Characteristics of firms engaged in collaborations Charlene Lonmo Science, Innovation and Electronic Information Division Statistics Canada Presentation at CIRANO September 19, 2008

Statistics Canada Statistique Canada 2 Overview of the Presentation  Theory – collaboration by science-intensive firms  Data: Surveys of Biotechnology Use and Development – 1999 to 2005  Profile of innovative biotechnology firms by selected characteristics  Comparison of collaborators and non- collaborators  Conclusion

September 19, 2008 Statistics Canada Statistique Canada 3 Theory: collaboration by science- intensive firms Science-based businesses “… connote a commercial enterprise or collection of enterprises that attempts to both create science and to capture value from it. That is, the science-based business actively participates in a process of advancing and creating science. Moreover, a significant part of the economic value of the enterprise is ultimately determined by the quality of the science upon which it rests.” Gary Pisano, Science Business

September 19, 2008 Statistics Canada Statistique Canada 4 Theory: collaboration by science- intensive firms “Cooperative and collaborative arrangements involve the active participation in projects between your company and other companies or organizations in order to develop and/or continue work on new or significantly improved biotechnology processes, products and/or services. Pure contracting-out work is not regarded as collaboration.” Biotechnology Use and Development Survey

September 19, 2008 Statistics Canada Statistique Canada 5 Data: Surveys of Biotechnology Use and Development – 1999 to 2005  Survey process Survey on Emerging Technologies supplemented with other sources such as the RDCI, government agencies and business associations to create a frame  Population covered by estimates Innovative biotechnology firms – those developing biotechnologies, not merely using them Biotechnology is defined in the questionnaire and this definition is generally accepted for biotech surveys in other OECD countries  Questions asked Technologies, human resources, HR challenges and strategies, firm characteristics (age, ownership, spin-off), products, impacts of regulations, contracting in and out, collaborations, intellectual property, traditional financial data, special financing, tax incentives, exports, imports and business strategies

September 19, 2008 Statistics Canada Statistique Canada 6 Profile of innovative biotechnology firms Source: Statistics Canada: Biotechnology Use and Development Surveys, 1999 to 2005

September 19, 2008 Statistics Canada Statistique Canada 7 Collaboration by selected characteristics: Human health biotech sector Human health biotech firms Human health collaborators % of biotech firms in the human health sector42%53% 58% % of human health biotech firms that collaborate73%65%55%53% % collaborators in human health49%57% 59% Source: Statistics Canada: Biotechnology Use and Development Surveys, 1999 to 2005

September 19, 2008 Statistics Canada Statistique Canada 8 Collaboration by selected characteristics: firm size by employment Small biotech firms (<50 employees) Small collaborators % of biotech firms that are small75%71%72%75% % of small biotech firms that collaborate57%59%50%51% % biotech collaborators that are small68%69%71%72% Source: Statistics Canada: Biotechnology Use and Development Surveys, 1999 to 2005

September 19, 2008 Statistics Canada Statistique Canada 9 Collaboration by selected characteristics: age of biotech firm Young firms (5 yrs or less) Young collaborators % of biotech firms that are young..42%49%27% % of young biotech firms that collaborate..67%51% % biotech collaborators that are young..46%49%26% Source: Statistics Canada: Biotechnology Use and Development Surveys, 1999 to 2005

September 19, 2008 Statistics Canada Statistique Canada 10 Collaboration by selected characteristics: biotech firms that are spin-offs Spin-off biotech firms Spin-off biotech collaborators % of biotech firms that are spinoffs34%37%36%34% % of biotech spinoffs that collaborate66% 63%65% % biotech collaborators that are spinoffs36%41%44%41% Source: Statistics Canada: Biotechnology Use and Development Surveys, 1999 to 2005

September 19, 2008 Statistics Canada Statistique Canada 11 Collaboration by selected characteristics: biotech firms with patents Biotech firms with patents Collaborators with patents % of biotech with patents58%66%64%63% % of patenting firms that collaborate79%66%60% % collaborators that have patents73% 75%71% Source: Statistics Canada: Biotechnology Use and Development Surveys, 1999 to 2005

September 19, 2008 Statistics Canada Statistique Canada 12 Collaboration by selected characteristics: biotech firms that obtained funding Biotech firms with funding Collaborators with funding % of biotech firms with funding26%25%33% % of funded firms that collaborate69% 66%61% % collaborators that have funding42%41%47%38% Source: Statistics Canada: Biotechnology Use and Development Surveys, 1999 to 2005

September 19, 2008 Statistics Canada Statistique Canada 13 Collaboration by selected characteristics: stage of development Biotech firms with no biotech products/processes Collaborators without biotech products % of biotech firms without biotech products47%52%56%39% % of biotech firms without biotech products that collaborate67%57%53%60% % collaborators that have no biotech products50% 57%45% Source: Statistics Canada: Biotechnology Use and Development Surveys, 1999 to 2005

September 19, 2008 Statistics Canada Statistique Canada 14 Collaborating firms: collaboration partners and purposes Purpose of collaboration Partners Both Science onlyBoth Science onlyBoth Science onlyBoth Science only All collaborators Both public and private Private only Public only Source: Statistics Canada: Biotechnology Use and Development Surveys, 1999 to 2005

September 19, 2008 Statistics Canada Statistique Canada 15 Comparison of collaborators and non- collaborators by selected key variables Key variables:  Biotech revenues  Biotech R&D  Biotech employment  Fund-raising

September 19, 2008 Statistics Canada Statistique Canada 16 Collaborators vs. non-collaborators by Biotech Revenues Collaborators Average biotech revenue per firm (millions) Biotech intensity (by revenues)13%10%12%10% Non-collaborators Average biotech revenue per firm (millions) Biotech intensity (by revenues)5%26%13%5% Source: Statistics Canada: Biotechnology Use and Development Surveys, 1999 to 2005 Note: Revenues are in constant 2002 dollars

September 19, 2008 Statistics Canada Statistique Canada 17 Collaborators vs. non-collaborators by Biotech R&D Collaborators Average biotech R&D per firm (millions) Biotech intensity (by R&D)87%99%60%71% Non-collaborators Average biotech R&D per firm (millions) Biotech intensity (by R&D)63%79%74%60% Source: Statistics Canada: Biotechnology Use and Development Surveys, 1999 to 2005 Note: R&D expenditures are in constant 2002 dollars

September 19, 2008 Statistics Canada Statistique Canada 18 Collaborators vs. non-collaborators by Biotech Employment Collaborators Average biotech employment per firm Biotech intensity (by employment)13%18%22%15% Non-collaborators Average biotech employment per firm Biotech intensity (by employment)10%24%10%16% Source: Statistics Canada: Biotechnology Use and Development Surveys, 1999 to 2005

September 19, 2008 Statistics Canada Statistique Canada 19 Collaborators vs. non-collaborators by Biotech fund-raising Collaborators Funds raised (millions) 2, , Average funds raised by seekers (millions) Non-collaborators Funds raised (millions) Average funds raised by seekers (millions) Source: Statistics Canada: Biotechnology Use and Development Surveys, 1999 to 2005 Note: Funds are in constant 2002 dollars

September 19, 2008 Statistics Canada Statistique Canada 20 Conclusions Trends  The proportion of biotech collaborators is dropping  Spin-off firms are more likely to be collaborators  Firms with patents are more likely to be collaborators  Firms that obtained funding are more likely to be collaborators  The proportion of funded firms that collaborate is dropping, as has the average value of funds raised – the difference between collaborators and non-collaborators is diminishing Value of other approaches Linked database to enable the study of impacts

September 19, 2008 Statistics Canada Statistique Canada 21 Questions For further information: Chuck McNiven – Section Chief for Emerging Technologies Charlene Lonmo – Survey manager for BUDS and the Survey on Emerging Technologies Beau Cinnamon – Survey manager for Bioproducts Survey and Functional Foods and Natural Health Products Survey