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 - PowerPoint PPT PresentationTRANSCRIPT
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 presentationIntroduction: need for new indicators1. Overview of Vancouver biotech cluster,
compared to Montreal and Toronto2. 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)
Cluster Biotech Innovative Firms
Biotech Revenues $M
Biotech BERD $M
# of Biotech Employees
# of Bio-Scientists
Montréal 80 1017 113 2935 70
Toronto 55 1094 85 2661 47
Vancouver 48 N/A *258 1701 80
Subtotal 183 2110 456 7297 197
Canada 375 3569 1337 11897 430
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
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.
Location, location, location
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)
0
10
20
30
40
50
60
70
80
Millio
ns o
f d
ollars
NSERC
CIHR
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
Hamilton
Ottaw aCalgary
Toronto
VancouverMontreal
Regina
Québec City
St. John'sSaskatoon
London
Sherbrooke
KWG
Kingston
Edmonton
WinnipegOttaw a
Toronto
Calgary
Québec CityLondonHamilton
Edmonton St. John's
Saskatoon
Sherbrooke
KWG
Kingston
VancouverWinnipeg Montreal
Regina
0
200
400
600
800
1000
1200
9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22%
HQP/Pop
2002-2003
1998-1999
Regina
KWG
Toronto OttawaVancouver
London
Sherbrooke
Kingston
St. J ohn's Québec CityWinnipegSaskatoon
Montreal
EdmontonHamilton
Calgary
Regina KWG
Toronto
Vancouver
Calgary
Ottawa
Winnipeg
St. J ohn'sSaskatoon Montreal
Québec CityHamilton
Edmonton
London
SherbrookeKingston
0
100
200
300
400
500
600
700
9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22%
HQP/ Pop
2002-2003
1999-2000
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)
20.6%
24.0%
23.6%
10.1%
8.2%
5.7%
3.8%3.5% 0.6%
Montréal
Toronto
Vancouver
Québec City
Edmonton
Calgary
Winnipeg
Ottawa
London
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
Cluster Number publications 2000
R&D funding for biotech 2001 $M
Publications per$M invested
Montréal 291 68.0 4.3
Toronto 279 52.2 5.4
Vancouver 165 49.0 3.4
Subtotal 735 169.2 4.3
Canada * 1291 391.6 4.9
Measures of biotechnology activity in metropolitan centres (VEDC, 2002)
Biomedical research capacity and activity
Lower Mainland / Southern Vancouver Island
52 – centre average (US cities)
CIHR/CFI funding 2000
US$34.5 millions US$225.5 millions
Patents files at US Patent Office 1990-1999
354 676
Research Index 0.34 1.0
Measures … cont.BiotechnologyCommercialization
Lower Mainland / Southern Vancouver Island
52 – centre average (US cities)
Venture capital 1998-2001
US$204.1 millions US$191.3 millions
Value of R&D alliances
US$290.0 millions US$203.0 millions
Biotechnology firms with 100 or more employees
6 6
New biotechnology firms 1991-2001
60 9
Commercialization Index
2.50 1.0
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)
Clusters Active Inactive Total Survival Rate
Active per 100,000 HQP
Montréal 31 13 46 67.4 6.0
Toronto 23 9 32 71.9 2.7
Vancouver
19 7 26 73.1 5.6
Venture capital financing $M(MacDonald & Assoc.)
Cluster 2002 2003Venture capital per
innovative firm
Montreal 167.7 152.9 2.1
Toronto 100.6 74.5 1.8
Vancouver 71.9 43.1 1.5
Subtotal 340.2 270.5 1.9
Canada 479.0 392.0 1.3
$-
$100 000
$200 000
$300 000
$400 000
$500 000
$600 000F
un
din
g (
$1
000
s)
Montre
al
Toronto
Vanco
uver
Ottawa
Quebec
Win
nipeg
Calgar
y
Kingst
on
Edmonto
n
London
Halifa
x
Saska
toon
City
Venture Capital and CIHR Funding Per City 2000-01 to 2003-04 (NRC & SECOR, 2004)
Venture Capital CIHR Funding
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)
Cluster Pop. Millions
Employ-ment Millions
HQP Millions
# Biotech Employees
Share of Biotech Employ-ment
Avg. emplo-yees innova-tive firms
Montréal 3.50 1.68 .51 2,935 24.7 36.7
Toronto 4.88 2.41 .87 2,661 22.4 48.4
Vancouver 2.08 1.00 .34 1,701 14.3 35.4
Subtotal 10.46 5.09 1.71 7,297 61.4 39.9
Canada 31.02 17.05 3.68 11,897 100.00 31.7
Distribution of biotech employees in innovative firms (NRC & SECOR, 2004)
Montrea % Toronto % Vancouver % Tot %
Sci. research/
direction
509 35.3 354 27.7 416 41.4 34.4
Technicians 400 27.7 274 21.5 261 26.0 25.1
Reg. Clinical Affairs
52 3.6 109 8.5 28 2.8 5.1
Production 154 10.7 51 4.0 60 6.0 7.1
Finance/Mrktg. 125 8.7 336 26.3 54 5.4 13.8
Mgmt. 189 13.1 135 10.6 120 11.9 11.9
Other 13 0.9 17 1.3 66 6.6 2.6
Total Major Clusters
1442 100 1276 100 1005 100 100
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.