An investment methodology for materials

Will a new material innovation succeed in the market place? Should time and money be invested in developing it? By whom? A methodology has been developed to address these questions. The investment methodology for materials (IMM) is proposed to help identify promising materials innovations at an early stage, helping to direct research and development in directions most likely to lead to successful exploitation, and guiding investment strategy to achieve this. IMM adapts existing and emerging predictive software tools and business strategies to materials innovations, linking them to give a practical, comprehensive procedure. It consists of three interwoven strands: viability assessment, market forecasting and value capture. Viability assessment involves the analysis of technical suitability of the material for an application, an estimate of production cost, and the marketʹs trade-off between performance attributes and cost. Market forecasting involves gathering application-specific market preferences, making an estimate of the technically and economically viable market size, and predicting the timing of industrial adoption by comparison with relevant historical precedents. The analysis of value capture utilises tools to assess industry structure, appropriability and organisational structure. The methodology was developed in response to perceived under-investment in new materials innovation. It has been validated through interviews with venture capitalists and materials industry experts. IMM is aimed in particular at small and medium sized enterprises (SMEs) which are attempting to commercialise a new materials innovation. It is envisioned that IMM will assist SMEs in obtaining financing to commercialise new materials innovations and/or to refocus their efforts. The method is demonstrated through a case study in a companion paper.