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Assessing the Value of Research in the Chemical Sciences (1998) / Chapter Skim
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5 The Technology Value Pyramid
Pages 50-55

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From page 50...
... In the corporate world, what you would acquire would be the physical assets, the list of customers, some marketing rights and brands, and so forth, but at least you would hope that an acquirer would pay more than the sum of these. What the acquirer would also be paying for would be your patents, your other intellectual property, and so forth.
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From page 51...
... where we said, "Let' s do a self-assessment." So we got together with our chief scientists and rated each other on how we were performing on a scale from zero to 10, zero being "dumb as a stick" and 10 being "should have won the Nobel Prize, but the committee was unaware of my work." All the scientists rate each other 9.5 and then present this selfevaluation to the business unit, which says, "Yeah right." This process lacks credibility. There are a number of other metrics that have great potential for gaming, but I think you understand the issue.
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From page 52...
... I would suggest that is true for government agencies and academic institutions as well. Immediately below portfolio creation, we put in integration with the business, because the portfolio Is not going to make much sense unless it is integrated with the company's business needs.
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From page 53...
... The new-sales ratio is generally defined as the sale of products introduced into the market during the last "X" years, divided by the total sales of the corporation; IRI typically uses a period of 5 years. I suppose if you were in the computer business, 5 weeks might be more appropriate; but for a lot of the IRI businesses, 5 years is fairly reasonable.
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From page 54...
... CONCLUDING REMARKS Let me conclude. First, I believe you can use the metrics developed by IRI to judge the value of scientific research, at least for research directly connected to business needs.
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From page 55...
... The R&D link has to be strong enough to hold up its piece of that total value chain. Second, there are commercial products available that will lead you through the process needed to obtain a reasonable estimate of how likely a project is to be successful or not, both commercially and technically.
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Key Terms

  • technology value
  • value pyramid
  • value creation
  • portfolio creation
  • delivering value

  • products introduced
  • customer base
  • portfolio management
  • create value
  • billion companies

  • business unit
  • little argument
  • public sector
  • mixed bag
  • substantial sales

  • chief financial
  • business units
  • tolerably easy
  • price grow
  • total value

  • unit managers
  • sales typically
  • marketing rights
  • ignore basic
  • academic institution

  • broader context
  • corporate world
  • pretty easy
  • stakeholders indicated
  • lacks credibility


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