A new strategy for Canada’s R&D and innovation ecosystem?

Canada’s research and development (R&D) and innovation ecosystem encompasses thousands of firms, hundreds of academic institutions and programs, dozens of government departments and support mechanisms, and numerous not-for-profits, Indigenous organizations, industry groups and associations (as illustrated in Global Advantage’s annual Canada’s R&D and Innovation Ecosystem Map).  

Source: Global Advantage Consulting Group Analysis and Visualization

An audience for a new plan

Global Advantage Consulting Group CEO Omer Kaya presented to Foresight Synergy Network Canada on Oct. 13th on the need for a new R&D and innovation strategy in Canada.

Approximately two dozen attendees were present, and included representation across government, academia, and private sector industries from Calgary to Montreal.

Canada lagging behind peer nations

Canada significantly underinvests in R&D — its national R&D expenditures are 57%, business R&D expenditures are 55%, and government R&D expenditures are 50% below the OECD average (OECD, 2020). While Canada is 8th in innovation inputs, it ranks only 23rd in innovation outputs (Global Innovation Index, 2021) — a persisting issue in Canada’s innovation system is our inability to turn innovation inputs into outputs.  

Source: Global Advantage Consulting Group Analysis and Visualization

As a result, Canada is lagging in labour productivity and competitiveness, which impacts Canadians’ standard of living and quality of life. Moreover, Canada risks falling further behind while its international allies forge ahead with new historic investments in research and innovation (e.g., U.S. Innovation and Competitiveness Act, Inflation Reduction Act, EU Research and Innovation Strategy and Plan, etc.).  

Source: Global Advantage Consulting Group Analysis and Visualization

A new plan needed to support Canadian innovation?

In this regard, the Federal Budget 2022 moved towards better supporting Canadian enterprise and promoting innovation with an emphasis on increasing productivity — showing signs of change and rethinking the entire approach to innovation (below is a summary of these new initiatives). Will anything that’s announced in this budget, help even get Canada back to a baseline that might allow it to compete globally? On the other hand, if such a shift of approach is occurring, what might it mean for the research and innovation community in Canada? Is a new strategy for Canada’s R&D/Innovation Ecosystem, potentially underway? 

According to ISED’s Assessment of Canada’s Innovation Performance (2019) “Without immediate and targeted action that builds upon existing strengths, addresses key gaps and weaknesses along the innovation continuum, and drives growth, Canada will fall even further behind, putting its high quality of life at risk.” Canadian private sector businesses, entrepreneurs, and SMEs are the drivers of such growth, and they have various needs. Irrespective of any sector, region, or a technology area, Canadian entrepreneurs and SMEs need access to Talent, Information, Funds, Technology and Markets. Any new strategy will need to provide comprehensive support systems to address each one of these needs. 

Source: Global Advantage Consulting Group Analysis and Visualization

A menu of options to boost innovation

As a result, we produced a series of suggestions (menu of options) for developing a New R&D/Innovation Strategy for Canada.

For Starters;

1. Set a National objective:
   Spend 2.5% of GDP on RDI by 2030 (Fill the $22 B gap).
2. Establish a process:
   Make the 9 Economic Strategy Tables permanent (Government, Private Sector, Academia).
3. Reframe the research questions:
   What “new knowledge” do Canadians need from research to meet their needs?
4. Set Performance Targets inside each Economic Strategy Table:
   Identify spending, tax, regulatory and procurement initiatives to navigate a roadmap to achieve these targets.

For Mains;

1. Integrate: Integrate 4 national policies (Innovation, Industrial, Trade and Skills) and their 100’s of programs around a targeted export strategy (grow global exports by 30% by 2025)
2. Look outward: Establish a national process to identify incoming global risks (Technological, Environmental, Social, Economic, Geopolitical) to be managed
3. From “start-up” to “scale-up” to “scale-out”: Focus more on widespread technology adoption and applied research to increase productivity and competitiveness. Rebalance from an emphasis on individual company support to collective industry support.
4. Rebalance Canada’s Game from Defence to Offense: Place less emphasis on Social Equity and more support for Economic Growth (make the pie bigger first – then allocate pieces equitably)
5. Ask for and encourage locally produced food: Examine the impact of public money being used to assist foreign- controlled firms through Departments, Agencies and Universities. Does this produce the benefits we want for Canada?

For Dessert;

1. Create “Implementation” metrics in each Economic Strategy Table:
   To establish milestones, measure performance feedback, manage emerging risks and adjust priorities and schedules.
2. After eating offer to help clear the table:
   The Public Service needs implementation help (COVID-19/ policy complexity/hundreds of new programs in Budget 2022 to implement)! What can we all do to help?

Learn more about Global Advantage Consulting Group’s analysis of the 2022 Federal Budget here.

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