Public and Private Goods in the Development of Additive Manufacturing Capacity:
Community Colleges as Local Industrial Commons
Steven Samford, University of Toronto
Peter Warrian, University of Toronto
Elena Goracinova, University of Toronto
Abstract: The promotion of additive manufacturing (AM) technologies has been a
prominent feature of new policies seeking to revitalize manufacturing in
developed economies. Canada has sought to promote AM in small enterprises by
using community colleges as anchors for regional industrial commons and as
partners for private firms. By providing both information and working capital to
private sector partners, the programs should mitigate the so-called “valley of
death” in local ecosystems. There are many successful individual cases of
partnership (i.e. the provision of private goods); however, doubts still remain
about the ability of the decentralized local community colleges to provide aid that
is both sufficient and appropriate to achieve the public good of systemic
mitigation of the risks of AM adoption and the increase of manufacturing capacity
in Canada.
Prepared for the 2015 Industry Studies Association Meeting
Kansas City, MO
Draft. Please do not circulate without permission of authors.
Recent years have seen a re-emergence of interest in manufacturing in high-income
countries, following decades of movement to low-cost countries. As in other countries, the
imagination of Canadian policymakers has been captured by the potential of additive
manufacturing (AM) to help revitalize domestic manufacturing. The popular expectation is that
because of the technology’s potential to speed design and prototyping and produce increasingly
complex parts, small enterprises with additive manufacturing capacities will be able to both stem
the flow of manufacturing abroad and to reshore the supply of parts and inputs to original
equipment manufacturers (OEMs) operating in Canada. Although distinct from traditional largescale industrial policy, there is broad recognition that innovation-led change will not occur
without the sponsorship of federal and provincial governments, and policymakers openly debate
the manner in which local “innovation ecosystems” may become better at integrating additive
manufacturing methods.
The reality that these expectations encounter is that the small businesses they imagine
benefitting from the use of AM face very high barriers to its adoption, given the costs and
technical requirements. The US Small Business Administration (2015) recently identified eleven
endemic problems to SME adoption of AM, most of which which generally fall into areas such
as lack of access to capital, lack of technical information and expertise, and difficulty with
adoption and commercialization of AM. These barriers speak to the need for active policy to
promote adoption of AM, if SMEs are seen as key to revitalizing domestic manufacturing.
Moreover, each of these barriers is almost certainly higher in Canada than in the United States.
The US federal government has begun to provide public goods to help the adoption of AM and
digital fabrication, most notably the AmericaMakes program in Ohio, a centralized program that
aids firms by providing access to shared manufacturing technology and facilitating contact
1
between private sector actors, educational institutions and research infrastructure . How have
domestic policymakers sought to mitigate the barriers to AM adoption among SMEs in order to
revitalize the Canadian manufacturing sector? What are the future prospects for these policies?
We identify the use of local community colleges as a key aspect of both federal and
provincial policy toward SME development of AM (and other digital manufacturing methods)
and argue that policy efforts amount to efforts to build regional industrial commons by
expanding the role of the colleges with the private sector. For roughly the last decade, the federal
government through the National Science and Engineering Research Council (NSERC) has
funded the establishment of collaborative programs within the community and polytechnic
colleges that directly assist SMEs with use and adoption of new technologies. Funding for these
programs and the number of participating institutions have expanded vastly over the last few
years. These programs are highly politically appealing: they invoke an innovative (and, possibly,
glamorized) technology, they aim to help small businesses, and they function in theory by
providing the public goods of industrial commons and training of an appropriate workforce. In
fact, these community college programs have been effective at assisting the commercialization of
numerous products that use or depended upon AM and are intentionally designed to both draw
on and feed into local economies by providing public goods that reduce the gap between primary
research and commercial success. They seek to do so by narrowing the so-called “valley of
death” that, at a systemic level, forms a barrier between research and commercialization of
innovations. That being said, there are several elements of these public-private programs that
may undermine their effectiveness as levelers of the barriers to AM adoption.
In what follows, we initially elaborate the ideas of the innovation ecosystem and the
“valley of death” – concepts which policymakers and small businesspeople frequently reference.
2
We then present the contours of the Canadian efforts to harness community colleges for explicit
use as developers of advanced and additive manufacturing capacity and how those efforts may
re-shape challenges faced by SMEs. Finally, we discuss the manner in which these partnerships
may fail to live up to their potential on a systemic level.
Innovation Ecosystems and Valleys of Death
Although both “innovation ecosystem” and “valley of death” are possibly over- and mis-used
concepts, they provide a useful framework for the discussion of Canadian efforts to develop the
use of AM in SMEs. Jackson (2013) offers a useful heuristic framework for depicting the manner
in which innovation ecosystems function. She conceptualizes the innovation ecosystem as two
interlocking economies: 1) the “research economy” in which investment in research and learning
generates new technologies, which provides the basic technology for 2) the “commercial
economy” which adapts and commercializes those technologies and introduces new technology
needs. At the level of the ecosystem, the research side relies on the invested returns from
commercialization for sustainability. So in stable ecosystems, the returns from
commercialization must be greater or equal to what is invested in the generation of new
technologies. Jackson (2013) represents the ecosystem as two curves – cost of investment and
return from commercialization – each of which represents one of the economies, as reproduced
in Figure 1. Along the bottom axis is the stage of development: discovery (dominated by
academia), technology demonstration and development (dominated by small enterprises), and
commercialization (involving investors and broader industry).
This heuristic draws attention to several features of the pathway in which most
innovation ecosystems function. First, the costs invested in generating new technologies are
3
typically greatest at the outset, at the point of so-called “basic science” or fundamental research,
and then decline as the technology moves toward adaptation and commercialization. Although
the funds invested in primary research often come from the public sector (as in government
support for universities), in a stable ecosystem the original sources of those funds are returns
from commercialization. Second, the returns accruing after commercialization are not
immediate, but instead require a period during which firms develop the means to use the
technologies and gather the capital necessary to produce at the required scale. Third, there is a
gap in the life of a technology between the investment in primary research and the full
commercialization of the products that incorporate them (or the complete use of process
innovations). This gap, where funding for primary research has dwindled and before
commercialization has been fully established, has been referred to as the “valley of death,” the
point at which most efforts to commercialize new technologies fail. This “valley of death” is
often used to refer to the challenges faced by individual firms, but it also functions as a model for
the difficulties faced at a system level. Some systems may have wider and deeper gaps than
others. When much of the investment in the generation of new technologies is publically
sponsored and the burden of commercialization rests on private industry, this metaphorical
valley is a transition from investment to return, from greater public responsibility to greater
private responsibility, from research to application.
Some of the common parlance around innovation ecosystems suggests that in particular
situations they are either present or absent. A more accurate way to think about them is as 1)
either being sustainable (or not) in terms of producing sufficient return from commercialization
to account for the investment in research, and 2) as fitting somewhere on a spectrum between
being more or less productive. Regarding sustainability, the notion is simply that to be a
4
sustainable innovation ecosystem, the rate at which investment is made in research must be
matched (or exceeded) by the returns on commercialization. Regarding the latter, some
ecosystems may both invest more and reap higher returns than others, just as some biological
ecosystems are places of high activity (e.g. jungles) while others are sustainable at lower levels
of biological activity (e.g. deserts). Figure 2 represents this notion that both high and low
productivity equilibria are possible. The solid lines represent a higher-productivity equilibrium,
where investment in R&D is relatively high, but the corresponding returns from innovation are
also high and sufficient to account for the higher rate of R&D investment; this would correspond
to, say, highly innovative ecosystems in Canada. The dotted lines represent both lower
investment and correspondingly lower return in a lower productivity ecosystem (in Brazil, for
example). Investment may be covered by returns, but they both have a lower baseline.
The tendency of an ecosystem to effectively promote successful commercialization of
technologies is critical to generating returns on investment to support new ideas. We contend that
the shape of the research and commercialization curves – and hence the capacity of an ecosystem
to generate and effectively commercialize innovations at a given rate – is largely a question of
public policy. Jackson (2013) suggests that the research vector can be shifted to the right by
government “championship” of industry through the provision of funding and resources for basic
and applied research. On the commercialization side, she suggests that any activities that lower
the perceived risks of investing in firms that are trying to commercialize individual technologies
will shift the commercialization curve to the left. The consequence of these two shifts is a
shrinking of the “valley” between the investment in research and the profit from
commercialization. We argue that many policies in Canada to promote the adoption of AM help
close the “valley of death” for SMEs seeking to adopt additive manufacturing methods by
5
creating a set of public goods. The following section describes the development of AM
promotion in Canadian Community Colleges and identifies the manner in which the programs
provide semi-public goods that mitigate the threat that SMEs face regarding the adoption of AM
technologies.
Community Colleges as Industrial Public Goods Providers
Community Colleges. Faced with the idea that although Canada is a leader in providing
funding for research its SMEs do relatively poorly in the areas new product development,
NSERC established the Community College Innovation (CCI) program in 2004. The logic
behind drawing upon community colleges was that they were already deeply embedded in their
communities, aware of the kinds of industry and their likely needs, and training students who by
and large remained in the area (NSERC 2013). As well-placed potential partners, the federal
government began to fund them specifically to develop regularized forms of interaction between
the private sector and the colleges, with the notion that these partnerships would draw upon
expertise and available labor in the college and provide both assistance to the small firms as well
as give students practical training in advanced manufacturing problem solving. Many of the
colleges have dedicated the funding to establishing centers or laboratories to manage these
public-private interactions, regularizing the benefits from them.1 In the years that ensued, the
federal NSERC program was expanded from six colleges to roughly 100 eligible institutions
with grants of $50 million CAD annually.
The programs generally function by funding applied working partnerships between
colleges and private enterprises, who face particular barriers to adopting advanced manufacturing
1
Examples are the Center for Advanced Manufacturing and Design at Seneca College, the Center for
Advanced Technologies at Sheridan College, and the Additive Manufacturing Resource Center at
Mohawk College, all in the Greater Toronto-Hamilton area.
6
methods. Small enterprises that encounter gaps in their capacity to develop and commercialize
an idea apply to a funded community college for assistance. The firms present relatively shortterm problems to the college. The faculty and students use their equipment and know-how to
address the applied research question at hand. The gap faced by the firms may fit somewhere on
the spectrum between developing a concept and commercialization. On the former end, one
administrator remarked that,
The smaller companies, all they have is an idea in their heads. A lot of work has to be done
ahead of time using our faculty and our students to design the part, and many iterations of that
design, and maybe making parts out of plastic first to say, ‘Is this what you really wanted or
not?’ before we even attempt to make a metal part.
For other companies, the gaps are the consequences of production difficulties after
commercialization that require remediation. While there is a broad range of processes that they
will take on, the college administrators are quick to point out that they do not engage in primary
research and that ultimately “who exploits this value [of innovation] is still the job of private
industry” (DB). The colleges are not interested in acquiring intellectual property or in
commercializing the products for their own gain, but rather see themselves as providers of
human and physical resources to address specific business failings. In the words of one college
administrator:
Here is where we are, we have a technological hub facility, with expertise of our faculty. We
have the manpower of the students who are willing to work on these projects, spending more
time on these projects, and hopefully we can solve them [for the firms]” (FR).
What the colleges do, then, is to provide physical and informational resources in the gap between
the decline of funding for pure research and the realization of commercial returns for goods.
On the level of individual firms, these partnerships with the colleges clearly provide two
distinct kinds of assistance. In one respect, the aid they receive is informational and addresses
technological incapacity. SMEs are well known to generally face more significant constraints on
their informational access to new technologies and often lower levels of human capital.
7
Moreover, additive manufacturing and other methods are what one administrator referred to as
“closed areas,” blocked by very high barriers to entry and, for many SMEs, a lack of experience.
A college administrator posited that “For them [SMEs], it's a strange area because it's closed,
they don't have any experience, and they cannot go back to the data and say, ‘Oh if I do this, this
will be correct.’” (FR; see also SBA 2015). So the contact with the community college allows for
the enterprise to gain access to information about and direct experience with new technology,
without which exposure, the field of AM would remain closed to them.
On the other hand, the partnerships may be understood as satisfying the needs of SMEs in
another manner: by providing working capital to the enterprises through the colleges. One of the
key features of SMEs is that their size severely limits the number of employees, the amount of
space, and uncommitted physical capital that they can dedicate to their own research and
development. Under these partnerships, the colleges’ facilities and efforts on behalf of the
enterprise are subsidized by funds from the federal and provincial governments. The colleges
provide physical space, machinery, expertise, and even labor for the enterprises that they would
otherwise be without, or that they would have to provide for themselves by raising and spending
additional funds. While the exposure to the technology itself is important, the access to this
working capital is also a critical benefit for the participating SMEs.
From most indications, SMEs who have been engaged with these projects are
overwhelmingly positive about their individual interactions (86 percent reporting a positive
outcome; 69 percent reporting concrete changes in their R&D capacity (NSERC 2013).
Public Goods. The provision of information, training, and working capital to
participating firms is clearly a benefit to those enterprises engaged in partnerships with the
colleges. We argue, however, that beyond the private goods that accrue to the individual firms, in
8
the best of cases these partnership programs may provide public goods at the level of the
innovation ecosystem. Specifically, the aggregate benefits should have the effect of shrinking the
gap between the research and commercialization economies. This section summarizes the
relationship between individual and ecosystemic benefits (see Table 1).
As community colleges operate in the area of applied, rather than primary research, the
large increase in federal funding for the community colleges moves funding toward later stages
of product development. In other words, resources are added to activities such as practical or
applied research rather than to the primary research that the federal and provincial governments
have subsidized, largely though the university system. Clearly, this shift – which maintains
funding for basic science research in the universities and research institutes – implies a greater
total amount of funding going to investment in the adaptation and diffusion of difficult to adopt,
high-tech manufacturing methods, such as AM, to the benefit of SMEs that have typically little
to do with primary research
Heuristically, this can be illustrated by a rightward shift of the research/investment line,
demonstrating the extension of funding for investment further into the cycle of product
development. In Figure 3, if (a) is the baseline, line (b) illustrates the extension in greater degree
to adoption and practical research, without diminishing the investment in pure science R&D.2
Alternatively, as in line (c), the extension of funding to applied research and commercialization
may be accomplished by a rebalancing of investment, reducing government investment into
primary research activity. In either case, the point is that investment is increasingly devoted to
The re-alignment of funding from “discovery” to adaptation might be appropriate, for example,
for ecosystems that rely more on the import of technologies and for whom the adoption and
adaptation – rather than their generation or discovery – are more important. Although there is
concern with benefitting from the presence of MNC’s and their technologies, this has not been
the central pillar of Canadian development in the way that it has been for later developing
countries like Mexico who have pursued FDI-led development strategies.
2
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applied research and adoption of new technologies, rather than discovery. The expectation is that
funding of these later stages of product development and technology adoption will reduce the
gap between the research and commercialization economies (i.e. shrinking the Valley of Death).
One critical note is that this shift has not been limited to a single industrial sector, but has instead
allows for the commercialization of AM across sectors, from medical devices to aerospace.
While these community college partnerships may be interpreted as shifting the research
investment line rightward to reduce the challenges of commercialization of particular
technologies in a given ecosystem, they are also clearly aimed at shifting the commercialization
curve leftward (i.e., so commercialization occurs more efficiently). We interpret them as moving
it in two ways. First, by providing human and physical resources necessary for adaption, the
college programs have the effect of reducing the private time and effort necessary to adopt new
process or product technologies. The leftward shift of the baseline – seen here in line (b) – as
well as the increased inclination of the curve (c) in Figure 4 depict this insight. Practically
speaking, the reduction of risk, the provision of working capital for commercialization, and so
forth, decrease the time and private effort necessary for the commercialization and return. As an
example, the president of one firm described its work with Mohawk College as speeding its
efforts to overcome a design barrier:
Because of the design of our particular first product that we have… we wanted it to be as close
to the design parameters as we could get. There was a sticky point with us that we were having
to redo our design to be able to fit the machines, which is quite common in engineering to do.
We were hoping that there was another method to do it. This is where Mohawk [College] came
up. They showed us that, yes, they can do the thing that we need to be done. That was a
bottleneck, in a way, but we were going to find a solution.”
Moreover, the partnerships can also speed adoption and commercialization, shifting the
commercialization curve, by reducing the need to either save or raise additional capital. For
example, the working capital provided by these industrial commons may stand in for financing
that would otherwise need to be raised or borrowed, facilitating the speed at which SMEs may
10
move forward with product development.
Finally, for SMEs the programs clearly reduce the amount of risk they face in their efforts
to successfully bring new technologies to market. This reduced risk is in part a consequence of
the added efforts of experts and the additional labor committed to the project in question. Where
firms might otherwise conclude the monetary risks associated with failure to effectively adopt a
new technology are too great, the promise of a subsidized project team to work on developing a
solution lowers the potential costs, even if the technology is never successfully commercialized.
We might also consider what effect increased training of students in additive and
advanced manufacturing methods have. Clearly, human capital accrues to individual students,
who are then better situated to find employment in higher value-added tasks. For individual
firms, the opportunity to employ highly trained workers who have experience with applied
research has obvious benefits. In aggregate, however, the benefits should accrue to the ecosystem
as a whole. That is, a dense population of workers trained in the use of AM methods will
generally reduce both the time and the risk associated with bringing new products and processes
to markets.
Those studying innovation from a management perspective tend to emphasize factors that
shift the commercialization curve, such as finance; those focusing on the technical generation of
innovations or invention tend to focus on policies and conditions that might shape the research
investment curve. It is our contention that policies that simultaneously and systematically shift
the two lines toward one another are likely to be the most successful at improving the rates of
technology adoption and innovation. Because primary research is so often the role of the public
sector and commercialization best accomplished by the private, policies that shape both inhabit
the area of public-private arrangements and are likely to be geared toward applied research. As
11
the breadth of private firm beneficiaries increases, the systemic gap between discovery and
commercialization should become less and less daunting.
Challenges to Bridging Ecosystem Gaps
There is much appealing in the Federal and provincial sponsorship of community college
partnerships: individual firms are pleased with their contacts with colleges; the elements of these
public-private cooperative programs are politically appealing, touching a wide swath of potential
beneficiaries; and they should result in broad social benefits, raising the levels of human capital,
providing public goods to promote more innovative and globally competitive SME, spurring
economic growth and reinvigorating traditional manufacturing. Whether this partnership model
does deliver all of those benefits – and not simply private gain for participating firms – is less
clear. An open question is how effectively these programs are in making private assistance
translate into public benefits for the broader innovation ecosystems in which they operate. We
identify three challenges to this goal: program density, decentralization, and the technical limits
of community colleges.
The first concern is with the density of partnerships and whether the provision of these
public-private partnerships is sufficient to truly approach status as a public good. As many have
pointed out, there are relatively few examples of pure public goods, and that most goods land
somewhere on the spectrum between pure private and pure public goods. As suggested above,
we can reasonably conclude that industrial commons and funding, such as the community
college partnerships outlined here, when effective, are clear public goods: they help close the gap
between research and return on a system level, reducing the aggregate economic losses
associated with failure to adopt innovations, raising the level of human capital appropriate for
12
advanced manufacturing. The problem with this arises if the provision of public-private
partnerships is too sparse. With low program density, the status of the assistance program creeps
toward private goods and away from a broader program that has an effect at the level of the
ecosystem. In other words, if there are too few partnerships, the aggregate effect on the broader
ecosystem becomes negligible, even though participating firms still benefit.
Although the federal and provincial governments have been expanding these programs,
year over year, there is some evidence that levels of provision fall below demand, across over
100 eligible colleges. One clear indicator of this is the capacity of the colleges to engage in
partnerships. One administrator reported being approached by five or six firms weekly, when
ultimately they have the space, expertise, and labor to work with between 40 and 50 per year.
Asked about outreach, the administrator responded,
We want people to approach us, but we do not approach people, the industry directly… But,
really imagine if I advertise what I am doing, now suddenly, 100 are coming. How can I
respond to that need?
If, as suggested, only 20 percent of firms seeking assistance are able to receive it, and that
making the services more widely known will only lower that proportion, the obvious question is
whether that is enough. If technical assistance is only provided to a small proportion, the systemwide benefits of that assistance are less certain. Aid begins to look less like a publicly available
“industrial commons” than a private good issued to a select few.3
This inability to assist more broadly is related to a second pair of concerns: light
coordination and decentralized decisionmaking. The use of the community colleges is justified
by governments based on their presence in the local community and ecosystem: they understand
3
One possibility that needs further exploration is that while enough public-private partnerships
may be formed to provide the necessary human capital development and training for students,
that this number of partnership falls short of closing enough of the gaps faced by firms seeking to
adopt AM or other advanced methods.
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the production methods and local firms, what kinds of skills requirements their employers have,
and how to anticipate what skills they will need. However effective on a small scale, it remains
unclear whether this constitutes a viable national strategy.
First, there are concerns with localized decisionmaking. If, as suggested above, there are
more firms seeking access to public resources than can be provided access, the question of the
criteria on which private-sector interlocutors are chosen becomes salient. Several administrators
suggested that decisions were based on perceived fit with their colleges and students: “Largely,
faculty in community colleges are engaged in applied research because they want to improve
their students' learning. That's the primary motivation for the community college faculty.” (DB).
The decisions are likely to rely at least in part on what faculty interests are and what capabilities
they currently possess in their centers (more on which below). This criterion may be appropriate
for the local students, but insofar as the program is aimed at national industrial development and
the diffusion of advanced manufacturing methods, it is potentially a sub-optimal basis for
selection. An administrator of Federal grants, for example, said:
They focus on these local companies because this is mainly the objective of the [Community
College Innovation] program to help SMEs to be more innovative, to help them to
commercialize better stuff or develop new products and adapt new technology. The colleges
are really there to help the SMEs.
This focus on the capacity of SMEs differs quite clearly from the focus on training students;
because there is discretion at both the college level (deciding on firm partners) at the federal and
provincial level (deciding on funding), drawing into question whether the relevant decision
makers are working toward the same overall goals.
A related issue is the question of coordination. Interviews with college administrators,
policymakers concerned with the partnership programs, and firms all indicated that loose
organizational structure and reliance upon networks contacts was inefficient. College
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administrators identified multiple, un-coordinated means by which businesses might make
contact with them. Most saw the arrival of their private sector partners as ad hoc: they might be
referred by provincial or federal agencies, might be referred by business organization, or might
just know of the college. This betrays a sense that there is little overall coordination of the efforts
to ease the absorption of advanced manufacturing methods in SMEs. A federal IRAP official was
less generous when asked about coordination:
No, the answer is no [there is no effort to coordinate]. We tried a few times, but these funding
agencies work the same way as the dairy industry across Canada… In other words, this is mine,
and you can't touch it. I'm not going to let you get mixed into my decision making process. In
other words, this is my particular empire.
This inefficiency is borne out in the experiences of enterprises as well. For example, one firm
that ultimately ended up working with one of the community colleges indicated that they had
initially sought help from a university in the Southern United States because the administrators
were unaware of the community college center within their own municipality. Similarly,
Warrian, Samford, & Goracinova (2015) document the efforts necessary for a single business to
uncover the services necessary to prototype and begin production of an industrial fastener.
A final concern relates to the limits of expertise in the community colleges themselves,
and, thus, for their partnerships to be able to ease adaptation and commercialization of AM
methods across sectors of the economy. One administrator identified the broader industrial aim
of their cooperation with SMEs as: “Keep those parts [produced] here at home for the
manufacturing sector, bring parts back home, and a make parts that nobody else can make and
export those parts.” (TT). Warrian, Samford, and Goracinova (2015) also document the fact that
while most of manufacturing that is relevant for industry in Canada (particularly the auto and
aerospace industries) final products are metal, the vast majority of additive manufacturing
capacity in the colleges is on polymer printers. While these polymer machines may be useful for
15
rapid prototyping and design applications, they use a dedicated technology and the know-how is
unlikely to migrate over into metal sintering. Moreover, the colleges typically lack the capacity
to do diagnostic testing or functional prototyping on many parts that they are able to produce
(Warrian, Samford, and Goracinova). If the colleges are limited technically, then they may only
be capable of helping bridge the systemic gap in certain kinds of manufacturing.
In short, if there are limitations in the amount or type of assistance offered through these
college-private sector partnerships, the goods provided are likely to look more like private goods
provided to a select group of firms (that are chosen with competing criteria) than like public
goods that reshape the broader innovation ecosystem, making adaptation of AM technologies
faster and less risky.
Conclusions
Several directions for further research have emerged from our initial analysis of the use
of community colleges as industrial partners. Clearly there are outstanding question about how
effective Canadian efforts to ground regional innovation ecosystems in industrial commons
created by community colleges will be. Although these efforts do seem to bring together existing
capabilities in the community colleges with identified barriers to SME adoption of additive and
advanced manufacturing and the need to train capable workforce, there are clearly questions
about whether the technical assistance is both sufficient and appropriate. Regardless, two points
of comparison are clear. First, efforts to build regional industrial commons for SMEs is
“industrial policy” that differs vastly from previous iterations of industrial development policy
that focused on heavy industry and large-scale production. Second, it is clear that the US and
Canada have approached developing AM capacity differently, the US approach appearing to be
16
much more centralized rather than attempting to take advantage of different local capacities.
There are a number of open questions relating to the effectiveness of these distinct approaches
and the extent to which they yield national and local benefits in terms of revitalizing
manufacturing in the two countries.
One tension that emerges from our analysis is that between individual and systemic views
of the challenges to commercialization. In interviews, SME operators often spoke of a valley of
death that their firms individually face in commercializing new technologies. From their
perspective (i.e. operating individually in the systematic gap between the pure research and
commercialization), they face and talk about this phenomenon in individual or micro terms.
From this perspective, this valley is a permanent feature of their operations and that any
technology, product, or process changes will be associated with the risk of failed
commercialization. As such, they perceive the need for policies and funds that mitigate risk as a
permanent necessity. This raises the question of how long term policymakers – who see these
phenomena at a systemic or macro level – perceive the need for on-going active funding of these
projects. Our intuition is that they do not see the need for programs such as the CCI to go on
without end at the same (or higher) funding levels. Whether the innovations adopted by
participating SMEs ultimately return enough revenue and employment gains to perpetuate the
program is unknown. Yet, our analysis suggests that the research and commercialization curves
will return (at least in part) to their prior shape without consistent long-term funding. There may
well be a political conflict baked into these distinct micro and macro views of the “valley of
death.”
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Figure 1: Valley of Death in Innovation
Ecosystem
Figure 2: Low and High Innovative
Ecosystems
investment
Investment
high investment/commercialization
Revenue
Revenue
commercialization
Return
low investment/
commercialization
Stage of Production
Stage of Production
1. Discovery
3. Tech Development
2. Tech Demonstration 4. Commercialization
Figure 3: Shifting Investment Curve
Figure 4: Shifting Commercialization Curve
c
Revenue
Revenue
b
a
c
Stage of Production
b
c
a
b
Stage of Production
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Table 1: Public and Private Benefits from Colleges-Enterprise
Partnerships
Individual Benefit
Systemic Benefit
(Private Good)
(Public Good)
Applied information about
Raised levels of practical/adaptive
“closed” technologies like AM
research
(Firm)
Working capital (Firm)
Reduced time to
commercialization; lowered levels
of risk in commercialization;
Individual human capital
More highly trained workforce in
(Community College Students)
AM; decreased risk in
commercialization; more effective
adaptation of AM methods
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