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The Next Move

March 29, 2016
By: 
Ted Hsu
Former MP Kingston & the Islands, Former Liberal Party of Canada Science critic, Member of the Board of Directors (Switch)

The day after Budget Day 2016, I had the wonderful opportunity to attend Queen’s University’s Three Minute Thesis competition, where graduate students explain their research to a general audience. Research faculty were cheery.  The budget announced new support for R&D, including $2 billion over three years for R&D and commercialization infrastructure upgrades at post-secondary institutions, a $95 million annual increase, the largest in over a decade, to the research councils, as well as funding renewal for major programs supporting research.

Beyond robust funding, must there be a more strategic approach to funding research and supporting innovation and commercialization? One might argue that much of the best fundamental research is curiosity driven, not directed by the government. In the private sector one might argue that, for productivity growth, the government should simply lower taxes, remove perverse incentives, encourage competition and trade, and then simply step aside.

The Trudeau government’s own priorities suggest how research funding should be re-examined. Its government-wide emphasis on policy making informed by evidence is in itself a renewed receptor for research inputs. Moreover, if policy is to be evidence and science informed, how can voters be satisfied that decisions are driven by solid evidence as well as political imperatives? Can a research strategy enhance the potential for science to help earn needed social licence in, say, building economic infrastructure?

A second priority influencing a research and innovation strategy is Mr. Trudeau’s government-wide drive to support sustainable growth and address climate change. We can find evidence for this throughout the budget document. It is another area ripe for innovation and where new investments in research will find ready receptors.

The government’s own priorities go hand-in-hand with some large-scale trends to be considered in any strategy for research and innovation. One of these is income inequality. How Canada responds to the continuing revolution in information and communication technologies, in particular automation and artificial intelligence, and how Canada approaches education, training and innovation at an individual and firm level will significantly contribute not only to overall economic strength, but also to how income inequality plays out in Canada over the next few decades.

Another large-scale trend is Canada’s aging demographic. We must find ways to manage economy-wide costs of caring for the elderly and to support sustained growth in labour productivity. Any long-term approach must begin with a thoughtful strategy for research and innovation.

Here are some particular questions that might be considered:

Given the new challenges and opportunities Canada is likely to encounter in the coming decades, is the current funding ratio between the three research councils and other funding programs optimal?

Are requirements for matching funds hindering certain areas of research (indigenous affairs, public health, privacy and ethics)?

Is policy, from visas and travel policies to funding rules, allowing Canadian researchers to fully participate in the leading-edge international collaborations, whether for big science facilities or bench-scale research?

Experts have noted that Canada has experienced a market failure when it comes to getting enough cash invested to take risk and bring discoveries or innovations to market. The problem is complicated and gets worse when there is a need to scale quickly, when the innovation is disruptive or when there is a long time from lab to market. Economists tell us that this should not come as a surprise in a small, open, natural resource-based economy which has historically relied on a single export market to the south. And that is why it makes sense for our government to look for gaps and help fill them.

Some questions to ask:

Is SR&ED the best way to get businesses to take a risk and make an investment in Canadian R&D that they otherwise would not have? If not, what could we copy from other jurisdictions?

Do programs to support commercialization recognize the differing requirements for different commercialization activities, for example, as distinguished by typical time needed to go from laboratory to market?

To its credit, Budget 2016 acknowledges the need to redesign the federal government’s strategy for supporting research, innovation and commercialization. It describes many of its measures as “interim”, while stating that the, “Minister of Science will undertake a comprehensive review of all elements of federal support for fundamental science” and that, “through 2016, the Government will redesign and redefine how it supports innovation and growth, in partnership and coordination with the private sector, provinces, territories and municipalities, universities and colleges, and the not-for-profit sector.

There is an old and wise adage in the game of chess, “When you see a good move, look for a better one”. May this government continue to improve how we support research and innovation so that Canadian talent -- like those students in the Three Minute Thesis competition -- can maximize their contribution to society.