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Innovation in Universities and the

Drive towards Commercialization

Gilles G. Patry – Rector and Vice-Chancellor – April 27, 2004

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Outline

1. Introduction

2. Context

3. University and Commercialization

4. Potential Barriers and Opportunities

5. Recent initiatives at U of O

6. Conclusions

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The Responsive University

• To survive and thrive, colleges and universities will have to be responsive.

Responsiveness is in the eyes of those being served:

• Students• Parents• Governments• Businesses• non-profit organizations.

• Each of these publics will judge the university in terms of

• the quality of their relationships with the university, and• the quality of the outcomes of those relationships.”

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Innovation Strategy

Goals of the 2002 Federal Innovation Strategy

• rank among the top five countries in the world in R&D performance (we currently rank 14th)

• at least double the Governments current investments in R&D

• rank among the world leaders in the share of private sector sales attributable to innovations

• raise venture capital investments per capita to prevailing US levels.

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Research and Innovation – Budget 2004

• $90 million annually to the budgets of Canada’s three federal granting councils

• $20 million a year to help Canada’s universities and research hospitals offset the indirect costs of research

• $60 million to Genome Canada to strengthen research in genomics

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Commercialization of Research

• $50 million over five years to improve the capacity for commercialization at universities, hospitals and other research facilities

• $25 million over five years to support proposals by federal science-based departments and agencies aimed at improving their research commercialization activities

• $5 million per year to IRAP to strengthen its support for the regional innovation initiatives sponsored by NRC

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Universities and Commercialization

• “Universities are starting to learn … (some universities have) set-up commercialization (units) in their universities through technology transfer officers.”

• “… we need to create partnerships to allow them to commercialize. …”

• “… I think it’s going to take a three-way partnership: the private sector, the academic community, and the government, all working together to create the economy that we want.”

The Hill Times – Monday, February 16, 2004The Hon. Joe Fontana – Parliamentary Secretary for Science and Small Business

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Universities and Commercialization

“The key drivers of prosperity in a knowledge-driven economy are factors which contribute to innovation such as Federal R&D expenditures, the production of R&D personnel, …

… the government-university partnerships are not simply about the procurement of research results.

It is about nurturing and maintaining the human strengths of a great technological nation and sowing the seeds that will ultimately bear fruit in new products and processes to fuel our economy and improve our quality of life.”

James J. Duderstadt (2003) former President of the University of Michigan

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Universities and Commercialization

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Universities and Commercialization

• Concept extends beyond science, technology and health (NSERC, CIHR)

• Social Sciences and Humanities Research Council[1] Consultation Framework where one reads …

“A new university landscape. [Universities]cannot be ivory towers, disengaged from their community or the knowledge economy. They are called to be at the heart of both.” On the new research environment, the document states “A new collective culture of “research entrepreneurship” is emerging as an important dimension of research activity in Canada.”

[1] Social Sciences and Humanities Research Council (SSHRC). “From Granting Council to Knowledge Council”, Volume 1. Consultation Framework on SSHRC’s Transformation. January 2004

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The Pillars of the University Mission

Learning Discovery Engagement

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Learning and Innovation

• Entrepreneurship concepts transpire across our curricula – fine arts, engineering, law, science and health

• Innovative teaching methods and curricula are also the object of commercialization

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Engagement

• Universities are key economic and cultural engines of our communities(UofO economic impact in excess of $1.6 billion)

• Commercialization key element of the economic benefits to the community

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Discovery

• Curiosity driven research is critically important raison d’être of universities – basis upon which future commercialization opportunities rest

• Commercialization potential of curiosity driven research discoveries

• Commercialization in Canadian universities is at its infancy wrt to US universities

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Licensing Income/Research Expenditures US Universities

Rank University Licensing Inc. Res. Expend. LI_to_RE Ratio1 Columbia University 155,653,442$ 407,405,270$ 38.206%2 New York University 62,700,209$ 179,727,000$ 34.886%3 Florida State University 52,077,120$ 154,705,048$ 33.662%4 University of Rochester 42,095,533$ 260,093,000$ 16.185%5 Emory University 29,557,917$ 250,719,041$ 11.789%6 Michigan State University 29,758,071$ 289,787,000$ 10.269%7 Stanford University 50,176,009$ 573,416,214$ 8.750%8 University of Florida 31,597,753$ 369,246,830$ 8.557%9 Univ. of Wisc. Madison 32,060,854$ 662,100,000$ 4.842%10 UC System 82,048,000$ 2,417,638,000$ 3.394%11 MIT 26,346,992$ 898,989,000$ 2.931%

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Licensing Income/Research Expenditures Canadian Universities

Rank University Lincense Inc. Res. Expend. LI_to_RE Ratio1 Université de Sherbrooke 10,594,400$ 41,481,000$ 25.540%2 University of British Columbia 5,585,186$ 193,432,000$ 2.887%3 Queen's University 2,709,737$ 101,365,000$ 2.673%4 McGill University 6,404,573$ 280,267,000$ 2.285%5 University of Alberta 4,916,654$ 240,548,000$ 2.044%6 University of Manitoba 1,222,755$ 101,570,000$ 1.204%7 university of Calgary 1,964,752$ 172,101,000$ 1.142%8 University of Waterloo 755,820$ 72,907,000$ 1.037%9 Université de Montréal 2,766,826$ 349,542,000$ 0.792%10 Simon Fraser University 170,050$ 25,414,000$ 0.669%11 University of Saskatchewan 530,553$ 101,572,000$ 0.522%12 Memorial University 145,350$ 34,278,000$ 0.424%13 University of Toronto 1,926,033$ 470,062,000$ 0.410%14 McMaster University 584,983$ 184,945,000$ 0.316%15 Concordia University 31,008$ 20,675,000$ 0.150%16 ETS 7,154$ 5,166,000$ 0.138%17 University of Western Ontario 133,086$ 131,836,000$ 0.101%18 University of New Brunswick 13,687$ 22,056,000$ 0.062%19 Université Laval 108,879$ 187,383,000$ 0.058%20 University ofOttawa 59,626$ 150,848,000$ 0.040%

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Potential Barriers andOpportunities to

Commercialization

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Barriers to Commercialization (1)

• Commercialization will detract from the core mission of the university (learning, discovery and engagement)

• A focus on commercialization will undermine and diminish the importance of basic research

• As publicly-funded institutions (at least in part), universities should not compete with the private sector in bringing ideas to market

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Barriers to Commercialization (2)

• As publicly-funded institutions, universities and faculty members should not profit from discoveries

• Graduate students and faculty members will be taken advantage of in the process.

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Barriers to Commercialization (3)

• Commercialization inevitably brings in partnerships with the corporate sector and corporate science corrupts (Ralph Nader)

On universities and corporations working together – Feb. 23, 2004 – University of Ottawa[1]… “The purpose of universities dedicated to truth becomes undermined. [Corporate and academic sciences] are not compatible. Corporate science is secretive due to more propaganda [and] power from the government. Academic science is open, part of the common, [and] tends to address the needs of the people”

[1] Ralph Nader. “The Scholar and the State.” GSAED Multidisciplinary Conference. University of Ottawa February 20, 2004.

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The Way Ahead

• Be Strategic• Align the commercialization strategy with

the strategic areas of development

• Provide support and resources to researchers

• Bring people together – multi-disciplinary

• Recognize and reward the contributions of faculty to innovation

• Partnership: A Key to Success

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Commercialization at the University of Ottawa

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The University of Ottawa

• Technology Transfer and Business Enterprise Office (TTBE)

• Strategic Focus

• Research Cluster

• Communication Strategy

• Policy Review

• Recognize the Contributions of Faculty

• Entrepreneurship Centre

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Conclusions

• Universities are not Development enterprises

• Critical that we harness the benefits of university-based discoveries – potential returns are important

• A three-way partnership involving Government – Private Sector – Universities where all are rewarded for their contributions

Special thanks to Dr. Jean Farrall and Mr. Sean Flanigan of TTBE for theirassistance

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Acknowledgements

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Canada’s Place inIntensity of Research (OECD, 1996)

3,7

3,01

2,89

2,73

2,61

2,55

2,31

2,18

2,18

2,04

1,95

1,93

1,84

1,83

1,66

1,62

Suède*

Japon

Finlande

Suisse**

É.-U.É.-U.

Corée

Allemagne

France

OCDEOCDE

Islande

Pays-Bas

Danemark

Belgique

R.-U.

Norvège*

CANADACANADA

0 1 2 3 4 5

Percentage of GDP

15

55

*1997 **1996Industry Canada, 2001

2. In

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Str

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Commercialization of University Research

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Evolving Role of Universities

Universities have added to their missionAdvancement of knowledge and education of a skilled labour force

Actively engaging in commercialization activities university-industry partnerships

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A Focus on Economic Growth

UniversitiesCreation of

New KnowledgeEconomic

Growth

Need to stimulate the creation of knowledge as well as thediffusion and adoption of new technologies.

Need to bridge the innovation gap relative to other major industrialized countries. (OECD, 1996)

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Innovation Gap

• Lower overall rate of adoption of high technology vs. low technology in the production of goods and services

• Small and medium-sized enterprises understaffed in terms of professional engineers and technologists compared to other OECD countries

• Lower national effort in R&D• Smaller number of researchers per capita• Smaller number of inventions per capita (x10)• Lack of entrepreneurship focus in engineering curricula• Financial community less prone to investing in

technological innovation

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The Way Ahead

• Reinforce the research capacity of universities and government labs

• Accelerate the commercialization of new knowledge

• Need of a global science and engineering strategy

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University TechnologyTransfer Process

UniversityResearch

Publication ofResults

Results Transferred to

Company

InventionDisclosure

InitialTechnologyAssessment

FurtherResearch

Returned toInventor

3rd PartyCommercialization

PrototypeDevelopment

CommercializationProcess

LicensingOptions

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University Technology Transfer Process

LicensingOptions

Spin-Off CompanyDirect Licensing

To an Existing Co.

Direct LicensingTo Spin-Off Co.

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