Measuring Knowledge Commercialization/ Denzil Doyle

Measuring Knowledge CommercializationA Presentation By Denzil J. Doyle

Making Technology Happen TM

June 12th, 2007

Prepared For:

Federal Partners for Technology Transfer2007 National Meeting

Halifax, Nova Scotia

Contents:

• Licensing and Spin-off FamilyTrees

• Measuring Knowledge Commercialization – The Model

• The Commercialization Engine

• Economic Impact Results from the Model

• Implementation

Measuring Knowledge Commercialization: FPTT National Meeting 2007

1. Licensing and Spin-off FamilyTrees



2. Measuring Knowledge Commercialization – The Model


Measuring Knowledge Commercialization

Licensing & Cost recovery dollars go to the laboratory. Highly visible & measurable. Shorter time frame. Tax dollars go to the government. Less visible & measurable. Longer time frame. Tax dollars much greater than the licensing and cost recovery dollars. Taxes typically 20% of sales. Royalties typically less than 5% of sales. Cost recovery can conflict with long-term payback – scientists may hoard the technology to provide a test or calibration service that should be delivered by the private

sector.

Some Things to Note About the Model:



3. The Commercialization Engine

The TTO is an amplifier whose gain is controlled by the investment community.- IRAP, VCs, angels, SREDs, corporate treasuries, etc.- No money, no commercialization.

New companies – companies that would not exist without the transfer of people or technology from the lab.

Licensing rates will vary depending on the end use – products, services, or processes.

The cost recovery box may or may not have a multiplier associated with it.

Some Things to Note About the Commercilization Engine:



4. Economic Impact Results from the Model

Companies

0 27

15

26

39

51

5853

62

0

10

20

30

40

50

60

70

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Year

Com

pani

es


Source: Estimates by Doyletech Corporation, October 2006.

CRC Spin-offs – Number of Companies

Employment

0 100450

900

1,600

3,000

4,000

5,100

6,471 6,378

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Year

Em

ploy

men

t



CRC Spin-offs – Annual Employment

Sales

63,000,000

360,000,000

1,359,000,000

1,613,449,802

128,000,00014,000,000

2,000,0000

600,000,000

918,000,000

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000

1,600,000,000

1,800,000,000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Year

Sal

es (

$M)



CRC Spin-offs – Annual Sales

Chart #1 - Cumulative Licensing and Contract Revenue

002,959,328

9,928,227

17,338,371

3,280,968

9,224,094

16,356,436

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

1990 1995 2000 2005

$

Foreign

Canadian



CRC’s Cumulative Licensing and Contract Revenue

If a company pays a royalty of 2.5% on sales of products, its product sales are forty times licensing revenue.

This ratio was used for product-oriented licensees.

For service-oriented licensees, a ratio of 20:1 was used.

For a number of reasons – like a service company cannot develop its own technology so easily.

For the licensing of a process – a factor of 10:1 was used – incremental sales are not usually a priority – efficiency is.

Extrapolating From Licensing Revenue to Sales:


Multiply all Canadian product licensing revenue over some period of time (5 year intervals were used) by forty to get Canadian cumulative sales over that period.

Do the same with Canadian service licensing revenues (using 20:1 multiplier) and with process licensing revenues using 10:1.

Add them all up to get Canadian cumulative sales.

The result is the next slide.

The Extrapolation Process:


Chart #2A - Cumulative Canadian Sales(Summary Total)

0

87,027,224

323,263,504

520,327,235

0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

1990 1995 2000 2005

$



Cumulative Canadian Sales (Summary Total)

To Turn this into Employment:

Industry Canada

A sales/employee figure of $200,000 was used for all licensees. The result is cumulative person-years of employment. See next side.




Chart #3A - Cumulative Canadian Person-Years of Employment(Summary Total)

0

435

1,617

2,602

0

500

1,000

1,500

2,000

2,500

3,000

1990 1995 2000 2005

#

Cumulative Canadian Person-Years of Employment (Summary Total)

Summary:

CRC’s 62 spin-off companies are generating $1.6 billion of sales (in one year) and 6,378 in employment. CRC’s licensing activities have generated $520 million of cumulative sales and 2,602 cumulative person-years of employment over 17 years. A typical high-technology company generates tax revenues of all types (employee, corporate, GST, EHT, stock options, etc.) of 20% of revenue. The $1.6 billion of spin-off sales is generating $320 million of tax revenues per year. The $520 million of cumulative sales has generated about $100 million of tax revenue over the past seventeen years.



5. Implementation5. Implementation

http://www.ppt-vorlagen.de/

A Model for Assessing the Local Economic Impact of Spin-off Companies:


Making Technology Happen TM

Completed By:

Doyletech Corporation

Project Team:

Denzil Doyle, Jeffrey Doyle, and Glenn McDougall

Project:Project:Measuring Knowledge CommercializationFederal Partners for Technology Transfer


Measuring Knowledge Commercialization/ Denzil Doyle

Technology

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