Canadian R&D Needs Greater Investment to Drive Forward Innovation

By May 31, 2013
Canadian R&D Needs Greater Investment to Drive Forward Innovation

Canada’s current spending on R&D is not sufficient to turn around the country’s relatively poor performance in innovation. Also needed are closer collaboration between universities and industry and better management of science and technology human resources, says a government-sponsored report.

The intensity of spending by Canadian firms on research and development has continued to decline over the last decade, reveals a report* by Canada's Science, Technology and Innovation Council (STIC) which sketches out the ‘state of the nation’ in terms of R&D in relation to the Canadian economy. Business expenditure ‘intensity’ – i.e. as a percentage of GDP – in R&D represented just 0.89% in 2011, compared with 1.04% in 2007 when the country reached a high just before the recession struck. According to the Organisation for Economic Cooperation and Development (OECD), the 0.89% figure places Canada 25th out of 41 comparable economies, way behind countries such as South Korea and Finland, where expenditure is over 2.5% of GDP, and Israel, where it stands at 3.5%. Clearly a huge effort will be needed to get up alongside the leading OECD countries, and the authors of the report pick out the areas to which they reckon Canada should give priority if the country is to obtain convincing results.

Rich human resources, ‘disappointing’ collaboration

Given the current decline, if Canadian companies are to remain competitive, they must focus firmly on innovation as a strategy, says the STIC report. And Canadian innovation needs massive investment both in the development of Information and Communication Technologies (ICT) and basic R&D.  The good news here is that people educated in science and technology are currently one of the country’s strongest resources.  While Canada represents just 0.5% of the world’s population, 4.4% of all publications on natural sciences and engineering worldwide in 2010 came out of the maple leaf country. Moreover, over a four-year period, from 2006 to 2010, Canada saw a rise of close to 50% in the number of doctorates granted in sciences and a growth of 39% in the number of engineering doctorates. The problem is therefore not the knowledge base. The authors of the study argue that the problem lies in the fact that university graduates are not moving into private industry in sufficient numbers and that collaboration between industry and the universities continues to “disappoint”. Although the STIC could not provide any hard figures to support its conjectures, it sounded a sceptical note on studies which appear to show good levels of collaboration between universities and industry.

Boosting innovation

In the drive to foster innovation there are other factors that could be boosted, says STIC. Allowing greater immigration of qualified people for instance could be a key policy move. But whatever else happens, the country still needs to invest long-term in research and development. In the ten most innovative countries in the world, calculated by their ratios of investment in R&D to GDP (‘intensity’) direct government support in 2010 accounted for 70% of total government support for firms’ R&D, while direct support in Canada only amounted to 12%. STIC underlines that government policy plays an absolutely essential role in prioritising the necessary areas of technological development. Among other priorities, STIC lists wireless networks, telecoms equipment, and (given the ageing population which is going to need care) the fields of neuroscience and health.

*State of the Nation 2012 report: Canada's Science, Technology and Innovation System: Aspiring to Global Leadership; by the Science, Technology and Innovation Council (STIC), 21 May 2013


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