Universities Must Drive Greater Social and Economic Impacts through Innovation

In recent months CBU has advanced a case for Nova Scotia Universities that is deeply connected to community, industry and the economic and social ambitions of our province.  Opinion pieces in the Chronicle Herald: Universities as engines of progress and Education hive would keep economy buzzing have been reinforced by the publication of our Accountability Report which has received positive reviews.

So it was timely that the Fall 2014 meeting of the Association of Universities and Colleges of Canada (AUCC) was styled an ‘Innovation Dialogue.’  The event was enriched by the presence of high level delegations from Israel and Germany – two nations with complementary experiences to Canada but higher levels of success in innovation and harnessing the results of university research for economic and social gain.

By way of context-setting, Gilles Patry, CEO the Canada Fund for Innovation, referred to the often-noted “paradox” of Canada’s failure to effectively commercialise university research with our stellar academic reputation – as measured by citations of our scholarly articles.  Patry – himself a commercially savvy former university president – drew attention to under-investment in R&D by Canadian industry compared with competitor nations.  He also cited analysis by the Council of Canadian Academies which suggests that underlying problems include the lower risk tolerance of Canadian industry, our comparative lack of competitiveness, and our over-dependence on the draw of the US economy.

Patry noted that the 1.7% of GDP dedicated R&D in Canada – including $11.8 bn for universities – is inadequate to keep pace with the growing investments of competitor nations, for example Germany which invests 2.89% of its GDP in R&D.

Enno Aufderheide, Secretary General of the Humboldt Foundation was too gracious to comment on Canada’s underperformance in harnessing university R&D.  But he did indicate that even Germany has constraints, particularly with respect to the modest interest in entrepreneurial careers among university students, the relatively low level of start-ups, and the relatively limited access to venture capital.  But he did stress the importance of social mobility and being more open to immigration, which presumably explains the abolition of student tuition at all German universities.

And clearly Germany is doing something right in terms of international outreach and growing public and private investments in R&D.  The Humboldt Foundation now has 26,000 ‘fellows’ – academics from 130 countries around the world who have been sponsored as visiting academics to Germany to share their knowledge, including fifty one Nobel Laureates.  German Chancellor Angela Merkel throws a party for them every year.

Arguing that there is no contradiction between scholarly excellence and a commitment to applying the results of university research, Dr Aufderheide noted the high level of public esteem for basic research in Germany.  And he stressed the importance of what he described as ‘planning reliability’ from research funders with a 5% increase in research funding delivered in the period 2011-15 and a 3% increase planned for 2016-20.  He was proud to reference the fact that private industry funding of R&D in Germany was double the OECD average.

In Israel, there is similarly no perceived contradiction between scholarly excellence and industry engagement. Ruth Arnon, President of the Weizman Institute of Science gave numerous examples of how academic institutions in Israel deliver benefits to society and the economy through innovation and technology transfer. It is not assumed that any more than a “fraction” of innovations become ‘applicable’ or ‘transferable’ to industry.  But there are well developed, government-backed structures to support such developments.   And in contrast to Germany there is great interest in entrepreneurial careers among Israeli youth.

Arnon’s remarks were echoed by Yaacov Michlim, CEO of Yissum, the technology transfer company of the Hebrew University of Jerusalem.  Michlim’s case study included a description of the Yissum approach to bridging the ‘valley of death’ for financing new businesses in a country that has been described as a ‘Start Up Nation’.  Today Yissum lists 8537 patents, 2403 inventions, 725 licenses, and 90 spin outs with $2bn in annual sales.  On a research budget similar to Dalhousie University, each year the Hebrew University of Jerusalem receives tens of millions in royalties for its inventions, supports 25-30 projects with ‘baby seed’ funding, and launches 6-8 start-ups.  Industrial project partners include Intel, Google, Lockheed Martin, Roche, Philips, CocaCola, GM and P&G.

Today Yissum is rated in the top 15 technology transfer companies worldwide (by revenue).  Two of the most important success factors for Yissum are: i) that Yissum itself is a commercial company (wholly owned by the university) with a majority of board members drawn from industry; and ii) the Hebrew University of Jerusalem has an intellectual property ownership structure that incentivises commercialisation by ascribing 40% of ownership to the individual researcher, 20% to his or her laboratory and 40% to the university. As a result, more than 50% of academics are pursuing commercial links with industry.

A German case study was provided by Gerhard Sagerer, Rector Bielefeld University in Ostwestfalen-Lippe.   The Region benefits from a large number of family owned and family managed companies, including internationally known business such as Bertelsmann, Miele, Dr. Oetker, Melitta and Claas.  The university has 174 partners, including more than 100 businesses.  Interestingly – like the Hebrew University of Jerusalem – the university also has a high proportion of academics participating in industrial collaboration but this is not restricted to science and business faculty.  It also involves social scientists and humanities researchers working on the development of products to support people with special needs and other social priorities.  The Bielefeld centre for business creation is called the Zentrum für Unternehmensgründung (ZUg).  Sagerer ascribes the success of Bielefeld to the natural competitiveness of SMEs (small and medium sized enterprises) and the number of larger family owned and administered firms in the region.

The implications of the AUCC discussion to Nova Scotia are manifold.  But clearly this in not just about the under-performance of Canadian business on R&D spending.  It is also a leadership imperative for our universities.  So….

  1. We need to raise our game on the promotion of entrepreneurial opportunities for both students and academics, including the establishment of appropriate university based infrastructure;
  2. We need to ensure the availability of both mentoring and financial support to start ups across the spectrum, from pre-commercial enterprises through incubation to full application and commercialisation;
  3. We need to attract and support faculty and students who are enthusiastic about research links with industry and social enterprise;
  4. We need to provide formal and informal educational programming to support student and faculty-led enterprise.

At Cape Breton University I am proud to say we have made a start.

  • We have a long track record in driving social enterprise, from the establishment of New Dawn Enterprises to the launch of our international training company LearnCorp International.
  • The Verschuren Centre for Sustainability in Energy and the Environment has a wide variety of relationships with industry and government agencies that may lead to full commercialisation.
  • We are partners with NSCC in the Island Sandbox – a pre-incubator space in the Verschuren Centre for students and faculty funded by the Province of Nova Scotia.
  • We are partners with the Cape Breton Partnership, NSCC, school boards and others in a project to develop and island-wide network of support for entrepreneurship education and start-up mentoring.
  • We are a leading national player in capacity-building for Aboriginal entrepreneurship via the Purdy Crawford Chair in Aboriginal Business Studies.
  • We are partners, with Gavin Uhma and Volta, in UIT (@UITstartup) –  a new program for future leaders of digital enterprise.
  • We are developing, with others, the Cape Breton Island Futures Fund – a future source of grants and pre-commercial funding in the digital/clean tech/health tech space.

In coming years Cape Breton University intends to spark a large number of new enterprises and educational and other support e.g. mentoring and financial services for start-ups.  We will measure our success through simple outcome measures such as number of people employed in CBU affiliated start ups and annual sales of CBU affiliated start ups.  We intend to ensure that our governance, intellectual property and funding policies are cutting edge.  And we will commit to becoming one of Canada’s leading entrepreneurial campuses.