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Title: Creating and Executing a Technology Strategy for a Global Industry


1
Creating and Executing a Technology Strategy for
a Global Industry
Hal StillmanDirector of TechnologyInternational
Copper Association, Ltd. 20 October 2006
hstillman_at_copper.org
2
ICA TECHNOLOGY
  • Research, develop, and commercialize new and
    improved product and process technologies, and
    create new uses for copper
  • Very complex situation
  • How to start
  • How to achieve success

3
COPPER PROPERTIES
Electron structure is origin of many valuable
properties Single electron at fourth energy level
is highly mobile fills only 1 of 32 available
positions Electron has gas-like behavior moves
to transfer charge, collides to transfer
vibration (heat) Easy to create copper ion
copper ions readily penetrate microbes when
mobilized in adsorbed water Other properties
arise from cubic crystalline structure
malleability, color, alloying
4
COPPER/ALLOY ADVANTAGES
High electrical conductivity High thermal
conductivity Range of valuable mechanical
properties Corrosion resistance Aesthetic
qualities
Antimicrobial surface Essential for life 100
recyclable Integral to energy efficient
design Integral to technological development
5
INDUSTRY VALUE CHAIN
Producers
Fabricators
6
END MARKET APPLICATIONS
Fabricators
End Users
60 of copper use is electrical applications
7
ABOUT ICA
  • A not-for-profit industry trade association
  • 39 member companies represent gt85 of world
    copper production
  • Focus is promoting and developing copper use
  • Headquarters in New York
  • 27 offices globally with 200 technical marketing
    staff
  • 2006 budget 45 million plus 20 million
    co-funding

8
ICA MISSION
  • Advance copper as the material of choice for
    current markets and new applications given its
    superior attributes in terms of technical
    performance, sustainability, essentiality for
    life, and its contributions to a higher standard
    of living.

9
THE UNSTATED MISSION
  • Do what you can within anti-trust guidelines to
    assure that there is demand for just a little
    more copper than the industry can produce

10
SITUATION IN 2002
  • Very little innovation in the industry
  • Copper industry ceding markets to alternative
    materials
  • Little effort to create new applications
  • Price at bottom of cycle
  • Rapidly developing economies expected to raise
    demand
  • Concern about price volatility
  • Industry highly fragmented
  • Strong competition in each stage of value chain
  • Producers, fabricators and end-users are not
    collaborating to provide superior products for
    consumers

11
SITUATION IN 2002
  • 15 million tonnes from mine production
  • 5 million tonnes recycled
  • Total value in 2002
  • 20 million x 2000 40 billion of commodity
    material
  • Low industry profitability
  • Opportunity for technology development recognized
  • Avoid repeating experience of automotive radiator
    market

12
AUTOMOTIVE RADIATORS
  • In 1975 copper had 100 of the market and did not
    believe that situation could be changed
  • By 2002 market share was less than 10 with loss
    of gt100,000 tonnes
  • Real reasons for the success of aluminum
    automotive radiator is not weight but
  • 25-year development effort of the aluminum
    industry
  • Total neglect in that same period on the part of
    the copper industry

13
AIRCON HEAT EXCHANGERS
A similar story about to happen
Aluminum
Copper
Same performance at half the size
14
ICA TECHNOLOGY INITIATIVE
  • With the support of ICAs Technology Steering
    Committee, the Director of Technology will
  • Create and execute a plan for the development of
    an infrastructure for research work and the
    search for promising technologies or products
    that would benefit from/or be developed with ICA
    funded research
  • Develop a concept for an external venture capital
    company to further development and
    commercialization of promising new products and
    technologies

15
SOME CONSTRAINTS
  • Can not engage in ordinary business
  • Retain not-for-profit status
  • Anti-trust concern prohibits price discussion
  • Members are competitors (in many ways)
  • Slow decision-making
  • Vocal member opposition to diverting funds to RD
  • Wary insider opposition to outsider leading
    organization in new direction
  • Must achieve tonnage impact

16
BEFORE ICA INCRA
  • International Copper Research Association
  • Previous industry research organization
  • Operated from 1958 - 1990
  • 459 projects in 32 years spending 90 million
  • Outstanding technical managers
  • Bookshelf of detailed project reports
  • Excellent research quality
  • No lasting commercial successes
  • In 1990, industry shut down activity and focused
    solely on promotion

17
THE BOOKSHELF
18
THE CHALLENGE
  • Re-start some type of technology activity but do
    a better job than INCRA
  • What would you do?

19
LEARNING FROM INCRA FAILURE
  • Surprise many of the same ideas thought to hold
    promise in 1960 still held promise in 2002
  • Great job of spotting opportunities, but spread
    RD effort too thinly
  • Prematurely stopped work on problems that were
    worth solving
  • Technical breakthroughs needed to achieve market
    success had not been made
  • Puzzling once-a-decade review of new
    opportunities and commercialization possibilities
  • What were they thinking?

20
LEARNING FROM INCRA FAILURE
  • Governance barrier to getting directly involved
    in commercialization
  • Dont compete with members
  • Put RD results into the public domain and hope
    for the best
  • Belief that a great research result is sufficient
    to spark commercialization
  • Single product Product Engineer insufficient to
    drive commercialization

21
CONCLUSION 1
  • Research should hold a persistent focus on real
    opportunities despite short-term technical
    setbacks
  • Multiple attempts should be made to find a
    solution path to a promising market opportunity
  • Focused efforts should not be constantly diverted
    by the search for new opportunities

22
CONCLUSION 2
  • Find a way to connect technology to the market
    through entrepreneurial business development
  • An entrepreneur will persist in trying to find a
    technical solution to a market opportunity
  • Protect intellectual property to capture
    potential value
  • Persistent effort will be needed to find a
    workable approach for ICA
  • Attract potential commercialization partners and
    supporters
  • Butorganization really not ready to embrace
    venture capital-like approach to
    commercialization

23
EXECUTION PATH
  • Articulate desired state
  • When business and technical people think about
    innovationcopper comes to mind

24
EXECUTION PATH
  • Form a Steering Committee that helps prioritize
    activities and provides political guidance
  • Quarterly meetings with briefing book in advance
  • Dialogue begins where briefing books ends
  • Achieve consensus on major processes and concepts
  • Take significant directional decisions
  • Do RD, but talk about commercialization
  • Multi-lingual, multi-cultural, multi-level,
    multi-company team
  • Tell your story in pictures

25
ICA NETWORK CONCEPT
Connect to a number of networks within key
domains and stimulate thinking about
copper-related technology
Materials science, metallurgy and materials
processing networks
Government funding initiatives and networks
associated with copper
Application and design engineering networks
relevant to copper
  • RD and academic organizations with a potential
    contribution to copper technologies
  • Understand past/current projects and their
    relevance to copper
  • Leverage ICA funds through their sources of
    funding
  • Expand on current ICA contact base
  • Academic, industrial and development
    organizations that apply copper in commercial
    applications
  • Identify possible programs relevant to copper
    remove technology roadblocks
  • Leverage ICA funding
  • Understand linkage between copper and government
    funding priorities
  • Profile types of projects being funded
  • Create new funding initiatives that involve
    copper
  • Connect individuals in other domains to
    appropriate funding sources

H. Stillman November 2002
26
PROJECT APPROVAL PROCESS

3

7

Technology Committee

Non-secret, small, simple project
may gain rapid approval

6

9

ICA President

2

4

X

Technology Director

8

Project Management Team

Periodic review of project by Project
Management Team with decisions to
continue, change or terminate
X

activities. At least one member is on
Project Manager

Team.

5

X

Legal Counsel

Due diligence process for commercial, legal and
technical review applies to all projects but
with
special emphasis on projects undertaken in
X

collaboration with external firms or
organizations
Subject Matter Experts

in which disclosure of project information to
members is limited to protect secrecy and
(can include members)

intellectual property rights

1

Project Proposer

Decisions

1. Submit RD proposal/concept

5. Legal agreements for RD

2. Proposal passes screening

6. Proposal passes due diligence

If proposal exceeds approve
d
4. Investigate and resolve conditions
technology budget, Advisory
3. Conditional approval

7. Funding authorization

Committee approval is required


8. Reviews by Steering Committee

9. Proceed with commercialization

27
Positive
Negative
28
IMPACT MATRIX
2007-2011
_

Impact of emerging/evolving technologies on
copper usage
HIGH MEDIUM LOW NONE LOW MEDIUM HIGH
- Antimicrobial surfaces - Aquaculture cages   Wind power Power doors - Wireless LANs - Fission power - Biotechnology - Cu nanomaterials   - Wireless telecom - Fiberoptic LANs - VOIP PEx plumbing systems - Flat panel displays Al micro-channel HX
- CMR - Deep sea cables - Hybrid automotive - High efficiency stators - High bandwidth communications over copper SSM Server cooling Cu/CNT thermal conductors - Al solar thermal - Rare earth permanent magnet motors Al magnet wire - Automotive wiring alternatives
- Flat tube HX - Cu-plate HX - DGWH - Vehicle batteries? - Desalination? Dist. energy sys. Power quality - Electric ships - RFID tags - Superconductive cables - Electroactive polymer actuators    
Copper-tube corrosion solutions - CO2 heat pumps Fuel cells (Cu- catalyst and desulphurization) - Power electronics Cu-bulk metallic glasses - Nuclear waste storage - Cu/CNT electrical conductors - Polymer conductors? - Polymer HX    
      Fusion reactor systems Electromagnetic rail propulsion?    
100
80
Probability ()
60
40
20
0
Aug 2006
ICA projects shown in red
29
PORTFOLIO ASSESSMENT
2007-2011 Impact
Higher
Low (lt10000 tons)
Medium (lt50000 tons)
ISG
High (gt 50000 tons)
GeoSolar
CAT 7
GeoSol
Probability of technical success
Conform
EB
MEGA
Heat exchange systems
Kompact
Electrical energy
Fuel/ Natural gas-S
Mech. alloy
Antimicrobial
VAE
SSM
FC catalyst
Cu BMG
Tarnish resistance
Cu2S PV
Lower
Later
Sooner
Timing
30
PROJECT SELECTION PROCESS
31
ICA TECHNOLOGY PIPELINE
Continue development to make process more
competitive wider tolerances, more efficient
braze coating
Provide breakthrough to interested companies to
stimulate market development
Seek non-automotive market opportunities
license to product companies apply new Cu
technology developments
Support with ICA market promotion push market
development in touch surfaces and aircon
Coating production source available coating
formulation will be available to members members
involved in project
Engage tubing companies in development project
quick commercialization if economically viable
Assist foundries and manufacturers charge access
fee leverage with government funds
Fund start-up to demonstrate system engage
industry from the start possible ownership
position through RD funding
Form company to focus solely on Cu alloy SSM
support with market promotion leverage with
government funds
Engage fabricators and industry to produce
prototypes aim for widespread application

MEGA
Flat copper HX conduits
Copper motor rotor
Antimicrobial copper/alloy surfaces
Cuprobraze
Electronics cooling bus
Chemically grafted coatings
Semi-solid metal forming
ICA pre-competitive RD funds move technologies
towards commercialization
Commercialization
  • New project sources
  • RD network
  • ICA network
  • Market intelligence
  • Venture capital network
  • New projects not shown
  • Round tube/plate fin all copper aircon HX
  • Plate heat exchangers
  • Lower cost solar thermal systems
  • Thin section extrusion
  • Subsea cables
  • Plumbing tube coating
  • Water heating heat pump
  • Rationale for ICA role to accelerate
    commercialization
  • 2 10 million need for technology and market
    development
  • Market development best pursued by motivated
    entrepreneurial company
  • Likely to attract external capital to grow a
    company
  • Success would create substantial new copper use

32
EXECUTION PATH
  • Set down principles and socialize them
  • Buy-in from 15 companies with inconsistent
    outlooks
  • Initiate member-to-member interactions
  • Push the group just beyond lowest common
    denominator of acceptance
  • Assure appropriate level of discomfort
  • Give members time for stress relaxation
  • Expose to comparable organizations with similar
    issues
  • Visit Gas Technology Institute
  • Soybean Board

33
ICAs RD PRINCIPLES
  • Focus on creating new, high tonnage, global
    applications
  • Support pre-competitive RD where ICA funding can
    make a difference
  • No internal resources global RD network
  • Involve members and customers in projects
  • Take active role in technology commercialization
  • Leverage with external funding
  • Each is a difficult sell

34
EXECUTION PATH
  • Build personal relationships with member firms,
    end-users organizations and RD organizations
  • Visit all ICA members discuss market dynamics
    and technology
  • Visit key copper users understand attitude
    towards copper use
  • Visit universities, research institutes,
    corporate labs find the leading edge of
    research
  • Stimulate open debate of relevant issues in
    Technology Steering Committee
  • Demonstrate competence and discretion to gain
    credibility

35
EXECUTION PATH
  • Establish initial pre-competitive projects
  • Mix of new applications and unaddressed needs
  • Mine the bookshelf identify new challenges
  • Select high risk, learn-as-you-go projects
  • Overcome basic obstacles
  • Engage full supply chain
  • ICA members have first access to developments
  • Deal with major exception secret project with
    global automotive OEM
  • Initiate activities to gain co-funding

36
COMMMERCIALIZATION CONCEPTS
  • Focus and sustain effort to achieve tonnage
    impact
  • Understand potential market impact and possible
    commercialization route from the start
  • Build credibility through co-funding
  • Connect technology with entrepreneurial effort
  • Prefer technology transfer, licensing or royalty
    over equity ownership
  • Equity ownership in business in exceptional cases
  • Exit ownership position when strategic benefit
    achieved

37
TECHNOLOGY DEVELOPMENT PROCESS
  • Technical capabilities
  • Properties
  • Processes

Technology feasibility demonstration
Member/supply chain participation
New copper application
Venture creation / entrepreneurial effort
Market/business innovation
  • Application knowledge
  • Industry pain points
  • Market dynamics

38
ICAs RD FOCUS
  • Create and commercialize application-directed
    technology breakthroughs in a few high potential
    technology domains
  • Heat exchange systems
  • Automotive
  • Antimicrobial surfaces
  • Renewable energy
  • Electrical energy
  • Data communications

39
HEAT EXCHANGE SYSTEMS
Condensing demand gas water heater
Plate heat exchanger
CO2 heat pump
Small diameter aircon tubes
Flat multichannel tube
40
AUTOMOTIVE HYBRIDS
Electromagnetic transmission
Integrated starter generator
41
ANTIMICROBIAL
Antimicrobial surfaces
Antimicrobial aircon heat exchangers
42
RENEWABLE ENERGY
GeoSolar system
Emergence BioEnergy
43
ELECTRICAL ENERGY
Deep sea electrical cable sheathing
Copper motor rotor (industrial, appliance and
automotive applications)
44
DATA COMMUNICATIONS
Data communications beyond 10 Gbps
Power over Ethernet
45
UNIVERSITY RESEARCH
  • Wear-resistant mechanically alloyed
    alumina/copper dispersion
  • Silicon carbide reinforced copper for high
    temperature heat-transfer applications
  • Copper-based bulk metallic glass
  • Copper sorbents for desulphurization of fuels and
    natural gas (licensed)
  • Copper catalyst for methanol-to-hydrogen
    conversion


46
CO-FUNDED RD CONSORTIA
EcoSea
GeoSol
Super Calefont
47
2006 TECHNOLOGY PROGRAM
48
CURRENT SITUATION
  • Active for 4 years
  • ICA funding 12 M cumulative
  • External funding attracted 12 M cumulative
  • Estimating 2006-2010 impact of 200,000 tonnes
    (1.6 billion)
  • Major growth opportunities coming from Technology
  • Global RD Network established (140 active
    researchers in 2006)
  • Commercializing RD results

49
SYSTEM ARCH. FRAMEWORK
                                                
                                                  
                                                  
                               ___________________
______________________________
Source Ed Crawley, MIT, ESD34.J
50
Example Project Copper Alloy Fish Cages
51
BEYOND R D
  • Traditional CTO management roles
  • R Research (market and technical)
  • D Development (leadership)
  • E Engineering
  • Additional disciplines required at CTO level
  • C Connect (partner selection, contracts, IP,
    value sharing and motivation matching)
  • M Commercialization (funding, business
    development)
  • New opportunities and innovations arise from
    making creative connections and moving to market

52
TECHNOLOGY TRANSFER
Copper alloy enclosures for the cultivation of
marine organisms in their natural habitats
Proven in Japan Yellow tail
Needed in Chile Salmon
53
AQUACULTURE CAGES
  • Fish cages made of copper alloys
  • Resist fouling
  • Have low corrosion rates
  • Resist attack by marine mammals
  • May prevent growth of infectious bacteria
  • Are recyclable at end of life
  • Reduce operating costs

54
1976 INCRA PROJECT
55
RATIONALE IN 1976
  • Farmed fish production doubled 1970-1975
  • Production at 4.5 million kg/year 10 of global
    fish supply
  • US alone is 800 million retail industry
  • Growth should continue
  • Open ocean fish stocks declining due to pollution
    and over-fishing
  • Western countries more health conscious and
    eating more fish
  • Price of fish rising making farming potentially
    more profitable

56
RATIONALE IN 1976
  • Fast growth has been in low labor cost countries
    with traditional practices
  • Slow growth in technologically intensive
    countries
  • Little scientific research focused on making
    aquaculture a profitable venture
  • Large companies not willing to take the risks
    involved in investing in large-scale aquaculture
    businesses
  • INCRAs floating copper-nickel fish cage could
    accelerate growth of aquaculture
  • More cost-effective technology
  • Focus on luxury crops such as salmon, trout and
    oysters

57
ADVANTAGES OF Cu-Ni CAGES
  • No biofouling
  • Avoid the costs, fish stress and nuisance of net
    changes
  • Healthy fish - maintain level of oxygen and
    water-borne nutrients
  • 5 blockage after 18 months of submersion vs 75
    blockage for nylon net with copper antifouling
    coating
  • More fish per cage
  • Avoid predator attacks
  • Reduced labor costs

58
CAGE CONSTRUCTION
  • Expanded 90/10 copper-nickel sheet
  • 76 open area
  • Proven anti-fouling
  • Rigid modules with fiberglass frames
  • 1 x 3 meter panels
  • Assembly into different shapes as needed
  • Floats covered with 90/10 copper nickel

59
WHY EXPANDED METAL
  • Many material forms considered
  • Wire mesh (welded and woven)
  • Fine braided wire woven into netting
  • Perforated sheet
  • Expanded metal selected because it gave lowest
    cost cage
  • 26.23/m3

60
WHAT WENT WRONG?
  • Expanded metal rigid cages cost effective but not
    the right choice for the application
  • Flexibility important
  • Some biofouling caught in corners of expanded
    metal
  • Not easily scaleable to large enough volume
  • Industry grew faster than expected and needed
    proven, risk-free technology
  • Cost analysis based on 10-year cage life and no
    end-of-life value
  • No entrepreneurial drive

61
EXPERIENCE IN JAPAN
62
JAPANESE TECHNOLOGY
  • Netting material provided by SAMBO (Japanese
    subsidiary of Mitsubishi Materials)
  • Second generation material
  • Unique alloy low corrosion, antifouling, high
    strength, abrasion resistant
  • Chemical composition (wt. )
  • 64 Cu, 35 Zn, 0.6 Sn, 0.3 Ni
  • Formed into woven wire net
  • 200 current net installations

63
JAPANESE TECHNOLOGY
  • Cage design, construction and installation by
    Ashimori
  • 12m x 12m x 10m deep

64
JAPANESE TECHNOLOGY
UR30 net after 4 years in Japan
UR30 net after 5 months in Chile
Nylon net after 5 months in Chile
65
REAL BENEFITS IN JAPAN
  • NO maintenance or net changes over 4 years
  • No cleaning costs
  • No cost for disposal of biofouling on nylon nets
  • No net change costs
  • No loss of fish due to stress of net changes
  • NO antibiotics NO disease
  • NO parasites NO fresh water immersion
  • NO predator perimeter net required

66
REAL BENEFITS IN JAPAN
  • Lower environmental copper release
  • Constant low level release (about 30 of nylon
    nets coated with copper-based paint)
  • 50 more fish per cage
  • 10-15 faster fish growth
  • More profit at lower cost
  • A clean technology
  • Higher consumer acceptance
  • Lower environmental impact
  • More profitable

67
A HAPPY FISH FARMER
68
AN OPPORTUNITY FOR CHILE
  • Transfer of Japanese technology to Chilean
    industry
  • Woven brass alloy cage well suited to salmon
    culture
  • All production, from metal mining to installed
    cage, by Chilean companies
  • Cage leasing to overcome high initial cost
  • CleanTech approach
  • Reduced environmental impact from salmon
    production
  • Complete metal recyling at end of cage life
  • Strong economic benefits
  • Much better than copper antifouling coatings!!!

69
ECOSEA PARTICIPANTS
  • ICA initiation, organization, research and
    funding
  • Intesal Chilean salmon industry research
    institute
  • Universidad de Concepcion research assistance
  • Mitsubishi Materials copper alloys for fish
    cages
  • Codelco project management
  • Ashimori fish cage fabrication and installation
    expertise
  • Madeco production of copper alloy wire in Chile
  • Rivet wire weaving for fish cages in Chile
  • Aqua Cards fish cage fabrication and
    installation in Chile
  • Various salmon farms in Chile

70
COPPER ALLOY SALMON CAGES
  • Resist fouling
  • More oxygen equals faster growth
  • Higher conversion factor
  • Allow more fish per cage
  • Resist attack by marine mammals
  • Reduce operational complexity
  • Avoid net changes
  • Avoid the need for antibiotics
  • Lower environmental impact
  • Lower low copper ion release
  • No liquid or solid wastes
  • Are recyclable at end of life

71
2006 SUCCESS FACTORS
Better alloy material in better form
Technology proven in use needs adaptation
Technology transfer to local industry
Deeper understanding of industry needs
Leasing business model to lower capital cost
Business consortium with government co-funding
72
SUMMARY
  • Identify and develop network of relationships
  • Define a vision, processes, and gain buy-in
  • Find opportunities worth pursuing
  • Devote the effort needed to succeed
  • Plan for commercialization early in the process
  • Combine technological advances with business
    model innovation
  • Gain leverage from partners
  • Encourage entrepreneurial efforts
  • Systems thinking essential

73
Creating and Executing a Technology Strategy for
a Global Industry
Hal StillmanDirector of TechnologyInternational
Copper Association, Ltd. 20 October 2006
hstillman_at_copper.org
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