Canada has a productivity challenge. The country’s ranking in the Organisation for Economic Co-operation and Development has dropped from sixth in 1981 to 18th in 2022, a trend economists regard as “troublesome.”
“What we’ve seen is essentially a growth crisis related to lagging productivity,” says Robert Asselin, senior vice-president of policy at the Business Council of Canada. “This isn’t just a blip but has developed over time – and it can lead to a future where living standards will not be what they are today.”
Ensuring a prosperous, inclusive and sustainable society for younger generations “will not be possible without a growth agenda,” Mr. Asselin emphasizes. Looking to history and economic models for inspiration of what such an agenda can entail, he authored Engines of Growth, a report that outlines challenges and proposes steps for “powering up engines for growth.”
The central premise is that there is a “strong correlation between growth and innovation,” he says. “Innovation drives productivity gains, and this, in turn, enhances economic competitiveness.”
Among measures for boosting innovation, Mr. Asselin suggests better leveraging Canada’s strengths, fixing domestic barriers to growth and bolstering partnerships with the private sector. “Our main challenge is not to produce ideas but to make them powerful at scale,” he says. “That’s where we have a missing link between intellectual capital and economic outcomes.”
There is no question “scientific and technological advances are key to economic growth,” says Sylvain Charbonneau, president and CEO at the Canada Foundation for Innovation (CFI), a funding agency that supports research infrastructure in post-secondary institutions across Canada.
To tackle the challenges that prevent Canada from reaching its full innovation potential, he proposes to take a collaborative approach – with participation from government, industry and post-secondary institutions.
With experience in all three areas, Dr. Charbonneau has a well-rounded understanding of the research and innovation ecosystem – he also experienced coming up against barriers. Before assuming his role at the CFI recently, he served as vice-president of research and innovation at the University of Ottawa. Prior to that, he worked as a researcher and executive director at the National Research Council of Canada and then in the private sector.
“I know that support for companies to scale up is perennially a challenge,” says Dr. Charbonneau. “Additionally, navigating regulatory frameworks and accessing markets can be daunting for emerging businesses, hindering their growth potential.”
What works in favour of many startups is “the ability to take advantage of existing research infrastructure, equipment that would otherwise cost millions to purchase,” he adds. “This can be extremely valuable to these companies.”
Equipping the innovation ecosystem
Since access to state-of-the-art research infrastructure underpins leading-edge research in virtually all areas of impact, funding partners like the CFI play a crucial role in the innovation ecosystem, says Dr. Charbonneau.
“Launched as an organization to stop the brain drain from Canada in 1997 – and fuelling innovation in all sectors of the economy – the CFI has helped put Canada on the map in terms of scientific productivity,” he notes. “We are looking at 27 years of impact and $25-billion of investment with contributions from the provinces, research institutions and the private sector.”
Feedback from post-secondary education and industry confirms the importance of having access to the necessary tools and facilities “to enable researchers to conduct high-quality work,” says Dr. Charbonneau. “This also ensures that students receive training on state-of-the-art tools and equipment and acquire skills that are in demand in industry so they can contribute to innovative businesses when they enter the workforce.”
What’s more, research in colleges and universities plays an essential role in “cultivating an ecosystem for new ideas that can lead to commercialization and the creation of new businesses,” he says, referencing a recent CFI impact report. “When we look at outcomes related to CFI-funded infrastructure in 2023, nearly 300 intellectual property rights were published or delivered. Researchers reported over 500 new or revised processes, products or services – and the institutions reported 36 spinoff companies.”
Stronger connections to support industry
These success stories can inspire post-secondary institutions to “step up efforts to promote entrepreneurship and reach out to industry,” proposes Dr. Charbonneau. “We need more challenge-driven research focused on solving industrial problems.”
For Mr. Asselin, it starts with “an advanced industry agenda, where we ensure that technology development is seen as a priority, especially in sectors where we have a competitive advantage.”
Concerted efforts are required to leverage Canada’s people, capital and ideas to make the country a player in key advanced industries, he says. “Canada should be designing, not assembling, the next waves of products and services in agriculture, energy, infrastructure, health care, computing, microelectronics, biomanufacturing and aerospace.”
It’s an approach Mr. Asselin calls “more California and less Michigan,” in reference to the creative versus manufacturing might associated with the two states, since innovation, such as IP generation, achieves a greater impact in the long term.
Strategic use of public investments and public-private partnerships are important parts of the equation, he says. “Turning research findings into market-ready applications is often a lengthy and expensive process. That’s why government has an important role in de-risking R&D activities and becoming a partner in technology development.”
In recognition of the value of partnering with industry, “we encourage institutions to collaborate and take advantage of CFI-funded infrastructure through collaborations with researchers,” says Dr. Charbonneau, adding that in the CFI’s last major competition, almost half the funding went towards infrastructure housed in core facilities, “which offer access to research infrastructure to a broader range of users – with skilled support staff to operate and manage it, making it easier for the private sector to partner with the research institution.”
The focus on challenge-driven investigations can also be applied and adapted to the scale and scope of “today’s most complex and pressing issues, such as climate change, technological advancement and national security,” he says. “Simply put, scientific research and innovation are central to human progress and national economic success.”
For the vision of creating an ecosystem where innovation can help drive the economic outcomes required for a future where Canadians can thrive, Mr. Asselin suggests, “We need to have an agreement on what we’re trying to achieve and where we want to be in 10 years. And then, we can do it together.”
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