Opportunities Lost and Captured: Canadian Case Studies outlining Socio-

Economic Impact of the Triple Helix Innovation Model on Technology

Development in Genomics and Proteomics.

Christopher J. Dambrowitz.
3
Presented to the 2nd Annual GE LS Symposium ("Genomics in an Open Society") Feb 5-7 2004, Vancouver BC.

ABSTRACT:
The multiple reciprocal relationships generated by the accelerating convergence of academic research,
industrial sponsorship and governmental support have given rise to a new model for the innovation process,
characterized by Etzkowitz and others as the Triple Helix1. The increased integration between public
institutions, corporations and government, designed to speed realization of socio-economic benefit by
facilitating effective technology transfer, has elevated concerns relating to the linkage between public trust and
investment, private profit, and public risk and benefit.

We present two contrasting case studies, using the context of bioanalytical instrumentation development for
genomics and proteomics research, to demonstrate the socio-economic implications of triple-helix innovation
model in Canada. The domestic development of high-throughput DNA sequencing instrumentation highlights
the potential for long-term lost-opportunity costs in the absence of a balanced triple-helix approach. In contrast,
the successful application of the triple-helix model is explored through the synergistic development of a new
mass spectrometer for proteomic and bioanalytical applications. The potential for iterative refinement of
Canadian approaches to triple-helical innovation is discussed. The growing importance of engaging Canadian
and international publics as a “fourth helix”2 is addressed.

INTRODUCTION:
We are in the midst of a societal revolution that presents the potential for incredible positive socio-economic
strides, and for tremendous human turmoil. In the knowledge-based economy to which our society is rapidly
transitioning, the social and economic well-being of a nation’s citizens are increasingly determined by the
nation’s ability to efficiently reap benefits from its innovation systems. An illustration of this can be found in a
root cause of the widening “productivity gap” between Canadian and American economies - a widening
“innovation gap” in which Canadians are at real risk of being left behind3. Despite high levels per capita of
investment in education (relative to other G7 countries), and excellent scientific productivity (measured by
numbers of peer-reviewed publications per capita), Canada has until recently trailed most other developed
nations in expenditure on research and development (R&D) relative to gross domestic product (GDP).
Canadian industry has begun to respond, increasing R&D expenditures at a greater rate relative to GDP growth
than any other OECD nation in the past ten years3. Similarly, Canadian governments (federal, provincial &
regional) are intensifying their focus on policies and programs that stimulate innovative research, speed
technology transfer and support commercialization of efforts.

In the quest to develop strategies that facilitate the progressive transformation of theoretical knowledge to
innovation to wealth to national well-being, a powerful model has emerged that actively seeks to integrate the
roles of academia, industry and government. Characterized by Etzkowitz1 and others4 as the “triple helix”, this
model is designed to drive realization of socio-economic benefit by enabling effective transfer of technologies
developed through basic research at academic institutions to commercialization by appropriate industrial
partners, in a manner that returns value to regional & national economies and governments (and their
constituents). The increased level of interaction and co-operation of universities and governments with
corporations has raised concerns relating to the linkage between public trust and investment, private profit, and
public risk and benefit. Critics of the iterative changes that are transforming the Canadian innovation system
TECHNOLOGY
Description
Field of Application
Specific Applications
Scientific & Social Impacts
HELIX 1: UNIVERSITY PARTNERS
Academic Institution
Inventors
Awards for Technology Development
HELIX 2: GOVERNMENT PARTNERS
Initial application date(s) for ooo
Cdn Gov't funding
Initial application for Cdn Gov't
ooofunding accepted?
Reasons for rejection
Application date for US Gov't funding
Application accepted?
US Government funding organization
Period of US Gov't funding support
US Gov't grant information
Joint industry & Cdn Gov't funding
Triple-Helix funding:
oooooIndustry partner
Triple-Helix funding:
oooooCdn Gov't partner
Other Partners:
oooooGov't Research Institutions
Period of Cdn Triple-Helix funding
# of highly-qualified personnel (HQP)
ooooosupported by funding
# of HQP attracted to Canada
ooooodue to research project
# of HQP retained by Canada
ooooofollowing project completion
# of HQP lost from Canada
ooooofollowing project completion
HELIX 3: INDUSTRIAL PARTNERS
Initial Technology Champion
National Base
Academic-Industry Partnership Initiated 1995
TECHNOLOGY TRANSFER
Cdn Patent: application submitted by:
Cdn Patent: application date
Cdn Patent: PCT Publication Date
Cdn Patent: Number & Title
US Patent: application submitted by:
US Patent: application date
US Patent: date granted
US Patent (Application) Title
Foreign claim on patent
Competing patents granted
Technology Transfer method
Commercialization Partner
National Base
COMMERCIALIZATION
Product
Retail Price at Launch ($Cdn)
Manufactured by
Country of Manufacture
Canadian Employees - Manufacturer
Sold by
National Base of Vendor Organization
Product Launch
Number of Units Produced (to 2003)
RESULTS FOR CANADA
Inventors Retained by ooo
Canadian Universities?
Current Institution of ooo
Lead Investigator(s)
Inventors Retained by ooo
Canadian Industry?
Canadian Jobs Supported by
Commercial Activity
Multiple-Capillary DNA Sequencer QqTOF Mass Spectrometer
Sensitive, high-throughput system capable of rapid Hybrid mass spectrometer capable of measuring parent oo
automated analysis of genetic information & fragment ion masses, enabling accurate protein
identification
Genomics Proteomics
High-throughput de novo sequencing of human genome. Protein "biomarker" patterns for disease diagnosis &
Science 291(5507): 1304-51 (2001). prognosis. Clinical Chemistry 49(8): 1276-8 (2003).
Workhorse of the genomic revolution Accurate identification accelerated from one protein every
five months to several hundred per day
University of Alberta, Edmonton, AB University of Manitoba, Winnipeg MB
Norman J. Dovichi & Jianzhong Zhang Kenneth Standing, Werner Ens
ooooo & Igor Chernushevich
1996 American Chemical Society Award in Chemical Instrumentation 2000 NSERC Synergy Award
1997 ASTech Award - Outstanding Leadership in Alberta Technology ooooofor University-Industry R&D Partnerships
"Unsung Hero of the Genome Project",Science 291:1207 (2001)
1989-1992 (5 proposals to provincial & national agencies)
No
Project goals too ambitious; technology speculative
1991
Yes
US Department of Energy
1992-1998
DE-FG0291-ER61123 Multiple-Column Capillary Gel
Electrophoresis and Laser-Induced Fluorescence Detection
for DNA Sequencing
NSERC Research Partnerships NSERC Research Partnerships
MDS Sciex (division of MDS Inc.) MDS Sciex (division of MDS Inc.)
NSERC NSERC
NRC Institute of Marine Biosciences
1995-1998 1996-1999
7 8
0 4
2 of 7 7 of 8
5 of 7 1 of 8
MDS Sciex (division of MDS Inc.) MDS Sciex (division of MDS Inc.)
Canada Canada
1996
Academic Industry Liason Office (ILO)
June 2, 1994
December 22, 1994
CA2164207: Multiple capillary biochemical analyzer
Academic Industry Liason Office (ILO) MDS Sciex (on behalf of University of Manitoba)
June 3, 1993 November 13, 1996
August 8, 1995
US-A5,439,578: Multiple capillary biochemical US-APP 60/006,530: ESI source having RF
analyzer multipole/fine capillary for use in a TOF spectrometer
US Gov't claim on invention through DOE grant
Takahashi & Kambara, US-A5,529,679 (1996):
DNA detector and DNA detection method
Patent licensed to MDS Sciex Know-how licensed to MDS Sciex
ooooo(4 year limited license)
Patent sub-licensed to Applied Biosystems MDS Sciex
ooooo(division of PE Corp.)
USA Canada
ABI 3700 DNA Analyzer API QSTAR LC/MS/MS System
$450, 000 $600, 000
Applied Biosystems MDS Sciex
USA Canada
0 550
Applied Biosystems Applied Biosystems/MDS Sciex (Joint Venture)
USA USA/Canada
1999 1999
1700 500
0 of 2 2 of 3
University of Washington, Seattle WA USA University of Manitoba, Winnipeg MB
0 of 2 1 of 3
<10 >500
have noted that a fourth column with strong vested interest in the outcomes of the triple helix system, the
Canadian public, should be actively engaged in the process.

In the following case studies, we examine the development of two Canadian inventions from research concept
to mature commercial product. Multicapillary DNA sequencing technology invented at the University of Alberta
allowed the completion of the sequencing of the human genome over five years ahead of schedule. A hybrid
quadrupole/time-of-flight mass spectrometer invented at the University of Manitoba and MDS Sciex permitted
the accurate identification of proteins within minutes instead of days, and has found application in diagnostics,
drug discovery & development and large-scale proteomics efforts. Both inventions are bioanalytical instruments
that have had a significant impact on the direction and scope of scientific inquiry in their respective fields of
application. In both cases, the commercialization of the technology has been successful, generating significant
revenues and supporting hundreds of jobs in research, engineering, manufacturing, sales & marketing,
management, and all other aspects of production. The differences lie in the nature of funding for basic research
leading to the technology’s invention; the method by which the technology was transferred from an academic
environment to the commercial arena; the interaction and level of integration between university, industry and
government throughout the innovation process; and the downstream consequences of these details with
respect to Canadian job creation, wealth generation, and long-term competitiveness in a global knowledge-
based economy.

CASE STUDY 1: MULTI-CAPILLARY DNA SEQUENCER

From the time of Watson & Crick’s elucidation of the structure of DNA until 1977, determining the nucleotide
sequence of DNA molecules was performed using laborious chemical methods. In that year, two novel
methods of DNA sequencing were developed, by Sanger and by Maxam & Gilbert. (Sanger and Gilbert shared
the 1980 Nobel Prize in Chemistry for their contribution to modern biology.) The subsequent commercialization
of a key reagent, dideoxynucleotides, led to the Sanger method becoming the predominant approach to DNA
sequencing. In 1986, Lloyd Smith, Lee Hood and others improved Sanger’s method (which had relied on
radioactively-tagged reagents and manual data analysis) to incorporate four fluorescent labels, laser-induced
fluorescence detection and automated data analysis5. Novel instrumentation was developed to analyze DNA
samples using this new method, involving the electrophoretic separation of DNA molecules through a large
rectangular gel matrix (“slab gel”) sandwiched between plates of glass. This system was commercialized by
Applied Biosystems in 1987 as the first-generation automated DNA sequencer.

In 1989, Norman Dovichi, a professor in the University of Alberta’s Dept of Chemistry, was interested in using
fine quartz capillaries filled with gel to sequence DNA, speeding analysis. Instead of illuminating the sample by
shining a laser through glass plates, the new system would involve post-column detection in a sheath-flow
cuvette, resulting in increased sensitivity. Most importantly, capillaries could be easily incorporated into an
automated instrument, allowing high-throughput operation and dramatically increasing the rate at which DNA
could be sequenced. The major bottleneck in large-scale DNA sequencing efforts with previous technology had
been the workhours required to operate slab-gel sequencers. The new approach would make it possible for a
single technician to service dozens of instruments in a high-throughput DNA sequencing “factory” - dramatically
reducing the cost and time required to analyze large genomes.

Repeated attempts to access traditional public sources of funding for Canadian research were met with failure.
Reviewers were either unable or unwilling to support the direction and scope of the proposed research. After
five failed attempts to secure funding from provincial or federal funding organizations, the investigator was
forced to turn to a foreign government to obtain support for his Canadian-based research. Only after
technology-development efforts had been supported by the US Department of Energy Human Genome
Program for three years was the investigator able to obtain Canadian funding. Consequently, the intellectual
property developed through the DOE project was subject to claim by the American government (giving US
corporations the first right of refusal on any project IP).

Initial Canadian support for multiple-capillary DNA sequencing technology came not from traditional government
organizations for funding basic academic research, but from Canadian industry. MDS Sciex, a division of MDS
Inc. focusing on analytical instrumentation, provided funding to the Dovichi group's sequencing-technology
development efforts for four years starting in 1995. This support was matched by the National Sciences and
Engineering Research Council through the innovative Research Partnerships program. (The NSERC funding
represented the first Canadian government support of the novel DNA sequencing-technology project, and
provides a telling example of the utility of triple-helix support for innovative research.) MDS Sciex negotiated
with the US DOE to relieve US government claims on the IP, and subsequently licensed the intellectual property
from the University of Alberta.

MDS Sciex was able to find a sublicensee to carry the technology to commercialization: Applied Biosystems.
Following their successful commercialization of the first slab-gel DNA sequencer, Applied Biosystems was now
one of the leading American developers of bioanalytical instrumentation. Through a lack of timely protection of
the IP surrounding multiple-capillary DNA separations with laser-induced fluorescence in a sheathflow cuvette,
competing IP now existed with claims interpretable as restricting freedom to operate in several international
markets. As a result, Applied Biosystems was forced to negotiate licenses for two patents in order to obtain
freedom to operate in all significant markets for the new DNA sequencing technology. This in turn weakened
both the intrinsic value of the Canadian IP, and MDS Sciex’s bargaining position with respect to royalties. The
monetary return available to the University of Alberta (and the inventor) as a consequence was significantly
reduced from the level that could have been anticipated in the case of a patent providing unencumbered
freedom to operate.

The technology has been a dramatic commercial success, selling over 1700 units to date and creating over
$500 million (US) in shareholder value in the first year following launch. Over 2200 jobs were supported in the
US as a result of this commercial activity. No such jobs were created in Canada. Indeed, several of the highly-
qualified personnel from the Canadian research group found employment in the US with Applied Biosystems
during the commercialization process. This represented a loss, both of unique Canadian scientific talent and of
Canadian public investment. (These HQPs received financial support throughout their graduate career through
several Canadian public funding agencies, including NSERC, the Alberta Heritage Fund for Medical Research
(AHFMR) and the Canadian Genetic Disease Network (CGDN). Their loss therefore represents a loss of return
on investment on the part of the Canadian taxpayer.) Shortly thereafter, the inventor himself accepted the offer
of a position at a leading public research-based university in the US, where he viewed the prospects for
continued public funding and the potential for financial return from future technology transfer of his academic
research were substantially greater than in Canada. Six additional HQPs left Canada to follow the investigator
to the US to establish a new research laboratory and to find subsequent employment.

CASE STUDY 2: TANDEM QUADRUPOLE/TIME-OF-FLIGHT MASS SPECTROMETER

As their name suggests, mass spectrometers are capable of analyzing the mass of molecules with great
precision. The precision with which a particular mass of molecule can be selected for detection is of great value
in the identification of the molecule. The introduction of two “soft-ionization” methods (electrospray and matrix-
assisted laser-desorption ionization, for which the 2002 Nobel Prize in Chemistry was awarded) greatly
simplified the analysis of biological macromolecules with these instruments. As a result, mass spectrometry
has in recent years become a core technology for proteomic research, driven by the instruments’ high
sensitivity, accuracy and throughput.

Several configurations of mass analyzers have been developed - sector, quadrupole, ion trap, time-of-flight -
each with different design and operation characteristics. A “tandem” mass spectrometer is an instrument that
combines two (or more) of these different configurations, providing a new set of capabilities derived from both of
the constituent segments of the machine. Tandem mass spectrometry is a particularly powerful tool for
identifying proteins from complex biological samples. An intact protein molecule can be specifically selected
from a complex sample based on its mass; directed into a “fragmentation chamber” where the molecule is
broken up by collisions with gas molecules; and the masses of the resulting fragments identified and matched
with the intact molecular mass to provide structural data for identification (for example). The availability to
biologists (i.e. non-specialists in mass spectrometry) of commercialized, user-friendly versions of these powerful
but complicated instruments has been vital to their widespread application to proteomic and other bioanalytical
research.
MDS Sciex (based in Concord ON) is a world-leader in the research and commercialization of mass
spectrometers. Their expertise in the development and production of single- and triple-quadrupole instruments
was central to this success. Ken Standing’s research group in the University of Manitoba’s Time-of-Flight Mass
Spectrometry laboratory had been recognized experts in TOF development for over a decade. In 1996,
members of Sciex’s research team approached the Standing group about a potential collaboration for the
creation of an instrument combining quadrupole technology with time-of-flight mass analysis. Together, these
industry and academic research teams applied for Canadian government support for this research, through
NSERC’s Research Partnerships Program.

On the strength of the effective matching of academic research expertise, industrial know-how and
commercialization experience, and governmental institutional involvement represented by this consortium, the
application was approved for funding (NSERC Research Partnership Grant 653-015-96: Development of
advanced instrumental techniques for analytical applications in biotechnology). MDS Sciex provided funding
and commercialization experience; the Manitoba researchers provided TOF expertise, and NSERC provided
matching funds to support the integrated project. Additionally, researchers at the National Research Council
(NRC)’s Institute for Marine Biosciences played an important role in testing the new instrument in bioanalytical
applications, also providing expertise in biological sample preparation. This research project provided financial
support and training opportunities for two graduate students, two post-doctoral fellows, a technician and a
machinist (all in an academic environment) for three years. This valuable pool of highly-qualified personnel
included several Russian scientists, most of whom remain active in Canadian research and/or industry,
representing a net “brain gain” as a result of this triple-helix project.

Within a few months, the industry-university research teams were able to demonstrate that the performance
characteristics of the new hybrid tandem quadrupole time-of-flight (QqTOF) mass spectrometer exceeded the
expectations that had driven the collaboration in the first place. In the view of the lead academic investigator,
the effective application of the triple-helix model for supporting innovation took full advantage of the skills and
assets of all partners, and resulted in the creation of a powerful new tool for application to human health through
bioanalysis and pharmaceutical development. Commercialization efforts were aggressively pursued at MDS
Sciex, through a joint venture with Applied Biosystems, and the hybrid QqTOF instrument, the QSTAR, was
launched in 1999.

Like the multicapillary DNA sequencer, the QSTAR mass spectrometer has been a commercial success. As a
result, the original research team responsible for the QSTAR was awarded the 2000 Synergy Award for
Innovation by NSERC and the Conference Board of Canada, for outstanding achievement through university-
industry collaboration. The award recognizes effective application of academic and industrial human &
technical resources; superior management skills and processes; effective training of highly-qualified personnel,
and innovation, creativity and entrepreneurship. Over one hundred units of the QSTAR were sold in the first
year of release (impressive for a new instrument with an initial sticker price of $600, 000 Cdn). Sales of the
original QSTAR, and subsequent upgrades, exceed 480 units to date. Over 500 Canadian jobs, both within
MDS Sciex and in other organizations supplying ancillary devices and services, have been created and
supported as a result of this commercial activity. The growing pool of highly-qualified personnel, generated by
the initial research and subsequent commercialization and application activities, contributed in part to the
formation of at least one new company, driving additional corporate R&D investment in Canada exceeding $150
million dollars over three years.

IMPORTANCE OF A STRONG TRIPLE-HELIX APPROACH TO INNOVATION IN CANADA

By comparison of these two case studies, valuable insights can be gained into the importance of an effective
triple-helix approach to Canadian innovation. In both cases, the technology was invented in Canada. In both
cases, the technology was successfully commercialized, generating jobs, spurring new economic activity, and
significantly speeding basic and applied research on human health. In both cases, the nature and timing of the
involvement from Canadian universities, Canadian industry, and Canadian government were important factors
in the development of the invention towards commercialization. The potential for long-term negative socio-
economic impact in the absence of a timely and efficient triple-helix approach, through poor return on Canadian
public investment and lost-opportunity costs, is demonstrated by the outcome of the development of high-
throughput DNA sequencing instrumentation. In contrast, the identification by an experienced industrial partner
of an academic research concept with excellent commercial potential, and the timely and effectual support of
the resulting collaboration by a government funding agency, resulted both in the creation of a powerful tool for
bioanalytical research and in the capitalization of the perceived value of that invention in a manner
demonstrating a strong return on investment for Canadians. Even in the short timespan between the initial
conceptions of each invention, the iterative refinements in the Canadian triple-helix system had improved the
innovation environment significantly.

As the directed evolution of the Canadian innovation system proceeds, the social benefits and risks of triple-
helical interactions between government, academia and industry are subject to increased scrutiny. The need to
engage the various Canadian and international publics, in whose interest governments are called to act, in this
debate is of great and growing importance. As a putative "fourth helix", the role of these publics will be to
become informed regarding the impacts of triple-helical approaches to innovation upon national and regional
well-being, and to act as monitors, adjudicators and advocates throughout the process of refining this system to
meet their needs. In a global economy in which knowledge is the most precious commodity, "human capital"
becomes the dominant currency, to be sought out, combined, integrated and maintained. Through triple-helical
programs such as Genome Canada, biotechnology and other cutting-edge scientific advances can contribute to
stemming the brain drain, creating employment, and ultimately improving the personal and economic health of
Canadians2. The public deserves the opportunity to become engaged and informed regarding the incredible
potential for positive socio-economic change available through continual improvement of effective triple-helical
approaches to Canadian innovation, and of the tremendous risks and costs presented by the ineffective capture
of value from Canadian ingenuity. As the ultimate beneficiary of a strong national innovation system, the fourth
helix will be a powerful advocate for change to government policy and programs, ensuring the potential of
Canadian innovation is reaped to its fullest for the benefit of all Canadians.

REFERENCES:
1 Etzkowitz, H. The Triple Helix: The Entrepreneurial University and the Industrialization of Research.
Nobel Symposium on Science & Industry in the 20th Century. Center for History of Science, Royal Swedish
Academy of Science, Uppsala Sweden. 2002.
2
Mehta, MD. Regulating Biotechnology and Nanotechnology in Canada: A Post-Normal Science Approach for
Inclusion of the Fourth Helix. International Workship on Science, Technology and Society: Lessons and
Challenges. National University of Singapore. 19 April 2002.
3 Whelan, S. A Canadian Innovation Agenda for the Twenty-First Century: Fifth Report of the Standing
Committee on Industry, Science and Technology. Government of Canada. 2001.
4 Wang et al. Technology Transfer of Federally Funded R&D: Report by President’s Council of Advisors on
Science and Technology. RAND Science and Technology Policy Institute. Arlington VA USA. 2003.
5 Dovichi, NJ & Zhang, JZ. How Capillary Electrophoresis Sequenced the Human Genome.
Angew. Chem. Int. Ed. 39(24):4463-4468 (2000).

Additional Information derived from the Annual Reports of PE Corporation, Applera Corporation and MDS Inc.