Patenting The number of patents per calendar year generated by inventors in roughly doubled between 1975 and 1997 from approximately 200 patents per year to 400 patents per year (see Figure 1). Most of this growth occurred in the last decade. The industrial mix of patents also changed significantly between 1975 and 2007. While there is a high level of diversity within the knowledge economy, the combination of pharmaceuticals (16.1%), telecommunications (11.4%), and computers (9.5%) accounted for more than 2 out of every 5 patents between 1998 and 2007. Both the high number and high growth in patents in pharmaceuticals and telecommunications in the are reflected in the top patenting enterprises (see Table 1). Ericsson is the most prolific generator of patents with 248 between 1998 and 2007. Nortel (138), Pratt and Whitney (123), Merck Frosst (120), and McGill University (115) were also significant contributors to the development of new science and technology in. Table 1 - Top 10 Patenting Enterprises 1998-2007 Enterprise Patents Ericsson 248 Nortel Networks 138 Pratt and Whitney 123 Merck Frosst 120 McGill University 115 Hydro-Quebec 65 National Research Council 58 Universite de 44 Interdigital Technology 42 Cryocath Technologies 39 - Source: USPTO - All data has been cleaned and geocoded by Prof. Dieter Kogler University College Dublin - Patents counts are proportional to number of inventors Figure 1 - Number of patents by year and key industries Special Purpose Machinery 1978-1987 1988-1997 1998-2007 Pharmaceuticals Computers & Office Machinery Telecom. & Signal Transmission All Other Sectors 600 500 71.3% 11.4% 13.1% 1.4% 2.8% 71.8% 8.2% 12.2% 3.3% 4.4% 57.8% 5.1% 16.1% 9.5% 11.4% 400 Patents 300 200 100-1975 1980 1985 1990 1995 2000 2005 Prepared by Local IDEAs at the Munk School of Global Affairs, University of Toronto Page 1
Inventor Connections An analysis of patents that involved collaboration between inventors based in and inventors elsewhere in Canada show that the majority of these relationships exist with nearby cities. Specifically, connections to Toronto (see Figure 2) are the most common with 348 instances of a Toronto-based inventor collaborating with an inventor in. Connections with Ottawa-Gatineau (325), Quebec (242), an Sherbrooke (100) are also quite strong. Figure 2 - Top ten Canadian city-regions by number of co-inventors, 1975-2007 Toronto Ottawa - Gatineau Québec Sherbrooke Vancouver Saint-Jean-sur-Richelieu Edmonton Kingston Granby Saguenay Number of Co-Inventors 0 100 200 300 400 100 71 68 60 59 52 49 Figure 3 - Top five US states by number of co-inventors, 1975-2007 242 348 325 Most instances of international collaboration occur with US-based inventors. The top five US states (see Figure 3) are California (380), New York (333), Connecticut (259), Pennsylvania (246), and New Jersey (216). Beyond the United States (2,720) the top countries for inventor collaboration with are France (408), Great Britain (106), Sweden (81), and China (80) (see Figure 4). Figure 4 - Top five countries by number of co-inventors, 1975-2007 - Source: USPTO - All data has been cleaned and geocoded by Prof. Dieter Kogler University College Dublin - Each co-inventor counts as one and is not dependent on the total number of co-inventors on each patent Prepared by Local IDEAs at the Munk School of Global Affairs, University of Toronto Page 2
Business Expenditure on R&D Business spending on R&D in averaged around $3.8 billion between 2005 and 2009 from a high of nearly $4 billion in 2007 to a low of under $3.7 billion in 2009 (see Figure 5). Expenditures per R&D employee averaged $115,000 over the same time period. There were roughly 4,000 business in reporting significant R&D activity in 2008 (see Figure 6). This was up by approximately 400 firms over a four year period. R&D spending per firm declined slightly from just over $2 million in 2005 to slightly below $2 million in 2008. Figure 5 - Business enterprise R&D (BERD) 2005-2009 (constant dollars) BERD ($000,000) $4,000 $3,950 $3,900 $3,850 $3,800 $3,750 $3,700 $3,650 $3,600 $3,550 $3,500 $140 $120 $100 $80 $60 $40 $20 $- 2005 2006 2007 2008 2009 BERD ($000,000) BERD per R&D Employee BERD per R&D Employee ($000) Figure 6 - BERD per R&D enterprise 2005-2008 (constant dollars) $1,200 4,500 $1,000 4,000 3,500 - Source: Statistics Canada via The Impact Group - Exact figures cannot be disclosed for proprietary reasons - Dollar amounts have been standardized to constant 2008 or 2009 dollars by Local IDEAs - The figures represent the most recent data available BERD per R&D Enterprise ($000) $800 $600 $400 $200 $- 2005 2006 2007 2008 BERD per R&D Enterprise R&D Enterprises 3,000 2,500 2,000 1,500 1,000 500 - R&D Enterprises Prepared by Local IDEAs at the Munk School of Global Affairs, University of Toronto Page 3
Post-Secondary Research Funding Research funding to public institutions such as universities and research hospitals increased steadily from 1999 through 2003 in before levelling off somewhat around $1 billion per year to 2008. 2003 was the most bountiful year for public research funding with over $1.2 billion in spending. Apart from general funding from all three levels of government (24.1%) medical and health research (18.7%) was the largest specific channel funding in 2008 (see Figure 8). Not-for-profit organizations and private businesses and individuals both contributed 12.4% of funding while the Natural Sciences and Engineering Research Council accounted for 10.6%. Figure 7 - Public research funding 1999-2008 (constant dollars) Public Research Spending ($000,000) $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Figure 8 - Share of public research funding by major sources (2008) Other Sources, 10.9% Natural Sciences and Engineering Research Council, 10.6% Social Sciences and Humanities Research Council, 4.0% Other government sources, 24.1% Medical & Health Research, 18.7% - Source: Canadian Association of University Business Officers (CAU- BO) - Dollar amounts have been standardized to constant 2008 dollars by Local IDEAs Not-for-profit organizations, 12.4% Individuals and businesses, 12.4% Canada Foundation for Innovation (CFI), 2.6% Canada Research Chairs, 4.3% Prepared by Local IDEAs at the Munk School of Global Affairs, University of Toronto Page 4
Venture Capital Venture capital activity had its strongest year in 2000 when the dot-com boom was at its peak (see Figure 9). That the region saw over 250 deals worth a total of over $1.4 billion (estimated). Since then the number and value of deals has declined to less than 100 deals worth $400 in a typical year. Software and ICT services (33.8%) obtained VC at the highest frequency between 1996 and 2011 (see Figure 10). ICT manufacturing (14.0%) and bio-pharma (13.2%) were other notable sectors that attracted significant amounts of venture capital. Figure 9 - Venture capital deals and estimated total value (constant $) Estimated Total Value ($000,000) $1,600 $1,400 $1,200 $1,000 $800 $600 $400 50 $200 $0 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total Estimated Value Number of Deals 300 250 200 150 100 Number of Deals Figure 10 - Share of venture capital deals by industry, 1996-2011 Bio-Pharma, 13.2% All other industries, 39.0% ICT Mfg, 14.0% - Source: Thomson-Reuters - Annual values are estimated due to undisclosed values on certain deals (annual averages are applied) - Dollar amounts have been standardized to constant 2011 dollars by Local IDEAs Software & ICT Services, 33.8% Prepared by Local IDEAs at the Munk School of Global Affairs, University of Toronto Page 5
University Spin-Offs Since 1970 there have been 147 companies spun started by either local university professors or based on technology produced at a local university in. Of these companies 37 have been high growth firms 35 of which remained in the Waterloo Region with 2 others decamping to other locations (see Figure 11). Over half (83) of these were in biomedical and pharmaceutical industries. Figure 11 - University spin-off firms by growth and location 110 35 2 High growth firms (Montreal) High growth firms (relocated) Other firms Figure 12 - University spin-off firms by industry 33 Biomed & pharma Software 15 83 ICT 16 All other industries - Source: Denys Cooper USO/USSO database - Individual firms cannot be disclosed due for reasons of confidentiality - High growth firms defined as doubling of employees within five years to at least 20 employees or doubling in sales within five years to at least $10 million Prepared by Local IDEAs at the Munk School of Global Affairs, University of Toronto Page 6