Feds need to tap into global innovation opportunities Canada is still in the bottom half of OECD countries when it comes to innovation and both businesses and governments should be looking at different ways to tap into global innovation opportunities, say top experts. By BEA VONGDOUANGCHANH Published November 16, 2009

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Although the federal government is doing a good job at investing in research and development, Canada is still in the bottom half of OECD countries when it comes to innovation and both businesses and governments should be looking at different ways to tap into global innovation opportunities, say experts.

"I think the first thing that has to be acknowledged is that we're very successful as a society and as an economy and Canadian business has not emphasized innovation in its business strategies," said Peter Nicholson, president of the Council of Canadian Academies, who worked as prime minister Paul Martin's chief of policy from 2004 to 2005. "There clearly are innovative companies in this country, but relatively to the countries we usually compare ourselves with, we have had a less innovation-oriented business sector and that does show up in lower R&D numbers and the usual statistics."

The Council of Canadian Academies released a report, "Innovation and Business Strategy: Why Canada Falls Short" in June 2009 which found that Canada has consistently lagged behind the U.S. on innovation and productivity for the last 45 years and "has been fairly near the back of the pack" of Organisation for Economic Co-operation and Development (OECD) countries for the last 25 years. The report looked at a broad definition of innovation to mean "innovation that leads directly into productivity and therefore economic growth," Mr. Nicholson said, which he called multifactor productivity. "It's really important. It intuitively represents the return that the economy receives from simply acting smarter from more effective combinations of labour and capital."

Marc Saner, executive director of the Regulatory Governance Initiative at Carleton University, said there is still room for improvement when it comes to innovation. He pointed to the Science, Technology and Innovation Council's report last year which noted that Canada still faces some challenges in the innovation sector. "From what I read, the forecast is that we probably have to get a bit better organized if we want to keep our position in the world," Mr. Saner said, adding that one of the challenges is funding to support research infrastructure.

"There are concerns in the academic system that just bringing the people to Canada and giving them freedom to do research is not enough. The rest of the system is not adapting to the change," Mr. Saner told The Hill Times. "One complaint is that you bring in the people but the funds to run labs or the support from the universities is not there."

David Turpin, president of the University of Victoria, agreed. He said there are a number of national programs and platforms for significant research, such as the Mars and Venus projects for oceanographic research and the Triumph project for leading subatomic physics research that are in danger of closing shop because there's no national strategy to keep these types of research projects going.

"We don't have a system to fund the operation of those initiatives," he said. "Every one of those initiatives and a handful of others currently get their funding through different envelopes, different government departments, different agencies. What we need in Canada is a program that allows us to make rational decisions on the establishment of major research infrastructure and operate them in a sustainable fashion."

Innovation is "absolutely critical" to Canada's future economy, Mr. Turpin said. "We can't lose sight of the fact that the currency of the new economy is knowledge and the people are incredibly mobile and we have to ensure that we continue to invest in our research enterprise here in Canada," he said. "The challenge for us, if you look at how we compare to other countries, one of the big challenges is how to encourage private sector research investment. We do not do a good job in Canada of the private sector research and development. Clearly one of the challenges we face as a nation is to lever the capacities of university research in support of industrial research and investment."

University of McGill associate professor Richard Gold, founding director of the Centre for Intellectual Property Policy, said that while Canadian innovators are good at doing basic research, there is a problem with commercialization, which is a result of a "clear underinvestment by industry in research and development and a clear lack of mechanisms to transform the research capacity to innovation." He said there needs to be a shift in industry strategies to collaborate with universities and government on more projects rather than going at it alone. Another challenge is to start shifting Canada's economy from a resource-based one to an innovative one.

"It's not in the culture, it's not in where people make money in Canada to have invested in R&D. Part of it is trying to figure out how to move industry into that, so government's role there is somewhat limited," Prof. Gold said, noting that while the federal government can implement tax incentives and a competitive business environment, industry could play a bigger role. "There aren't any real programs that make people change the way they're doing things or encourage them to do so. So to me, it's not that they've done anything wrong, they just haven't figured out a way and it's not necessarily easy to get industry to think differently. Some of the incentives for universities I think have been wrong. I think there's been too much emphasis on universities patenting and then transferring that knowledge over to university. I think that's the wrong model. We need more of a sharing of knowledge."

For Mr. Nicholson, however, the major challenge is to start looking outside of North America and more globally. He said the government has "done a lot of the right things" which they need to continue doing, but "the real watchword now is to have a more global outlook." There are numerous opportunities for Canadian innovators in emerging markets such as Asia, he said, which businesses and government should take advantage of.

"This country both in terms of government and business class, has been too fixated on North America and the opportunities are abroad. You have to look at every one of your policies and ask, 'Is this helping or hindering or having not much effect on the ability of Canada to protect itself in the new global growth markets?" he said. "There has to be a really strong emphasis on an outward looking orientation."

bvongdou@hilltimes.com

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