The SRA Symposium - College of Medicine

Papers
a strong science system, which is defined by the different research councils, while the innovation
is largely based on the successful linkages between the outputs of technology or R&D institutes
and the market. Such economies tend to be well diversified, through a well coordinated national
innovation system. Knowledge management, especially through skilful use of the ICT and the cyberspace
in general, is central to the structure and functioning of these economies. In them, there
is continuous gathering and processing of all types of information which is necessary for meeting
economic demands across the whole world. The economies use the information to re-position
themselves as necessary in order to take advantage of changes in opportunities. For example,
Heher states that in 2002, universities in the USA and Canada earned US$1.2b from the commercialization
of research (Heher 2004:1). In addition, universities that participated in the survey
conducted by the Association of University Technology Managers (AUTM) over a 10 year period
reported 4,300 new companies formed and over 300,000 jobs created. Heher makes two more
important observations. First, he notes that the indirect economic impact is estimated to be an
order of magnitude higher. Secondly, he states that the success of university technology transfer is
considered one of the key drivers of the sustained growth in the USA economy in the past 20 years
(Heher 2004:1). In this case, technology transfer by these universities is able to re-direct R&D to
produce new products and services that are essential to continue the innovation process. Indeed
without continuous innovation, economies cannot expect to survive in a global and increasingly
competitive business environment. Other countries have responded to this success by taking steps
to put in place support programmes for technology transfer and commercialization, as I shall
demonstrate for India, later.
The success of North American universities in commercialization of research needs to be considered
cautiously, because innovation or commercialization of research is often very risky. For example,
Majewsky notes that the US$1.2b made by the US and the Canadian universities is mainly
license fees and it represents only 3% of the research income of these universities. This means
that the returns are minimal, hence the need for spin off companies. But forming spin off companies
can also be problematic, because that requires venture capital, which is not readily available,
especially in the developing countries. Majewsky notes that in Warwick University between 2000
and 2003, researchers made 120 commercial opportunities and 20 spin off companies including
4 inventions licensed. The spin off companies raised 2 million Euros but it took 1 Million pounds
sterling to create 1 opportunity, and 1 million pounds sterling to bring about 1 spin off company
(Majewsky 2003). The problem is complicated by the fact that most technologies from the universities
never get licensed because they are too under-developed. Developing the technologies is not
straight forward; it is risky, it requires careful NPV calculations to reduce the risk because usually,
development costs can be 10 times the research cost. Above all, the support services are very
strong in the developed world. CONNECT is one of the many companies used in the UK and the
US to link university researchers with investors in technology development since 1985.
Non cautionary comparisons across countries might lead to wrong conclusions regarding efficiencies.
For example, UK universities produce 5 to 6 more start-up companies for every US$100m
when compared with the US universities. From these figures, it might appear that the UK is more
efficient than the US. The difference, however, is accounted for by the difference in policy. In the
USA, emphasis is on licensing while in the UK emphasis is on start up company formation (Heher
2004). The implication for developing countries is that have to clearly determine what their priorities
are in science & technology based innovation and then make policies accordingly. This point is
taken up later under the discussion on Botswana.
By contrast, the history of education in Africa has indicated that before independence, the continent
has focused more on liberal arts to the neglect of science education. Through its reforms,
the World Bank tried to shift the focus towards science but the number of students in science in
a number of tertiary institutions in Southern Africa continues to be lower than the number of
2005 Symposium Proceedings Book 163