Clarifying the Language of Innovation in Canada

In the discourse around innovation in Canada, two distinct but related concepts are often not sufficiently distinguished: industry-academic collaborations aimed at boosting R&D investment, and academic entrepreneurship focused on moving discoveries into society for economic development. Innovation is frequently used as an umbrella term for both, leading to confusion in policy, strategy, and execution. This conflation can obscure the very different roles these pathways play within Canada’s innovation ecosystem. While both approaches are critical, they represent different stages of the innovation process and should not be treated as interchangeable.

At the heart of this distinction is intellectual property (IP) sovereignty, a critical issue for universities, businesses, and policymakers alike. In industry-academic collaborations, the focus is typically on incremental discovery—the steady advancement of knowledge and technology that may eventually lead to practical applications. IP in these cases is often tightly controlled, with companies seeking to maintain competitive advantages. On the other hand, entrepreneurship represents disruptive innovation—where novel ideas or technologies are brought to market, often reshaping industries. Here, the focus is on retaining IP to support the growth of startups and new ventures.

Sector-Specific Innovation Strategies Are Critical

This is why Canada urgently needs a sector-specific innovation strategy. The AI sector (McKinsey & Company), for example, has seen a surge in disruptive innovation through the rapid growth of startups, particularly in cities like Montreal. However, the challenge lies in scaling up these startups into larger companies that can have a meaningful economic impact. While the AI sector thrives on early-stage innovation, it lacks the long-term strategy and support for expansion that would allow these startups to grow into major players​ 

In contrast, the aerospace sector is highly mature, with well-established incremental discovery processes through long-standing partnerships between industry and academia. Canada’s aerospace industry is globally competitive and ranks first in R&D intensity among manufacturing industries. The focus here is on continuous, steady advancements in technology rather than disruptive shifts, which makes this sector more reliant on stable, long-term collaboration. 

Meanwhile, the energy transition sector, fueled by significant government investments, is still defining its relationship with academia. Large-scale investments in clean energy and sustainability are advancing this sector, but the collaboration ecosystem remains nascent. As the sector continues to grow, building a clearer framework for academic-industry partnerships will be essential to meeting Canada’s ambitious sustainability goals ​(Deloitte United States)​ (RBC Capital Markets).

The federal government’s recent exploration of a patent box regime, aimed at incentivizing the commercialization of IP developed within Canada, is a step in the right direction. Such measures could encourage both academic institutions and industries to engage more actively in IP development and retention, while also helping businesses see value in sharing IP through collaborations. However, balancing these incentives with sector-specific needs is critical to ensuring the long-term success of these partnerships​.

The Role of Universities and Researchers

While universities play a key role in fostering incremental discovery through industry collaborations and disruptive innovation through entrepreneurship, there is no clear national framework guiding researchers or institutions on which path to prioritize. Currently, the choice between collaboration and entrepreneurship is often left to chance or the availability of ad-hoc opportunities. Researchers, while increasingly open to commercializing their discoveries, are not provided with structured incentives or guidance on whether to focus on partnering with industry for R&D or on pursuing entrepreneurial ventures to bring innovations to market.

This ambiguity results in a lack of alignment with government priorities. Researchers and institutions are frequently navigating a complex landscape without clear incentives or a roadmap, leading to inconsistencies in how academic knowledge is applied to national economic growth. For example, government programs promoting academic entrepreneurship, such as Lab to Market, are welcome, but they coexist with R&D-focused funding mechanisms without a unifying strategy. Universities are left to pursue both directions without a broader vision guiding them.

One potential avenue to address this gap is through Canada First Research Excellence Fund (CFREF) investments. Each CFREF initiative is required to develop a commercialization strategy, which offers an opportunity for institutions to better align their innovation efforts with governmental priorities. For example, McGill’s D2R (DNA to RNA) program aims to become a world leader in RNA therapies and incorporates a clear focus on commercialization as part of its strategic objectives. D2R’s goal is to successfully bridge the gap between academic discovery and societal impact, and this model could serve as a blueprint for other institutions looking to balance incremental discovery and disruptive innovation.

This is where government intervention is essential. By establishing a cohesive national innovation strategy that offers clear guidelines and incentives for industry collaboration and entrepreneurship, Canada can ensure that academic research efforts are aligned with national economic and societal priorities. Such a strategy would not only provide clarity for universities and researchers but also help bridge the gap between incremental discovery and disruptive innovation, ensuring that academic knowledge contributes meaningfully to both scientific advancement and economic development.

Open Science Ecosystems: A Path Forward

Another key element that has been underexplored in Canada’s innovation strategy is the potential of open science ecosystems, which could serve as a bridge between academia and industry, especially in pre-industrial research. Open science allows universities to remain true to their mission of producing and sharing knowledge while still contributing to innovation ecosystems that benefit the public and industry alike. For example, CQDM, a precompetitive research consortium in the life sciences, demonstrates how open science can support an entire ecosystem rather than just individual partners. Creating sector-specific open science ecosystems could enable more efficient collaboration, mitigate IP concerns, and accelerate innovation across multiple industries.

The Role of Government in Supporting Innovation Ecosystems

One crucial point that must not be overlooked is that universities are not directly funded to support collaboration ecosystems beyond indirect costs on individual projects. This presents a fundamental challenge. Governments must take the lead in structuring these ecosystems by clarifying roles, facilitating sector-specific dialogues, and implementing a clear IP strategy that serves both academic and industry needs, and supporting the stakeholders in the implementation of that strategy.

The recent federal consultations on revising Canada’s IP framework, including the potential for a patent box regime, are timely and reflect an increasing recognition of the need to improve IP commercialization and retention​. However, these reforms must go hand in hand with a broader strategy that takes into account the maturity of different sectors, their IP needs, and how academia fits into the equation. A well-coordinated approach, supported by government and designed to navigate the complexities of IP sovereignty, will be key to driving meaningful collaboration between academia and industry. It is only through such clarity and coordination that we can unlock the full potential of academic research and entrepreneurship for economic development.