David Crane

S&T needs to be in Budget stimulus package

By David Crane

There seem to be three points of agreement on the forthcoming stimulus package, which will be presented in a federal budget on January 27: The package should be large, it should be capable of having a fairly quick effect, and it should contribute to the longer-term well-being of the country. Measures to boost science, technology and innovation (STI) would seem to fit the bill superbly. In other words, STI should be a key part of the stimulus package.

We know that the federal granting councils lack the funds to finance many of the high-quality research projects coming out of our universities. We know there is an urgent need for more funds to help companies, especially small and mid-size companies, fund early-stage technology through the so-called "valley of death". We know that a crisis is emerging in venture capital financing for our entrepreneurial innovators. We know that Canada is falling behind on universal access to high-speed broadband. We also know that investments in clean energy and other 21st century technology could create an important procurement market for our high-tech companies.

Investments in all of these areas would quickly yield economic benefits that would contribute to future jobs and prosperity. One of the significant features of the new Obama administration in the United States is the presence of people with strong science and technology backgrounds. Barack Obama seems to have a clear grasp of the role of S&T in the U.S. economy. Indeed, he ran a high-tech election campaign.

In Canada, none of our party leaders has shown a grasp of S&T. And almost none of our MPs have a science education. Marc Garneau, the Liberal S&T critic, was formerly head of the Canadian Space Agency and has a science PhD. He is a rarity in the House of Commons.

The Obama stimulus package contains significant funding for STI. One priority is to double spending on basic research, which is seen as an investment in the future competitiveness of US high-tech businesses. The House of Representatives Committee on Appropriations has voted $10 billion for accelerated spending on research in the natural sciences, life sciences and engineering. This includes a major boost to agricultural research as well, along with $70 million for a Technology Innovation Program, an initiative to boost research in "potentially revolutionary technologies" that have great potential for future jobs.

The administration is also seeking $150 billion over 10 years to transform energy technologies in the US, including investment in a digital electricity grid for the nation. The Appropriations Committee has voted a number of initiatives though, not yet, the full $150 billion. Its measures include $2 billion to help support development of batteries for electric vehicles, $11 billion for R&D, pilot projects and matching grants for the Smart Grid Investment Program, $2 billion for renewable energy R&D, and $500 million for energy-efficient manufacturing demonstration projects.

Other initiatives for which the Obama administration is seeking Congressional approval include doubling the funding for the Manufacturing Extension Partnership, which helps manufacturers implement new technology, creating a national network of public-private business incubators to support start-up companies and the establishment of an Advanced Manufacturing Fund to support innovative proposals by companies for new products.

For its part, the House Appropriations Committee is also looking at massive investments in high-speed broadband and applications that run on these networks. This includes $6 billion to upgrade the broadband and wireless infrastructure, $20 billion for health information technology and $32 billion to improve the US power grid.

Many of the details have yet to be ironed out, and the US Senate will also have to approve the stimulus package, which means there will probably have to be some compromises. But the Obama administration will enjoy a honeymoon period and the mood of fear over the economy will mean that a huge stimulus package will be voted on and it will include a large commitment to STI.

It's also worth noting that the US Congress has already voted for a $25-billion fund to help auto companies and their component suppliers develop the technology for much more fuel efficient and low-carbon vehicles and that president George W. Bush signed this into law. That money has yet to be tapped.

We should expect our own government to adopt a similar approach. Canada urgently needs to improve its economic effectiveness in a global economy in which not only the United States but many other countries are rapidly expanding their innovation investments.

Chinese premier Wen Jiabo, for example, recently announced that to help stimulate the economy the Chinese government will accelerate investments in 16 major projects that constitute part of the country's long-term development plan for S&T. Areas include wireless technology, energy, computer chips, water treatment and AIDS prevention. Britain is moving ahead on a Digital Britain strategy that will include universal broadband access while France has unveiled its France Numerique 2012 plan to accelerate the infrastructure, services and content of the digital economy. Even the energy-rich Gulf states are now aspiring to create a Silicon Valley for clean energy,

Canada has never really grasped the importance of STI as the core requirement for a successful economy — even though these have played a crucial role in Canada's development for more than 100 years and despite the fact that we have some highly successful scientists and science-based companies.

One positive improvement came in the Chrétien years, when the Canadians Institutes of Health Research, the Canada Innovation Foundation, Genome Canada and the Canada Research Chairs were all launched, and S&T budgets expanded. Technology Partnerships Canada was also created to help companies fund high-risk early-stage R&D and demonstration activities. But the current government killed Technology Partnerships Canada and while it has not ignored S&T, it has failed to effectively advance the innovation agenda.

Canada cannot afford to be a laggard in the global economy. The forthcoming budget provides an opportunity to advance the innovation agenda and in a way that will quickly boost the economy.

David Crane is a writer and adviser on innovation strategy. He can be reached at crane@interlog.com.