IPASJ International Journal of Management (IIJM)

Web Site: http://www.ipasj.org/IIJM/IIJM.htm

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Volume 7, Issue 1, January 2019 ISSN 2321-645X

Technology Commercialization Strategy in

Venture Companies in Daejeon
Won Il Lee
Department of Business Administration & Accounting
Hanbat National University, South Korea

ABSTRACT
In this paper, I consider the success factors of venture companies' technology commercialization in Daejeon area. For this
purpose, the concept of technology commercialization and success factors of technology commercialization were examined. As
a practical case study, I reviewed the technology commercialization ecosystem of Daedeok Innopolis, a representative
innovation cluster in Korea, and examined the major factors to consider when promoting technology commercialization. The
technology commercialization strategy for the success of the technology commercialization was derived in the following three
ways. First, it is to establish a systematic technology commercialization strategy based on future technology prospects. Second,
identifying difficulties in technology commercialization for overseas market entry and establishing strategies. Third, the
establishment of a firm open and innovative BM model for technology commercialization. It is necessary to have a corporate
management system that can achieve successful technology commercialization through periodic review of these technology
commercialization strategies.
Keywords: technology commercialization strategy, venture companies, open innovation

1. INTRODUCTION
In today's rapidly changing business environment, new commercial products are rapidly becoming more important
[1]. Companies that strategically promote such technology commercialization will win in a short period of time, but
those that fail to succeed in technology commercialization will disappear by innovation of other companies. [3]. In this
sense, successful technology commercialization is more than just one product winning the market, which is an
important factor in determining the survival of a company. In Daejeon, there are more than 1,100 venture companies.
Daedeok Innopolis is the biggest innovation cluster in Korea. Venture companies are growing with various technical
cooperation activities with universities and research institutes [2]. The technology commercialization strategy that is
considered to be important in venture companies in Daejeon area can be considered from various viewpoints. In this
paper, I consider important factors in the commercialization of venture companies in Daejeon region and consider
strategic directions for the success of these technologies. There are many factors that need to be taken into
consideration when promoting technology commercialization. Among these factors, strategic aspects, foreign market
entry and open innovation aspects are examined. First, the concept of technology commercialization and considerations
for promoting high technology commercialization will be examined from the viewpoint of dominant design,
overcoming of chasm and promising technology commercialization. After that, the ecosystem of technology
commercialization in Daejeon area and the technology commercialization strategy based on it were examined in detail.

2. LITERATURE REVIEW

2.1. Importance of technology commercialization

The current management environment is called the hyper-competitive environment [3]. This hyper-competitive
environment is characterized by a shortened period of stabilization as the process of intensification of competition
rapidly develops, and it is characterized by a very unstable condition beyond the intensity of competition [3]. In the
competition situation, local competition is extinguished, competition intensity is drastically increased, and competition
rules are diversified and continuously destroyed. In addition, the competitive environment is rapidly changing, leading
to extreme uncertainties [3].
The most important cause of the hyper-competition environment is technological innovation. Current technological

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 IPASJ International Journal of Management (IIJM)
Web Site: http://www.ipasj.org/IIJM/IIJM.htm
A Publisher for Research Motivation ........ Email:editoriijm@ipasj.org
Volume 7, Issue 1, January 2019 ISSN 2321-645X

innovation is happening simultaneously in all industries and its cycle is also very short. The current situation is always
the era of technological innovation, and after the IT technology, new BT and NT technologies are emerging and are
converging with the existing industry and developing[3]. Under these extremely uncertain and highly volatile
competition environments, existing competitive advantages may collapse in an instant, and companies that do well may
fall [3], [4]. It is difficult for existing innovation companies to catch up with new technology opportunities in the
framework of existing business operations. However, such opportunities are likely to be captured by new ventures, such
as start-ups [3], [4]. Professor Christensen expressed the difficulties of these existing innovators with the words
"Innovator's dilemma" [3], [4]. Companies that are well-versed in the emerging and industrialized technologies and
adaptation to these changing technologies that are in flux with other technologies and who are good at technology
commercialization will grow[3], [4]. With only a few new technologies and ideas, venture companies emerging as
superpowers in just a few years in the global market are emerging[3], [4]. As such, the current business environment is
in a period of radical change. In this disconnected transition, opportunities for new venture start-ups are widespread,
and through such venture start-ups, existing industries are naturally turning into new industries[5]. In this sense,
professional management of venture start-up, technology commercialization and technology management is very
important and meaningful.

2.2. Concept of technology commercialization

Similar concepts to technology commercialization include product commercialization and technological
industrialization [1], [6]. The concepts of technology commercialization and product commercialization are mixed, and
the concept of technology commercialization is defined differently by scholars. In general, commercialization of
technology is basically used as a micro concept which means shipment to the market of a single product and service
based on technology capability. Technology commercialization not only covers the concept of product
commercialization, and the concept of business formation through commercialization of various products [1], [6].

2.3. Technology commercialization and start-up

In terms of entrepreneurship, the concept of technology commercialization is consistent with the concept of
entrepreneurship, which is considered from the perspective of entrepreneurial process [7], [8]. The concept of
entrepreneurship can be considered in terms of the process of technology commercialization as well as the economic
viewpoint for wealth creation, the psychological perspective of challenge and innovation seeking [7], [8]. In other
words, it can be said that venture startup is entrepreneurial process that captures opportunities, develops new ideas, and
conducts actual business through procurement and organization management of necessary resources, which is
consistent with the technology commercialization process [1], [7], [8]. In addition, the scope of technology
commercialization is examined from various aspects not only technology commercialization in a single company but
also technology commercialization through technology transfer created by public research institutes and technology
holding company in university [1], [7], [8]. In this paper, I examine the commercialization of technology in a single
company.

3. CONSIDERATIONS IN PROMOTING TECHNOLOGY COMMERCIALIZATION

3.2. Promoting Dominant Design

In the early stage of innovation, product innovation takes place and then process innovation takes place. In the early
days of product innovation, many product innovations take place in the fluid phase, leading dominant products
dominating the market. Many new products are tested in the market at risk so that they can provide value to customers
in order to survive in this early market and grow into dominant products, market dominance [9], [10]. In this early
market, various strategies should be set up to grow into dominant design based on advanced technology.

3.3. Crossing the Chasm Strategy

Another approach to high-tech commercialization is based on the theory of acceptance cycle of innovation according to
the diffusion of innovation (S curve). In other words, the high-tech product market is largely composed of five types of

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customers in three markets [11]. It is divided into early market, mainstream market, and end market according to
technology life cycle [11]. In the early market, it is divided into innovator and early adopter, and the mainstream
market consists of early majority and late majority [11].
First, it is necessary to cooperate with the R & D and marketing departments considering the characteristics of the
market from the early stage [12]. Second, the planning capacity should be shifted to the market rather than technology-
driven [12]. Various market-oriented technology commercialization tools such as technology roadmap, technology tree,
and QFD should be utilized. Through these efforts, entrepreneurs can overcome the limitations of the initial market and
enter the mainstream market. In general, the initiative to overcome the chasm is as follows; Providing whole products
that combine all the services that customers want, utilizing word of mouth effects on the products, and securing market
leadership by winning in the early market[11]. In this market, the initiative can be realized by reflecting the needs of
the market and improving the usability, customer-friendliness of high-tech products [11]. Therefore, it is necessary to
go beyond technical approaches and marketing / market approaches, and to integrate them into commercialization in a
direction to generate synergy.

3.4. Commercialization of emerging technology

In the case of commercialization of advanced promising technologies, Technology Assessment should be made in
consideration of market, technology and organizational risk from the early stage [13]. In the case of promising
technologies, uncertainties in technology, market, and organization level are very high [13]. In addition to technology
valuation, it should be considered as multi-dimensional in terms of organizational dimension and technology
development finance cost [13]. In the early stage of the Technology Assessment, the factors to consider are as follows;
The first is the setting of the scope of technology development [13]. At this stage, the scope of the technology is set to
suit the strategic goals of the enterprise and the capabilities of the enterprise. The second is the technology development
searching stage [13]. At this stage, an issue of how and where to find the technology defined by scoping is presented.
The third is the evaluation phase. At this stage, candidate technologies are selected under the technical, financial and
organizational evaluation criteria [13]. The last step is committing. At this stage, it is a concrete action plan and a plan
to commercialize promising technologies [13]. Specific technology development will be pursued thereafter. Technology
development can be said to include not only internal but also external cooperation.

4. ESTABLISH TECHNOLOGY COMMERCIALIZATION STRATEGY IN DAEJEON

4.1. Technology Commercialization Ecosystem as Daedeok Innopolis

The Daedeok Innopolis special development zone was first developed in 1973 and the first phase of the special
development is completed and the second phase is being promoted in earnest since 2013 [2], [20], [21]. This special
research and development zone is centered on the government research institute which is the foundation of the national
research and development project, and its research result is linked with the venture enterprise and mid-sized enterprises
of Daedeok Techno Valley and the technology that creates synergy through cooperation with the nearby universities. It
is a complex ecosystem of innovation and innovation cluster [2], [20], [21]. The basic direction of the development of
Daedeok Innopolis is to promote commercialization of research results, to create venture ecosystem, to build global
environment and to activate the network [2], [20], [21]. First, in order to promote commercialization of the research
result, it will promote financial support for the commercialization of special technology, technology discovery, and
reinforcement of technology transfer support. Second, by establishing a venture ecosystem, the venture enterprise will
establish and support a step-by-step support system from start-up to growth. In order to build the global environment
and revitalize the network, Daeduk Tech Biz Center and other infrastructure will be built for technology
commercialization [2], [20], [21]. Based on these regions, Daedeok Innopolis will be stepped up into innovation
clusters. The Daedeok Innopolis covers all the processes from the world-class national R & D project feasibility,
technology commercialization of these achievements, venture start-up and venture business upbringing. There are about
1,191 venture companies in Daedeok Innopolis.

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Table1 Status of venture companies in Daejeon

Information
R & D Construction Wholesale Agriculture
Division manufacturing processing Other Sum
Services transport and retail etc.
S/W

Daejeon 808 223 24 24 13 2 97 1,191

Source: Venture Business (2016), Venture Business Status (April 2016), [22].

Daejeon's venture business should grow not only through business development by establishing its own technology
commercialization strategy but also by continuous cooperation with Daedeok Innopolis. Daedeok Innopolis has a
variety of enterprise support programs, ranging from venture start-ups to industry-academia cooperation, corporate
growth, and overseas market entry. Companies can grow step by step through technological development, human
resource exchange, and information exchange through cooperation with innovation clusters. The desirable corporate
strategy of these companies is shown through the 2 * 2 matrix.

Figure 1: Venture business growth strategy in Daedeok Innopolis

4.2. Establish strategy to commercialize technology for future prediction

Since the current innovation paradigm has changed into an open innovation, it is necessary for firm to adapt to
environment in the area of corporate survival and reflect this in terms of technology commercialization strategy. In
establishing technology commercialization strategy, exploration of external technology, selection of development
technology, technology development timing, and technology acquisition strategy should be considered [14]. Using
scenario planning and technology roadmap, which has comprehensive information on market and product as well as
technical information, can be a powerful tool to increase the success rate of technology commercialization in the future
[14], [15].Venture companies in the Daejeon region will be able to dramatically improve the technological
commercialization success rate by establishing the technology commercialization strategy.

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4.3. Establishment of technology commercialization strategy for overseas market

In order for a company to succeed in a global business environment, it is necessary to establish a technology
commercialization strategy for companies to enter the overseas market[16], [17]. For this purpose, it is necessary to
identify the difficulties in entering overseas markets. In general, venture firms' weak competencies when they enter
overseas markets include information on local businesses and technologies, securing overseas experts, and securing
technological competitiveness[16], [17]. The company should review the current status and difficulties in entering such
overseas markets and establish a corresponding response strategy. In the current business environment, companies
should review business models from the beginning of finding new entrepreneurial items and build a growth strategy for
overseas market entry. Daejeon venture companies should also review the current status, difficulties, and policy support
for overseas market entry so that they can enter the overseas market in a customized manner.

4.4. Open Innovation Business model for successful technology commercialization

The third step in the success of technology commercialization is to transform the internal innovation system of the
company into an open innovation implementation system suitable for the current innovation paradigm. This implies an
open, complete transition of R & D operations to implement open technology strategies [18], [19]. The venture
companies in Daejeon develop under the organic linkage with the global innovation cluster called Daedeok Innopolis.
Venture firms will develop through organic cooperation with innovation clusters through the introduction and
implementation of open innovation systems. In order to introduce and co-develop external technologies, venture
companies in Daejeon should be aware of the key technologies for developing new products through technology
roadmaps.

Figure 2: Strategic Direction of Technology Commercialization of Daejeon Venture Company

5. CONCLUSION AND IMPLICATIONS

In this paper, the technology commercialization strategy is derived through the investigation of the status of venture
companies in Daejeon area. There are more than 1,100 venture companies in Daejeon that link with Daedeok
Innopolis. These venture companies can be developed through successful technology commercialization. Based on this
fact, this paper examines the direction of technology commercialization strategy of venture companies in Daejeon. In
addition to the technology commercialization strategy considered in this paper, various technology commercialization
factors can be considered. However, three kinds of technology commercialization strategies are derived through theory
and case studies. First, it is the establishment of systematic technology commercialization strategy based on future
prediction. Second, the establishment of a technology commercialization strategy to advance into overseas markets.
Third, the establishment of a firm open and innovative BM model for technology commercialization. Through this
study, venture firms will be able to consider strategic factors in establishing technology commercialization strategy. It is
very important to establish a technology management system through systematic technology commercialization strategy
for these venture companies. In this paper, I did not consider the detailed technical commercialization strategy, nor did
I consider the problems and policy support. In the future, further research will be carried out to the extent not covered
in this paper.

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AUTHOR

Won Il, Lee is a Professor in the Department of Business Administration & Accounting at Hanbat National University
in Daejeon, South Korea. He is also currently the director of technology entrepreneurship training center at start-up
support foundation at Hanbat National University. He was a visiting professor at Portland State University in the US in
2018. He received a B.A., M.S., and Ph.D. in Business Administration from Yonsei University, Seoul, South Korea.
Before joining the faculty of Hanbat National University in 2012, he worked for the KISTEP(Korea Institute of Science
and Technology Evaluation and Planning) as a national science and technology planning researcher for years. His main
research interests include technology strategy, technology commercialization, innovation management, and innovation
clusters.

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