How small industrial SMEs can reach international markets and growth through Technology transfer

The challenging path of an industrial SME specialized in joining technologies to become a first-class supplier of a leading steel multinational company, by using Technology Transfer as enabler
The challenging path of an industrial SME specialized in joining technologies to become a first-class supplier of a leading steel multinational company, by using Technology Transfer as enabler

This Open Innovation (OI) collaboration initiative features an Austrian SME that is specialized in a very specific industrial market niche: the joining of dissimilar metals. Its products are highly technological and can be used for welding different types of traditional and new lightweight materials, allowing several improvements in weight, energy consumption and usability. This technology can be applied in automotive, railway, aircraft and shipbuilding markets, as well as the construction of pipelines, aluminium and steel products.

The financial resources of this SME for internationalisation outside of Europe are very limited and so expansion (especially outside of the EU) could not be focused on setting up own offices or subsidiaries in target countries. The option of finding distributors or representatives was also discarded due to the specialization and sophistication of the technology.

With the support of i2m Unternehmensentwicklung GmbH (a technological consultancy company) and an OI approach (i.e. aiming to implement a Collaborative product design and development strategy) the solution was to look for market leaders in selected countries outside of the EU (e.g. non-OECD countries like Russia, India or Brazil) and set up collaborative research teams of both companies. These teams analysed the best technological solution for the needs of the client in an open collaborative way, with the aim of transferring the innovative technology of the SME to the multinational company. A University representing the local scientific community was also involved in the research teams as crucial opinion leaders who validate the technology for the selected country and the specific application.

Additionally, the Austrian public sector was involved in the project, providing the necessary resources and guarantees to minimise the risks in case of failure.

Process Main Stages: 

STAGE 1: Design of the cooperation concept and validation of the technology (4 months)

The first challenge related to the collaboration was to identify the correct partner, interested in investing in new technologies. The message and presentation of the technology transfer concept, as well as a personalised approach were crucial to find a common ground for understanding. The participation of the local University in this process was also fundamental, in order to validate the technology approach. Furthermore, the Public Funder provided not only financial perspectives, but also contact data of potential stakeholders. The main tools used during this stage were Youtube and Webex. Key success factors were personal engagement of the SME’s CEO, research work, definition of common technological goals, and an attractive concept for all stakeholders involved.

STAGE 2: Preparation of collaboration and exchange activities (2 months)

The main process related to this stage was to design the collaboration process and select the correct people to interact from each side. On one hand, common ground on technological levels needed to be defined. On the other hand, the transmission of the common goals to the operative teams had to be clear and transparent for both sides. Main tools used were standard presentation and visual communication tools. Key success factors included personal visit of the SME CEO to the Multinational, definition of a common technological roadmap, and establishment of clear milestones.

STAGE 3: Implementation of collaborative Technology Transfer project (12 months)

The main process was the setup of the common research teams, with a clear definition of responsibilities and a direct reporting to the CEO/CTO. A critical aspect was the respect of the different milestones by each participant and the timely availability of each deliverable. Main tools used were Online Project Management Tools and frequent personal presence of the SME personnel at the premises of the Multinational company. Key success factors included a well-designed research plan and monthly monitoring by the CEO (of SME) / CTO (of Multinational).

Touchpoints & Bottlenecks: 

For the SME, the main positive experiences were the design and testing of a new way of distributing its sophisticated products and services, based on a collaborative approach rather than purely a sales approach; and the development of a marketing approach tailored to the product-technology-market combination and an innovative revenue model. The process was quite demanding especially in terms of personal engagement for the management of the company.

TOUCHPOINT 1: Finding the common research ground

Finding a  common research ground and estabilishing the different steps, milestones and deliverables was a huge challenge, as the SME was confronted not only with a new playground but also with a new cultural environment of a non-European company.

TOUCHPOINT 2: Financing agreements

Concerning the financing and the services offered by the Public funders, the main bottleneck was the extended decision-making time that was needed by the Agency (6 weeks longer than originally planned). During this period, the project development was uncertain and no clear messages were provided on the evaluation process. Once the project was started and the research activities got on their way, the cooperation entered into a very positive dynamic, achieving excellent results and contributing to design a future-oriented model for further potential markets.

TOUCHPOINT 3: Technological knowledge and transfer

For the Multinational, the main objective was to learn and implement a new disruptive technology into its production processes, in order to gain a clear competitive advantage in the global market. The collaboration, in terms of developing a common R&D project with a foreign company, meant a completely new approach and showed a viable alternative for future projects.

Overcoming the internal challenge of several administrative barriers was made possible through the engagement of the senior technological responsible of the company, who showed full confidence in the process and in the project results.

TOUCHPOINT 4: Online collaboration tools

The online collaboration tools used and the lively and frequent interaction of all parties involved contributed greatly to the success of the project. The previous discussions and the common set-up of the research plan, as well as the establishment of realistic milestones and deliverables, played a significant role.

Concerning the University, a specific working group was set up with the SME to understand the technical process and the potential application fields of the technology. Additionally, the local Multinational was involved in this collaboration team, in order to demonstrate its use and advantages.

A fundamental aspect was the organisation of the available resources, which were quite limited as the scientists and experts selected were partly involved in other projects. The direct support of the management of all parties involved facilitated a dedicated engagement of all participants. The use of advanced collaboration tools (e.g., Protosphere, OwnCloud) also contributed to the success of the project.

TOUCHPOINT 5: Funding as a kick-off

Although the funding was secured with some delay, the project could start immediately and a clear plan was established in order to achieve the desired results.

Success Factors / Barriers: 

The main objective of the participating SME was to find a partner to develop an industrial joining process of metals in a key market, like steel. The SME had to demonstrate that its technology could deliver a first class solution, generate a collaboration model applicable to further markets, use OI tools to guarantee a smooth cooperation and integrate the know-how of the local scientific community to optimise the access to the target country.

The Multinational’s objectives were to identify and adapt an innovative, viable solution to a novel joining process and to provide access to the most advanced technology. Additionally, the solution would help to gain competitive advantage, implement collaborative methods and contribute to the modernisation of a very traditional industry.

The objectives of the University were to get access to new advanced technology, useful for further research and publications, and to test and validate the technology for its use in the specific sector of steel production. Additionally, it aimed at getting PhD students involved in industry lead projects, implement collaborative methods for research and contribute to the further technological development of the University.

Finally, the objectives of the Public funder were to contribute to the dissemination of Austrian technology, support the collaboration with international companies, support the use of OI tools, and provide a fall-back scenario to the SME to encourage it to take the risk.

The success factors of this collaboration can be summarised in the following points:

  • All parties obtain a clear benefit in the cooperation
  • Professionally complementary partners
  • Compatible company strategies and visions of main actors
  • The OI tools used (e.g., Online Project Management Tools Protosphere, OwnCloud) set the basis for a long-lasting collaboration
  • The technical results allow for a further business cooperation
  • The methodologies implemented can be used in further markets

For an innovative industrial SME, it is extremely difficult to succeed in international markets with Multinational clients in a classic sales approach. The set up of collaborative research teams as a way of introducing the technology, using Open Innovation tools and involving all kinds of stakeholders (SME, Multinational, University, Funding Agency) has shown that an alternative way of successfully making business is possible. The drawback is that the time span needed to reach success is far longer than expected, due to the numerous people and processes involved.

  • Have a clear plan of the collaboration content and objectives.
  • Define your own interests and understand the interests and motivations of the other partners involved.
  • Define very clear technical deliverables and milestones.
  • Establish common medium and long-term goals.
  • Try to involve top tier management of all the actors involved.
  • Select easy-to-use online Project Management tools.
  • Invest in personal contact, schedule personal visits to your partner.
  • Secure the basic financing before getting starting.
  • Count with additional 3-6 weeks to your original planning.
  • Impose your views on the partner.
  • Expect fast answers.
  • Underestimate the time framework planned.
  • Underestimate the technical skills of your partner.