Commercialisation and Feasibility
Objectives for the Commercialisation and Feasibility report: The aim of carrying out a Commercialisation and feasibility analysis is to identify whether there is a market for the technology itself, or from other technologies, products and services that might be derived from it. The market research should assess the potentially relevant needs, characterised by customer segments and geographical location. The research should also assess the ease of access to the potential market, focusing on the intensity of competition, regulatory and tax barriers, and customer readiness among other factors. The following information should be provided in a market research:
Section A – Market Research
- A thorough understanding of the product/service/technology being proposed by:
- Undertaking a primary market research to understand what the possible applications of the proposed idea might be and in which type of market it would fit. Through such an analysis it is important to capture the potential impact of the new idea to the market, given other new market ideas and existing products / services / technologies on the
- Undertaking an assessment of the perceived differentiating factors and USPs of the product / service / technology. This would enable the establishment of the potential market/markets for the technology, and for products / services / technologies which can be derived from it, categorised in relevant segments for further
- Provision of indications of the potential sizes and growth rates of markets and market segments identified in Step (1).
- Identification of a geographical market.
- Identify the potential for access to the markets and market segments identified, considering regulatory issues, extent of competition and customer
- Capture the relevant technology trends to provide details on how different sectors are investing in technological products; Such trends should seek input from:
· Data from several technology market research reports (depending on the sector) such as Gartner, Forrester, IDC, Hoover’s database of businesses, Ovum, Zenith International as well as industry trade associations; Such sources are being provided only as an example one is free to use other technology market research reports as it deems appropriate.
- Data from online qualified industry surveys, blogs and publications, for sources of news, trends and market information with a declared methodology, such as the US Census Bureau which publishes annual technology surveys; Such sources are being provided only as an example one is free to use other technology market research reports as it deems
- Delineate the potential life cycle of the technology and of derivative technologies/products and services leading to the development of a demand forecast based on sound methodological approaches, including indications of pricing and revenue generation; This should indicate if there is an existing demand or whether it can be
- Document the competitive landscape to identify and recommend target country markets, thus establishing the geographical
- Undertake a risk assessment with respect to the market situation, and how this may impinge upon demand, pricing, and
- Review of the environmental forces (political, economic, societal, and technological) that could influence the success of the product. Identify and quantify barriers to entry and any relevant legislation or
- Market Research should consider gender balance in terms of the end-user of the product or
Section B – Estimation of Costs and revenue generation:
The estimation of costs and revenue generation report should include the cost involved to get the technology being developed onto the market through a defined product / service. Such costing should also cover any technology transfer to be undertaken by the industry acquiring the technology. The following should be covered through the analysis: The identification and estimation of the costs involved in the production and supply of the identified product, service, or technology.
- An assessment of the dependence of such costs on critical factors, such as the use of essential inputs, and transport to different markets, amongst other An identification of direct and indirect, fixed, and variable costs. An analysis of the extent to which unit costs depend on scale of production, including an assessment of the technological likelihood that a minimum efficient scale is achieved.
- The undertaking of a risk assessment to highlight the principal risks to which cost estimates are subject, and their potential
- Where possible, identify the direct costs, which refer to the direct costs involved in the production of the product / service under consideration. Such costs may include material and process selection as well as labour
- Where possible, identify the overhead costs, which refer to the indirect costs that are still related to the cost object, but cannot be directly related to the actual production of the product/service. These may include environmental impact costs and regulatory/certification costs, health and safety costs, water and electricity, general administration costs, quality control, and general maintenance. Overhead costs can be either treated as a lump-sum or else they can be allocated to the products and
- Establish the minimum breakeven level that would need to be achieved to fully absorb the identified fixed
At the end of the exercise, a report including an analysis of market potential and detailed costings including all the costs involved to produce the product/service as a result of the proposed technology should be presented. The report should include a concluding expert opinion on whether the technology proposed is recommended for further considerations or not, thus identifying clearly whether the project proposal should: Proceed to the next step of the Voucher Programme, including technical recommendations for improvement, if any. Be rejected, including the reasons thereto to be communicated with the applicant.
Section C: Financial, economic and welfare assessment
The aim of this analysis is to examine the potential effect of the proposed technology on the local economy. In this regard the financial, economic and welfare analysis should measure the potential effect of the outcome of the technology in terms of changes in economic growth (output or value added) and associated changes in jobs (employment) and income (wages). Thus, this would enable the assessment of the economic potential of that technology by comparing the level of economic activity occurring at a given time with the presence of the technology, compared to what would be expected if the technology were not developed.
Section D: Risk Profile
Risk profiles enable organizations to:
- To determine the critical risks associated with the eventual technology development
- To determine the critical risks associated with the eventual commercialisation and implementation of the resultant product/service
- To determine the level of risk involved if an investor had to make a decision to invest in the research proposal. Risk profiling is necessary to determine if an investment is suitable for an investor or otherwise, as it is a method which is applied to identify the risk involved if one had to undertake such an investment
The risk profile should:
- Identify the drivers and pressures that are likely to constitute sources of risk to the
- Identify, preferably through statistical modelling and analysis, the sensitivity of the project to specific shocks to determine the critical risk
- Identify the probability of risks occurring and the impact should they occur.
- Mitigation plans should also be briefly outlined for each
- Scenario analysis should be undertaken to quantify the effects of pre-determined shocks, and to identify the extent of shocks required to completely remove the benefits of the project. The analysis should focus on single shocks and consider the effects of joint shocks.
At the end of the exercise, a detailed report including all the necessary data and information detailing the incremental effect of the proposed proposal on the local economy and risk register (with risks evaluated as high, medium, or low impact and probability) should be presented. The results should enable a technology development lead and/or an investor to evaluate the risk to which a portfolio is exposed and make buy and sell decisions based on this risk and their willingness to accept risk. In addition, this report should include an expert’s opinion on whether the technology proposed is recommended for further considerations or not, thus identifying clearly whether the project proposal should:
- Proceed to the next step of the Voucher Programme, including technical recommendations for improvement, if
- Be rejected, including the reasons thereto to be communicated with the applicant.
This article was last updated on: July 16, 2021