In search of impact and outcome indicators based on vancouver biotech cluster studies
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IN SEARCH OF IMPACT AND OUTCOME INDICATORS BASED ON VANCOUVER BIOTECH CLUSTER STUDIES. Monica Salazar & Adam Holbrook CPROST-Simon Fraser University Vancouver, Canada. Outline of presentation. Introduction: need for new indicators

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IN SEARCH OF IMPACT AND OUTCOME INDICATORS BASED ON VANCOUVER BIOTECH CLUSTER STUDIES

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In search of impact and outcome indicators based on vancouver biotech cluster studies

IN SEARCH OF IMPACT AND OUTCOME INDICATORS BASED ON VANCOUVER BIOTECH CLUSTER STUDIES

Monica Salazar & Adam Holbrook

CPROST-Simon Fraser University

Vancouver, Canada


Outline of presentation

Outline of presentation

Introduction: need for new indicators

1. Overview of Vancouver biotech cluster, compared to Montreal and Toronto

2. Role of universities: inputs (public R&D funding) and outputs (patents, scientific publications)

3. Outcomes of R&D funding: commercialization of research, venture capital financing, employment

4. Conclusions


Statistical issues

Statistical issues

  • Definition: biotechnology vs life sciences

    • Human health biotech: our focus

  • SMEs vs multinational pharmaceutical companies

    • SMEs mainly, usually called “SBF”

  • Data at provincial or city level

    • Clusters in Canada are limited to a single city or metropolitan area: need of data at city level

  • 2001 is the reference year (as much as possible)

  • Normalization: population, HQP, innovative firms


1 comparison of canadian biotech clusters stat canada biotech survey 2001

1. Comparison of Canadian biotech clusters(Stat Canada Biotech Survey 2001)


Vancouver distinct characteristics

Vancouver: distinct characteristics

  • Firms recognize the cluster: 59%

  • Networking patterns and interaction between various actors:

    • No vertical integration

    • Neither horizontal integration nor competition among firms

  • Each firm works in specific niche of technologies or products, knowledge coming from local researchers

  • Little local manufacturing, IP producer

  • No competition for local talent

  • Competition for venture capital financing


Location location location

Location, location, location

  • Role of location and lifestyle are contributing factors, for instance:

  • Why located in Vancouver: 85% founders from the city, with local connections (labs), (and city is nice)

  • Advantages of the city: cluster existence and facilities -R&D labs, VCC, CROs- associated with it (and city is nice)

  • Factors contributing to growth of the cluster and the firms (most important first):

    • research institutions,

    • supply of workers with particular skills,

    • co-location with other firms in the same industry,

    • educational and training institutions.


2 role of research institutions inputs and outputs

2. Role of research institutions: Inputs and Outputs

  • Biotech industry: research dependent, though

  • universities and public R&D funding are essential.

  • Universities are a necessary but not sufficient condition for cluster emergence.

  • Regions must offer fertile climate and soil to allow seeds from universities to flourish.


In search of impact and outcome indicators based on vancouver biotech cluster studies

R&D funding for biotech 2001

(CIHR and NSERC biology)


Tests to qualify impact of r d funding in cluster creation and development clayman holbrook 2003

Tests to qualify impact of R&D funding in cluster creation and development(Clayman & Holbrook, 2003)

  • R&D intensity: R&D expenditures normalized by HQP

    • “Productivity” indicator in terms of IP (allocation mechanisms)

  • HQP intensity: HQP normalized by labour force

  • R&D intensity and HQP intensity

    • Measure of receptor capacity


Year to year changes in nserc r d intensity for 15 major cities

Year-to-Year Changes in NSERC R&D Intensity for 15 Major Cities


In search of impact and outcome indicators based on vancouver biotech cluster studies

Year-to-Year Changes in CIHR R&D Intensity for 15 Major Cities


Patenting activity

Patenting activity

  • Output measure of R&D activity

  • Relationships through patents between companies and researchers, involvement in creation of start-ups (economic relations)

  • Patents as a knowledge spillover measure

  • Number of patents and patent citation real factors of employment growth in biotech companies (Queenton & Niosi)


Bio scientists u s patents by canadian cities in 2002 queenton 2004

Bio-scientists U.S. Patents by Canadian cities in 2002(Queenton, 2004)


Scientific publications

Scientific publications

  • Publications more or less follows the R&D funding pattern, although …

  • Vancouver bio-scientists publish less per millions of dollars invested (public R&D funding). Why?

  • One possible answer is the closer relationships these researchers have with local firms.


Scientific publications1

Scientific publications


Measures of biotechnology activity in metropolitan centres vedc 2002

Measures of biotechnology activity in metropolitan centres(VEDC, 2002)


Measures cont

Measures …cont.


3 outcomes of r d funding

3. Outcomes of R&D funding

  • Commercialization of research: hot topic

    • Licensing (patents)

    • University spin-offs: no official collection of statistics

  • Venture capital raised

  • Human resources: HQP, employment creation/growth, attraction and retention of talent


Biotech spin off companies 1995 2001 holbrook clayman 2003

Biotech spin-off companies 1995-2001(Holbrook & Clayman, 2003)


Venture capital financing m macdonald assoc

Venture capital financing $M(MacDonald & Assoc.)


In search of impact and outcome indicators based on vancouver biotech cluster studies

Venture Capital and CIHR Funding Per City

2000-01 to 2003-04 (NRC & SECOR, 2004)

$600 000

$500 000

Venture Capital

CIHR Funding

$400 000

Funding ($1000s)

$300 000

$200 000

$100 000

$-

Halifax

Ottawa

Calgary

London

Quebec

Toronto

Montreal

Kingston

Winnipeg

Edmonton

Saskatoon

Vancouver

City


Human resources talent employment

Human resources, talent & employment

  • Input (HR, HQP) and outcome (employment)

  • New economic geography of talent

  • Relations between talent and quality of life of places (R. Florida)

    • What is the impact in cluster emergence and development? (firms follow people)

    • Industrial agglomeration: economic, social & cultural factors

  • Vancouver is attracting people: 70% top management have Ph.D. degrees from non-local universities (new data being collected)

  • Bio-scientists play a major role in the location and growth of firms

  • Vancouver firms have a different employment structure


Human resources data stats canada

Human resources data(Stats Canada)


Distribution of biotech employees in innovative firms nrc secor 2004

Distribution of biotech employees in innovative firms (NRC & SECOR, 2004)


Conclusions

Conclusions

  • Identified factors and conditions that contribute to the emergence and success of regional clusters [Vancouver]:

    • Strong university research-oriented [UBC],

    • Funded by public granting agencies [not as important],

    • An entrepreneurial spirit [crucial],

    • Availability of venture capital [critical],

    • A favourable location and environment, so that talented people is attracted to these places [sticky labour market].

  • Research capacity is a necessary but not a sufficient condition.


What do the indicators tell us

What do the indicators tell us?

  • Is Vancouver significantly different in structure, not just size, from Toronto and Montréal?

  • Is Vancouver biotech industry an emergent or a research-based cluster?

  • Vancouver is a R&D-based cluster: local firms invest more on R&D, large pool of bio-scientists, who are highly productive (patents), firms employ more scientists and technicians, and there is little manufacturing.

  • Why do Vancouver perform well in outcomes, but not very good in inputs and outputs? Are we measuring the right issues? Need for new indicators.


Is vancouver a viable cluster

Is Vancouver a viable cluster?

  • The model of being an IP producer cluster seems to work.

  • It seems that we do not need a manufacturing facility or pharma company to further develop the cluster.

  • If the largest local company were to relocate or disappear it is unlikely that the cluster would be jeopardized. New ideas, new firms, new people will come.

  • Policy advice: environment is key; more R&D money would be good.

  • Need of longer-term studies.


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