Industry Committee on June 15th, 2017

[Chandra Arya, Liberal, Nepean, ON]

Jeff, we have heard that small technology companies especially have problems in negotiating simultaneously with two or three different universities. They each have their own rules and their own guidelines. Many times the technology companies don't have the resources to be spent on negotiating these deals, and the universities have their technology transfer offices, which are different from the guys who are actually dealing with the technology in the industry. What has been your experience?

[Jeff Musson]

You're absolutely right. It has been a difficult process, not only from the entrepreneur's side—because your resources, timewise, are kind of limited—but there are so many hoops you have to go through when you end up having to negotiate—

[Chandra Arya, Liberal, Nepean, ON]

What is the solution you suggest?

[Jeff Musson]

You have to streamline the process and standardize it across the board.

The second thing, and what I've done with my company, along with other entrepreneurs in our North of 41 group, is to partner with universities to do a beta concept, a proof of concept as it relates to technology. There may be a bit of IP, but nothing too drastic. What ends up happening, theoretically, is that when these people graduate, I hire them on internally. That's how we've continued to develop products.

[Chandra Arya, Liberal, Nepean, ON]

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Dreeshen. You have seven minutes.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you, Mr. Chair.

Thanks to all the witnesses for being here today.

It's certainly interesting to hear the discussions. For the last couple of weeks, we've had numerous people talk about different ways in which they feel the dollars and investments we have in universities, colleges, and polytechnics...how well that matches with the needs of the industry, and how closely that can come together with commercialization.

There has been discussion about how the superclusters are going to work. That hasn't really gained a great deal of traction with business. I think there are still some concerns about where that's going to go. Are we going to be looking at picking winners and losers? I believe at least two of you have mentioned how significant it is to make sure that we are focused in the right areas.

Mr. Cubitt, in your five points, you mentioned standardizing the way in which we look at technology transfer and streamlining it across the country. I think that's probably one of the key things that have been mentioned here. Sometimes even in the same city, we have three or four different ways in which universities are setting up their technology requirements and their licensing regime.

I wonder if you could give us an idea, from the business side, of what that streamlining would look like to an organization such as your own. Perhaps, Mr. Musson, you could add to that as well.

[Code Cubitt]

First of all, I'll echo some of Jeff's comments. I think standardization is an obvious lever, in the sense that, once you've gone through the process, you've been through the learning curve and you can do it again and again. That facilitates the industry's going back to that well of knowledge on an ongoing basis and hunting for IP.

It's not necessarily one standard policy writ large across the country, but certainly regional policies could be put in place—let's say in Ontario and Quebec—or three or four universities in a cluster can agree on a framework. Innovation and innovation commercialization are largely a regional activity that's been proven out. Having standard equity documents, standard royalty agreements....

One of the frustrations I had specifically was that the technology transfer manager felt that it was his duty to maximize the profit for his university. He negotiated extremely hard and ended up, I would argue, kind of sabotaging the deal for his own personal career growth. Having a standardized template and not trying to maximize every dollar would go a long way toward solving the problem.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Mr. Musson.

[Jeff Musson]

Yes, I echo a lot of those same comments.

What's interesting is you have industry and academia, both of which have certain objectives, and you have to figure out that common ground. Using that example. I had a similar situation with one of our projects, whereby the tech transfer individual was pushing hard to maximize those dollars. Is that what it's really about, or is it about getting that technology into the ecosystem and letting it grow? That becomes a key thing: to figure out how to have common objectives when you have two separate groups.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Ms. Johnston, we heard from representatives from the Intellectual Property Institute of Canada. They argued that the lack of national IP and tech transfer policy among our universities plays a role in creating low rates of commercialization. That was their position. However, others have described their national IP strategy for universities isn't particularly important for incentivizing this.

In your discussions, you get the think tanks together from each of the universities, and they're asking how they can make this happen, how they can make sure they're working at the speed of business rather than the speed of the bureaucracy associated with universities or government. What type of ideas do you think are going to come from the discussions your universities are having?

[Pari Johnston]

We certainly think the idea of having some standardized templates for negotiations would be quite helpful. Some models in the U.K. and Australia would be helpful for us to look at.

As part of the Business/Higher Education Roundtable, which includes 27 of our universities, colleges, CEOs, and the Business Council of Canada, some work is being done now on some standard research collaboration templates for that very reason. As my colleague said, and as I've noted, having a one-size IP policy, given regional and sectoral differences, is not necessarily the answer to drive commercialization, but having standard templates in best practice that can be learned from, we think would be very useful.

In terms of other initiatives that we think are important to help support the collaborative efforts between our institution and the private sector that leads to tech transfer, as I noted earlier we are concerned with the fact that right now we don't have a funding mechanism that supports knowledge mobilization out of universities. We think the clusters are a good step. They will support some important initiatives, including, we think, not just geographic clusters, but those that are networked in as well, in terms of specific expertise. Some support along the lines of what the U.K. has, a higher education innovation fund, which allows supports for business, universities, and other partners to work together, is one thing we think Canada should consider.

As well, perhaps look at whether there could be a new form of what existed, which was the intellectual property mobilization program through the tri-councils, which, as colleagues have said, helped strengthen and streamline the expertise within tech transfer offices to share best practices and to have expertise within our universities that is dedicated to getting the intellectual property and the technology out of the institutions. The loss of that program really did result in a decline of the capacity within our institutions to act on tech transfer objectives with their companies. We can share the statistics with the committee if you're interested.

I think we're seeing some novel IP frameworks within open science initiatives. The Montreal Neurological Institute launched an open science initiative last year. We think this is a new area where Canada is leading, and can result in some new ways to promote commercialization, and make the knowledge coming out of these research initiatives widely available.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Masse. You have seven minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you to our witnesses for being here today. I'll start with Ms. Johnston and go across the panel.

The common theme we've heard today is the standardization or some type of a base element. There doesn't seem to be a lot of time for those in the entrepreneurial sector to research all the universities, find those partners, know where they are, or even to know about the regional clusters. It's almost as though a portal is missing, and a lot of time and energy are wasted on that.

Your model is to continue to have some flexibility for the decision-making for those regions. I want to dig down further on that.

Would it be appropriate to set even a base percentage or a base expectation, and then with that, measurement models about what gets to market and what doesn't? The value of measurement is more important in many respects too, because just going to market is not always the end that it should be, depending upon what's being done.

Starting with you, Ms. Johnston, and then going across the panel, do you think there is enough of a common ground for us to find that so at least Canadians can look at that? An innovator in British Columbia could look at Ontario and find a cluster and see that it is actually doing some innovative stuff related to the farming industry, for example, and see that he or she has something that might actually cross-pollinate into that.

[Pari Johnston]

There is certainly merit in trying to have more publicly accessible places where, as you note, entrepreneurs or technology leaders can go to find out what is going on within the institutions or clusters of institutions. I think that is happening in some cases, and I would point to some of the work that the AI groups are doing within the Vector Institute and others in Montreal, where there has been a clustering of expertise. The public availability of that information is something that is going to be quite available through the Vector Institute.

I want to talk about the value of measurement to make sure that we're also talking about the broad ways in which institutions like ours support innovation. I think that while we're focusing on specifics around patents and the number of licences developed, it's really important to remember that institutions like ours, through their highly qualified graduates, through creating incubators and accelerators on campuses where small and medium-sized businesses can come for business solutions, are also part of creating Canada's innovative capacity.

My concern is that if we focus on very narrow measurements of outcome for what institutions are doing with their public research dollars, I think we're missing some of the ways in which institutions are supporting Canada's innovation.

[Brian Masse, NDP, Windsor West, ON]

Mr. Musson, you mentioned something that I think is one of the most important aspects, which is actually hiring people out of the university. That's kind of the end product that I would like to see—production at the end of the day in Canada. We can argue that a university is getting a subsidy from the taxpayers, but you could also argue the fact that a SR and ED tax credit or some type of incentive for a public goal for research is also important.

What can we do better to get people into employment outside the university when they graduate that can actually lead to production in Canada?

[Jeff Musson]

It goes back to the theme that this is knowledge transfer instead of technology transfer, because in business, especially technology businesses, time equals money. If you can develop a product quickly and get it out into the marketplace, you'll get ahead of the competitor, because everyone is nipping at your heels.

As entrepreneurs, we don't know—I do because I'm plugged into what's happening in Waterloo, Western, Toronto, Ryerson, and a few others. In order to encourage hiring out of there, there should be a nationwide repository or database showing where clusters of technology are being developed. Obviously, the research is led by a professor or an associate professor. Those individuals who come graduating and who have been working on projects in a similar space are what I consider to be of high value to an entrepreneur, because their training has already been done in university, and they're ready to hit the ground running for whatever project, especially in areas like my software business, where we're working in artificial intelligence.

[Brian Masse, NDP, Windsor West, ON]

Mr. Cubitt, can you add to that?

[Code Cubitt]

You touched on a number of things.

At the end of the day, it's a large ecosystem. Capturing the knowledge from the university graduates as they leave is really important, and obviously there's a brain drain problem. My view is that industry will always pick the best minds. If it's American companies picking our best minds, we need to have better companies that are able to capture them.

I'll go back to something else you said, which is really about consolidating all the IP created by universities. This is a three-pronged problem. The first one is to create awareness. You have to be aware that the IP exists and you have to be able to distill and evaluate it among all the rest, whether that's a single repository database that you search and say you need something on AI or whether it's a team of people who go around to industry and meet with every company in the country once a year to say, “Look, here's what's relevant to your business.” I'm not sure of the answer, but awareness is a big one.

Second, you need to reduce the friction for getting the IP out in the first place. We've talked about that at length.

The third is measuring the results of that, whether it's the Ph.D.s who stay in the country versus leave or whether it's IP licences granted, and so on, and then use that as a feedback mechanism, all the way back to the beginning.

My broader point is that historically, universities have been the bastion of knowledge. They've been the keepers of technology, innovation, and knowledge. That's no longer the case. Universities used to live in an ivory tower where they'd say they needed tenured professors who can research and create IP without fear of any retribution or any undue influence from industry. That's an antiquated notion. If our universities are going to compete with universities globally, they need to be better aligned and more closely affiliated with industry players, because industry is going faster than universities in a lot of cases. My thrust here is really to try to create connections between industry and university and break down the barriers, whatever they might be.

[The Chair, Liberal, Dan Ruimy]

Thank you very much. We were so enthralled by your answer.

We're going to move to Mr. Baylis for seven minutes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

I'd like to start by delving a little deeper into the concept of template contracts so that there's something there. Ms. Johnston, you mentioned the idea of the Lambert Toolkit in the U.K.

Let's say we do that, put together a template. How could we positively encourage universities to actually use that set of templates? Let's assume they exist and they can be tweaked, let's say, but they're grosso modo the same thing. When I've done a deal with university A in Ontario, I go to university B in Calgary and I'm expecting the same template. Maybe I have to argue about the royalty amounts and things such as that, or they have a little block they add.

How do I get the university to actually say they're going to use it? What levers do we as government have to help you do that?

[Pari Johnston]

It's a really important question. In part, working closely and supporting the tech transfer offices to be equipped to work with our faculty and understand the value for them, and on the faculty side, being able to have such a template, also makes things easier on the university side. There are several demands on university faculty. We spoke to that earlier. There is value added in having something that is already set and agreed to in terms of saving time.

I want to respond to the notion that universities are evolving. They are dynamic, responsive institutions in Canada that want to promote knowledge transfer and see themselves as important players in Canada's knowledge economy. The faculty who wants to make a contribution and see their technology go out to market are motivated to do so.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

I don't doubt the motivation and the interest. I'm more saying that you have university A that asks why it should use the same template as university B in P.E.I. From the perspective of the company, that has huge value. However, from the perspective of the university, they might not see that value because they say, “Well, we've made a great set of templates. Why don't we just use ours? We know ours.”

How do we change that?

[Pari Johnston]

It partly comes down to the notion of the competitive marketplace. Institutions will be incentivized to use such things if the companies they want to work with are expecting that they're going to use them, and if they're not, they're going to go elsewhere. That is a motivator; institutions will respond in that case.