Patenting The number of patents per calendar year generated by inventors in the Waterloo Region increased by nearly a factor of five between 1975 and 1997 from roughly 100 to 500 patents per year (see Figure 1). Most of this growth occurred in the last decade and after the dotcom bust. The industrial mix of patents also changed significantly between 1975 and 2007 as the knowledge economy became more specialized. The combination of telecoms ( 42.1%) and computers (18.1%%) accounted for 3 out of every 5 patents between 1998 and 2007. This is up from one third from 1978-1987. Both the high number and high growth in patents in computers and telecommunications in the is largely due to Nortel Networks which registered 1,447 patents between 1998 and 2007 (see Table 1). As Nortel is now operating under bankruptcy protection this activity has fallen off dramatically. Other significant organizations generating new science and technology in the region include Alcatel Lucent (211), the NRC (166), Mitel (151), Mosaid Technologies (141), and JDS Uniphase (141). Table 1 - Top 10 Patenting Enterprises 1998-2007 Enterprise Patents Nortel Networks 1,447 Alcatel Lucent 211 National Research Council 166 Mitel 151 Mosaid Technologies 141 JDS Uniphase 141 Tropic Networks 65 Entrust Technologies 57 Dew Engineering and Development 54 Logicvision 38 - 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 1978-1987 Computers & Office 1988-1997 1998-2007 Machinery Telecom. & Signal Transmission 7.4% 9.2% 18.1% All Other Sectors 800 700 66.7% 25.9% 66.3% 24.5% 39.8% 42.1% 600 500 Patents 400 300 200 100-1975 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 show that the many of these relationships exist with nearby cities. Specifically, connections to Montréal (see Figure 2) are the most common with 419 instances of a Montréalbased inventor collaborating with an inventor in. Connections with Toronto (319) are also numerous. Most instances of international collaboration occur with US-based inventors. The top five US states (see Figure 3) are California (343), Texas (197), Massachusetts (139), New Jersey (113), and New York (109). Figure 2 - Top ten Canadian city-regions by number of co-inventors, 1975-2007 Montréal Toronto Vancouver Calgary Edmonton Québec Kingston London Hamilton Kitchener-Waterloo Number of Co-Inventors 0 100 200 300 400 500 89 80 54 54 53 46 42 34 Figure 3 - Top five US states by number of co-inventors, 1975-2007 319 419 Beyond the United States (1,450) the top countries for inventor collaboration with are Great Britain (295), Japan (88), France (85), and Germany (76) (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 the region declined between 2005 and 2009 from $3 billion to just under $2 billion (see Figure 5). Expenditures per R&D employee decreased from roughly $225,000 to $160,000 over the same time period. There were close to 1,000 business in reporting significant R&D activity in 2008 (see Figure 6). This was down by nearly 200 over a four year period. R&D spending per firm decreased slightly to just under $2.5 million in 2008. Figure 5 - Business enterprise R&D (BERD) 2005-2009 (constant dollars) BERD ($000,000) $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $300 $250 $200 $150 $100 $50 BERD per R&D Employee ($000) $- 2005 2006 2007 2008 2009 BERD ($000,000) BERD per R&D Employee $- Figure 6 - BERD per R&D enterprise 2005-2008 (constant dollars) $3,500 1,200 $3,000 1,000 - 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) $2,500 $2,000 $1,500 $1,000 $500 $- 2005 2006 2007 2008 BERD per R&D Enterprise R&D Enterprises 800 600 400 200 - 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 2004 in Ottawa- Gatineau before levelling off at over $300 million per year to 2008. 2007 was the most bountiful year for public research funding with nearly $350 million in spending. General sources of government funding represented 24.1% of the total in 2008 (see Figure 8). Notfor-profit organizations were the second largest sources of funding accounting for 20.8%. Medical and health research received the most of any specific category at 13.4%. Figure 7 - Public research funding 1999-2008 (constant dollars) Public Research Spending ($000,000) $400 $350 $300 $250 $200 $150 $100 $50 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Figure 8 - Share of public research funding by major sources (2008) Other government sources, 24.1% Other Sources, 7.2% Natural Sciences and Engineering Research Council, 11.5% Social Sciences and Humanities Research Council, 4.6% Medical & Health Research, 13.4% - 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, 20.8% Individuals and businesses, 12.2% Canada Foundation for Innovation (CFI), 2.7% Canada Research Chairs, 3.6% Prepared by Local IDEAs at the Munk School of Global Affairs, University of Toronto Page 4
Venture Capital Venture capital activity in Ottawa- Gatineau had its strongest years in 2000 and 2001 when the dot-com boom was at its peak (see Figure 9). There were on average 70 VC deals in each of these years for an estimated total amount of almost $1 billion per year. The number of VC deals has declined steadily since to roughly 20 deals per year between 2009 and 2011. The estimated value of all deals has dropped under $100 million. Software and ICT services accounted for just over half (51.5%) of all venture capital deals between 1996 and 2001 (see Figure 10). ICT manufacturing represented nearly one third (30.3%) of all VC deals. Figure 9 - Venture capital deals and estimated total value (constant $) Estimated Total Value ($000,000) $1,200 $1,000 $800 $600 $400 20 $200 10 $0 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total Estimated Value Number of Deals 90 80 70 60 50 40 30 Number of Deals Figure 10 - Share of venture capital deals by industry, 1996-2011 All other industries, 17.8% ICT Mfg, 30.3% - 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, 51.9% Prepared by Local IDEAs at the Munk School of Global Affairs, University of Toronto Page 5
University Spin-Offs Since 1970 there have been 58 companies started by either local university professors or based on technology produced at a local university. Of these companies 12 have been high growth all of which remained in the Ottawa- Gatineau region (see Figure 11). Biomedical/pharma was the most common industry for spin-offs with 22 while roughly half were in either software (19) or ICT (8) industries. There have also been a significant number (35) of started by university students from Ottawa- Gatineau institutions since 1975. Four of the university student spinoffs have achieved high growth status with all of them remaining locally-based (see Figure 13). Software (14) and ICT (12) have accounted for nearly three quarters student spin-offs (see Figure 14). Figure 11 - University spin-off by growth and location 46 12 Figure 13 - University student spin-off by growth and Location 0 (Ottawa-Gat) (relocated) Other Figure 12 - University spin-off by industry 8 9 Biomed & pharma 19 22 Software ICT All other industries 31 4 0 (Ottawa-Gat) (relocated) Other Figure 14 - University student spin-off by industry 3 6 Biomed & pharma Software 14 ICT - Source: Denys Cooper USO/USSO database - Individual cannot be disclosed due for reasons of confidentiality - 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 12 All other industries Prepared by Local IDEAs at the Munk School of Global Affairs, University of Toronto Page 6