This background paper examines the complexities of innovation and commercialization in an attempt to demonstrate the linkages between science, technology, and innovation, and to highlight the growing importance of factors other than basic research in commercial success. As shown, innovation is a complicated process in which markets often stimulate development of new technologies and product or process development stimulates scientific and technical research.
Many factors influence commercial success, including the nature and composition of markets; competition from older technologies; choices of design and implementation; the availability of financing, standards, and complementary assets or infrastructure; and the ability to link with strategic partners. Government exerts significant influence on the innovation process, both intentionally and unintentionally.
Research conducted for government missions can benefit commercial industry; federal procurement can jump-start nascent industries; environmental regulations can create markets for new technical approaches; government-sponsored technology demonstrations can provide useful information about new products, processes, and services to both users and developers; and laws in the areas of tax, investment, intellectual property, and antitrust shape the environment in which firms compete for resources and market share.