University Patenting in Wales and Scotland

University Patenting in Wales, Scotland and Northern Ireland:

A Comparative Analysis

Andrew Beale, David Blackaby and Lynn Mainwaring, Swansea University,

Abstract

Using data on the patent portfolios of UK HEIs, the paper compares the levels of patenting activity (filings and grants) and patent quality (patents with commercial co- assignees and patent citations) at Welsh, Scottish and N. Irish institutions. Patent activity, per researcher, in Wales is on a par with that in Scotland and about twice the rate in Northern Ireland, but the academic research bases in Wales and N. Ireland are around half of that in Scotland in per capita terms. In respect of patent quality, Wales clearly lags Scotland and there are signs that it is falling behind N. Ireland. We conclude that bolder steps are needed on the part of the Welsh Assembly Government to develop the HEI-business interface.

1 Introduction

The traditional research ‘mission’ of universities has been the generation of research

outputs as public goods. Academics are strongly motivated by, and institutionally

rewarded for, disseminating their findings in open-access academic journals of the

highest standing and, therefore, of the highest readership among their peer groups. This approach is exemplified and reinforced in the UK by institutionalised procedures such as

the regular Research Assessment Exercise (RAE) conducted by the Higher Education

Funding Councils as a means of determining the allocation of public research monies.

Publication is the main determinant of RAE success, and although patents and other

forms of intellectual property (IP) are formally considered as publications for evaluation

purposes (HERO, 2002), there is little doubt that most of the assessment panels in the

sciences and engineering give overwhelming weight to academic rather than commercial

publications.1 Even if Vice-Chancellors and academics themselves have been happy to play this game (and the seriousness with which they take RAE rankings suggests they have), there is a growing awareness, perhaps filtering down from other government agencies and a mass of academic studies, that failure to take IP seriously means that the

universities are missing out on regional wealth-creating possibilities.

In the United States, concern about the loss of potentially valuable benefits of

university research through free international diffusion led, in 1980, to the Bay-Dohl Act

(Jaffe, 2000) which allowed universities to patent findings that were generated from federally-funded research. In the UK, rights to IP arising from university research were

formerly granted to a government corporation, the British Technology Group, but were

ceded to the universities themselves in 1983. As a result, IP awareness and IP activity in

2 UK universities have been transformed in the last two decades (though not to the same extent as in the USA) (HEFCE, 2001; 2003). This more positive approach to HEI commercialisation is one facet of a changing attitude to modern economic development encapsulated in the notion of the ‘knowledge economy’ and which, in line with the ‘third missions’ of many institutions, tends to be focused on regional wealth creation.2 If some

UK universities have been slower in this respect, that has been due partly to a lack of appreciation of the benefits of IP protection, partly to an understanding that many of the benefits are economy-wide and not fully appropriable by the institution, and partly because of unresolved tensions about the appropriate objectives of university research

(see, for example, Poyago-Theotoky, et al., 2002; Owen-Smith and Powell, 2001; and

Stephan, 2001).

In respect of the first of these, change has come about largely because of emulation of institutional leaders. Cambridge, for example, was one of the first British universities (along with Heriot-Watt) to establish a science park (Siegel, et al., 2003), and it opened an Industrial Liaison and Technology Transfer Office (Lynxvale) as early as

1970, eighteen years before Oxford set up its commercial arm, Isis (Lawton Smith, et al.,

2001). The second problem arises because academic institutions lack the experience, skills and acumen to commercialise their own research and may fail for a variety of reasons based on information asymmetries and transactions costs to realise the full value of their knowledge through licensing agreements (Shane, 2002). While learning by doing and by emulating best practice can help overcome these problems, the government, keen to maximise social benefits, has imposed implicit incentives on universities to do better.

University expansion in the face of the limited growth of traditional (i.e., public) funds

3 has forced universities to look increasingly at their own wealth generating capabilities,

and particularly at university-industry synergies. Moreover, even within the publicly-

funded component, greater attention is now being given to third-mission activities,

including contributions to local economic regeneration. The third problem remains:

many academics continue to be concerned about the perceived assault on ‘open science’

or, more cynically, about any detrimental impact on conventional research rankings. The

evidence here is mixed. Zucker and Darby (1996) find synergy between academic and

commercial research in biotechnology, whereas Louis et al. (2001) found that

commercially-oriented academics were more hostile to the ethos of open science. Our

own findings, from 29 UK universities (Beale et al., 2006), is that patent productivity has

a statistically significant positive relationship with RAE score and a small and

insignificant relationship with a Teaching Quality Assessment measure.

The purpose of this paper is to see how universities in Wales have compared with

their counterparts in Scotland and Northern Ireland in the development of their patent portfolios. It draws on and elaborates results presented in a report published by IP Wales

(Beale, 2005) the data for which were commissioned from MicroPatent Professional

Services. The data in that report relate to patent filings and patent grants in the years

1983 – 2005 for all HEIs in Wales, Scotland, Northern Ireland and the Republic of

Ireland and for all English universities belonging to the self-selected elite Russell Group.4

For the purposes of this paper, the English universities are excluded since they can in no way be claimed to be representative of overall HEI performance in England. Universities in the Republic of Ireland are also excluded from detailed consideration because other aspects of the comparison (notably staff counts) are not obtainable on a consistent basis.

4 The three regions/nations that remain are, however, of considerable interest in themselves because they are three distinct elements of the UK devolutionary settlement

(Clifton and Cooke, 2005). Over the coming decades, observers will be able to assess the extent to which the differing degrees of political and economic autonomy and styles of government succeed in delivering improvements in living standards to these peripheral regions. Devolution is, however, imposed on different cultures and historical legacies, economic, political, legal and intellectual. So the gathering of base-line data is critical to the running of this natural experiment. The significance of university patent outputs is that it provides us with one metric (among several) of the extent and resilience of the region’s innovation system. Although the data presented in this paper run through to

2005, lags in invention commercialisation are estimated to be around six years (US,

Department of Commerce, 2003). So, although the interesting questions (‘starting from base, where and how far do we go?’) can be asked now, the answers may take some time in coming.

Patent filings and patent grants can be thought of as measures of commercial research outputs - subject to well-known qualifications; see Griliches (1990), Pavitt

(1988). To compare productivity we need an input measure and for that we use academic staff counts derived from returns to the 2001 RAE (HERO, 2002). The input measure tells us something about the potential size of the HEI-based innovative potential in each nation/region, an interesting comparison in its own right. The input comparisons are discussed in the next section. We then consider increasingly refined productivity comparisons – refined in the sense that the output measures (i.e., patent documents) more effectively capture innovations of commercial value. The measures are, respectively:

5 patent filings, patent grants, and patents having a commercial co-assignee. Although

patent filings may be regarded as a weaker measure of output value, they do provide a

much larger data set and, in any case, they give insight into the degree of commercial

research activity (and hence awareness of its importance) in individual HEIs. These

comparisons are followed by an analysis of patent citations, which is an alternative way of looking at patent quality. The final section summarises and interprets the findings.

The University research base

So far as patentable outcomes are concerned, the research base is taken to consist of

academic staff in research-oriented ‘old university’4 schools/departments in the sciences

and engineering. There are a number of issues relating to this definition. First, it omits

technicians and other support staff. Apart from the difficulty of getting consistent counts

of such staff, it is reasonable to suppose that academics are the main source of new ideas

and that, in any case, across institutions the ratio of academic to non-academic staff is

roughly uniform. Secondly, it excludes staff in the ‘new’ universities, or former

polytechnics and technical institutes. This is because the staff counts are based on returns

to the science and engineering panels of the 2001 RAE. The old universities all have an explicit research mission and submit returns in all, or nearly all, relevant RAE ‘units of

assessment’ (UoAs). This is not true of most new universities, whose comparatively

weak research capabilities lead them to concentrate submissions in the few areas where

they hope to make an impact. Thus entire schools/departments may fail to leave any

trace in the RAE returns. Thirdly, the definition begs the question of what is meant by

‘sciences and engineering’. There is inevitably a strong element of subjectivity in this

6 regard and, as it seems to us, no obviously right way to draw a boundary around those

areas that are patent-relevant and those that are not.

Universities may submit staff to the RAE in categories - UoAs – defined

specifically for the purposes of the Exercise. This is helpful in that it forces institutions

to decide which UoAs their staff belong to. Thus, compared to identifying appropriate

departments from the imaginative titles employed by universities, we are able to get consistent definitions. Of the 68 UoAs, we consider 27 to fall into areas of science and engineering and, therefore, to be patent-relevant.5 An example of possibly contentious

boundary drawing is the inclusion of Applied Mathematics and the exclusion of Pure

Mathematics. Community-based Clinical Subjects are included despite the fact that some

of the research here is epidemiological and psychiatric, because other research may look

at preventive medicine and cardiovascular disease. One could argue in favour of

extending the net to include any UoA in which research could conceivably lead to a

patent, or constrain it even further to exclude all staff whose interests are not focused on

commercial outputs. Ideally, we want to match inputs to the known outputs (patent

documents) but we have no direct way to do this, and our choice of UoAs is simply our

best guess as to what is appropriate.

One of the problems of using the RAE is that not all staff are returned as ‘research

active’. There may be an element of genuine judgement here on the part of the institution

but the decision may also be a strategic one. Each UoA Panel graded submissions on the

scale {1,2,3a,3b,4,5,5*}. A staff member considered research active by a department

content to get a 3b rating might be excluded by a department aiming for a 5*. For the

purpose of evaluating university patent productivity we need to include all staff and not

7 just those deemed research active by the universities themselves. (In fact, even the many

RAE rankings published in the Educational press6 are adjusted for the proportion of staff

submitted.) The returns do not tell us the exact proportion of staff submitted but do give

proportions within (six) bands. By using the mid-points of these bands, the reported

numbers can be scaled up to yield an estimate of the total staff complement for each UoA

for each institution. These estimates are reported in Table 1 for Wales, Scotland and

Northern Ireland on an absolute and per capita basis (using the 2001 Census of

Population).

The academic (as opposed to purely commercial) quality of a department is

obtained by weighting the submitted staff according to the rating it receives. This is sometimes done by replacing the idiosyncratic scale noted above by a {1, …, 7} scale but, since the official rating of 1 effectively means research of no merit a {0, …, 6} scale is more appropriate. Rankings from this sort of exercise are published in the Educational media for departments and institutions. Table 1 reports our own estimate of the scale- weighted numbers of researchers in the 27 units of assessment deemed to here to be patent-relevant, which we refer to as ‘research mass’.

Table 1 tells a striking story. The number of academic staff based in the science and engineering departments of old universities relative to population is nearly twice as high in Scotland as it is in Wales and Northern Ireland. When adjusted for quality there is a marginal change – in Scotland’s favour: research mass there is over twice as high as it is in Wales. Whatever the patent productivity measures show, the fact is that Welsh universities have been attempting to compete on the basis of half the resources of

Scotland. This picture is unlikely to be distorted as a result of the exclusion of the new

8 universities, as is implied by the fact that these institutions account for 8.5 per cent of

Scottish patent filings compared to 4.5 per cent for Wales and zero for Northern Ireland.

Patent filings

A search by MicroPatent uncovered patent application filings for each HEI in Wales,

Scotland and Northern Ireland at five patent (and trademark) offices over the period 1983

- 2005. The five offices are: Europe (EPO), Great Britain (UKPO), Japan (JPO), United

States (USPTO) and the World Intellectual Property Organisation (WIPO) via the Patent

Cooperation Treaty (PCT). Patent applications were not separately published by USPTO

prior to 2000; thus for 1983 – 1999 only patent grants are counted. It is perfectly possible

to apply for a patent in individual countries other than those stated but such applications are excluded from the data. However, patents granted by EPO, JPO, USPTO and via the

PCT are generally regarded as high-value patents (OECD, 2004). Publication of documents typically lags behind filings by 18 months and, for this reason, the data, which were collected in 2005, are incomplete for the period 2003 – 2005.

The HEI portfolios were assembled by including documents on which the

institutions were named as an assignee (owner) or co-assignee and documents that were

‘family members’ of the HEI-assigned documents regardless of the assignee name. The family-member definition used is that due to INPADOC7, and is one of the more

expansive ways to define invention families. Roughly speaking, these are documents that

have been filed in different patent offices on the same invention, along with any other

patent documents that rely on the original family members for ‘priority’, meaning – again

roughly – that they represent a downstream development of the original invention.

9 Inclusion of all INPADOC family members in the HEI portfolios means that some

documents in the collection are ‘unassigned’ and some are assigned to entities other than

the institution itself. When a document was unassigned or inventor-assigned, its probable institutional source was inferred by examining the rest of the family members.

Table 2 reports HEI patent filings, individually for old universities and

collectively for new universities and other HEIs. For old universities staff numbers in the

relevant RAE UoAs are also included, together with estimates of filings productivity

(total filings per staff member). (For comparison, filings per member of the English

Russell Group universities is 0.59.) For Scotland, it can be seen that there is considerable variation in filings productivity, with Strathclyde, at 1.1 filings per member, markedly ahead of the other institutions. (This is despite the fact that, unlike Aberdeen, Dundee,

Edinburgh and Glasgow, it does not have a medical school.) There is a substantial and interesting difference in the performances of Scotland’s two Russell Group members,

Edinburgh and Glasgow. Edinburgh, which has Scotland’s largest concentration of science and engineering academics, has a filings productivity barely above that of the two smallest groupings (among old universities), St. Andrews and Stirling. Among the other

HEIs, Glasgow Caledonian and Napier College accounted for 65 of the 129 filings. Only one per cent of applications were filed in Japan and only 10 per cent at UKPO

(presumably because UK protection can also be had via EPO and WIPO.)

For Wales, there is a clear-cut difference between Cardiff University (including,

for our purposes, the University of Wales College of Medicine with which it is now

merged) and the other three old universities. Cardiff accounted for 375 (74 per cent) of

the 507 filings from Welsh institutions and has a productivity rate twice as high as its

10 neighbours. 22 of the 27 filings by other HEIs came from Glamorgan University.

Thanks to the dominance of Cardiff, Wales’s overall old-university productivity exceeds

that of Scotland: 0.52 per member compared to 0.44. The geographical distribution of

applications is broadly similar to that of Scotland except for a greater concentration in

UKPO, possibly reflecting less confidence in the global value of the innovations.

For Northern Ireland, there is little difference between Belfast and Ulster, except

for scale. The overall rate of 0.27 filings per member is comparatively low. There is also

a greater propensity to use multi-country routes (EPO and WIPO).

Patent grants

Patent filings may be a useful measure of the level of commercially-oriented research

activity, but their utility as a measure of the value of outcomes of that activity is

compromised by the fact that application success rates may vary from institution to

institution. Our data provide some insights into these variations. For EPO data we are able to compare filings over the period 1983 – 2005 with the number of grants. This does not tell us how many applications over that period went on to be granted since recent applications may be granted after 2005. Nevertheless, given the length of the period, the

‘issuance ratio’ (the ratio of patents granted to applications not granted) gives a good indicator of overall success. We can do the same for US data but only for the years 2000

– 2005, the shorter period giving a less robust measure of success. Since this success rate tells us something about the effectiveness of HEI schools/departments in pursuing commercially viable outcomes, they are worth recording in their own right (Table 3).

11 For some institutions, the small numbers involved suggest that the issuance rates should be treated with caution. Among the more active institutions, Strathclyde again stands out. Thus, not only does it have the highest filings rate but it also (on the basis of

EPO and USPTO data) has the highest issuance rates. The overall rates for Wales and

Scotland are similar, though those for Northern Ireland are markedly lower. It is interesting that issuance rates are higher for US applications than those for EPO, suggesting either that US criteria are easier to satisfy or that they are subject to shorter lags8 or both.

Table 4 reports the total number of patents at EPO and USPTO for 1983 - 2005 and the corresponding (granted) patent productivity rate. (Again, for comparison, the productivity rate for the elite English universities is 0.14.) The ranking of institutions on this measure is pretty close to that based on filings productivity - suggesting that, as cross-section data, filings may not, in fact, be a poor measure of outcomes. (This may not be true over time, as universities become more experienced and more selective about what inventions to patent; see HEFCE, 2003, p.23.) Even so, a patent grant only tells us that an application satisfies the ‘inventive step’ criterion;9 it does not necessarily imply that the invention has commercial value.

One way to get a handle on the issue of commercial value is to examine the assignee-at-issue for each patent document, the idea being that those for which an HEI is a co-assignee with a commercial entity are more likely to have commercial value. This idea gains support from the fact that (for our data) applications are more likely to proceed to the grant stage when the first assignee is a commercial entity. If we pool all the data, including those for English Russell Group universities and HEIs in the Republic of

12 Ireland, we find that the issuance rate at EPO is 1.0 when there is a commercial first assignee, compared to 0.5 for all assignees; and for the USPTO it is 1.4 compared to 0.9.

Patents with commercial first assignees

Table 5 attributes to each institution patents with commercial first assignees which have been identified according to the INPADOC patent-family definition and illustrates how performances have changed over time. It is clear that commercial cooperation in patent activity was low in the early years for most institutions (and the data for 1983 – 1992 are compacted in the table) but has grown steadily on average since then. The average, however, conceals idiosyncratic patterns for a few institutions, casting fresh light on the outcomes related above. The last three columns of Table 5 show: the total count for the entire period; the count for the period end (2000 – 2005); and the ratio of end count to total count. The ratio gives a rough indication of whether institutional activity is accelerating or declining relative to other institutions.10

Perhaps the most surprising results are those for Strathclyde. This university has high absolute filings and high EPO/USPTO patent grants – in both cases higher than

Glasgow. Yet in Table 5, it comes some way behind Glasgow (and even further behind

Cardiff) and only just ahead of Dundee. Yet more remarkable is that most of

Strathclyde’s documents refer to years prior to 2000; only 24 per cent are post-2000

(about half the Scottish average). Note also that the previous ranking of Edinburgh and

Glasgow is reversed when it comes to the end count: total count ratio. Three quarters of

Edinburgh’s patents with commercial first assignees are post-2000 compared to fewer than half for Glasgow. That late starters are catching up is also evident from the results

13 for ‘other’ Scottish HEIs, for which 82 per cent of such patents relate to the last five years.

In Wales, the story is even more interesting (and worrying). Over the entire period, Cardiff, to which we have attributed 45 documents, outperforms all other institutions in the Table. Yet only seven of these relate to the end period. Cardiff’s activity, on this measure, seems to have stalled drastically. The numbers for the remaining Welsh institutions are simply too small to say anything meaningful about trends, though they speak eloquently about the historically low levels of activity and effectiveness. To be on a par with Scotland in per capita terms, Welsh outputs need to be at least half of those for Scotland. Yet for this kind of patent, the ratio stands at about one third for the entire period and around a quarter for the last five years. The figures for

Northern Ireland are dominated by Belfast which has much in common with Edinburgh and ‘other’ Scottish HEIs and is pretty much a mirror image of Cardiff: 80 per cent of its patent attributions are from the end period. For the last five years the total count for the region exceeded that of Wales.

Patent citation analysis

When a patent or application is published it may serve as a reference for inventions that are subsequently filed by the same inventor or others. If an inventor or an examiner makes reference to an earlier patent document, some technical relationship is implied, but the nature of that relationship may vary. The earlier work may be similar or it may be a different solution to the problem that is addressed by the new application. If a patent has had a significant impact on a technical field, the number of times it is cited by others will

14 tend to be higher. Self-citation (i.e., by the inventor or assignee) implies continued R&D

investment in the technical area. Citation by others implies some recognition of technical

reliance on or advancement over the prior work.

Naturally, one would expect citation frequency to increase with the age of the

patent since the opportunity for citation increases with time. It is also the case that

citation practices vary across patent offices, with much higher frequencies being recorded

on USPTO documents. Since the percentages of filings in the USPTO are very similar

for our three nations/regions (Table 2), we can ignore this effect. Citations data have

been complied for EPO, USPTO and WIPO documents as part of an analysis of the full

set of documents including those of English and Republic of Ireland universities. The

mean citation rate for the entire collection is 0.25 citations per patent. A simple summary

comparator is provided by the proportion of documents having citations in excess of two standard deviations above the mean. Three per cent of Scottish documents are above the

2SD threshold compared to four per cent for Wales and one per cent for (All-)Ireland.

If this seems good from a Welsh perspective, more troubling is that citation

frequency in that region has been low – consistently so – from 2000 onwards. Although

one expects lower average frequencies for newer documents, among the newer

documents higher rates do predict innovations of emerging interest. What is apparent is

that both Scottish and Irish HEIs are generating documents of emerging interest while

Welsh HEIs are signally failing in that regard. Although mean citation rates for this

restricted period are close to zero for all three regions, the 2SD markers are 3.9 for

Scotland, 2.1 for Ireland and only 0.7 for Wales. This echoes the remarkable downturn,

15 noted in Table 5, in patent families with commercial co-assignees at Cardiff compared

with, say, Belfast and Edinburgh.

Implications and conclusions

Conclusions from this analysis have to be prefaced by drawing attention to limitations in

the data. These limitations are both inherent and conceptual; that is to say that even as

patent counts they are approximate due to unavoidable constraints on search accuracy,

and that registration of IP rights may, in any case, give only a partial indication of the

strength of HEI-business technology transfers. Institutions have different policies (and

competences) with regard to the registration of IP rights, which lends a degree of

uncertainty to the attribution of inventions to researchers in an institution. Attributions

via the family-member searches, for example, include some patents for which the

institution is not an assignee. If this suggests the possibility of exaggerating the

portfolios of some institutions, it is equally certain that patents resulting from HEI

research have eluded the search procedure (Beale, 2005).

We have no reason to suppose that the data limitations induce serious cross-region

biases (at least in relation to Scotland and Wales). They are more likely to have an

impact on comparisons of individual institutions. Some institutions, like Strathclyde,

clearly have in place systematic procedures to capture IP and maximise technology transfer effectiveness. Others, just as clearly, have not.

Even allowing for data caveats, the differences that emerge - between Scotland

and Wales in particular – are too substantial to dismiss. The significant differences relate not to the quantity measures (filings and grants) but to quality measures (commercial co-

16 assignment and citations) and they echo findings on IP generation from industry itself.

(Moore and Mainwaring (2006) show that, in the production sector, Welsh firms are at least as likely to engage in patenting as their Scottish counterparts but are less likely to hold multiple patents. It is plausible that single patents are more likely to represent innovation dead-ends, whereas clusters and families suggest innovation routes with on- going potential.) In Scotland, there is also evidence of a systemic, network-based culture within higher education, reflected in the number of collaborative linkages. The patent filings documents in our data reveal 10 instances of co-assignment between HEIs in

Scotland and 34 between Scottish HEIs and English members of the Russell Group

(including six with triple assignment). There were, by contrast, zero intra-Wales collaborations and only seven (all from Cardiff) with other Russell Group universities.

For Northern Ireland, the corresponding figures are zero and two.

Given the time lags between research and commercialisation, it would be unwise to ascribe the differences in performance to post-devolutionary policies on education and innovation. Much of the observed performance in Wales is the consequence of long- standing problems that pre-date devolution. It might have been thought that co-operation between Welsh institutions would have been facilitated by their membership of the federal University of Wales. But that body has shown no willingness or ability to help formulate an all-Wales research strategy, let alone co-ordinate and support technology transfer and help spread its not inconsiderable costs. On the other hand, as the old universities successively weaken and cut their ties with the federal body, there seems little sign of the Welsh Assembly Government or of the Higher Education Funding

Council for Wales putting such a strategy in place (though the latter has instituted

17 incentives for collaboration: HEFCW, 2004). Concern about the lack of a coherent

science policy for Wales has been trenchantly expressed by some of its leading academic

scientists (Cadogan, 2006). Cooke and Clifton (2005) contrast the Assembly

Government’s ‘precautionary’ attitude to innovation with the ‘visionary’ approach of

Scotland, as outlined in the Scottish Executive (2001) strategy document. Among the

measures that have sprung from this vision has been the creation of Intermediary

Technology Institutions - for Life Sciences, ICT and Energy – to help promote HEI-

business technology transfer.

More positively, one can point to what a report to the Welsh Assembly

Government on HEI-business links calls ‘a very impressive list of effective support

programmes’ (WAG: HEED, 2004). However, the same report says that this could be taken as indicating a ‘fragmentation of effort’ and calls for a more holistic and strategic

approach. One current development that has something of the appearance of a broad strategy was actually initiated at an institutional level by a university that recognised clearly the need to raise its game (Swansea). This is the Technium business interface project whose first facility was opened in 2001 to provide spin-out and spin-in spaces for

knowledge-based firms. Newer discipline-based Techniums (in life sciences, digital

media, sustainable technologies, performance engineering and energy) are being rolled

out in parallel with the creation of a medical school and an Institute of Advanced

Telecommunications which will have the effect of tripling the academic research base at

the university. The Techniums are linked into the Swansea campus, where they can

access not only research but also IP support, and they are managed jointly by the

18 University and the Welsh Development Agency (now subsumed into the Assembly

Government).

The Technium project was initiated by a single academic bidding for EU

Objective-1 Stuctural Funds. Purely for financial reasons, therefore, there are constraints

on extending the concept to those parts of Wales (or elsewhere) that are not eligible for

such funding. The WDA has built three other facilities elsewhere in the Objective 1 area

(and another two are planned), but at these the HEI links are much weaker. Funding

apart, this kind of concept (but with greater managerial input from proximate

universities), reinforced by a strengthening of intra-Wales HEI links, offers a template for

an all-Wales innovation strategy (Abbey, Davies and Mainwaring, 2006).

The evidence of this paper, and elsewhere, clearly points to a highly effective system of university research commercialisation in Scotland. No doubt this owes much to a historical legacy of intellectual achievement, a distinctive legal system and, latterly, a strong devolutionary settlement – and, some may say, to Scotland’s favourable treatment under the UK Treasury’s ‘Barnett formula’.11 Even so, there is surely much that the

Welsh Assembly government can learn, not only from Scottish practice, but what is

already happening at a more local level within Wales.

Acknowledgements

We should like to thank Marc Clement, Iwan Davies and Peter Sloane for their useful comments, and Julie Allan who helped in the preparation of the data.

Notes

19 1. A survey of HEI-business links by the Higher Education Funding Council for

England (HEFCE, 2003) attributed the modest incentives in most institutions for

staff to engage with industry to a RAE ‘halo effect’. They also characterise the

promotions structure in most HEIs as one where ‘promotions committees still take

a narrow focus on research even though guidance suggests industrial collaboration

as equally valid’ (p.18).

2. On the importance of localised learning in the knowledge economy, see Maskell

and Malmberg (1999). A regional knowledge economy may be underpinned by a

territorial system of innovation of which the region’s universities are an integral

part. An application of the regional innovation system concept to Wales is found

in Cooke (2001).

3. Formed in 1994, the Russell Group is an association of 19 major research-

intensive UK universities. In 2001-02 they accounted for 60 per cent of UK

universities’ research grant and contract income.

4. ‘Old university’ here refers to those in possession of a university charter before

the abolition of the ‘binary divide’ in 1992 which allowed polytechnics to claim

university status. Other HEIs have since become universities. All post-1992

universities are referred to here as ‘new’.

5. Units of Assessment in the 2001 RAE are numbered 1, …, 69, with UoA 12 either

redundant or having no returns. Of the resulting 68 UoAs, 27 are assumed to be

patent relevant. These are: 01, Clinical Laboratory Sciences; 02, Community-

based Clinical Subjects; 03, Hospital-based Clinical Subjects; 04, Clinical

Dentistry; 05, Pre-clinical Studies; 06, Anatomy; 07, Physiology; 08,

20 Pharmacology; 09, Pharmacy; 14, Biological Sciences; 15, Agriculture; 16, Food

Science and Technology; 17, Veterinary Science; 18, Chemistry; 19, Physics; 20,

Earth Sciences; 21, Environmental Sciences; 23, Applied Mathematics; 25,

Computer Science; 26, General Engineering; 27, Chemical Engineering; 28, Civil

Engineering; 29, Electrical and Electronic Engineering; 30, Mechanical,

Aeronautical and Manufacturing Engineering; 31, Mineral and Mining

Engineering; 32, Metallurgy and Materials; 33, Built Environment.

6. The educational media here refers to the (higher) education sections and

supplements of the ‘quality’ press (e.g., The Guardian, The Times, etc.) and the

specialist Times Higher (now independent of the Times).

7. INPADOC (INternational PAtent DOcumentation Center) is a database now

maintained by EPO containing the bibliographic and family data of patent

documents of 71 patent-issuing organisations.

8. Since applications are growing over time, if EPO has longer processing times

proportionately more of its applications will be awaiting a decision.

9. This is one of the criteria for the granting of a patent according to the UK Patent

Act, 1977.

10. The determination of the end sub-period is arbitrary; readers can readily vary the

calculation.

11. The Barnett formula determines devolved public spending levels. According to

Mackay (2006), in 2002 devolved spending per head in Scotland was seven per

cent higher than in Wales even though Gross Value Added per capita was 17 per

cent lower in Wales.

References

Abbey, J., Davies, G. and Mainwaring, L. (2006) ‘Vorsprung durch Technium:

Building a System of Innovation in South West Wales’, mimeo, IP Wales, School

Law, Swansea University, forthcoming Regional Studies.

Beale A. (2005) A Study of Intellectual Property in UK HEIs with Emphasis on Wales.

IP Wales, School of Law, Swansea University.

Beale A., Mainwaring L. and Murphy P. (2006) ‘Mission Overload? Academic

versus Commercial Outputs from UK universities’, mimeo, IP Wales, School of

Law, Swansea University.

Cadogan, J. (2006) …… Cardiff: Institute for Welsh Affairs.

Cooke P. (2001) ‘Regional Innovation Systems, Clusters and the Knowledge Economy’,

Industrial and Corporate Change, 10, pp. 945 – 74.

Cooke P. and Clifton N. (2005) ‘Visionary, Precautionary and Constrained ‘Varieties

of Devolution’ in the Economic Governance of the Devolved UK Territories’,

Regional Studies, 39, pp. 421 – 36.

Griliches Z. (1990) ‘Patent Statistics as Economic Indicators: a Survey’, Journal of

Economic Literature, 28, pp. 1661 – 1707.

HEFCE (2001). Higher Education-Business Interaction Survey. Report by the Centre

for Urban and Regional Studies, Newcastle upon Tyne, paper 01/68. London:

Higher Education Funding Council for England.

HEFCE (2003). Higher Education-Business Interaction Survey, 2000 -01. Paper 03/11.

22 London: Higher Education Funding Council for England.

HEFCW (2004). Future Third Mission Funding Arrangements in Wales. Circular

W04/11HE. Cardiff: Higher Education Funding Council for Wales.

HERO (Higher Education Research Opportunities) (2002). The Research Assessment

Exercise, 2001, http://www.hero.ac.uk/rae/.

Jaffe A.B. (2000) ‘The US Patent System in Transition: Policy Innovation and the

Innovation Process’, Research Policy, 30, pp. 681 -703.

Lawton Smith H., Keeble D., Lawson C., Moore B. and Wilkinson F. (2001) ‘University-

Business Interactions in the Oxford and Cambridge Regions’, Tijdschrift voor

Economische en Sociale Geografie, 92, pp. 88 – 89.

Louis K.S., Anderson M.S., Jones L., Blumenthal D. and Campbell E. (2001)

‘Entrepreneurship, Secrecy, and Productivity: a Comparison of Clinical and

Non-clinical Life Science’, Journal of Technology Transfer, 26, pp. 233 - 45.

Mackay, R. (2006) ‘Identifying Need: Devolved Spending in Wales, Scotland and

Northern Ireland’, Contemporary Wales, 18, pp. 236 – 55.

Maskell, P. and Malmberg, A (1999) ‘Localised Learning and Industrial

Competitiveness’, Cambridge Journal of Economics, 23, pp. 167 – 85.

Moore N.J. and Mainwaring L. (2006) ‘Intellectual Property in the Welsh

Production Sector’, Contemporary Wales, 18, pp. 256 – 74.

Owen-Smith J. and Powell W.W. (2001) ‘To Patent or Not: Faculty Decisions and

Institutional Success at Technology Transfer’, Journal of Technology Transfer,

26, pp. 99 -114.

Pavitt K. (1988) ‘Use and Abuse of Patent Statistics’. In A. van Raan (ed.) Handbook

23 of Quantitiative Studies of Science Policy. Amsterdam: North-Holland.

Poyago-Theotoky J., Beath J. and Siegel D. (2002) ‘Universities and

Fundamental Research: Policy Implications of the Growth of University-Industry

Partnerships’, Oxford Review of Economic Policy, 18, pp. 10 -21.

Scottish Executive (2001) A Smart, Successful Scotland: Ambitions for the

Enterprise Network. Edinburgh: Scottish Executive.

Shane S. (2002) ‘Selling University Technology: Patterns from MIT’, Management

Science, 48, pp. 122 - 37.

Siegel D.S., Westhead P. and Wright M. (2003) ‘Science Parks and the

Performance of New Technology-based Firms: a Review of Recent UK Evidence

and an Agenda for Future Research’, Small Business Economics, 20, pp. 177 – 84.

Stephan P. (2001) ‘Educational Implications of University-Industry Technological

Transfer’, Journal of Technology Transfer, 26, pp. 198 – 205.

US Department of Commerce (2003) Technology Transfer and Commercialization: Their

Role in Economic Development, Washington.

WAG: HEED (2004) Knowledge Economy Nexus: the Role of Higher Education in

Wales. Report of the Welsh Assembly Government’s Higher Education and

Economic Development Task and Finish Group. Cardiff: Welsh Assembly

Government.

Zucker L.G. and Darby M.R. (1996) ‘Star Scientists and Institutional Transformation:

Patterns of Invention and Innovation in the Formation of the Biotechnology

Industry’, Proceedings of the National Academy of Sciences, 93, pp. 12709 – 16.

TABLE 1 HEI Research Bases

All Staffa All Staff Research Massb Research Mass per capita per capita WALES 932 0.32 562.4 0.19 SCOTLAND 3,146 0.62 2045.1 0.40 N. IRELAND 660 0.39 337.1 0.20

a: Estimate of all ‘old university’ staff in 27 RAE units of assessment. b: Research-active staff of ‘old universities’ in 27 RAE units of assessment weighted on a scale 0, …, 6. Per capita figures derived using 2001 Census of Population.

TABLE 2 Patent Filings and Filings Productivity, 1983 – 2005

Staff EPO UKPO JPO USPTO WIPO All All/Staff SCOTLAND Aberdeen 321 52 15 0 38 73 178 0.56 Dundee 350 75 19 4 53 105 256 0.73 Edinburgh 917 43 13 1 39 66 162 0.18 Glasgow 683 96 28 5 89 110 328 0.48 Ht-Watt 300 19 13 2 13 22 69 0.23 St Andrews 146 3 1 1 1 2 8 0.06 Stirling 90 2 1 0 0 2 5 0.06 Strathclyde 339 117 29 6 94 129 375 1.11 Total (Old) 3,146 417 119 19 327 509 1,381 0.44 Other HEI 33 26 0 21 49 129 Total (All) 440 145 19 348 558 1510 PO shares 29% 10% 1% 23% 37% 100%

WALES A’ystwyth 109 9 10 0 5 14 38 0.35 Bangor 128 11 1 0 5 15 32 0.25 Cardiff 557 97 60 5 86 127 375 0.67 Swansea 138 9 9 0 4 13 35 0.25 Total (Old) 932 126 80 5 100 169 480 0.52 Other HEI 7 7 1 6 6 27 Total (All) 133 87 6 106 175 507 PO shares 26% 17% 1% 21% 36% 100%

N. IRELAND Belfast 473 42 11 0 34 51 138 0.29 Ulster 187 13 1 0 8 19 41 0.22 Total (All) 660 55 12 0 42 70 179 0.27 PO shares 31% 7% 0% 23% 39% 100%

TABLE 3 Issuance Rates for Applications to EPO (1983 -2005) and USPTO (2000 – 2005)

EPO USPTO Appls Patents Appls/ Appls Patents Appls/ Patents Patents SCOTLAND Aberdeen 36 16 0.4 16 11 0.7 Dundee 54 21 0.4 22 15 0.7 Edinburgh 31 12 0.4 17 10 0.6 Glasgow 72 24 0.3 30 31 1.0 Heriot-Watt 14 5 0.4 3 5 1.7 St Andrews 3 0 0.0 0 0 - Stirling 2 0 0.0 0 0 - Strathclyde 56 61 1.1 17 27 1.6 Other HEIs 23 10 0.4 11 6 0.5 Total 291 149 0.5 116 105 0.9

WALES Aberystwyth 4 5 1.3 1 1 1.0 Bangor 7 4 0.6 3 2 0.7 Cardiff 65 32 0.5 25 21 0.8 Swansea 5 4 0.8 2 0 0.0 Other HEIs 5 2 0.4 1 1 1.0 Total 86 47 0.5 32 25 0.8

N IRELAND Belfast 30 12 0.4 17 7 0.4 Ulster 10 3 0.3 6 1 0.2 Total 40 15 0.4 23 8 0.3

TABLE 4 European and US Patents (1983 - 2005) and Patent Productivity

Total Patents Patents/Staff SCOTLAND Aberdeen 38 0.12 Dundee 52 0.15 Edinburgh 34 0.04 Glasgow 83 0.12 Heriot-Watt 15 0.05 St Andrews 0 0.0 Stirling 0 0.0 Strathclyde 138 0.41 Total ‘Old’ 360 0.11 Other HEIs 21 Total All 381

WALES Aberystwyth 9 0.08 Bangor 6 0.05 Cardiff 93 0.17 Swansea 6 0.04 Total ‘Old’ 114 0.12 Other HEIs 7 Total All 121

N. IRELAND Belfast 29 0.06 Ulster 5 0.03 Total 34 0.05

TABLE 5 Patents with Commercial First Assignees, 1983-2005

83-92 93 94 95 96 97 98 99 00 01 02 03 04 05 83-05 00-05 a/b (a) (b) Aberdeen 1 2 1 1 2 3 1 2 13 3 0.23 Dundee 2 3 1 1 3 2 3 3 1 2 4 25 13 0.52 Edinburgh 1 1 1 1 4 3 2 4 17 13 0.76 Glasgow 4 1 1 3 5 6 2 2 4 2 7 4 41 19 0.46 Heriot Watt 3 1 1 1 4 1 1 1 13 7 0.54 Strathclyde 5 2 6 1 1 4 3 1 1 1 3 1 29 7 0.24 Other 1 1 1 1 4 4 5 17 14 0.82 SCOTLAND 15 3 14 6 7 10 16 7 15 14 9 21 14 1 155 76 0.49

Aberystwyth 1 1 2 2 1.0 Bangor 2 1 1 3 7 7 1.0 Cardiff 7 4 1 5 5 7 4 5 3 1 3 45 7 0.16 Swansea 1 1 0 0 Other 1 1 1 1.0 WALES 8 4 1 5 5 7 4 5 5 2 2 4 4 56 17 0.3

Belfast 2 1 1 1 3 4 4 4 20 16 0.8 Ulster 3 1 1 5 2 0.4 N IRELAND 5 1 1 1 4 5 4 4 25 18 0.76