Table Of ContentTECHNOLOGY
COMMERCIALIZATION
TECHNOLOGY
COMMERCIALIZATION:
DEA AND RELATED ANALYTICAL
METHODS FOR EVALUATING
THE USE AND IMPLEMENTATION
OF TECHNICAL INNOVATION
Edited by Sten A. Thore,
Gregory A. Kozmetsky Centennial Fellow Emeritus, IC2 Institute,
The University of Texas, Austin
Former Chair in Commercialization ofScience and Technology,
Instituto Superior Tecnico, Lisbon
Springer Science+Business Media, LLC
Library of Congress Cataloging-in-Publication Data
Thore, Sten AO.
Technology commerciaIization : DEA and related anaIyticaI methods for evaIuating the
use and implementation oftechnicaI innovation / Sten A Thore.
p.cm.
Includes bibligraphicaI references and index.
ISBN 978-1-4613-5345-4 ISBN 978-1-4615-1001-7 (eBook)
DOI 10.1007/978-1-4615-1001-7
1. TechnologicaI innovations--EvaIuation. 2. TechnologicaI innovations--Management.
3. Data envelopment anaIysis. 1. Title.
HC79.T4+
2002022123
Copyright © 2002 Springer Science+Business Media New York
OriginaIly published by Kluwer Academic Publishers in 2002
Softcover reprint of the hardcover 1 st edition 2002
AH rights reserved. No part ofthis work may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, microfilm ing, recording, or otherwise, without the written
permission from the Publisher, with the exception of any material supplied
specificaHy for the purpose of being entered and executed on a computer system,
for exclusive use by the purchaser of the work.
Permission for books published in Europe:
Contents
Foreword: Technology Choices and The New Discipline of
Technology Commercialization. By Robert Ronstadt xi
Acknowledgements xv
Prologue 1
PART I: COMMERCIAL PRIORITIES
Chapter 1. Tutorial. The Many Dimensions of an R&D Project:
Multi-Criteria Analysis. By C. Bana e Costa and S. Thore 23
Chapter 2. Using Frontier Analysis to Rate the R&D Projects of a
Commercial Corporation 45
EDITORIAL INTRODUCTION 45
RESEARCH PAPER: Prioritizing a Portfolio of R&D Activities,
Employing Data Envelopment Analysis.
By S. Thore and G. Rich 53
Chapter 3. The Life Cycles of Sales and Profits: Dealing with the
Uncertainties of the Commercialization Process 75
EDITORIAL INTRODUCTION 75
Vl
RESEARCH PAPER: Prioritizing R&D Projects in the Face
of Technological and Market Uncertainty:
Combining Scenario Analysis and DEA.
By S. Thore and L. Lapao 87
Chapter 4. Investment Policies by Venture Capital Firms and
Government Development Foundations 105
EDITORIAL INTRODUCTION 105
RESEARCH PAPER: Applying Data Envelopment Analysis to
Evaluate the Efficiency of R&D Projects - -
A Case Study of R&D in Energy Technology.
By B. Yuan and J.-N. Huang 111
Chapter 5. Rating Academic Research 135
EDITORIAL INTRODUCTION 135
RESEARCH PAPER: Controlling the Efficiency of University
Research in the Netherlands.
By T. Garcia Valderrama and T.L.C.M. Groot 147
Chapter 6. Rating R&D Stock 183
EDITORIAL INTRODUCTION 183
RESEARCH PAPER: Pricing IPOs, Using Two-Stage DEA to Track
their Financial Fundamentals. By C. Abad and S. Thore 197
Chapter 7. Monitoring the Dynamic Performance of a Portfolio
of R&D Projects over Time 227
EDITORIAL INTRODUCTION 227
RESEARCH PAPER: Evaluating a Portfolio of Proposed Projects,
Ranking them Relative to a List of Existing Projects.
By S. Thore and F. Pimentel 233
Chapter 8. R&D Budgeting: Assessing the Efficiency of
R&D Projects in the Presence of Resource Constraints 247
vii
EDITORIAL INTRODUCTION 247
RESEARCH PAPER: On the Ranking of R&D Projects in a
Hierarchical Organizational Structure subject to Global
Resource Constraints. By B. Golany and S.Thore 253
PART II ENVIRONMENTAL CONCERNS 275
Chapter 9: Tutorial. The Environmental Impact of New Products.
By S. Thore and P. Ferrao 277
Chapter 10: A New Mathematical Programming Format for
Activity Analysis and the Life Cycle of Products 291
EDITORIAL INTRODUCTION 291
FIRST RESEARCH PAPER: Activity Analysis with Environmental
Variables and Recycling: An Example from the Portuguese
Bottled Water Industry. By S. Thore and F.M. Freire 301
SECOND RESEARCH PAPER: Life Cycle Activity Analysis:
A Case Study of Plastic Panels. By F. Freire, E. Williams,
A. Azapagic, R. Clift, G. Stevens and W. Mellor 323
Chapter 11. Ranking Commercial Products with Harmful
Environmental Effects 353
EDITORIAL INTRODUCTION 353
RESEARCH PAPER: Using DEA to Rank the Performance of
Producers in the Presence of Environmental Goals.
By S.Thore and M. Freire 363
Appendix. The Mathematics of Data Envelopment Analysis 385
Index 407
Contributors
Cristina Abad is a Ph. D. student at the Department of Accounting and
Finance, University of Seville. E-mail:
x
Tom L.C.M. Groot is a Professor at the Vrije University, Amsterdam,
The Netherlands. E-mail:
Foreword
TECHNOLOGY CHOICES AND THE NEW
DISCIPLINE OF TECHNOLOGY
COMMERCIALIZATION
by Robert Ronstadt, The Ie2 Institute,
The University of Texas at Austin, www.ic2.org
You won't read about it in the Sunday Times, but I'm predicting that the
application of Data Envelopment Analysis (DEA) will be seen in the years
ahead as a major achievement in the history of technology
commercialization.
If you're reading this book, you probably know that DEA means
something other than the Drug Enforcement Agency. But just in case ...
DEA is a statistical methodology that permits the setting of commercial
priorities while taking into account a wide array of factors where outcomes
are calculated against a "frontier or best practice," as oppose to some
statistical average. For those of you who never resonated to statistical
regression, DEA is much more palatable. Think of it as "progressing to an
optimum, versus regressing to a mean." Who wants to be "average,"
anyway?
xu
Certainly, the authors don't. Led by Senior IC2 Fellow, Sten Thore, they
have produced a book that shows how to apply theory to difficult real world
problems. In the process, they've enriched a stream of seminal research
2 2
started by IC Fellows, Bill Cooper and Abe Charnes over 20 years ago. IC
Institute has regularly supported the early theoretical work and the
subsequent applications work of DEA over the last two decades. We've
done so because we believed this work has the potential to improve the
efficacy of: I) national and corporate research laboratories; 2) university
research investments; 3) venture incubator portfolios; 4) venture capital
portfolios; and, in fact, any portfolio where choices must be made about
capital allocations.
In fact, this array of applications is telltale. They reveal that this
extremely readable book is more than one more step in the arduous journey
to quantifY research and development (R&D) projects. Despite the
limitation of the book's subtitle, Technology Commercialization is much
more. From my perspective, this book is part of a larger movement whose
outline is now barely visible on the horizon, a movement whose goal is more
than the demonstration of a new quantitative technique, but part of an effort
to create an entirely new discipline around a critical wealth producing
process known as technology commercialization.
What is technology commercialization? Technology commercialization
can be defmed simply as "the movement of ideas from the research
laboratory to the market place." The value of this simple defmition is its
ease of understanding. People can be perplexed about "technology
commercialization," but they generally comprehend that the "lab to market"
description implies a conversion of ideas into products and services. Also,
it's easy to expand this defmition to be more precise about the starting and
ending points of the technology commercialization process. For instance, a
more realistic starting point sees technology commercialization commencing
at the very moment of ideation versus some laboratory workbench... and
ending at that point when a venture actually creates real wealth.
These latter stipulations aren't just semantics. The recent dot.com
bubble illustrates how new businesses can reach the market place, even go
public, without creating real wealth. And breakthrough ideas are just as
likely (perhaps more likely) to hit us after a good night's sleep, or in the
shower, versus at some research laboratory.
Why are applications of DEA important? History shows us the
discovery of new scientific tools often opens the floodgates of scientific
breakthroughs and eventually commercial application. F or instance, many
scientific theories and new technologies would never have seen the light of
