Capturing value from research networks in emerging technologies

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Plastic Electronics in the UK

Mapping the UK's technological competence in plastic electronics

An analysis of the UK’s competence in printed and plastic electronics was completed at the end of June 2008. The objective was to identify how plastic electronics is being developed in the UK, in terms of materials and technologies being used and the scale at which activity is being conducted. The resulting Competence Matrix is intended to aid understanding about how near we are to bringing products to market in the UK, what kinds of markets the UK might be able to dominate, and the feasibility of collaboration to bring technologies to market.

The Competence Matrix has been prepared by Cathy J Curling (an independent technical consultant with extensive experience in thin film and plastic electronics acting on behalf of the University of Reading), and Dr Zella King of the University of Reading.

Click to download the Competence Matrix for Plastic Electronics (PE) in the UK. Please read this file with its supporting documentation. Any enquiries should be directed in the first instance to Zella King at z.king@henley.reading.ac.uk or info@printedelectronics.net

The matrix contains two sections, the first covering university departments and the second covering companies. Each section is divided into five parts:

  1. Main classification – each entity is categorised in terms of its technology areas and its role in the plastics electronics value chain
  2. Materials and technologies – covers technology areas in more detail, and provides information on the scale of technology research and development and progress towards proof-of-product
  3. Specific Application/Product areas – indicates which application areas the emerging technologies are intended for
  4. Component Manufacture and Supply – indicates whether the entity is involved in the supply of finished components, and the position of that component in the Plastic Electronics value chain
  5. Business Model and Financing Status – shows how the organisation is funded and its main business model(s) (e.g. licensing of IP, direct supply to customers)

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Take away insights from the UK Competence Matrix

A quick glance at the UK Competence Matrix reveals the following

From these preliminary observations, and conversations with people working in plastic electronics in the UK, I set out below my thoughts on the outlook for the UK:

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Volume production in the UK is unlikely under current funding conditions

Few entities have moved beyond lab-scale or engineering stage to large volumes (Parts 1 and 2 of the Competence Matrix) and the manufacture or supply of finished components is still relatively modest (Parts 1 and 4).

This is not at all surprising, since the plastic electronics industry is still nascent and very few products have reached a market in any country. Bringing plastic electronics to market is still difficult and risky, involving not only the development of unproven technologies, but also the establishment of new markets. Involving end-users is important to prove to investors that new markets exist, but end-users need to be convinced by the technology before they commit.

That’s a challenge for any business plan, leaving innovators with two choices: either to licence their IP to potential end-users, or to scale-up production to the point where they can prove the cost and performance characteristics of their finished components. Fabless business models are not likely to be possible until global capacity for PE production is sufficient and standardised.

Relatively few UK-based SMEs seem to be following the IP route as yet (Part 5 of the Competence Matrix). Companies like Plastic Logic that are pursing a forward integration route are still in the process of demonstrating that their finished components can be produced cost-effectively at low volumes. Even though plastic electronics components can in theory be manufactured at lower cost than conventional electronics, and the capital expenditure required to establish production facilities is very much smaller, establishing production in the UK is still difficult for the following reasons

If the UK is to become an attractive location for production (beyond highly niche low-volume applications mentioned below), a significant renewal of manufacturing capability is necessary.  

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Lack of end-users is likely to constrain access to markets for UK SMEs

The matrix suggests a preponderance of activity in innovative developments in materials, inks, technologies and design (see Part 1 of the Competence Matrix) and very few end-users. By end-users we mean companies involved in electronics product integration and volume production.

Even if UK companies can show that their finished components can be produced cost-effectively at low volumes, the lack of end-users is likely to constrain access to markets. Only De La Rue is at present active as an end-user in PE products. They are integrating simple passive component antennas into their RFID products.

The UK lacks large-scale component manufacturers and product integrators. It therefore cannot provide a suitable eco-system of customers and suppliers (such as companies producing components for cars, laptops or mobile phones) who could be interested in exploratory PE technologies.

Small companies wishing to pursue routes to market through partnering with end-users will be obliged to court partners overseas (typically in the Far East). This constitutes a clear area of risk for the UK’s ability to capture value from plastic electronics, but is by no means an easy or immediate problem to address.

Another related problem arises from a lack of coordination between the mainly small companies innovating in these technologies. There is no incentive for companies to develop compatible standards or push for common technology platforms without a powerful end-user to insist on this. A solution could arise if UK enterprises collaborated to identify market opportunities (say in healthcare or sustainable housing) that could be addressed using PE technologies. Government procurement (e.g. through the NHS or defence) could provide an opportunity for end-user representation.

If UK enterprises are to coordinate their activities in this way, collaboration along the value chain is necessary. This means collaboration of a commercial as well as a technical nature, identifying common areas of opportunity and risk, and finding ways to organise to address these. It also requires conversations that think laterally: i.e. towards applying existing technology to new markets, or developing technology to serve established markets, such as in architecture or fashion.  

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UK universities are not fully represented in Collaborative R&D programmes

UK universities are almost exclusively involved in early-stage proof-of-concept work and in measurement (Parts 1 and 2 of the Competence Matrix, section 1 headed 'Universities').  Proof-of-concept work is exactly what we might expect from entities funded by the public purse. The UK still has immense brain power and scientific excellence in molecular materials, so universities might be expected to fuel the innovation pipeline.

However, it is not guaranteed that academics will focus research and generate technologies that are valuable to the companies able to exploit them. Issues of fit with the technology needs of the companies, and the commercial opportunities they are pursuing, are important here. Where ‘calls’ within the Collaborative R&D programmes and EPSRC funding are led by industry needs, technology developed by academics should be aligned with industry needs.

At present only 50% of university departments identified as active in plastic electronics are involved with Collaborative R&D programmes, however (see Part 5). Are the other departments not interested in the technology calls, not finding relevant partners or not submitting applications that get funded? Do academics have the right incentives to get involved in this kind of project?

Universities are themselves, of course, expected to capture value from this innovation pipeline. Are some universities imposing conditions for intellectual property which are unattractive to potential partners?

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Quick wins for the UK are possible in niche markets using distributed electronics on unusual surfaces

The ARM business model is widely heralded as exhibiting the UK’s ability to sell ideas, but most of the value from ARM’s IP will be captured elsewhere. What markets exist where the UK could establish an early lead and capture value in plastic electronics? 

The UK clearly excels in materials science, and we can continue to anticipate technology leadership in the inks and materials necessary for plastic electronics. However, as devices which incorporate those inks and materials reach full-scale production, the lion’s share of value will be captured by players who produce those devices in volume and those who integrate them into end products.

Unless investment patterns change radically, value from producing high-resolution and highly standardised components (such as those that are pervasive in many applications as silicon chips are in conventional electronics) will be captured in the Far East, not the UK. There are a number of performance-cost hurdles that need to be overcome before standardised components based on PE become price competitive. In the meantime, quick wins will come from products that don’t need to have long life-times, and/or have novel functionality that cannot be delivered using conventional rigid electronics. A suitable market entry price point is also a key element.

I suggest that UK companies are most likely to capture value from the early development of low-volume devices and applications that can be produced in relatively small volumes. A good example is Elumin8, a company that uses materials in low resolution over large areas to make large and bright displays that are energy efficient.

Examples include wearable displays that are embedded in garments and medical sensors embedded in patches or dressings. These can be produced at relatively low resolution, and are potentially high margin products. The ILLUM illuminated cycling jacket, designed by British design firms PPD and Goose Design using electroluminescent ink and printed photovoltaic technology, is a great example:

Source: http://www.talk2myshirt.com/blog/archives/729

With its expertise base in materials, technology and design, the UK should be poised for these early wins. For wearable displays, the UK’s fashion houses could act as early adopters. For healthcare applications, government procurement (via the NHS) could help to demonstrate the potential market for such technologies.

Collaboration within and across layers of the value chain – addressing commercial opportunities as well as technical hurdles – is critical to making this happen. Click here to see more about how my research examines collaborative partnerships in Plastic Electronics.

Click to download the Competence Matrix, and Supporting Documentation.

 

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