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Open innovation at Canada’s universities: an idea whose time has come?

Published in Research Money, April 4, 2016

By Ted Hewitt

There has been much discussion in recent months regarding the benefits of broadly collaborative—or “open innovation”—models for commercializing research, or otherwise mobilizing research from academy to market.

It’s about time.

A number of studies have demonstrated how the closed innovation models of the past—involving proprietary activity undertaken largely within single organizations—are increasingly less effective in translating ideas into profits.

For example, some of the most successful companies of recent years, including Apple, Google, Netflix and Toyota, developed and leveraged open innovation platforms to support their product development. In all cases, this involved incorporating input both within and well outside company premises.

Similarly, within the pharmaceutical realm, recent findings show that increased investment in drug development on a closed basis has largely failed to realize an increase in the number of approved drugs, and in some cases, has resulted in fewer medications making it to market. As a result, some pharma companies are investing heavily in broad collaborations with academic institutions. The goal in this? To create patentable products, more quickly, more reliably and more effectively.

Growing corporate interest in open innovation, however, has, generally not met with similar enthusiasm on Canada’s campuses, and this represents a problem: our world-class universities are, arguably, the catalyst for much of the scientific discovery underlying the nation’s technological breakthroughs.

For the most part, the products of university research in Canada are primarily managed by the now-ubiquitous technology transfer offices. Most of these operate on tried-and-true closed patenting and licensing models. But while debates rage over whether “inventor” or “institutional” ownership of intellectual property provides a better stimulus to successful commercialization, few voices have openly and fundamentally questioned the model itself. This is somewhat surprising, given that surveys have shown consistently that the royalty returns associated with licensing activity, at approximately $60 million per year, barely even cover operational costs.

Moving towards open innovation is not without risk; it would require a radical move from traditional practices with which faculty-based inventors are relatively familiar and comfortable. In addition, many among them may be less than keen to surrender intellectual property to the marketplace absent the promise, at least, of some kind of eventual monetary return, however unlikely.

But in some quarters, at least, the ground is shifting.

Consider the model currently adopted by Toronto’s Structural Genomics Consortium (SGC). SGC’s collaborators are located around the world. It boasts a growing cohort of industry funders. Under this model of support, SGC researchers work at the rock face of pre-competitive drug discovery research. However, rather than keeping their findings closed and proprietary, they freely disclose the results of their work, in real time, to the entire healthcare community. If the growing number of companies jumping on this bandwagon is any indication, both the pace and the scope of drug development is about to take a significant upturn.  Similar efforts are underway at the Montreal Neurological Institute, which announced this past January that it will make available all research results and data at the time of publication and will no longer seek to patent any of its discoveries.

This kind of open, flexible model is entirely in keeping with the funding practices of Canada’s federal research granting councils. Typically, funds granted through the Social Sciences and Humanities Research Council (SSHRC), the Natural Sciences and Engineering Research Council, or the Canadian Institutes of Health Research are awarded without specific expectations regarding research ownership or protection of intellectual property (this is usually left for discussion at the institutional level).

Almost without exception, the main expectation on the part of the funding agencies is one on behalf of the Canadian public: that the product of federally-funded research ultimately finds its way into the public realm and is put to use for the public good. This is further backed up by funding support for research expenses extending well beyond fundamental discovery and into the realm of knowledge mobilization, whether directly, through grants, or indirectly, through institutional support programs like the SSHRC-managed Research Support Fund. In this context, embracing a model of open innovation for university research is both sensible and financially viable.

Opening the doors of university technology transfer to a more open innovation platform would also free staff to help efficiently move the results of research to where they are most needed. Under this model, the tech transfer “officer” takes on the role of an information broker, working with university faculty to identify potential partners and to develop more open, collaborative research platforms.

Of course, this also suggests a broader shift to embracing a much wider range of research as potentially beneficial to innovation, industrial use and applied knowledge: beyond the technical aspects of product development, we may see a greater understanding of the value proposition of market research, consumer behaviour and new insights into issues related to social licensing. Specialized staff might then work with faculty and community organizations to support the application of research to inform policy, or to programming in support of immigrant settlement or marginalized communities. Imagine that!

At the end of the day, we may have little to lose in adopting open innovation as our default model, and much to gain. In the face of Canada’s chronically sagging productivity, it is increasingly clear that traditionally closed innovation and proprietary licensing models are not effective in moving ideas to market. Existing examples and the growing body of research on open innovation—much of it originating with research outside of the technical realm—have shown us the way.

Ted Hewitt is president of the Social Sciences and Humanities Research Council. SSHRC awards grants, fellowships and scholarships that address many issues associated with innovation.