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

Monica Salazar & Adam Holbrook

CPROST-Simon Fraser University

Vancouver, Canada


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

  • 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)


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

  • 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

  • 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.


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)

  • 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 CIHR R&D Intensity for 15 Major Cities


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)


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 publications


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


Measures …cont.


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)


Venture capital financing $M(MacDonald & Assoc.)


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

  • 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)


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


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?

  • 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?

  • 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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