Dr Andrew Maxwell

Mining the intellectual capital - best practices

By Dr Andrew Maxwell

Federal and provincial governments are currently investing hundreds of millions of dollars into commercializing innovations funded by public research. Universities, colleges and federal laboratories have significant roles to play in this, either as part of their contribution to their community or to justify continued funding of research. However there is a good deal of debate on the precise roles such public sector institutions should play in this wealth creation activity.

Despite doubling research dollars, our economy in terms of GDP is slipping. Between 2002 and 2003, Canada slid from 9th to 13th place in the world, with Denmark, Austria and Iceland moving ahead of us. In the new global environment, there is an imperative to create wealth from the adoption and commercialization of technological innovation. The real question is thus, how do we harness the creative potential and world-class research activity in our institutions to address these macro-economic issues?

In my opinion this has to start by understanding that the fundamental issue of commercialization requires creating a “culture of commerce” both in the public sector institutions, and in the private sector, where commercialization happens. Inside research and academic institutions, we are keen to push the boundaries of science and create new knowledge, a vital and important role.

However, within such institutions it is difficult and even dangerous to build a culture around the profit motive. In a previous article in RE$EARCH MONEY, Mike Lazaridis, the founder of Research in Motion, argues that creating this culture in research institutions around the protection of intellectual property is diametrically opposed to the types of interaction and free flow of ideas that should be encouraged in an academic institution (R$, November 22/04).

Thus, the biggest challenge faced by institutions is not facilitating commercialization within the institution but creating the environment and culture which facilitates the extraction of innovation, leading to its eventual commercialization. Presently, this activity is measured by a limited number of metrics — licensing revenues, disclosures and patents. However, this ignores much of the economic value created by these research institutions, due to their ability to impact human resource development and undertake contract research.

A NEW MODEL FOR COMMERCIALIZATION

At the Canadian Innovation Centre, we have developed a model to better represent the commercialization value that can be created by the different types of research activities undertaken. The three basic types of research — pure, applied and contract research — create important opportunities for the private sector to mine the value we create through research knowledge in our institutions.

Opportunity extraction — the creation of new technology opportunities arising from pure and contract research — is only one of the ways that economic value is created. This commonly used definition, assumes that during pure or contract research, an innovation will be made that has some commercial value. Unfortunately, while this is the area that is currently measured, it is not the most significant as the chance of a discovery which meets a market need and the likelihood of having an organization to fulfill that market opportunity is limited.

The most significant source of economic value creation happens through student extraction. Students who have been exposed to the best and brightest research minds and then leave their institution to work in the private sector, are well positioned to work in industry, enhanced by the knowledge they have gained in the research environment.

The third significant potential is for commerce extraction, taking the outcomes of contract and applied research from the laboratory to the marketplace, where it can be used in applications and markets not foreseen in the original scope. While this work is often subject to intellectual property issues, a more entrepreneurial approach by industry, institutions and funding agencies can create additional commercialization opportunities.

Institutions wishing to increase their rate of commercialization must:

* Create a culture of commerce within the institution, teaching the commercialization process, and allowing academia researchers to appreciate the benefits of enterprise creation;

* Ensure that relationships with the private sector (where commercialization happens) are maximized, to identify synergies with industry in contract research and training, placement and work experience projects. Look at this receptor capacity, for all forms of extraction and in as broad a geographic range as possible; and,

* Create performance measurement systems that not only look at licence revenue and disclosures/patents, but also at student extraction impact, commerce extraction activity and wealth creation.

We need a better understanding and measuring of the ways our institutions can help address the need to create more technological innovations within our private sector. This will enhance their access to continued funding and community support by demonstrating a high return on investment for taxpayers.

Andrew Maxwell (amaxwell@innovationcentre.ca) is director of business partnerships at Canada Innovation Centre in Waterloo ON. A longer version of this article was presented in February to the Applied Research Conference of the Association of Community Colleges Canada in Ottawa.