When it comes to our performance in science, technology and innovation, Canada is lagging behind other nations. That’s the conclusion of a report released earlier this week by the Science, Technology and Innovation Council (STIC.) The Chair of the council, Howard Alper, is a chemist at the University of Ottawa and an Honorary Fellow of the Chemical Institute of Canada. Yesterday we chatted briefly by phone about the report’s findings and recommendations. Here’s what he had to say:
The broadest measure of performance provided by the report is the gross domestic expenditure on research and development (GERD.) When STIC first started tracking this statistic in 2006, its value was around 2 per cent of GDP, which ranked Canada 16th in a list of 41 comparable economies. Today, the value is 1.74 per cent, and we’ve slipped to 23rd place. Most of this slippage has occurred in the private sector; for the most part, Canadian companies just don’t do much scientific research and development. At first glance, this may seem like a symptom of the fact that many Canadian companies are in fact merely branches of larger multinationals headquartered in the US or Europe. But Howard Alper disagrees. “That’s an old argument that doesn’t really hold water today,” he says. “Industry itself is not investing enough that’s true, but government also plays a role.”
Alper says there are three main ways for governments to encourage scientific innovation in the private sector. The first is indirect support, through programs like the Scientific Research and Experimental Development (SR&ED) tax incentives. The second is direct support, whereby companies compete for government research funding through programs like National Research Council’s Industrial Research Assistance Program (IRAP.) Canada is really good at the first — second only to France — but lousy at the second. “Our ratio is about $10 of indirect support to $1 of direct support,” says Alper. “The United States is radically different: approximately 4:1 direct to indirect. Norway, at 2:1 direct to indirect, is pretty close to the average for the industrialized world.” Furthermore, programs like IRAP are designed to help small and medium-sized enterprises; there’s no Canadian equivalent to the Defense Advanced Research Projects Agency (DARPA) which has benefitted large American firms enormously by funding advanced research projects for the military.
The third way is to use government procurement programs to stimulate homegrown companies. “Governments buy a lot, not just federal governments, but provincial, city governments and regional governments,” says Alper. He cites the example of Finland, which during the 1990s changed from a resource-based economy (like Canada) to a more balanced one with a healthy knowledge sector, in large part due to aggressive buy-local policies. “Using procurement to stimulate business innovation is very important,” says Alper.
One of the federal government’s most controversial moves – apparently designed to stimulate business R & D – has been to re-tool the National Research Council (NRC) into an industry-focused research and technology organization. Critics have complained that this is an attack on fundamental, curiosity-driven research. However, Alper points out that universities now take on a much larger proportion of that work than they did when the NRC was founded, nearly 100 years ago. “In the early days, NRC was the primary source for basic research in Canada; universities like McGill, and the University of Toronto were important contributors, but they weren’t the drivers,” says Alper. “By the 1960s, with the establishment of new universities and the expansion of others, academia took on more and more responsibility in this regard.” This isn’t to say that NRC’s work was second rate; Alper points to NRC researcher and Nobel laureate Gerhard Herzberg as a great example of fundamental research done by the council. But he says that given the challenges Canada faces in stimulating private sector research and development, using the NRC to help out does seem like a ‘natural’ move. “I want to emphasize this point: it’s not an excuse for industry to do the same, or less,” says Alper. “It has to be an incentive for industry to do much more. If NRC can orchestrate that, in collaboration with industry, we will make significant progress.”
Does increased support for industry have to come at the expense of basic research, which is now carried out primarily in academia? The report shows that while the share of GERD accounted for by higher education has remained steady at 0.66 per cent of GDP since 2006, strong investments by other countries have caused us to drop from 3rd to 9th place in comparable economies. Alper, an academic himself, believes that this area also needs more attention. “We’re recommending that the government invest significantly more in ground-breaking research,” he says. “That is ultimately as important as investing in research that may be potentially valuable to industry. Look at the laser, look at magnetic resonance imaging; those began as very fundamental or basic research, and took 10 or more years to mature and evolve into commercial products. It’s the fundamental research that will impact society tomorrow, or in five years, or in 10 years, or in a generation.”
You can read the 2012 STIC “State of the Nation” report here. Do you have further thoughts on this? Let us know in the comments below.