How good are Canadian Uni’s?
Universities are known for the research undertaken by faculty and students. But how much of the research conducted by universities gets licensed to companies or ever reaches the public? This is important, as our universities are publicly funded. According to some studies Canada doesn’t rank well when it comes to transferring university intellectual property (IP) to private companies. In collaboration with a couple of colleagues, I decided to take a closer look at how well Canadian universities are doing when it comes to transferring IP.
Canada is a world leader in terms of innovation, ranking 15th in global innovation. A 2012 assessment of Canada’s science and technology (S&T) capacity, confirms that in most fields, Canada is indeed one of the world’s leading nations when it comes to producing basic science and knowledge. Previous reports have been critical of Canada’s ability to commercialize technologies, describing this as a ‘bottleneck’ in the innovation process within Canada. Upon closer examination of this, from a university perspective, I don’t believe this criticism is an accurate reflection.
Numbers point to success
Canadian universities hold in excess of 6,000 patents. On average, 57% of these patents are licensed, although this has been as high as 67% at the start of the century. Since 2000, license agreement revenues have ranged from $35 – $45 million a year. Revenues have been greater than expenses, although net revenues have narrowed from $26 million in 2001 to $2 million in 2008. About one-third of the patents are licensed to Canadian companies. Unfortunately, the data ends in 2008, but in the 11-year span, 1998-2008, over 1,200 university spin-off startup companies were created. This is an average of 109 companies per year or 9 per month.
[pullquote]Just imagine, a new company is created in Canada roughly every three days, as a result of university research![/pullquote]
Universities are generating licenses and creating companies. In 1994, the average value of a license was $29,000, rising to $70,000 in 2001. Revenue values have risen at the same time as the number of licenses generating revenue has declined. This indicates there is a significant increase in high-value licenses by the private sector. This could ultimately be the result of private company’s valuing Canadian university research and offering higher amounts of money to secure the licensing rights to new technologies and products that have been developed. Regardless of the reason, what is important is that Canadian universities are able to produce research which generates revenue. The ability to create revenue streams from licensing IP to private industries is a testament to the value of university research.
Does over half of patents licensed suggest Canadian universities are efficient commercializers of technology? I think that it is an indication of success. While commercialization might be a bottleneck in the Canadian innovation process, an IP licensing rate of nearly 60% is a commendable accomplishment that universities are not being given credit for, nor being recognized for. Can improvements be made? Undoubtedly, but the key message is that Canadian universities are not a bottleneck in the S&T innovation process. Canadian universities are a crucial, and successful, part of the innovation system in Canada.