Josh Pottel is CEO of Montreal-based Molecular Forecaster Inc., where his work advancing small molecule discovery has taught him that good ideas – like good molecules – need clear, well-designed pathways to reach their full potential.

Outdated tech transfer models are killing Canada’s startups and costing us a real competitive advantage.

Canada spends a lot of time talking about its innovation problem – at conferences, on task forces, and in government reports. What we’re far less willing to do is rebuild outdated university tech transfer models that weaken research and innovation early – long before commercialization pressures should apply.

I run a company that spun out of a Canadian university. That origin matters to me. For years, I stayed actively engaged with the institution that helped launch my career and my company.

What has strained that relationship is not people, but structure. Specifically, a technology transfer system that routinely pits universities against the very companies they help create, as if success requires one side to extract value from the other, rather than grow it together.

This isn’t just counterproductive, it’s wrong.

University technology transfer is often defended as a necessary revenue strategy; universities are under pressure, and licensing income is treated as an important economic lever. But we’re failing to do some very basic math that illustrates just how weak the revenue argument is.

Public data from the University of British Columbia (UBC) shows that its licensing revenue in 2021 totalled approximately $43 million. This sounds significant until it’s placed in context. The university’s total annual revenue that year exceeded $2.9 billion, meaning licensing income represented less than 1.5 percent of the overall amount. What’s more, 2021 was a banner year for UBC; most years, the licensing income is less than one percent.

Once inventor distributions, legal costs, and administrative overhead are accounted for, the contribution to the university’s balance sheet is effectively irrelevant.

When we continue to behave as if licensing income is central, the result is a system optimized to extract value early from the least resilient entities in the innovation ecosystem. Why are startup founders forced to negotiate equity, royalties, upfront fees and milestone payments with a supposed partner, before they’ve even landed on product-market fit, customers or stable financing?

If a university is hoping for long-term institutional benefit, this approach actively undermines it.

When spinouts become adversaries

When technology transfer becomes a negotiation to “win,” founders adapt out of necessity. Some walk away from university‑owned IP. Others recreate work elsewhere. And some move the company entirely.

This is not hypothetical; the story has been playing out across Canada for years.

The result is a quiet but compounding loss for universities. They forfeit not only the familiar benefits of successful spinouts – research partnerships, indirect funding, reputation, talent retention, alumni engagement – but also the companies that would have hired graduates, the founders who might have remained engaged, and the future partners, mentors and donors.

These are the benefits that shape institutions over time and dwarf any cheque labelled “Licensing Revenue.” But these benefits are routinely deprioritized because they do not appear on a balance sheet and are generally only seen many years after the initial license is signed.

These losses have already reverberated through the innovation ecosystem and will continue to compound if we don’t act.

The most damaging misconception in this debate is that founders and universities sit on opposite sides by default. The reality is, we want the same thing: to see publicly funded research translated into strong companies that create jobs, build expertise, and generate real economic impact.

Everyone sitting at the innovation table – founders, universities, investors, and funders – needs to get honest about incentives and non-negotiables.

Founders need speed, clarity and room to take risks. Investors need structures that do not punish early capital. Universities need recognition, alignment with their public mission, and confidence they’ll see a clear value return in the future.

None of this requires radical experimentation. It can start with a conversation and the willingness to consider a shift from short-term extraction to long-term partnership.

Spinouts are national assets

University spinouts are not just commercial entities. They are national assets and one of the most direct ways public investments in research become companies, jobs and exportable technology.

Countries that move research into the market efficiently do not just create prosperity: they build resilience, retain talent, anchor supply chains and attract capital that stays.

Canada already funds world-class research. What we lack is a system that allows that research to survive its transition into the real economy. When universities fail to align their tech transfer structures with early-stage realities, the best outcomes – and the people behind them – predictably go elsewhere.

Tech transfer isn’t just a Canadian problem. But it is one Canada can solve and, in doing so, realize a genuine competitive advantage. We don’t need to outspend larger jurisdictions – we need to out-execute them.

A tech transfer model that prioritizes speed, standardization, collaboration, and long-term alignment would be a powerful signal – to founders, investors and global partners – that Canada understands how innovation actually works.

The question is not whether universities should benefit from technology transfer. They already do. The question is whether we are willing to stop talking about the problem and instead take action, changing the rules early enough to let more companies survive long enough for those benefits to exist at all.

Silence preserves the status quo. And the status quo is not working.

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