Photo credit: David Stobbe
Photo credit: David Stobbe

The real tech transfer from universities

By only counting patents, licensing revenues and commercial startups as our economic impact, we almost completely discount the impact of universities through the training of our graduates.

This is the time of year for students to graduate. As I sat on the stage at graduation exercises at two Canadian universities in the last few weeks, I got thinking about our impact on the economy and innovation.

As with all such ceremonies, both the on-stage presentation and the handouts celebrated the individual success of students and a few notable efforts to transfer knowledge and technology by faculty or students.  For some reason, we drew a line between our mission to teach and our desire to contribute to innovation and economic growth.

This distinction is maintained in our institutional structures.  As faculty, we have an obligation to teach, which is almost always distinct from our mandate to do research.  Similarly, in universities, there are vice presidents academic, teaching and students that operate at arms-length from our research enterprise.

This is reflected in how universities talk to governments and stakeholders about their impacts.  Universities, their colleges and the national organizations representing universities report on the number of graduates separate from their efforts to transfer knowledge through patents and commercial startups.

From where I sat on the stage, I sensed that somehow this disconnect missed the whole point of universities.  By only counting patents, licensing revenues and commercial startups as our economic impact, we almost completely discounted the impact of universities through the training of our graduates.

Universities Canada reports that the 94 universities in Canada undertake somewhere in the range of $13 billion in research annually.  We have about 46,000 research-engaged faculty and more than 250,000 graduate students all applying their skills to research. But the total value of all research universities commercialized in Canada, reported in Association of University Technology Managers (AUTM) surveys, never gets much past $100 million annually. This represents less than a 0.8% return on our total effort, which is far less than our cost of capital. Moreover, universities report that they spend almost $100 million to generate that cash flow so that the net financial return on our research approaches zero most years in Canada.

I would argue that universities have their greatest effect through their teaching, both via courses and through research supervision.  Canada has more than 1.3 million students studying each year currently and about 340,000 individuals graduate annually.  The return on that effort is immense.  Somewhat dated studies of the internal rates of return to schooling estimated that the first degree generates more than 10% private return (shared between the individual and their employer) and another 5% social return, which we all share in.  Research degrees on average add a further 5-10%, shared between the individual and society.

In effect, virtually all of the impact of universities and their scholarship is realized through the efforts of our graduates and alumni rather than through the efforts of faculty and technology transfer offices to directly commercialize our knowledge and discoveries.

So the next time you see a student in a graduation gown or hear they have graduated, you should think of them as a unit of technology and knowledge transfer equal to or greater than the usually cited patents and commercial start-ups.

Peter W.B. Phillips

Dr. Peter W.B. Phillips is the director of the Centre for the Study of Science and Innovation, and a distinguished professor in the Johnson Shoyama Graduate School of Public Policy's University of Saskatchewan campus.

He earned his Ph.D. at the LSE and practiced for 13 years as a professional economist in industry and government. At the University of Saskatchewan, he was the Van Vliet Research Professor, created and held an NSERC SSHRC Chair in Managing Technological Change in Agriculture, and was director of the virtual College of Biotechnology.

He has had appointments at the LSE, OECD, European University Institute in Florence, University of Edinburgh and University of Western Australia. He was a founding member of the Canadian Biotechnology Advisory Committee and was on the boards of Canadian Agri-food Policy Institute, Pharmalytics and Ag-West Bio Inc. He has also held over 15 peer-reviewed grants worth more then $250 million and is author/editor of 15 books, and over 60 journal articles and 55 book chapters.

Share this story