Thank you very much. I appreciate having the opportunity to come and speak with you.
My name is Chris Lumb, and I'm the CEO of TEC Edmonton, which is a joint venture between the University of Alberta and the City of Edmonton. I'm speaking to you predominantly as a representative of the University of Alberta, but also as a representative of institutes and institutions that universities create.
I have a simple message, and it's based on experience. I'm going to give you the message and give you a couple of examples of why I believe it's supported.
The message is that intellectual property policy is not as important as the leadership of the institutions that manage intellectual property. Therefore, when creating legislation and policies, I would strongly suggest that you bias towards actions that support strong leadership as opposed to getting into the details of which particular IP regime is better or worse, because, if you look at the numbers and the facts, there really isn't a single better or worse IP regime.
I'm going to give you a little bit of background on TEC Edmonton and why it exists, because it's got context for this. The organization I run was created about six years ago, and it came out of three fundamental ideas.
One is that universities generate negligible revenue for intellectual property royalties, at a little over $50 million per year for all Canadian universities, versus tens of billions of research dollars of expenditure in universities overall, so it's just not material to universities. The University of Alberta recognized that some number of years ago.
Also, in many cases university intellectual property by itself is too immature and comes too early to fully commercialize.
Universities also recognize the growing importance of their role as drivers of commerce in the economy.
The University of Alberta's response to that was to partner with the City of Calgary to create a joint venture organization called TEC Edmonton, which I run. It is, at this time, pretty much unique in Canada. In one independent organization, it does four things. One, it manages the intellectual property assets of the university. Second, it's got a business advisory and accelerator service to provide advice to early-stage companies, whether they come from the university or not. Third, it runs an incubator, which serves university and non-university companies. Fourth, it carries on a variety of training and entrepreneur development activities.
What makes that unique is that most universities don't give their IP assets to an independent organization that they don't fully control. The goals in setting it up TEC Edmonton were to focus on creating more spinoffs and on licensing locally and regionally in preference to licensing internationally, on the basis that if the university could license locally, it would create more spinoffs. It wouldn't really be forgoing any licence revenue because universities don't generate very much anyway, but in the long run it would create more new economic activity in the region, and that would link the university to the region better. That was the goal.
There were a couple of good outcomes, and I'd like to highlight two of them. One is from the institutional point of view and one is from the community economic development point of view.
I'll start with the institutional. I was just invited to speak here three or four days ago, so I don't have material translated to hand out, but I'll give you the numbers, and we can get them to the committee later.
One of the measures of commercial success of universities is the creation of spinoffs that are still operational. If you look back over time, if a university created a spinoff and it died a year later, that's not really as effective as if it's still in existence over a number of years. That's a measure that is gathered by most institutions around North America.
The University of Alberta ranks in the top 10, somewhere between eight and nine, depending on the year you measure it, of all institutions in North America. There are several hundred research intensive-based institutions in North America, and the University of Alberta ranks in the top 10. In addition, the University of Toronto ranks in the top 10, and UBC ranks in the top 10 as well. Those happen to be, perhaps with the exception of McGill, the three largest research-based universities in the country: Toronto, Alberta, UBC. All three rank in the top 10 of North America for creation of sustainable spinoffs. Interestingly enough, they all have different intellectual property policies. Actually, the University of Alberta and UBC are inventor-owned. The University of Toronto is institution-owned. Waterloo, which is completely inventor-owned, with no involvement from the institution whatsoever, doesn't rank on this scale.
What it says to me is that there isn't a right answer. You can't say that institution-owned is better or inventor-owned is better. What really matters is what the leadership of the institution has done to foster a culture of commercialization within the institution. Within that, pretty much any IP regime can work. That's one of the pieces of evidence I put before you.
The second is results of an organization like TEC Edmonton, which are broader than simply university-based. We did a survey last year of 74 companies we worked with. We expected to see decent numbers in terms of growth of economic activity. Those 74 companies generated $75 million of revenue, raised $27 million in new capital, spent $17 million on R and D, and grew collectively by 25%. That compares with Industry Canada data that says that the typical growth rate of organizations as early-stage technology companies is 10%.
If our survey showed 25% and the typical growth rate is 10%, the conclusion I draw from that is that whether it's TEC Edmonton or any kind of accelerator, young companies that access support networks, such as those provided by institutions and organizations like ours, do better. They grow faster. That makes sense because they're accessing networks, financing, expertise, and all sorts of different things. It says that the role of universities to support these kinds of organizations—accelerator organizations, business support organizations, IP commercialization organizations—is very important, because it does actually make a difference.
Another interesting fact that came out of the survey is that of the job growth that we saw, which was a growth of about 25%. It went from 600 jobs to 750 jobs across these 75 companies. It was spread across a number of companies and a number of sectors. There's no one winning sector; there's no single, big company that generates all that. That, too, is consistent with data that comes from U.S. entrepreneurship studies.
There are two outcomes: one, Canadian universities in general do well; two, these support organizations do well. My conclusion, then, is that leadership matters, and the action that you can take is to support things like Tri-Council funding that fosters commercialization-type behaviours in universities.
As well—and this is perhaps a little self-serving—I believe you should consider having regional organizations such as Western Economic Diversification support tech transfer offices that behave in the way that you want to see them behave.
Thank you.