In order to achieve growth in society it is essential to have companies and innovators who successfully can commercialize their products and services. However, there are far too many inventions that do not manage to become commercialized. The paper present different ways for companies, innovators and investors to bridge this gap. Also EU has an important role to play when it concerns commercialization of innovations by embracing two different approaches to innovate. In the first approach an innovator or company innovate to meet a demand. In the other approach innovators first develop a product without a demand. The demand is created later and then become commercialized.

1. Jan Softa at Somerco Date: 2014-07-18
Enhance the EC member states competitiveness
Part 23 – Innovation, Commercialization, Growth
Abstract
In order to achieve growth in society it is essential to have companies and innovators who successfully can
commercialize their products and services. However, there are far too many inventions that do not manage to
become commercialized. The paper present different ways for companies, innovators and investors to bridge this
gap. Also EU has an important role to play when it concerns commercialization of innovations by embracing two
different approaches to innovate. In the first approach an innovator or company innovate to meet a demand. In the
other approach innovators first develop a product without a demand. The demand is created later and then become
commercialized.
Background
Helping geniuses! Our slogan sums up whom Somerco aims to help. Somerco are a company
that target to help researchers and innovators so that these geniuses can create prosperity and
jobs in society. In this paper, I will focus on how innovative ideas need a greater success rate by
commercializing these and thereby gaining growth for companies. The more growth for
companies the better opportunities societies has to prosper.
Introduction
The concept of commercialization is important to understand. Commercialization constitutes of
several parts which is discussed below. When it concerns commercialization of innovation there
is a need to focus on bridging the gap from innovative idea or product to achieve commercial
success. The more commercial success for innovative products the more competitive will the EU
zone become and in return enable society to increase the living conditions for its inhabitants.
Growth
For all countries, growth is fundamental in order to be able to provide prosperity in society. An
important part of this is to have a healthy private sector with successful companies that create
jobs and income to the public sector so these can provide basic services to its inhabitants as
building roads and so on. It is therefore essential that companies and innovators can
commercialize their old as well as new innovative products and services.
For EU as a whole this is considered to be one of the major challenges to work on together with
the governments of the member states. A major reason for the single EU market is to enable
European companies succeeds to commercialize their products and services which make them
more competitive. Therefore, it is important to create an environment for scientist and innovators
at companies and universities to achieve this.
Innovations
Innovations can be developed to meet an existing demand or out of curiosity to experiment. The
route for innovations that try to meet an existing demand often start with a market study. Others
think scientists and great innovators should be given free hands to experiment. This means that
there might not be a demand on the market before the innovation is developed. It is created
afterwards.
Demand
Demand and commercialization goes hand in hand. Sometimes there is already a demand to
develop new products as for scientists to help find new medicine to cure cancer better. Other
times you have to create a demand for an innovative product or service as for instance to use
Twitter. Companies, innovators and scientists at universities need to figure out what applies to
them of these two. When this is figured out, next step is to decide in how you should try to

2. Jan Softa at Somerco Date: 2014-07-18
commercialize your innovative products, service or idea. Should your innovation be open to a
global market or is it even deemed to be a global market from the start. Other times your
innovation can start on a national or regional level. It is also important to understand all
innovations are not relevant for a global market. No matter how big your size of the potential
market is the need to commercialize is elementary in order to become successful. And to a far
great extent it is a failing point for many.
Commercialization
Commercialization constitutes of meeting a demand or creating a demand for your innovations.
It is this part of commercialization that is the focus for most companies. Another part of
commercialization is to find investors to innovative companies. Sometimes these two parts of
commercialization interlink with each other.
Commercialization – building a brand, demand and market
There are plenty of great ideas, both those with and without a patent that never become a
commercial success. The reason is that companies and innovators do not have enough
knowledge, marketing budget or time to commercialize their products. Knowledge can be
learned or hired by others and more time can be allocated by companies and innovators.
However, most often there is a limited marketing budget for SMEs and innovators.
Also large companies have a limit to their marketing budget in order to commercialize new
innovative products. It is a challenge all have to figure out for how to do best. It could be by
placing ads in newspapers or magazines, use your own web page, participating at exhibitions,
use social media, visits to potential customers in your area, use of sales agents and so on.
However you choose to tackle this challenge, the key is to meet new customers and partners.
Commercialization - capital
Another part of commercialization for companies concerns finding investors or seeking funding
in order to be able to successfully commercialize the company’s products. Some ideas will
benefit from getting on board venture capitalist or business angels who bring knowledge about
commercialization of products. It is an option that is interesting for many start-ups and SMEs,
but also large companies do from time to time bring on this capital. However, it must be
mentioned that it is more rare than common. More common is it that other companies invest in
new great ideas and products. Often, this is achieved by buying the innovation or agreeing on a
license with the innovators. Daily you see large companies as Google, Cisco and so on buying
companies with great innovative ideas that can help them become commercialized. These
companies are so large that they will find great products and ideas anywhere on the planet. For
other companies finding entrepreneurs that have great ideas does not come as easily. Especially,
for SMEs there is a lack of resources to conduct this work.
Five scenarios
In order to highlight how commercialization of innovative ideas, services and products come
about I present five scenarios. I discuss what is unique with their innovation and how they can
create a demand for their innovative ideas, services or products.
The CNN example
In the first scenario, I give an example on how you first create a service or product and later a
demand for the service. It was unheard of a TV broadcaster that would air news 24/7 and also
have journalists based all over the globe when Ted Turner the founder of CNN promoted the
idea. It was an innovative idea that was untested.

3. Jan Softa at Somerco Date: 2014-07-18
Before CNN had its breakthrough it was questioned why anyone would be interested in watching
news 24/7 and why would they set up a global network of journalist that would give news from
all over the world. Was it not doubtful that TV viewers wanted news coverage from the other
side of the world? As history has shown, it is a concept that has been copied around the globe as
by BBC and so on.1
Before CNN first aired there was not great demand for it. The demand for the services CNN
provided was created later. This was an innovative concept that needed to cover the globe to
become a commercial success. It could be said that for CNN to become a commercial success
they were deemed to go international. It is doubtful that they would have achieved what they
have today if they started as a local TV broadcaster and build up from there.
The small-sized company
In the second scenario, I discuss how companies by filling a demand in one industry sector can
transfer commercialization of their product into new industry sectors by creating demand for
their products also here. A SME has for its manufacturing of specific components to the aviation
industry developed an industry process in order to meet the high specifications that are required
for this industry sector. The industry process is patented and they have concluded it could also be
used in other industry sectors. They decide to target two new industry sectors.
In order to be able to commercialize their industry process in these two industry sectors they
need to create a demand. It will be achieved by clarifying the benefits of this process compared
to existing industry processes for the companies in these two industry sectors. It is concluded
that the production capacity will increase by 10% and also the quality of their products will be
improved. The investment these companies’ needs to do are earned back in 16 months with
manufacturing at a full production capacity.
The SME contact companies directly and work with national and international governmental
agencies to locate as many companies as possible in these two industry sectors. Besides this, they
also use exhibitions where they can meet companies from these industry sectors and at the same
time build up their brand on these new markets.
The funded cooperation
The third scenario is about filling a current demand. The Faculty of Pharmacy of the University
of Ljubljana and the Center of Pharmaceutical Sciences at University of Vienna and a SME
pharmacy from UK have completed a funding program from EU. According to their market
study there is a demand for new alternatives to chemotherapy to cure cancer. Their research has
focused on a novel drug that is genetically designed to target cancer cells and their infrastructure.
The scientific publications have been well received.
The SME has been assigned to commercialize the drug after its approval from the governmental
authorities. It has already worked up sales channels with NHS in UK it can use. However, they
are targeting a larger market and decide to build their brand in other markets in Europe. Even if
there is a demand their own sales agents need to cover a large market and therefore they decide
to start with exhibiting at conferences. They also decide to find sales agents in other countries
that have channels into their countries health system, which helps the UK pharmacy to reduce its
travel costs.
1
A more recent example on creating a demand later is Twitter that invented the use of micro-blogging for people,
companies and organizations.

4. Jan Softa at Somerco Date: 2014-07-18
With the well-received science publications it becomes easier for potential sales agents to
represent them at their home ground. These need to explain how this novel drug fills the current
demand for new alternatives to chemotherapy. When customers decide to purchase this drug they
either buy from the sales agents or these direct them to online alternatives that are well-known
by ASOP–Alliance for Safe Online Pharmacy.
Large South Korean Software Company
It needs to be mentioned that the largest investors in innovations are companies investing in
other companies and innovators. These investments are more common and do by far exceeds the
investments you find from venture capitalists and business angels.
In the fourth scenario, a large South Korean company is interested in investing in great business
ideas and products in software. They are interested in finding out what software companies they
can find in Sweden and UK. They have already scouted three potential companies in Sweden
based in different cities and six potential companies based in different cities in UK. Two of the
companies in Sweden have already had commercial success in the Nordic market and the other
company’s software has just been designed and is part of an incubation program that focus on
mobile applications. It means it has proven to be a demand for two of them and it has been
possible to commercialize the software. When it regards the third software there is a demand at a
large international market but it needs to be commercialized. All but two of the software that is
developed by UK companies is a commercial success on a national level or on a few other
markets in Europe as well. The other two software’s that originates from UK has great potential
for the management of industry applications and the other for the health sector, but are yet to be
commercialized.
To find out if they will invest in these companies they travel to Stockholm in Sweden and
London in UK. While visiting these cities they allocate an extra day to let other companies pitch
business ideas in software areas that match their company profiles. In advance they contact
business incubators to help them find others candidates.
Business angels and venture capitalists
In the fifth scenario, two venture capital firms have teamed up and decided to invest in a Polish
company that develops machinery. There is a good profit margin for their machinery which has
been discovered by the venture capitalists. One venture capitalist has its base in London UK and
the other in Hong Kong and in New York US.
Previously, the Polish company has had success with their products on their home markets in
Poland and Germany. The venture capitalist firms have great knowledge about the industry
sector the Polish company provide machinery to in other markets in Europe, US and China.
Therefore, the venture capitalist wants to create a demand for their machinery in these new
markets.
In order for the Polish company to meet this demand they need to scale-up its production
capacity and employ staff who can work against these markets. Once this is achieved they use
the contacts the venture capitalists has on these markets in order to commercialize their products
also here. It is combined by using the matching between companies governmental agencies as
United Kingdom Trade and Investments (UKTI) and local Chambers of Commerce can provide
to companies when these want to enter new markets.
Summarize scenarios
In the first scenario, you first create a product and create demand for it later so it can be
commercialized. The second scenario is about transferring a commercialized product from one

5. Jan Softa at Somerco Date: 2014-07-18
industry sector to another by creating demand for it in these new industry sectors. The third
scenario is about commercializing a new innovative product in order to fill an existing demand.
The fourth and fifth scenario is about finding investors who can help to commercialize
company’s products. In the fourth scenario the example is on companies investing in other
companies and innovators. The fifth scenario is about business angels and venture capitalists
doing the same. Moreover, in the fourth scenario a large company aims to commercialize
innovative products that are produced and exist on one market into new markets. In the fifth
scenario, a company has successfully commercialized its products on its home markets by
meeting the demand here. Two different investors have knowledge about a demand for their
products on other markets. However, the company does not yet have enough production
capacity. Therefore, the company needs a large capital investment in order to scale-up its
business operation in order to also successfully commercialize its products on the new markets.
For EU - funding
EU holds a few different funding programs as Horizon2020, 3rd Health programme and
COSME. The European Research Council has its funding programs that focus its help on
excellent scientists. Horizon2020 has a commercialization phase after phase two of its funding
programs. The phase 3 in Horizon2020 indirectly support innovators and scientists through
simplified access to debt and equity financial instruments as well as various other measures, for
example on IPR protection.2
It is evident that when it concerns the funding programs EU has instruments in place to help
scientists and innovators in companies and universities succeed with its commercialization of
ideas, services and products. This is especially valid when it concerns those who innovate after
the concept to meet an existing demand. In almost every call application you are required to
describe what demand there is for the innovation seeks funding to develop and describe its
potential market. It means those who receive funding can point on demand on the market that is
possible to commercialize.
How about those who innovate out of curiosity and then create a demand? It might even be
someone else who see the commercial potential and create a demand for the innovation. Here the
commercialization of the services and products comes after the products are finished. It is very
likely that herein lays an unlocked potential that would benefit the competitiveness of Europe.
Horizon2020s funding program future and emerging technologies (FET Open) is a well adopted
call that can bring in this type of innovations. It has to be mentioned you have to point to a
potential market that lays 10-20 years ahead, so it is not entirely open to let geniuses freely
experiment. How can calls in Horizon2020, COSME be open for those who want to freely
experiment? The answer lays in how this could be measured because it is beneficial to have
some control of how valuable funding money is spent. It could be that companies and innovators
who receive this type of funding needs to have a track record of previous successful patents,
commercialized innovations and/or highly rated scientific publications.
Some of the calls in Horizon2020 focus on solving societal task as health problems and
environmental problems with an interdisciplinary scientific approach. Instead of focus on a
certain product or service there is a wider acceptance for the aim of conducting research and
development. However, when these project participants choose to innovate also in these calls the
applicants point to a demand in society that could be commercialized. It would be interesting to
find out what would happen if more of these entrepreneurs and scientists could innovative freely
2
The new dedicated SME instrument under Horizon2020. http://www.brusselsnetwork.be/eu-funding-m/1338- the-
new-dedicated-sme-instrument-under-horizon-2020.html

6. Jan Softa at Somerco Date: 2014-07-18
without pointing to a demand. The commercialization could happen after the demand has been
created on the market.
When it concern the European Research Councils programs these are more adopted for scientist
to conduct science without pointing to a demand on the private market that can be
commercialized. The scientific relevance is the focus. When there is a commercial potential in
their science there is possibilities for these scientists to be matched with actors that can help
them achieve this.
For EU – Private, Public, Partnership (PPP)
In today’s business climate it is essential for the public sector to cooperate with the private sector
to best provide possibilities for commercialization of innovative ideas, services and products. In
each country the public sector has its channels for cooperation with national organizations for the
industry. In Sweden there is the Confederation of Swedish Enterprises with its regional offices
spread over the country and in Spain there is the Spanish Enterprise Confederation of the Social
Economy. On a European level Business Europe operates with 41 members from 35 countries.
Besides this, well established companies have sometimes good contacts with governmental
agencies or departments as the Department for Business, Innovation and Skills in UK. It is not
uncommon that government is investors in such companies through pension funds and so on.
So what new can be brought to the table when it concern PPP and commercialization of
companies and innovators inventions?
EU as well as national governmental agencies should enable themselves to be able to participate
at online platforms for crowd sourcing and platforms for crowd funding.
On online platforms for crowd funding we find that the private sector and people help to fund
innovative projects. Sometimes the funders get equity or shares in return on these platforms.
These platforms attract companies and innovators that can find capital to innovative projects that
banks might find interesting but consider to have a to high risk to get a loan. If also the public
sector was able to give funding on these platforms many new innovations will be able to become
commercialized. It is a form of development of PPP into also includes people in the
commercialization of products that might have or not have a demand on the market. I call it
PP(P)P which equals to Private, Public, (People) Partnership.
On online platforms for crowd sourcing there are vast possibilities for companies and innovators
to get help develop new innovative products by the crowd which constitutes of other companies,
research institutes and people who are interested in devoting their time to this project. Sometimes
the contributors work for free and at other times for a fee. At the moment these platforms work
well for open source projects. It is an important movement to embrace and is already
contributing much to the commercialization of products. It has it deepest roots in information
technology. But the open source community is likely to emerge and succeed in other industry
sectors as well. Also the public sector can contribute in the development of crowd sourcing as a
source to use for the commercialization of products and services. Perhaps, there is a need to find
out if legislation has any hindrance for crowd sourcing to be used and just as important not to
adopt new legislation that stop movement of ideas cross-borders.
For EU – policy’s
Above, I discussed EUs role when it concern legislation for enabling crowd sourcing cross-
borders. There are plenty of other policies Europe can adopt in order to achieve a high success
rate of innovative products and services.

7. Jan Softa at Somerco Date: 2014-07-18
To begin with the fundamental is to have a great acceptance of the reasons for innovating. As
mentioned before, innovations spring from a curiosity to solve problems or create something
unique. Sometimes there is a demand to fill that can be commercialized in other cases there is an
innovation without a demand that needs to be created later.
When it concern funding from EU and national governmental agencies these could adopt an
action plan that embrace both ways of innovating. This will transcend into funding calls
innovators and scientist from companies and universities can apply to. The measure of success
could be patent applications, scientific publications and number of commercial products that has
been embraced by the market. When it concern patent applications and scientific publications
these can be measured fairly quickly. When it concern commercialization of products these
sometimes needs to be evaluated later. To have mechanisms for this is important. Perhaps, the
fund receivers two-three years after the completion of the funding program should send in
information about market growth, increased turnover and so on. It could help EU with its
evaluation of its funding programs.
Additional remarks
Even if it is not the focus of this paper an observation is that Europe in comparison to US have a
greater emphasize to have meet a demand before considering investing in products and services
that innovators and companies develop. There are plenty of examples in software developed by
techies in US that first invented an online service without there being a demand for it, as for
example Twitter who invented micro-blogging. The demand for the product was created later
and then commercialized. The truth is that one approach is of course not more relevant than the
other. The importance is to be able to embrace both these approaches and give them possibilities
to commercialize their innovative products and services. The better Europe can achieve this, the
more jobs and prosperity in society.

8. Jan Softa at Somerco Date: 2014-07-18
Draft proposals:
Enhance the competitiveness of EC member states: Part 1 - Designated tax to science
Enhance the competitiveness of EC member states: Part 2 – Strategy to support the software industry
Enhance the competitiveness of EC member states: Part 3 – Actions to support women in ICT
Enhance the competitiveness of EC member states: Part 4 – Going abroad–Competitive assets
Enhance the competitiveness of EC member states: Part 5 – Business incubators, financial recycling and incentives
into reward
Enhance the competitiveness of EC member states: Part 6 – Standardization as a tool to increase competitiveness
Enhance the competitiveness of EC member states: Part 7 – Different types of innovations
Enhance the competitiveness of EC member states Part 8 – Open source from science to society
Enhance the competitiveness of EC member states Part 9 – Crowd sourcing and crowd funding
Enhance the competitiveness of EC member states Part 10 – Green VAT for business
Enhance the competitiveness of EC member states Part 11 - Keep talents in Europe
Enhance the competitiveness of EC member states Part 12 - Research leftovers
Enhance the competitiveness of EC member states Part 13 - Science Parks-Specializations
Enhance the competitiveness of EC member states Part 14 - Patent trolls
Enhance the competitiveness of EC member states Part 15 – Science e- Parks
Enhance the competitiveness of EC member states Part 16 – Expansion options
Enhance the competitiveness of EC member states Part 17 – The locally developed infrastructure
Enhance the competitiveness of EC member states Part 18 – Treaty (Knowledge transfer)
Enhance the competitiveness of EC member states Part 19 – Different types of infrastructure
Enhance the competitiveness of EC member states Part 20 – Build infrastructure (In progress)
Enhance the competitiveness of EC member states Part 21 – Your small energy infrastructure (elsewhere) (In
progress)
Enhance the competitiveness of EC member states Part 22 – Quick market entry (Medical)
Enhance the competitiveness of EC member states Part 23 – Innovation, commercialization, growth
Enhance the competitiveness of EC member states Overview – Old and new key areas in order to increase the
competitiveness of the industry (In progress)
Input on threats against information society