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Measuring Knowledge Commercialization/ Denzil Doyle

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Includes CRC contribution to Canadian economy

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Measuring Knowledge Commercialization/ Denzil Doyle

  1. 1. Measuring Knowledge Commercialization A Presentation By Denzil J. Doyle Making Technology Happen TM June 12 th , 2007 Prepared For: Federal Partners for Technology Transfer 2007 National Meeting Halifax, Nova Scotia
  2. 2. Measuring Knowledge Commercialization: FPTT National Meeting 2007 Contents: <ul><li>Licensing and Spin-off Family Trees </li></ul><ul><li>Measuring Knowledge Commercialization – The Model </li></ul><ul><li>The Commercialization Engine </li></ul><ul><li>Economic Impact Results from the Model </li></ul><ul><li>Implementation </li></ul>
  3. 3. Measuring Knowledge Commercialization: FPTT National Meeting 2007 1. Licensing and Spin-off Family Trees
  4. 4. Measuring Knowledge Commercialization: FPTT National Meeting 2007
  5. 5. Measuring Knowledge Commercialization: FPTT National Meeting 2007
  6. 6. Measuring Knowledge Commercialization: FPTT National Meeting 2007 2. Measuring Knowledge Commercialization – The Model
  7. 7. Measuring Knowledge Commercialization: FPTT National Meeting 2007 Measuring Knowledge Commercialization
  8. 8. <ul><li>Licensing & Cost recovery dollars go to the laboratory. </li></ul><ul><li>Highly visible & measurable. </li></ul><ul><li>Shorter time frame. </li></ul><ul><li>Tax dollars go to the government. </li></ul><ul><li>Less visible & measurable. </li></ul><ul><li>Longer time frame. </li></ul><ul><li>Tax dollars much greater than the licensing and cost recovery dollars. </li></ul><ul><li>Taxes typically 20% of sales. </li></ul><ul><li>Royalties typically less than 5% of sales. </li></ul><ul><li>Cost recovery can conflict with long-term payback – scientists may hoard the technology to provide a test or calibration service that should be delivered by the private sector. </li></ul>Measuring Knowledge Commercialization: FPTT National Meeting 2007 Some Things to Note About the Model:
  9. 9. Measuring Knowledge Commercialization: FPTT National Meeting 2007 3. The Commercialization Engine
  10. 10. Measuring Knowledge Commercialization: FPTT National Meeting 2007
  11. 11. <ul><li>The TTO is an amplifier whose gain is controlled by the investment community. </li></ul><ul><ul><ul><ul><ul><li>- IRAP, VCs, angels, SREDs, corporate treasuries, etc. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>- No money, no commercialization. </li></ul></ul></ul></ul></ul><ul><li>New companies – companies that would not exist without the transfer of people or technology from the lab. </li></ul><ul><li>Licensing rates will vary depending on the end use – products, services, or processes. </li></ul><ul><li>The cost recovery box may or may not have a multiplier associated with it. </li></ul>Measuring Knowledge Commercialization: FPTT National Meeting 2007 Some Things to Note About the Commercilization Engine:
  12. 12. Measuring Knowledge Commercialization: FPTT National Meeting 2007 4. Economic Impact Results from the Model
  13. 13. Measuring Knowledge Commercialization: FPTT National Meeting 2007 Source: Estimates by Doyletech Corporation, October 2006. CRC Spin-offs – Number of Companies
  14. 14. Measuring Knowledge Commercialization: FPTT National Meeting 2007 Source: Estimates by Doyletech Corporation, October 2006. CRC Spin-offs – Annual Employment
  15. 15. Measuring Knowledge Commercialization: FPTT National Meeting 2007 Source: Estimates by Doyletech Corporation, October 2006. CRC Spin-offs – Annual Sales
  16. 16. Measuring Knowledge Commercialization: FPTT National Meeting 2007 Source: Estimates by Doyletech Corporation, October 2006. CRC’s Cumulative Licensing and Contract Revenue
  17. 17. <ul><li>If a company pays a royalty of 2.5% on sales of products, its product sales are forty times licensing revenue. </li></ul><ul><li>This ratio was used for product-oriented licensees. </li></ul><ul><li>For service-oriented licensees, a ratio of 20:1 was used. </li></ul><ul><li>For a number of reasons – like a service company cannot develop its own technology so easily. </li></ul><ul><li>For the licensing of a process – a factor of 10:1 was used – incremental sales are not usually a priority – efficiency is. </li></ul>Measuring Knowledge Commercialization: FPTT National Meeting 2007 Extrapolating From Licensing Revenue to Sales:
  18. 18. <ul><li>Multiply all Canadian product licensing revenue over some period of time (5 year intervals were used) by forty to get Canadian cumulative sales over that period. </li></ul><ul><li>Do the same with Canadian service licensing revenues (using 20:1 multiplier) and with process licensing revenues using 10:1. </li></ul><ul><li>Add them all up to get Canadian cumulative sales. </li></ul><ul><li>The result is the next slide. </li></ul>Measuring Knowledge Commercialization: FPTT National Meeting 2007 The Extrapolation Process:
  19. 19. Measuring Knowledge Commercialization: FPTT National Meeting 2007 Source: Estimates by Doyletech Corporation, October 2006. Cumulative Canadian Sales (Summary Total)
  20. 20. <ul><li>A sales/employee figure of $200,000 was used for all licensees. </li></ul><ul><li>The result is cumulative person-years of employment. </li></ul><ul><li>See next side. </li></ul>Measuring Knowledge Commercialization: FPTT National Meeting 2007 To Turn this into Employment: Industry Canada
  21. 21. Measuring Knowledge Commercialization: FPTT National Meeting 2007 Source: Estimates by Doyletech Corporation, October 2006. Cumulative Canadian Person-Years of Employment (Summary Total)
  22. 22. <ul><li>CRC’s 62 spin-off companies are generating $1.6 billion of sales (in one year) and 6,378 in employment. </li></ul><ul><li>CRC’s licensing activities have generated $520 million of cumulative sales and 2,602 cumulative person-years of employment over 17 years. </li></ul><ul><li>A typical high-technology company generates tax revenues of all types (employee, corporate, GST, EHT, stock options, etc.) of 20% of revenue. </li></ul><ul><li>The $1.6 billion of spin-off sales is generating $320 million of tax revenues per year. </li></ul><ul><li>The $520 million of cumulative sales has generated about $100 million of tax revenue over the past seventeen years. </li></ul>Measuring Knowledge Commercialization: FPTT National Meeting 2007 Summary:
  23. 23. Measuring Knowledge Commercialization: FPTT National Meeting 2007 5. Implementation
  24. 27. A Model for Assessing the Local Economic Impact of Spin-off Companies:
  25. 28. Making Technology Happen TM Completed By: Doyletech Corporation Project Team: Denzil Doyle, Jeffrey Doyle, and Glenn McDougall Project: Measuring Knowledge Commercialization Federal Partners for Technology Transfer

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