The federal government’s recent announcement of the Canada Innovation Corporation (CIC) represents a generational opportunity to close Canada’s innovation and productivity gap. With a robust national research community, a healthy manufacturing sector, and some of the world’s most dynamic tech ecosystems, there is no reason that Canada should continue to lag behind our peers in transforming research and development (R&D) into successful enterprises right here at home. I believe that the University of Waterloo’s unique approach to commercialization and entrepreneurship holds important lessons in how government can best leverage strategic investments for business creation.

The university sector has benefitted immensely from government investment in R&D. That investment is a key ingredient to our world-renowned research institutions and a big part of why Canadian universities are leaders in emerging fields like artificial intelligence and quantum computing. We have been wise stewards of this funding and these investments continue to pay countless dividends. 

The shortfall lies in low levels of business investment in R&D. This lack of investment undercuts Canada’s ability to gain maximum benefit from intellectual property development and undermines our ability to protect it as well. It also means that other countries are often better positioned to exploit Canadian discoveries and inventions. The case for a targeted and nimble government intervention is obvious. The question becomes what that will look like. I appreciate that the government has outlined a clear mandate for CIC while also allowing the flexibility and experimentation required to move at the speed of business. Folding the National Research Council’s Industrial Research Assistance Program (IRAP) into CIC will help to streamline processes as well. However, I would like to see post-secondary institutions more fully integrated into the CIC model.

Universities like Waterloo are generating highly entrepreneurial students with extensive co-operative education experience who are ambitious and driven, and able to bring innovations to market quickly. These students and graduates achieve this faster than more established enterprises because they aren’t constrained by a particular business model.

With the right support, such as Velocity’s Incubator program, these students graduate fully equipped for business success. Many have established successful startups in Canada, including businesses like ApplyBoard and Faire, valued at over $1 billion. Others are behind emerging companies like Avidbots and Vena Medical.

What sets Waterloo apart is our creator-owned intellectual property rights policy, which grants full ownership to the inventor and has driven a university culture that has, in turn, propelled commercialization and successful student-led and research-based innovation.

Deep tech startups lead to significant disruption through scientific advances and engineering innovation like digital cameras and online search engines, which have made previous innovations by Kodak and Yellow Pages redundant. Unlike the United States, post-secondary institutions in Canada generate many of the unique research and development-based deep tech discoveries, rather than businesses, because Canada isn’t home to technology giants like Apple, Google, Microsoft, IBM, and Intel.

Commercializing deep tech through university startups is a smart and proven approach as deep tech requires capital and specialized technical labour, but most small or medium-sized Canadian companies aren’t able to allocate the necessary resources. These startups engage the university inventor as the prime repository of deep technical knowledge and benefit from a supply of capable graduate students with the requisite deep tech knowledge. Further, these students often take on leadership roles within the startups instead of heading to the U.S. for potentially more lucrative opportunities.  

Welcoming universities to the table would contribute to fostering and achieving a thriving and entrepreneurially rich economy for Canada. The Canadian government needs to engage universities in this way to ensure that research, innovation, and commercialization are equally vital rather than mutually exclusive. Constraining one part of the innovation pipeline in favour of another will lead to one outcome – the whole ecosystem and Canadian society will be at a disadvantage.

Using an integrative approach to partnering and engaging with universities is key to entrepreneurial success. Greater support from programs like CIC will allow universities to advance the commercial readiness of new technologies for startup development and private sector use.

Universities and incubators have a proven track record of leveraging government investments to create transformative ideas and products. At Waterloo, Velocity and other institutions, we have also developed a proven framework that turns these innovations into successful Canadian businesses. We encourage CIC to tap more deeply into our knowledge of commercializing specialized technologies as it is the clearest and most cost-effective path to closing the gap.