Canada shows a “disturbing” decline in innovation and R&D

A new study from the Science, Technology and Innovation Council notes a serious decline in corporate R&D spending

Gustavo Ramirez Lozano working in a University of Toronto lab on asteroid-mining robotics equipment.

Gustavo Ramirez Lozano working in a University of Toronto lab on asteroid-mining robotics equipment. (Richard Lautens/Toronto Star/Getty)

It’s hard to imagine the state of Canadian innovation being more dismal, with an expert panel labelling the country’s standing as “disturbing” in a new report from the Science, Technology and Innovation Council.

“Despite efforts to improve Canada’s lagging business innovation performance, it has continued to deteriorate,” the report says. “Canada has fallen further behind comparator countries on key business innovation performance indicators and the gap between Canada and the world’s top five performers has widened.” The full report is available online here. (Note that while it is dated 2014 and its analysis ends with 2013 data, the report came out on November 27, 2015.)

Of particular concern is the lack of research and development funding by businesses. Canada’s ranking in business expenditures on R&D fell to 26th in 2013 from 18th in 2006. Total investment over the same time dropped by $1 billion.

Canada is also middle of the pack when it comes to investing in information communications technologies, ranking 13th out of 25 countries. On top of that, businesses are not properly absorbing advanced research talent, ranking 15th out of 33 countries in researchers per thousand employment, a big drop from seventh in 2006.

“This poor performance in private-sector absorption of research talent is mirrored at the broader level of science and technology (S&T)-related occupations across the economy,” the report says. “In 2011, S&T-related occupations accounted for 30 percent of total employment in Canada, which positioned Canada 22nd out of 43 countries.”

The poor results read as a condemnation of Canada’s lack of policy and leadership in science and technology matters over the past decade.

The STIC was put together by the Conservatives in 2007, with members including Elizabeth Cannon, the president and vice-chancellor of the University of Calgary, Brightspark Ventures managing partner Sophie Forest and Raymond Laflamme, director of the University of Waterloo’s Institute for Quantum Computing.

The report, titled “State of the Nation 2014,” was scheduled to be released this past spring but was delayed until after the election, likely because it would have embarrassed then-prime minister Stephen Harper.

The new Liberal government has its work cut out for it in spurring Canadian innovation, with the report suggesting a few courses of action. Policy leaders are urged to come up with a system that will:

  • close the gap on firms’ investment in innovation;
  • redress the imbalance of direct and indirect government funding for business R&D, to provide greater direct support for high-risk, high-reward business R&D;
  • embrace risk-taking;
  • boost higher education expenditures on R&D to keep pace with other countries’ support for “intellectual infrastructure”; and
  • invest strategically, further focusing government funds to build globally competitive critical mass in targeted areas.

It’s not an impossible task, the report notes, since Canada has a solid grounding with plenty of smart individuals.

The country has some real “star power,” with 96 researchers among the top 1% of the most cited in their fields. Canada ranks sixth in this measure, ahead of several countries with larger populations.

Canadian universities rank well internationally and the number of PhD graduates has doubled since 2006. Fifteen-year-old Canadians also performed just shy of leaders in reading, math and science.

Prime Minister Justin Trudeau’s Minister of Science and former researcher Kirsty Duncan says new cabinet ministers are being told to bring scientific considerations into all aspects of their decision making.

“This is a government that believes in science,” she tells The Globe and Mail.