BRIEF FROM THE PARTNERSHIP GROUP
FOR SCIENCE AND ENGINEERING (PAGSE)
Summary
The global economic recovery
hangs in the balance. Although Canada has so far fared better than others,
sustained economic growth in the long term requires a commitment to constructing
an innovation pipeline that brings the best ideas and products to market,
quickly and effectively. Investing in basic research and the people who do it
is crucial to ensuring a steady supply of ideas for the innovation pipeline, and Canada has been improving in this
regard. However we continue to struggle to translate ideas into
effective solutions and products that create wealth and jobs. In effect, there
are leaks in the innovation pipeline that prevent the best ideas from realizing
their full economic potential.
This brief presents three ideas for mending the Canadian innovation
pipeline. The government can stimulate innovation and shorten the time required
for the best ideas and products to get to market through co-localization of education, research and business
organizations in innovation clusters, provide jobs and incentivize
innovation by rewarding Canadian businesses for hiring highly qualified
Canadian graduates, and catalyze productivity by making data, especially that
generated through publically funded
research, freely available online. These actions are essential for building the
knowledge economy on which Canada’s future economic growth depends.
The Partnership Group recommends that the Government:
· Promote the creation of innovation clusters to catalyze the
generation and transfer of knowledge between the public and private sectors;
· That the Government implement incentives for businesses to hire
Canadian advanced research graduates and reduce the level of tax credits for
research and experimental development;
· That the Government develop a national policy on data
accessibility and management that contains a commitment to long-term access and
protects intellectual property.
Introduction
The world economic crisis that began in 2008 appears to be far from
over. Recovery is threatened by continued instability of global financial
markets and uncertainty over the robustness of the domestic economy. The
relative strength of our financial system, and the continued demand for our
natural resources, will help to buffer the Canadian economy somewhat against
future downturns. But this will not be enough. Long-term economic growth can
only be built on a foundation of knowledge creation and innovation - an
innovation pipeline that brings the best ideas
and products to market, quickly and effectively.
Ideas fuel innovation. Building
an innovation pipeline therefore starts with investment in ideas, which
means supporting basic research and the people who do it. The Partnership Group
for Science and Engineering (PAGSE) - an association of 26 professional and
scientific organizations representing over
50,000 members from academia, industry and government sectors - has repeatedly
emphasized this point in previous briefs to this committee. Our 2010 submission
stressed the need to compete aggressively for global research talent, and we
welcome the government’s recent commitment to support international training
opportunities in this regard. We also commend the announcement of the 10 new
Canada Excellence Research Chairs. Both programs will help attract and retain
top talent. We also strongly support the government’s continued efforts to
expand the direct and indirect costs of basic research delivered through the granting
councils, as this is the best means of ensuring a continued supply of ideas for
the innovation pipeline.
A vigorous research community
ensures a steady flow of ideas. There are a number of indicators to suggest
that Canada is improving in this regard: our scientific research output grew by
44% between 2002 and 2008,[1] and we are among the top tier of countries in international collaboration.[2] However numerous reports
have pointed out that we continue to fall short in translating these ideas into
deliverable, marketable products and solutions that improve health, the
environment, and increase productivity and wealth for Canadians. There is thus
a leak in the innovation pipeline: our best ideas are not achieving their full
economic potential. This brief presents three ideas for how the government might
begin to mend this pipeline.
Innovation clusters
Geography catalyzes creativity. Things happen when people interact
on a day-to-day basis, in person. Ideas are hatched, explored, revised,
abandoned, and new ones take their place. Shared physical location facilitates
mutual understanding, the development of natural partnerships, the exchange of
ideas and resources, and the emergence of innovations. Although technology has
gone a long way towards shortening the distance between distant geographic points,
there still is really nothing like getting
together to make something happen.
This is especially true when it comes to innovation. The recent
report by the Science, Technology and Innovation Council (STIC)[3] highlighted the importance
of clusters - a critical mass of geographically concentrated and intellectually
interconnected companies, educational institutions, and government research
organizations - as indicators and incubators of knowledge transfer and
innovation. The members of a cluster compete and cooperate, providing a place
where a more fluid movement of resources and talent allows new ideas to prosper
and shortens times to market for new
products.
There are plenty of examples where clusters have been successful:
Silicon Valley is probably the leading one, followed closely by the private
sector campuses of Bell Laboratories, North Carolina’s Research Triangle and,
closer to home, Research In Motion and the MaRS Discovery District. Germany has
led the way in developing national strategies for promoting investment by
businesses such as IBM in innovation clusters. All have brought basic
scientists, applied scientists, engineers, and industrial operations together
in a shared environment to catalyze innovation.
We suggest that the government
work with municipalities and provinces to create new environments for
innovation partnerships. Capital funds could be provided to universities to
build infrastructure that would serve as “Innovation Incubators” embedded in
their campuses. These initial investments would be leveraged through
public-private partnerships with any companies that wished to be housed within
the Innovation Incubator. Innovation Incubators would provide shared office,
research, teaching, and development space for university researchers and
government agency employees working on specific “theme” areas (e.g., health,
energy, agriculture, forestry, environment, water, food security, digital
economy, etc.), as well as established
private sector enterprises with shared interests.
The benefits are manifold. Innovation clusters provide interfaces
for academic, government and private sector researchers to explore new
partnerships; they embed the private sector within Canada’s centres of
learning, to share ideas and experience, and engage in the training of Canada’s
next generation of thinkers and innovators; they provide a novel training
ground for Canadian post-secondary students - enabling them to engage directly
with industry at the inception of their careers. Finally, innovation clusters
create new business opportunities and an environment to stimulate economic growth.
Recommendation:
That the Government promote the creation of innovation clusters to
catalyze the generation and transfer of
knowledge between the public and private sectors.
New jobs for Canadian graduates
A highly skilled workforce is an
essential component of the innovation pipeline. Canada has done well to
improve its capacity to train the next generation of researchers and
innovators. Between 2005 and 2008, for example, we experienced the highest
percentage increase in doctoral degrees - the highest level of academic
achievement - in science among comparator countries.[4] Clearly we are on our way to building the next generation of
cutting-edge researchers to supply the innovation pipeline.
Doctoral students and graduates
are one of the main agents by which ideas get translated into innovation. They
carry the specialized skills and knowledge acquired during their training into
an environment where they can be put to commercial use. However employment
prospects for highly skilled graduates in industry remain worryingly low.[5] A large part of the problem
is that businesses in Canada invest very little in research and development
(R&D), so they have little need to hire highly skilled workers. As a
result, Canadian graduates who do not pursue the more traditional route of
university or college teaching and research often end up leaving the country to take jobs in industry in places like
the United States or Australia.
This loss of Canadian talent
constitutes a leak in the innovation pipeline. Public investment in education
is being squandered because we are training people for jobs that do not exist.
The situation is not helped by the fact that the federal government has
preferred to use tax incentives to promote business investment in R&D. Tax
incentives appeal only to businesses that have actually declared a profit and
they tend to foster efforts to “prove” that R&D was performed after a
profit is declared, rather than fostering R&D itself. Other countries tend
to rely more upon direct support rather
than tax incentives. Improving R&D and business innovation performance in
the long run requires an up-front investment in personnel capable of performing
these functions.
To do this we need to increase the number of jobs, especially
industry R&D jobs, for Canadian graduates. Direct government incentives for
business to employ Canadian graduates would be more effective in the long run
than tax breaks. Such an incentive program could take several forms, such as
post-doctoral fellowships for doctoral graduates tenable in Canadian industry,
or grants or salary subsidies to businesses
based on new hires of advanced research personnel or even endowments to
establish corporate research chairs. The cost of such measures could be covered
by equivalent reductions in the level of tax credits for corporate
research for a zero-net cost modification of the current incentive system.
Recommendation:
That the Government implement incentives for businesses to hire
Canadian advanced research graduates and reduce the level of tax credits for
research and experimental development.
Open access data and design
Transforming the ideas generated through basic research into
marketable, deliverable solutions and products that create economic opportunity
and solve the complex problems facing society is often a complex, multi-dimensional process. Engineering design has
always been an essential part of this process. It utilizes the
principles of physics, chemistry, mathematics, and increasingly biology, to obtain the best solution to a problem
or need. Design is an essential component of the innovation pipeline
because it is what makes the difference between a good idea and a successful product
or service.
Knowledge sharing is becoming an
increasingly important component of this process as well. The complex nature of many of the most pressing
problems we face in society - environmental change management and
mitigation, the construction of effective information and communication networks,
the development of Smart Electrical Grid technologies - require large amounts
of scientific and engineering data. Often,
the quantity of data required is so large, and the problem so complex,
that no one research organization or company can hope to do it on their own. In
the pharmaceutical industry, for example, new models for knowledge sharing are
emerging because they allow companies to begin to understand the underlying
causes of complex diseases without investing
large amounts of money in unknown and potentially risky research areas.[6]
Making data freely accessible online improves the capacity for
research and innovation; it effectively
increases the flow of ideas into new products and solutions. Canadian companies
will more easily be able to access and use publicly funded data as a “jumping
off” point for their own research and development. Engineering design
will become more effectively integrated into the innovation process because it
will involve more and better information for end-product specifications. Freely accessible online data
also helps to bridge regional disparities in access to scientific equipment or research grants. It is
essential to completing the innovation pipeline.
Many Canadian organizations
supported by the federal government are already adopting a policy of open and
free access to their data. For example, NEPTUNE Canada, the world’s largest
cabled seafloor observatory, is developing a data access policy that
places few restrictions on data and allows
free online real time and archived data access. This is a welcome first step
but more must be done to keep up with competitor countries such as the
United States, United Kingdom, Australia and the European Union, which all have
national data access and sharing policies. Canada needs a comparable national
policy on data accessibility and management that contains a commitment to
long-term access.
The financial investment associated with open access data sharing
is small compared to the rewards; for example, in the United Kingdom, the
government expects open data to create £6 billion
(C$10 billion) in economic value for that country.[7] Canada cannot afford to
wait; we have excellent computing capacity, and among the highest levels
of government investment in research and development in the world. By unlocking
data, we can unlock the potential of those investments.
Recommendation:
That the Government develop a national policy on data accessibility
and management that contains a commitment to
long-term access and protects intellectual property.
Conclusion
There are signs that recent investments by the Canadian government
in building an innovation pipeline are paying off. Canada continues to punch
above its weight internationally in many fields of science and engineering, is expanding its output of research and
ideas, and is positioning itself as a global player in the competition
for talent. But more needs to be done. Canadian investments in building a
knowledge economy will be squandered if we cannot translate the ideas generated
through basic research into new products and solutions. This brief has
emphasized three ways the government could do this: create innovation clusters,
provide incentives for industry to hire highly skilled Canadian graduates, and develop a national policy on data
accessibility and management. These changes are essential to building an
effective innovation pipeline that can create wealth and jobs for Canadians,
and will enable us to weather economic uncertainties in the future.
The
Partnership Group for Science and Engineering (PAGSE) is an association of 26 professional and scientific organizations
representing 50,000 members from academia, industry and government
sectors. It represents the Canadian science and engineering community to the Government and seeks to advance research and
innovation for the benefit of Canadians. PAGSE is not a lobby group, but
a cooperative partnership that addresses broad issues of science and engineering policy at the national level.