Investments in research and infrastructure produce explosion in research contracts

Growth across all sectors

Research contracts continue to surge as government and industry increasingly look to post-secondary research expertise and infrastructure to solve problems and develop new products and processes. The value of research contracts grew an impressive 55% year-over-year from $1.27 billion in 2007 to $1.97 billion in 2008. Business enterprises and other Canadian organizations more than doubled their expenditures from $320.9 million to $660.9 million and the size of the average research contract rose by 39%.

The data are contained in the Survey of Intellectual Property Commercialization in the Higher Education Sector, Statistics Canada's flagship survey for determining the extent and nature of technology transfer and commercialization in Canada's universities. Due to data quality issues, StatsCan is unable to distinguish between business and other organizations (not-for profits and associations), making it impossible to determine the extent in which companies are engaging with universities.

One university that breaks down industry research contracts is the Univ of British Columbia. Over five years between FY03-4 and FY07-8, industry accounted for 22.3% of all externally funded research and 11.4% of total external research funding.

Despite some skepticism that the size of the increase is an accurate depiction of research contract activity, StatsCan confirms that its data collection processes and the relevant questions being asked have not changed. In fact, the accuracy of the 2008 data may have actually improved as the number of respondents year-over-year rose from 112 to 125, likely due to more reporting by affiliate institutions.

The federal government increased the value of its research contracts by 63.4% between 2007 and 2008 to $440.1 million while the growth in research contracts by provincial governments increased 44.0% to $481.7 million.

Research contracts with foreign sources (business, government and organizations) grew a respectable 15.7% to $235.3 million, while "other" sources grew 5.3%.

Of the $1.97 billion in research contracts, clinical trials accounted for $251.7 million (essentially unchanged from the year before) while collaborative R&D projects nearly quadrupled from $54.8 million to $194.7 million.

Intellectual property income slumps

The survey also includes detailed data on income from intellectual property (IP) — the traditional metric for determining commercialization activity at Canadian institutions. Income derived from those activities is $53.2 million and well off the historical high point of $59.7 million in 2006. Average IP income also declined 9% to $425,000.

Of the IP income, $35.4 million or 66.5% was derived from running royalties. Reimbursement of patent and legal fees totalled $5.9 million, followed by milestone payments ($4.7 million), one-time sale of IP ($3.1 million) and licence income received from another Canadian institution totaled $125,000. Unclassified income totalled $4.0 million.

At the same time, the number of full-time employees engaged in university tech transfer increased to 327 (up 15.5% from 283 in 2007), pushing operational expenditures devoted to exploiting IP up nearly $10 million to $51.1 million. That leaves to so-called profit between revenue and expenditures for 2008 at just $2.1 million, the lowest level in nine years.

The survey captures the activities of 125 institutions which include 77 universities and 48 hospitals. Of those, 191 are engaged in IP management while 69 have designated IP offices. Of the institutions surveyed, 22% owned the IP, while 35% allocate it to the researcher. Joint ownership accounts for 21% while 19% have no policy on ownership.

The number of patents issued dropped significantly, from 479 in 2007 to 346 in 2008. The total number of patents held at the end of 2008 was 5,908. This includes 3,704 patents held and 1,436 licensed, assigned or otherwise commercialized.

New licences at the end of 2008 totalled 524, relatively unchanged from the year before, bring the total number of active licences to 3,343. More than half (1,694) are with foreign licensees.

There were 19 new spin-off companies launched in 2008, bringing the total reported since 1999 to 1,242.

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