new product satisfying the needs of people not yet being satisfied by any other existing products in the market. Now this is not an easy task and, by its very nature, takes huge amount of time, money and effort. In fact there are hundreds and thousands of such attempts going parallel in and around the world by many people. The total dollar bill incurred by companies indulging in such research activities sometimes runs into millions. But only a very small percentage of such research initiatives result into a successful end product. Once the innovation fructifies and the end result is successful, commercialization is the only way to recover all the investments made during the initial R&D phase. A company may not be ready to invest in any innovation if they are unsure about recovery of their initial expenditure. Commercialization thus works as a booster to innovation.

During production, money needs to be spent in the form of operating expense. The production cost might be exorbitantly high, resulting in high market price, keeping consumers stay away from buying it. Adequate commercialization and higher penetration of the product makes it possible to gain economies of scale thus reducing the price and making the product more affordable to masses. Electricity and Mobile charges in India are prefect examples of diminishing cost of production due to economies of scale.

Innovation is a continuous process. Innovation in a product never ends with a single breakthrough. But for a product to evolve through continuous innovation, it is very important to put it in the hands of the consumers. Unless more and more people use it, give their feedback and suggest ways to improve the product, it may not realise its full potential in catering to the needs of the people. Look at the evolution of mobile operating system Android from Google. Because of it being open source and the freedom for consumers to add newer features to it, today's Android is much better than its initial version. This has been made possible by nothing but commercialization of Android OS.

Then there are unexpected benefits to the product from other products and vice-versa, due to commercialization and larger availability of the product to the masses. When two groups of scientists working separately on two completely different products joined hands together, the camera pill was invented. This pill made it possible for doctors to see through the entire length of the small intestine, notwithstanding its convoluted and complex structure inside the body. This became successful only when two separate groups - one working on Missile technology and the other on medical technology - came together. History is replete with such examples where a technology was benefited due to the fact that other one came out of closet and made itself available to the people at large. Had there been no commercialization of one, the world would never have been benefited by the synergy of the combined product, which many a times is much more valuable that either of them used separately.

As a conclusion I would like to state that innovators and scientists are important for the society, but at the same time we cannot ignore the importance of marketers who commercialise the innovation and help it realise its full potential as a much higher carat diamond.