Canada-US innovation summit seeks to boost economic prosperity through innovation

Outdated policies must be replaced

Outdated policies and regulations pose a greater problem to US-Canada innovation than traditional competitors and emerging nations, delegates at a bi-national innovation summit heard last week. With the rise of regional economies and the potential of cross-border collaboration and technology corridors, economic and innovation policies have failed to keep pace. Regulations are based on economic activity rooted in traditional industry and border security has been allowed to take precedence over the free flow of goods between the two nations.

"Our main competitor is the 20th Century, not China or India," said Jim Kastama, a Washington state senator and co-chair of the Pacific Northwest Economic Region, "Policy is too rear-view driven."

It's a view echoed by Glenn Murrary, Ontario's minister of Training, Colleges and Universities. Murray argues that "perverse subsidies" that favour the brown (fossil-fuel-based) economy combined with policies that fail to recognize innovation as a key driver of the economy are undercutting Canada's ability to leverage its economic relationship with the world's largest and most innovative economy.

"Policies are 15 to 20 years behind reality. We're still pursuing a North American economy, not regional economies. And regulations are all wrong," said Murray, who was previously Ontario minister of Research and Innovation prior to its merger with the economic development ministry. "Innovation has replaced production as the most important aspect of the economy. Canadian policy is designed for large industry and is woefully out of date. We have to catch up."

The one-day event in Ottawa — sponsored by the United States Embassy and Canada 2020 — featured several high profile panels examining bi-lateral issues surrounding innovation policy, financing and managing innovation and university partnerships.

While many speakers pointed to bi-national collaborations, partnerships and initiatives that are working well, there was general consensus that much more can be done to optimize the special relationship between Canada and the US.

US deputy secretary of state Thomas Nides set the tone for the summit by outlining the strength of the joint Canada-US economy, noting that more than half of the 70% increase in foreign direct investment in Canada over the past 10 years has come from the US. But constraints such as Canada's continuing protection of key sectors of the economy and lack of progress integrating intellectual property rights into the knowledge-based economy are hampering greater interaction.

"The US and Canada can be an unstoppable team when firing on all cylinders," said Nides. "The future prosperity of North America depends on it."

Many speakers agreed that strong research universities were an essential contributor to a vibrant knowledge-based economy. Dr William Colglazier, the recently appointed science and technology advisor to the US secretary of state, pointed to a 2006 US report that included strong university research along with efficient markets, robust government and business investment in R&D and IP protection as key elements of a successful, innovative economy.

Colglazier received little opposition from a panel of US and Canadian university presidents, who reinforced the necessity of maintaining support for basic research and boosting collaborative efforts between US and Canadian institutions and industry.

role of university collaboration

Univ of British Columbia president Dr Stephen Toope said Canadian universities were doing a "reasonable job" of spinning out new companies but Canadian companies are not great at picking them up.

"University-industry collaboration is more important than patents, licenses and spin-offs and people are the greatest source of university transfer," said Toope, pointing to the work of MITACS in matching university talent with industry. "We need to strengthen entrepreneurial culture, strengthen international training opportunities and promote regional excellence and clusters."

Dr Ronald Daniels, the Canadian-born president of John Hopkins Univ, said that while framework policies were essential for boosting bilateral collaboration at the university level, any such policies must be backed with appropriate resources.

"Framework policies are fine but they need funding to make them concrete," said Daniels, adding that Canada and the US should emulate the European model in which funding is already in place. "We need a strategic funding initiative to galvanize universities behind a clear, strategic research challenge."

A case in point is the Canada-California Strategic Innovation Partnership. Launched with great fanfare in 2006, the CCSIP had initial success in the area of stem cell research and regenerative medicine but subsequently floundered when the California and Canadian governments were unwilling or unable to fund strategic research collaborations (R$, September 28/11).

financing and managing innovation

The summit featured executives from several major innovative firms to discuss the challenges of financing and managing innovation.

Barry Jaruzelski, co-author of a global innovation report by Booz and Co, set the tone by stressing that process and culture are more important that R&D in stimulating innovation. It's essential for nations to create an innovative culture that aligns with corporate strategy, leverages customer insight, makes the right bets through effective portfolio management and manages the R&D pipeline with speed and efficiency.

"Governments should fund basic research and better connect companies, universities and government labs," said Mark Little, senior VP of GE Global Research. "We don't choose a country based on cost anymore. Labour costs are quickly leveling. We seek to build local teams connected to markets with engineering expertise."

Sophie Vandebroek, president and CTO of Xerox Innovation Group, also stressed the importance of public investments in company-government-university partnerships. Vandebroek pointed to Xerox's $10-million investment in the National Institute for Nanotechnology, which has generated "great IP and spin-offs".

Shannon Deegan, Google's director of people operations, said his firm doesn't directly seek government support for innovation but noted that "a lot of the companies we buy have benefitted from government assistance."

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