The IPL newsletter: Volume 14, Issue 288

INTRODUCTION

This newsletter is published by The Innovation Policy Lab at the Munk School of Global Affairs, University of Toronto, and sponsored by the Ministry of Research and Innovation. The views and ideas expressed in this newsletter do not necessarily reflect the views and policies of the Ontario Government.

The Business of Cities 2013: What Do 150 City Indexes and Benchmarking Studies Tell Us About the Urban World in 2013?

Tim Moonen and Greg Clark, Jones Lang Lasalle
The urban world is in full swing. The number of people living in cities is increasing by more than the population of the UK, Colombia or South Africa each year, and the present and future performance of cities has never been more important. Cities are now the major sites where challenges around the new economy, sustainability and resilience, equality, infrastructure, leisure and culture are all played out. Five years on from the Global Financial Crisis, the focus is on how cities are navigating new paths towards sustainable growth. The measurement of city performance is one of the critical ways in which we can assess the complexity of urban change, and judge which approaches are successful or not. This report makes a valuable contribution in assembling the widest possible collection of global city indexes, benchmarks and comparative rankings. This 2013 edition has been expanded in scope to encompass over 150 indexes, which together offer a comprehensive bird’s-eye view of the state of city watching worldwide. Cities are inevitably responding differently to the demand for new approaches to internationalisation. Some have moved faster than others, whether in terms of trade links, investment sources, sustainability or integrating urban systems. The benchmarks, reports and indexes presented here provide a unique resource for governments, business leaders and investors to learn about city strengths and weaknesses, and assess the progress of new agendas in a fast-moving global economy.

University Start-Ups: Critical for Improving Technology Transfer

Walter D. Valdivia, The Brookings Institution
University technology transfer has been largely dominated by a business model of licensing university patents to the highest bidder. This model is unprofitable for most universities and sometimes even risks alienating the private sector. However, a new and smarter model has emerged and is being increasingly adopted. In this new model universities nurture their own start-ups and make available their patents to them. This ought to improve technology transfer. But universities cannot do it alone, they operate within a larger innovation ecology and the government can help foster an adequate environment for entrepreneurship.

• The license-to-the-highest-bidder model has yielded high income for only a few universities. Most universities lose money on it. In 2012, a year very much in line with the ten-year trends in this sector, the top 5% of earners (8 universities) took 50% of the total licensing income of the university system; and the top 10% (16 universities) took 70%, nearly three-quarters of the system’s income.
• Not only licensing revenue is highly asymmetric but also the highest earners have become a select club with a stable membership. Only 37 universities have been able to reach the top 20 of licensing revenue any given year over the last decade.
• Of the 155 universities reporting licensing data in 2012, the top half in terms of research expenditures controls about nine of each ten dollars of research funds and of licensing revenue.
• Using tech transfer office expenses information, Valdivia estimates that 130 universities did not generate enough licensing income in 2012 to cover the wages of their technology transfer staff and the legal costs for the patents they file. What is more, with 84% universities operating technology transfer in the red, 2012 was a good year because over the last 20 years, on average, 87% did not break even.

Luckily, though, universities appear to recognize that their patent and commercialization projects must change and are moving to, what Valdivia terms, a “nurturing start-ups model.”

Three key recommendations to engineer a start-ups model revolution in tech transfer:

1. 1) The government should expand funding for the Small Business Technology Transfer program designating funds specifically for university start-ups.
2. 2) Congress should authorize a patent use exemption for non-profit research organizations for the purpose of exclusive experimental use.
3. 3) The government should create an equity rule for the distribution of funds among universities.