Thursday, May 28, 2009

Precompetitive Innovation

Some sort of basic science that benefits everybody or at least members (who might be competitors with each other) and is not competitive or commercializable. Or here at Wikitionary. 

To me this means something that everyone wants to know but it is unrealistic for one company to do it alone. For example a high pressure (20 bar) hydrogen gas quenching furnace/facility. In the heat treating industry there are people that want one of these so they can compare empirical test results to that of oil quenching. However, no such two phase low pressure carburizing and hydrogen gas quenching furnace exists for sale. There may or may not be one in Pennsylvania and Poland. It is theorized with some empirical evidence and computer simulations that hydrogen can quench as well (as fast) as oil. Now it seems that simulations of such a process are definitively precompetitive. It also seems that validating those simulations with tests of that process are precompetitive. However, building a furnace however big or small for the express purpose of validating the simulations becomes competitive because building a furnace is the responsibility of furnace manufacturers. That last sentence to me seems not entirely true. If the everyone desires t0 understand the process and perform physical experiments than perhaps everyone should take the hit to invest in the (possibly) first such furnace.

It seems to me that in any precompetitive research that one party will inevitably gain more from the experience than another. For example a furnace manufacturer, an auto maker, and a heat treating company go together on a new project. The project finished and is a success. The furnace company comes out with a new furnace and makes a ton of money in one day for the sale of that one furnace, the heat treater buys a furnace and saves a little money every year for 15 years, the auto maker buys the parts and saves even less money than the heat treater. Everyone saves money or makes more money but that precompetitive project was a different kind of investment for each company.

I think precompetitive research is important to the future of technological innovation because of publicly traded companies that focus on positive earnings every quarter research and development is likely one of the first areas to get funding cut. If all of that R&D can get done by a third party for a fraction of the cost because it is shared by several companies (even if they are competitors) than innovation is more likely to continue. 

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