To Get the Benefits of Innovation, Canada Needs a National Effort

October 1, 2018
Prime Minister Justin Trudeau waves to the audience as he is introduced during the Massachusetts Institute of Technology's Solve conference at MIT on May 18, 2018. (AP Photo/Charles Krupa)

Canadian efforts to extract social and economic benefit from innovation have not only been late but tepid. For too long, pundits and policy-makers considered innovation manna that falls from heaven without any strategy or government involvement. We have focused on attracting jobs and getting access to foreign technology rather than on building a Canadian innovation eco-system where firms bring back the financial gains from world-wide sales, groom the next generation of investors and innovators, and address pressing social needs. No other country that has succeeded at innovation has followed Canada’s path.

Innovation policy is not rocket science. It requires a national effort, bringing together federal, provincial and municipal governments, to chart a direction and invest over the long term. It is more about doing something—setting some course, some commitment—than passively hoping that innovation will fall from heaven.

Innovation policy experts and innovative firms largely agree on what it takes. For starters, it includes picking a direction, given Canadian strengths and needs, to reduce uncertainty for Canadian firms willing to invest over the long-term that innovation requires. Second, Canada needs to build capacity in intellectual property (IP) so that Canadian companies can create new markets globally while ensuring the free flow of knowledge between our firms and researchers.

Investing in education, standards setting, and the infrastructure and e-infrastructure needed to sustain innovation is also critical to our innovation capacity. Finally, we must ensure that the benefits of innovation are spread fairly. This means that firms retain revenue in Canada derived from innovation they develop and that technologies and social innovations return tangible social and economic benefit to Canadians.

The federal government has been moving in the right direction, albeit with baby steps. The government’s investment in superclusters is a start, but there is not enough money, direction or strategy for Canadian firms to own the IP built using taxpayer dollars. The 2018 federal budget pilot project of patent collectives is a step in the right direction by providing Canadian innovators tools to develop freedom-to-operate and an alternative to selling their IP to a foreign firm. Nonetheless, the amounts invested are low and goals remain undefined. The budget’s investments in IP training and procurement are positive but too small and of insufficient reach. Still missing is a dedicated fund that assists Canadian firms to build large and valuable global IP portfolios.

The provinces have yet to show significant leadership on innovation. While they invest in big projects—often controlled by foreign firms that extract taxpayers funded IP and other subsidies—they have yet to provide a clear and long-term commitment to innovation.

In light of this, governments need to come together to plot a direction for innovation. Green technology is a good path as it not only responds to an economic need but a social one with particular benefit to those with the least resources. Building on the leadership of Sustainable Development Technology Canada, funded by the federal government, this path has the added potential of turning Canada from a large oil producer to clean-energy powerhouse. Expanding on green tech to include transportation that reduces greenhouse gases and pollution seems like a natural step. Bringing in our Indigenous communities and innovators would also be a logical move.

There are simple steps that all levels of governments can take to get things moving. For example, they can use their procurement power to encourage Canadian firms to develop green cars, transportation systems, building materials and other green systems. Second, they can pay to collect and openly share data on such things as climate change, transportation usage and networks, and other relevant behaviours and phenomena while maintaining control over that data in Canadian hands. Provinces such as Quebec could use excess hydro power to fuel green transportation systems while all governments need to invest to help Canadian firms build capacity to deepen their IP holdings in major markets. Finally, governments should develop laws, policies and practices to ensure freedom-to-operate and sharing among firms and researchers in Canada.

Through these efforts, Canada has a chance to join innovative countries around the world so that firms invest in innovation that generates both financial and social returns.

This article originally appeared in The Hill Times.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.

About the Author

E. Richard Gold is a CIGI senior fellow and a James McGill Professor with McGill University’s Faculty of Law.