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Case
South Asian Journal of
Business and Management Cases
5(1) 1–12
© 2016 Birla Institute of Management Technology
SAGE Publications
sagepub.in/home.nav
DOI: 10.1177/2277977916634235
http://bmc.sagepub.com
Disclaimer: This case has been written solely as the basis for class discussion, for educational and development purposes and
is not intended to illustrate either effective or ineffective handling of an administrative situation or to represent successful or
unsuccessful managerial decision-making or endorse the views of management. Some of the names, events, financial and other
information have been disguised or camouflaged to protect identity and to maintain confidentiality.
1 School of Management at University of Tampere, Finland.
2 The University of Eastern Finland, Finland.
Corresponding author
Malla Mattila, School of Management at University of Tampere, Finland 33014.
E-mail: malla.mattila@staff.uta.fi
Networks in Technology
Commercialization
Malla Mattila1
Hanna Lehtimaki1,2
Abstract
This article examines technology commercialization as networked processes. It presents a longitudinal
analysis of a technological invention called intelligent paper over a period of 13 years in 1997–2009. In
the analysis, six technology commercialization phases are identified and the roles of various actors
in each phase are depicted. The study shows how the processes of technology development and com-
mercialization intertwine and shape each other. The study contributes to literature on commercial-
ization of innovation by presenting an empirical case study where the processes of technology
development and commercialization are complex and continuously evolving processes.
Keywords
Technology commercialization, technological innovation, network, R&D, intelligent paper, case study,
longitudinal research
Introduction
This article presents a case study of commercialization of technological invention called intelligent
paper.1 The invention combines multidisciplinary knowhow from several industries including paper
and printing, Information and Communication (ICT)/electronics and optics. It seeks to create a wide
functionality to printed substrates. It can be broadly defined as nanotechnology focusing on cost-
effective, high-volume and roll-to-roll production of printable optics and electronics which enables
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2 South Asian Journal of Business and Management Cases 5(1)
bringing novel, intelligent functionalities onto printed (flexible) matter. In this study, the purpose is to
examine the processes through which the development of technology and commercialization intertwine
and form a continuous dynamic process.
This study extends our understanding about the technology commercialization by examining networks
through which the technology gets construed, developed and disseminated. The network perspective
allows for appreciating the complexity of the innovation process and analyzing technology commercial-
ization as an unfolding social process, where many contributors interact. The authors did not identify any
single major commercial (breakthrough) innovation, but several successful commercialization activities
during the study period. Adopting a holistic and process-driven view, the authors show how the complex
phenomenon of technology commercialization is closely intertwined with the process of innovation.
The study contributes to the literature on commercialization of innovation in two ways. First, the
study shows that commercialization should not be treated as a final phase of a linear innovation process,
but, instead, as a network of activities that take place throughout the innovation process. Second, there
is still much to learn about the patterns of innovation networks and network relationships, and their
effects on technological innovations’ commercialization. In particular, the processual aspect—the
dynamic view to networks—is still an under researched area. The present study provides insight to
the networks of innovation and guides future empirical research.
Network Approach in Studying Technology Commercialization
Technology commercialization has argued to be important for firms to survive in contemporary competi-
tive markets (Frishammar, Lichtenthaler & Rundquist, 2012; Zahra & Nielsen, 2002). It can be viewed
as ‘the process of acquiring ideas, augmenting them with complementary knowledge, developing
and manufacturing saleable goods, and selling goods in market’ (Mitchell & Singh, 1996, p. 170). This
process relates to the technological innovation, which by definition, refers to introducing a new idea, be
it a technological solution, product, service procedure, policy or an organizational form, to the market.
Networks that are depicted within technological innovation have been called industrial districts
(Becattini, 1991, 2002), innovative milieus (Crevoisier, 2004; Crevoisier & Maillat, 1991), new indus-
trial spaces (Scott, 1988), clusters (Porter, 1998), networks of innovators (DeBresson & Amesse, 1991),
networks of innovation (Saxenian, 1996) or just innovation networks (e.g., Conway & Steward, 1998;
Ferrary & Granovetter, 2009; Perrin, 1991).
In the organizational and sociological studies of technology (Orlikowski, 1992, 2000), and the studies
of technological innovation (Dosi, 1982; Nieto, 2004; Teece, 1996; Wonglimpiyarat, 2004), a distinction
is made between the material nature of technology and the coordinated human action that constructs
and/or uses it. This analytical decoupling enables conceptualising technology as an outcome of human
action. Innovation is regarded as a process initiated by human actors who perceive an opportunity for
profiting from a novel idea which is introduced and disseminated through actors’ network relationships
(Garcia & Calantone, 2002; Håkansson, 1987; Wirtz & Janssen, 2010). The transformation of the poten-
tial into an economic value is seen as dependent on human actors engaged in technological innovation
processes and their networking relationships (Medlin & Törnroos, 2014, 2015). In other words, this
approach implies that the success and the failure of what actually comes out of the innovation process
rests with actors who participate in the process.
To depict the opportunities for creating value from technological advancement, there is an inclination
towards studies which highlight the dynamic view of networks (Araujo & Easton, 2012; Bizzi & Langley,
2012; Halinen, Medlin & Törnroos, 2012; Mattila, 2015; Medlin & Törnroos, 2014, 2015). According to
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Mattila and Lehtimaki 3
this view, technologies emerge and become established in networks through the overlapping stages of
exploration and exploitation where individuals with their own (deviating) understandings, interests and
goals engage in (Medlin & Törnroos, 2015). These networks are continually unfolding social processes
and they combine actors and their relationships into the activities that aim at profiting from novel ideas.
Research Methodology
A longitudinal qualitative case study (Eriksson & Kovalainen, 2008) was carried out to follow the pro-
gression of a technological invention called the intelligent paper between the years of 1997 and 2009.
The primary research materials consist of 11 semi-structured interviews (222 pages of transcribed text)
conducted in 2004, 2005, 2006 and 2009. Each interview lasted between 1 and 2 hours. Interviews
among four key people were repeated to include a temporal dimension in the study.
The secondary research materials comprise annual reviews, different kinds of publications, presenta-
tions, brochures, magazines, news and other documents (e.g., LinkedIn profiles, patents, company web-
pages and Wikipedia downloads), in total 486 pages. The secondary material was collected in parallel
with interviews with to contextualize the interview data.
Four researchers participated in the collection and analysis of the data. The research material was
analyzed following the principles of inductive content analysis (Elo & Kyngäs, 2008). Additionally,
investigator triangulation (Stake, 1995) was used to assess the reliability of analysis. Two researchers
analyzed the empirical materials together and one researcher did the analysis independently. Then all
three researchers compared their interpretations.
The Intelligent Paper
The case of the intelligent paper concerns the development and commercialization of technological
invention between 1997 and 2009. This journey involved several firms, companies, organizations,
start-ups and individuals, as well as a multitude of materials that together enabled bringing novel,
intelligent functionalities onto printed matter and plastics. Six phases were identified during which the
intelligent paper was both developed and commercialized. Each phase is described in more detail in
the following sections.
Individual Dream (1997–1999)
A large manufacturing company of hardware and software for the pulp and paper industry (later called
the parent company) provided the setting for the invention. In the mid-1990s, it faced an increasing
challenge of digitalization, namely the rise of the ICT industry. The consumption of paper was expected
to decline radically. To overcome this challenge, it assigned a research & development (R&D) director
to freely explore plausible future business scenarios for paper-making and new business development.
He was a visionary talent with a PhD in engineering, and interested in advancing understanding on a
branch of physics dealing with behaviours and properties of light in printed matter. He started to think
whether the optical and electronic technologies could be applied to future paper-making, and came up
with an idea of intelligent paper.
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4 South Asian Journal of Business and Management Cases 5(1)
At first, he utilized his close connections to different research institutions, research funding agencies,
and experts working in other companies in Finland to get an insight on how to transform the idea of the
intelligent paper into more concrete business solutions. He travelled to different research institutions
abroad to learn more about the latest developments in the field and to find collaborating partners. These
potential offshore partners showed, however, little interest in his idea.
Then, he started to collaborate with a few internal experts specialized in certain processes of paper-
making. He also networked with a few Finnish companies with expertise in optics and tailor-made
optical solutions. Through these contacts, access to tools, competencies and devices such as testing
apparatuses and pilot production facilities enabled him to make the early technology experiments. These
experiments verified that certain nanoscale structures can be imprinted on paper during a printing
process. The board of the parent company gave a full support to work on this line of development.
Team Building (2000–2001)
The parent company allocated resources to the R&D director to advance the intelligent paper. He con-
tacted experts from various firms, companies and business units. He wanted to attract the best expertise
to work for him, no matter where they were located, and he also hired experts internally. These experts
had a deep understanding about the printing processes and the properties of paper. They were motivated
by personal career development opportunities and future business prospects that the innovation project
could offer them. Two hubs of experts, partners and subcontractors were finally formed, namely one hub
in Finland and one in Italy. The R&D director also envisioned establishing hubs in the United States of
America and Japan that would operate near the potential customers.
In technology development, some activities, for example, ink development, were subcontracted, and
some, such as development on security threads, were taken further with partners. This resulted in patent
applications, concretized the applicability of the idea of the intelligent paper and demonstrated to the
parent company that the intelligent paper is worth investing in.
Then, the R&D director realized that he and his team had established a relatively strong network to
the technology-end, but lacked know-how on selling and marketing technology-based knowledge-
intensive applications. Through an internal recruitment in 2001, the key account manager with a degree
in international business, joined the team. He was to sell and market the innovation project to the parent
company’s board, potential customers, investors, partners, suppliers and subcontractors.
At the same time, the board of the parent company started questioning the networked structure of the
team and wanted to have the team operating in one location only. The R&D director did not agree. He
argued that if the development around the intelligent paper is put in one place, some important activities
might cease to exist. The best talent and competencies needed or already involved in the technology
development activities might be missed, because some experts were reluctant to move. Also, the intel-
ligent paper’s development work was linked to devices and test apparatuses such as certain printing
presses and pilot production facilities which were difficult, if not impossible, to transfer in one location.
As a result, no changes were made to the operations.
Incubation (2002–2003)
In 2002, the team participated in a 3-year nationally funded research programme on printed optics and
electronics (PRINTO) led by the national research institute VTT Technical Research centre of Finland
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Mattila and Lehtimaki 5
(later VTT). This research programme was among the first in Finland where novel electronical and
optical components in packaging were developed. Through the programme, the team got access to the
latest knowledge on various technologies and techniques which enabled fabricating active and passive
intelligent functionalities onto paper and plastics. Novel to the technological research projects in
Finland so far, the programme also involved researchers specialized in industrial design. These experts
envisioned possible applications within intelligent products. For the team, this meant getting more
insight into user-oriented product development. The programme resulted in several patents, research
publications and conference papers. New fabrication methods were introduced, namely integrated
embossing and roll-to-roll hot embossing.
To get an understanding of the state-of-the art development in the field, the team contacted several
offshore companies possessing expertise on different holographic solutions, inks and printing presses.
They found a European with which a possibility to manufacture nano-structured diffractive grating was
advanced. Also, the team managed to sign a contract for customer trials with one large multinational
brand owner.
In the midst of excitement on the collaborative technology development, the parent company’s board
decided that the technology project was not within its core competence areas. Other partners were to be
found to share the risk. Utilizing personal contacts, the team found two companies, a leading printing
house in Scandinavia and a global telecom company.
In 2003, the focus was put on customer launches. The R&D director held a strong vision that nano-
structured diffractive grating would soon provide a feasible alternative to holograms and become the
major application in anti-counterfeiting. The key account manager, in turn, saw business potential in the
mobile technology and high-end brands in product differentiation with printed technology. Eventually,
global consumer brand owners were targeted as the key customers with expected high volume and
investment potential. The plan was to approach them with unfinished solutions to serve customer needs
and to generate cash flow while still developing the applications of the intelligent paper. Additionally,
potential collaborators in the printing and packaging industries were contacted.
Spin-off (2004–2005)
In March 2004, a joint venture agreement between three leading Finnish firms was signed and Alpha
was established. This brought together a pulp and paper machinery manufacturer, a communication
technologies corporation, and a printing house. The business plan, strategies, budgeting procedures and
operations within the company and with its partners were redefined. The owners promised to finance
Alpha for 20 months.
In autumn 2004, after the approval from the national and European Union (EU) authorities, two
people from the parent company’s Italian business unit, four experts from the other two owner-partners
and one designer joined the firm. They all had a long working history in the fields of electronics, optics
and printing. Hiring was kept to minimum in order to maintain operational flexibility and low overhead
costs. Collaboration with individuals, firms and companies possessing necessary knowledge, tools and
machinery was active.
Soon, several operational challenges occurred—cash flow was not as expected, there were too many
customer applications in the pipe line, and while personal relationships were valuable in building the
contacts and trust in collaboration, knowledge management was problematic. There were also difficulties
in finding the best partners in the core technology development.
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6 South Asian Journal of Business and Management Cases 5(1)
To overcome the challenges, Alpha’s management reorganized and rearranged experts’ tasks and
duties to better control the dispersed innovation activities. For some, this meant a decrease in autonomy
and executive power, and an increase in reporting obligations. For others, it meant collaborating more
with stakeholders.
Two applications were chosen as a focus of development and commercialization. These were the
nano-structured diffractive grating and another product, called here InkByte. A designer was hired. By
the end of 2004, business prospects started to look brighter and two customer relationships with large
multinationals were established. The company employed 20 people. In late 2005, the management issued
special bonds and shares to strengthen the capital and liquidity.
Emergency Landing (2006)
In early 2006, the first product version was launched. At the same time, there were challenges. Two of
the original owner-partners required a wider ownership base, customer trials faced technological
challenges, and joint development ended with the potential customer-partners.
The operations were run down in 2006 even though the industrial field of printed intelligence was
emerging. In Finland, the future potential for printed intelligence technologies at large, and the devel-
oped applications of the intelligent paper, in particular, seemed stronger than ever. In all, 16 research
organizations, 8 manufacturers of printing presses and print heads, 28 material manufacturers, 19 techno-
logy sellers and 18 producers of end-user products were active in the printed intelligence markets.
A national 3-year spearhead innovation programme called Printed Intelligence was launched and VTT
Centre for Printed Intelligence was established. The centre’s plan was to boost the generation of a new
business sector around these applications and technologies.
New Take-offs (2007–2009)
Even though Alpha seized to exist, the network around the intelligent paper stayed active. The R&D
director, together with a product development manager, the two initial owner-partners of Alpha and VTT
Centre for Printed Intelligence wanted to continue the work.
Firstly, the R&D director, together with the product development manager, established another firm
called Beta. The purpose was to bring technological solutions based on printed, transparent electrical
codes and their reading to the product identification market. The idea had emerged in the PRINTO
programme and this version was to be more active and intelligent.
Financing was negotiated with VTT Centre for Printed Intelligence and two Italian partners, an ink
manufacturer and nanotechnology developer, to gain both funding and expertise. Beta’s first commercial
solution was a trademarked code. It could be printed with a standard industrial or office printing machin-
ery and tooling. It was to replace the existing authentication technologies, radio frequency identification
techniques and bar codes. It provided a cost-efficient and scalable production of codes.
In the summer of 2007, Beta started negotiations with a potential Chinese customer. Trials with the
codes were run with lottery tickets where the black conductive ink was embossed under the normal black
ink imprinting. The test trials were successful. An agreement of the pilot market test was made. The pilot
delivery was, however, delayed in early 2008. The negotiations with them proceeded slowly.
Then, the first round financing ended. The Italian partners, together with VTT Centre for Printed
Intelligence wanted to rearrange the company, resulting in the integration of the innovation networks
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Mattila and Lehtimaki 7
formed around Beta and VTT Centre for Printed Intelligence. This was done by dismissing the R&D
director and the product develpoment manager, and acquiring funding via a Finnish venture capital
investment company and a few other business angles operating already near the centre. Through these
arrangements, the centre was able to initiate the first company from the printed intelligence develop-
ments. In 2009, the firm was still operating.
Secondly, while the R&D director and the product development manager engaged in events and
activities resulting in the establishment of the start-up Beta in 2007, the two initial owner-partners of
Alpha turned to VTT and one Finnish technology consulting company specialized in R&D and business
strategy in the area of nanotechnology and advanced materials. Together, they started to investigate busi-
ness potentials for the intelligent paper. These included the identification of the most commercially
potential technology development areas as well as the mapping of the potential customers, investors and
technology development partners. Between 2008 and 2009, these investigations were ongoing.
Finally, the third interested party was VTT. Throughout the years, it had heavily invested in the
emerging printed intelligence markets. It had been actively involved in building up the infrastructure for
the printed intelligence markets and grounds for spin-offs to operate. After closing down Alpha and Beta,
the R&D director was hired by VTT to continue developing technologies around the intelligent paper.
Results
The case of the intelligent paper shows how technology commercialization occurs throughout the
development process and involves several actors and a multiplicity of tasks (Figure 1). In the figure,
the events described beneath the timeline occurred somewhat internally, at first within the parent
company and then within two start-ups. The events above the timeline involved external parties.
Additionally, the actors and activities depicted above the dashed line illustrate in more detail certain
key occurrences and events taking place in other firms, which were influential in the development and
commercialization activities of the intelligent paper.
In each phase, the main actions, produced outcomes, created and/or utilized network relationships,
and faced challenges have been depicted. Several individuals, firms, companies, research institutes,
universities, venture capitalists and public funding agencies were involved. The actors’ close network
ties enabled the fine-tuning of tangible (e.g., machinery, tools and apparatuses) and intangible (e.g.,
knowledge and reputation) assets not possessed by any single firm (Ahuja, 2000; Powell, Koput &
Smith-Doerr, 1996; Soh, Mahmood & Mitchell, 2004). This was particularly apparent in the start-
ups, where not only the technology developments and their disseminations, but also their business
models required many distinctive competencies (Prahalad & Hamel, 1990) that one firm could not
handle alone.
The innovation was developed in the intersection of paper and printing, optics and electronics
industries. The idea of the intelligent paper was disseminated to a wider audience through research
publications, conference papers and patents. The networks assisted in launching various types of innova-
tions during the process. Alpha was among the first companies in the world that focused on the mass
production of the nano-structured diffractive gratings (the trademarked D embossing technology). In
the process, refinement and other incremental innovations were also created. Together, these innovations
demonstrate how the commercialization is closely linked to the process of technological innovation
(Van de Ven, Polley, Garud & Venkataraman, 1999/2008) and how the technology commercialization
is closely intertwined with the actors and their network relationships participating in the ongoing and
unfolding social processes (Medlin & Törnroos, 2015).
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Mattila and Lehtimaki 9
The case demonstrates that technology commercialization involves unsuccessful product launches
and firm establishments and shut downs. It could be concluded that the appropriation of the technology
was not successful. However, from the perspectives of the key people in the start-up firms and the
technology, the invention has been a success. People have actively worked with the technology for
decades, and it has offered career development, networking opportunities worldwide, and a possibility to
establish an expert position in the field. Over the years, the actors have built and/or developed appara-
tuses, test samples, prototypes, patents, research publications and other scientific papers to demonstrate
that the intelligent paper and its advances are worth taking seriously and investing in.
Over the years, the Finnish government has heavily invested in nanotechnology and consequently
printed intelligence developments. This has created jobs and paved the way for development activities in
related technology fields. Due to this activity, VTT has become one of the leading scientific institutions
in printed intelligence. The launch of the spearhead innovation programme and the establishment of the
VTT Centre for Printed Intelligence are some milestones in the process. From the perspective of politics
and society, the innovation can be considered successful.
The importance of customer relationships was highlighted in the case in the same way as in previous
research on innovation (Kristensson, Gustafsson & Archer, 2004). The commercialization strategy in
the two start-ups was to develop the applications of the intelligent paper, together with their customers.
Strong personal relationships with a few customers and partners enabled to concurrently earn some profit
that was needed in ensuring the continuity of the innovation. Collaboration with partners and customers
made it possible to utilize bundles of competencies. It also enabled anticipating future customer needs
and changes in the markets. Customers learned about the latest technological developments in the field.
This created value for them.
It took almost 10 years before the first product version from the intelligent paper’s development
activities was launched. Before and after, the challenges were related to the complexity of technology,
inpatient financing, multiplex operations and risk in customer negotiations. The technology was pro-
gressed in the hands of certain experts, who already knew each other. These relationships enabled patents
and research publications, but fell short in business solutions. These challenges can be pointed to the
dynamics of the network to which the technology innovation was itself embedded; investments in
the creation and the maintenance of the network takes long time to develop (Håkansson & Ford, 2002;
Medlin & Törnroos, 2015).
Conclusions and Summary
This article depicts the complexity of the technology commercialization. The dynamic network view
shows how commercialization is closely linked to the process of innovation. In the study, the focus was
on the actors and the network of relationships, and the ways by which successes and failures of the
technological innovation evolve in the process were analyzed. The network relationships of the actors
involved in the technology development activities play a crucial role in shaping the inputs and outputs of
the invention and determining its future success. The study shows how the technology gets construed,
developed and disseminated through networks.
The results of the study question the view of commercialization as a single, final phase of the innova-
tion process. A holistic and process-driven examination allows for depicting how the processes of
development and commercialization evolve simultaneously. Six phases were identified through which
the technology gets simultaneously developed and commercialized. These phases demonstrate how the
technology commercialization involves a complexity of events, tasks involving many parties and
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10 South Asian Journal of Business and Management Cases 5(1)
multiple outcomes. The study provides a valuable contribution to the general understanding about
technology commercialization by presenting insight in the networks of innovation and depicting the
dynamics and complexity involved in commercialization.
Acknowledgement
The authors wish to express sincere thanks to the Foundation for Economic Education, VTT Technical Research
Centre of Finland, and the key persons involved in the intelligent paper development activities.
Note
1. This article is revised version of the paper, ‘Commercialization of Technological Innovation: Case of Intelligent
Paper’, presented and published in International Conference on Management Cases 2015.
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Authors’ bio-sketch
Malla Mattila, Ph.D. (Bus. Adm.), EMLE works as a University Instructor and a fellowship researcher
at the School of Management, University of Tampere, Finland. Having defended her PhD thesis
on network formation of technological innovation in 2015, she is currently doing research on the dynam-
ics of technology commercialization and service development. Her research interests arouse around
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12 South Asian Journal of Business and Management Cases 5(1)
innovation networks, sociomateriality in strategic network and innovation management, and material
constructionism.
Hanna Lehtimaki (Ph.D. School of Management, University of Tampere) is a Professor of Innovation
Management at the University of Eastern Finland Business School. Her research interests include
network and other relational approaches in strategic management, innovation management, and leader-
ship, and qualitative research with a focus on social constructionist methodology. Her articles have
appeared in such journals as Business Communication Quarterly, Journal of Business Ethics, Higher
Education, International Journal of Entrepreneurship and Innovation Management, International
Journal of Human Resource Development and Management, Scandinavian Journal of Management and
South Asian Journal of Business and Management Cases.
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