Science, Technology, and Innovation Council Reports
Today, the government’s advisory council on issues scientific (and technological, and innovative) released a long-awaited report on Canada’s place in the R&D world. The Science, Technology, and Innovation Council’s State of the Nation 2008 takes the pulse of “Canada’s Science, Technology, and Innovation System” (system! I like it) and finds that we’re doing well – a “solid mid-level performer”. Of course, we can do better, according to Dr. Howard Alper, STIC chair: “given the importance of innovation to our future, this is not good enough. We need to set our ambitions higher in keeping with what Canadians are capable of achieving”. The report is generally positive about the quality of research in Canada, but laments how poorly this research is translated into applicable technology and innovation.
The report is guardedly positive about the role of academic research in Canada. It acknowledges that Canada is 2nd in the OECD in the share of R&D performed by universities and recognizes that Canadian researchers are among the most prolific in the world in publishing their work in peer-reviewed journals. Despite the lament that there is a poor translation of basic research into innovation, Canada ranks fourth in the OECD in university-performed R&D funded by business (at more than twice the G7 average), and Canadian universities produce spinoff private companies at one of the highest rates in the world.
So what’s the problem? Why all the talk about the problems with the “system”? Despite the academic research community’s health, it hasn’t been matched by growth and activity in private, “Business” R&D. When Business, University, and Government R&D are all considered, Canada’s expenditure on R&D as a percentage of GDP is below the G7 and OECD averages, and is roughly half that of the top countries Sweden, Finland, Japan, and Korea. Furthermore, investment in Business R&D has been basically flat in Canada since 2001.
Finally getting to the nub of the problem with the science-technology-innovation system, the report points out that only 55% of Canada’s total R&D is performed by the business sector, compared to 77 percent in Japan; 70 percent in the U.S. and Germany; 63 percent in France; and 62 percent in the U.K. The report states [italics from the original]:
Since the R&D performed by business is more likely to be closer to the market (i.e more development than research) this may have an impact on Canada’s ability to turn research into new products, services, processes and business models that are sold globally. Compared to our major competitors, more of our R&D is performed by universities and colleges. Most of this is more basic research, farther away from being turned into profitable market opportunities and results.
So presumably, the government should be providing more money to Business to encourage it to innovate. Unfortunately,
for the 13 OECD countries for which data are available, Canada has the richest government support of business R&D, as a percentage of GDP.
Thus, if redirecting funding from University research to Business isn’t the answer, what is?. The report shows that the Canadian Business R&D sector does poorly in attracting and rewarding venture capital and is near the bottom of the OECD in collaborating with private, university, or government sector partners. While no obvious solution presents itself, the report suggests that the Business R&D sector may be the weak link in the STI “system”.
So what’s the solution? It doesn’t seem to be increased education – our 15-yr old students are 3rd in the world in science, math, and reading and we have the highest percentage of the OECD countries of adults with tertiary education. Worryingly, we are only 21st in the OECD in the percentage of science and engineering degrees awarded to graduates, though this is still higher than the US, and 20th in the OECD in the number of PhDs awarded per capita. Interestingly, the report also includes data to show that Canada produces only half as many business graduates as the US, and that managers at Canadian firms tend to have less education than their American counterparts. Perhaps this is why the government recently made changes to SSHRC funding to tie it to business studies.
Overall, the report provides a comprehensive and interesting examination of the state of R&D in Canada. I would suggest that the Science, Technology, and Innovation parts of the “system” correspond roughly to Basic Research, Engineering, and Business. The report suggests that the first part of the system is working well and strongly, but that engineering and innovation by the business sector need to be improved. Unfortunately, government investment in that area doesn’t seem to be the answer. The report’s authors suggest that strengthening links between the sectors will help, though government funding of basic research is already often tied to matching private funds and doesn’t seem to be generating the desired effects.
It isn’t clear how to improve this “system”. I suggest this, though: instead of targeting basic research to make it more technological and innovative, focus should be placed on improving the underperforming sectors. Basic research should remain a powerful engine for when the rest of the system gets tuned up. Increased and prioritized focus on innovative engineering programs and incentives matched with better business practices and training are the more appropriate places to tinker with the system. Basic researchers can’t do it all – they need to be supported by strong engineering and business components, and that’s where the government’s priorities should be focused.
