TEC Edmonton the result of unique academic-municipal partnership

The Univ of Alberta (U of A) and the City of Edmonton have joined forces to create a Canadian first. They’ve established TEC Edmonton — a new technology transfer and commercialization office positioned as part of a larger strategy to more effectively exploit the university’s rapidly expanding research capacity and enhance regional receptor capacity. The venture is also being seen as a novel response to Canada’s innovation strategy, linking the technology push of universities with the market pull of the private sector.

The decision to establish a jointly owned regional innovation organization is part of a larger strategic plan by the U of A that includes the creation of a seed fund and a strengthening of its research transition facility (RTF). The RFT is the U of A’s business incubator and TEC Edmonton will be co-located within its new facilities. It will begin operations this year with an initial complement of 24 staff, drawn from both the university and the city.

TEC Edmonton — which stands for technology, entrepreneur and company development — has already lined up nearly $20 million in cash and in-kind over five years and hopes to increase that to almost $25 million with federal and provincial assistance. The organization’s goal is to become self-sustaining by 2010, operating on a combination of technology licences, company equity and program cost recovery.

MAJORITY OF FUNDING ALREADY COMMITTED

Nearly half of the funding ($11.4 million) comes from the U of A, which is contributing $5 million by drawing on a $40-million equity pool in spin-off firms and another $5 million from licensing revenue. The City of Edmonton through Edmonton Economic Development Corp (EEDC) is contributing $700,000 over five years, including $300,000 in the initial start-up year.

“The key projection is the licensing revenue. It’s a bit of a crap shoot because it’s a non-linear process,” says Dr Peter Robertson, U of A’s associate VP research and TEC Edmonton’s CEO. “The university already has 160 licences in its portfolio and 40 are generating revenue. But 70% are in the life sciences sector and they’re often slow to mature.”

Also somewhat uncertain is the government funding that TEC Edmonton has tentatively built into its business plan. Robertson says discussions with the province have been fruitful and there is a willingness to provide some assistance if it is provided through the Western Economic Partnership Agreement (WEPA). That would allow the province to draw funding from its Ministry of Innovation and Science and match it with federal money from Western Economic Diversification.

In its first year, TEC Edmonton will keep its technology transfer services focused on university researchers while the programs being transferred from EEDC — the Deal Generator program and the VenturePrize competition — will target both campus and business communities. In the longer term, tech transfer services will be expanded to include the whole region, armed with a host of services geared towards mitigating risk and accelerating commercialization.

By this point, it’s hoped that the proposed seed fund of up to $25 million in capital will be in operation. The U of A has authorized $10 million from its equity pool to be used for the seed fund and hopefully matching provincial and federal funding, can be secured, once again through WEPA. There are also plans to partner with the Univ of Calgary’s University Technologies Inc (UTI), although discussions are preliminary.

“The province usually does not put money into venture capital but that may change,” says Robertson. “If TEC Edmonton and UTI get together and create the seed fund, the government would be interested ... maybe through Treasury Board or a new program or fund. An election is coming up so it’s all about timing.”

In addition to the two founding organizations, TEC Edmonton has been designed to accommodate even more partners. The same holds for formal collaboration agreements. Relationships have been established with several organizations such as the Alberta Research Council, NRC’s Industrial Research Assistance Program, InnoCentre Alberta, TR Labs and the Alberta Heritage Foundation for Medical Research.

MULTIPLE COLLABORATIONS

Collaborations under active development include Alberta Value-Added Corp, Grant MacEwan College, Northern Alberta Institute of Technology, National Institute for Nano Technology and private sector service providers. Future considerations may see participation by the Alberta Ingenuity Fund, Red Deer College, Olds College and a range of federal, provincial and municipal governments, the granting agencies and industry associations.

The creation of TEC Edmonton is just the latest development by the U of A to enhance the research commercialization services it provides to the university community and the region at large. It’s also a recognition that new approaches are required to deal with the university’s rapidly expanding pool of sponsored research funding, which is on target to reach $500 million by 2006.

In 2002, the university engineered a reorganization of its research services operations with the consolidation of three separate offices (R$, June 7/02). At that time, sponsored research income stood at $287.5 million. For FY03-04, it increased to $380 million, putting the $500 million goal within reach.

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