Dr Thomas Brzustowski

Strategic leap-frogging

By Dr Thomas Brzustowski

I see a very close link between the federal government’s goal of moving to 5th place in R&D per capita and the forthcoming innovation agenda. To start with, the goal of moving from 15th place to 5th is very attractive. It’s a clear commitment to action. It’s measurable. And it is instantly understandable by the public. We all know that a team in 15th place is out of the playoffs, but a team in 5th is a contender. And the promise of greatly increased federal investments indicates how serious the government is about achieving the goal.

But R&D intensity is only an indicator. It is the fruits of the increased R&D effort that will affect Canadians. It is the prospect of these fruits that will attract public support.

THE FRUITS OF MORE R&D

In general terms, I would group the fruits of more R&D in three broad classes:

* more discoveries leading to a new understanding of people and of nature that may have important long-term impacts;

* more new uses of knowledge to solve today’s problems and improve the quality of human lives and of the natural environment;

* more successful Canadian innovations - more new traded goods and services offered by all sectors of Canadian industry that succeed in world markets.

All three kinds of results are important and needed, but only growth in innovation can produce a virtuous cycle in the economy. Only the increased production of successful new Canadian traded goods and services can lead to new value-added activity in our economy that will create wealth fast enough to make possible timely investments in more R&D and in more innovations, and to build up the prosperity to pay for the important things that Canadian society decides to do.

That means that to move Canada from 15th place to 5th with the greatest benefit, we need:

* a much increased capacity to do R&D in Canada - in industry, in government, in universities, in colleges;

* a much greater appetite for R&D and innovation on the part of managers and investors in the private sector;

* an innovation system that more effectively connects Canadian R&D to the production of successful new Canadian products for world markets;

* and to make all of the above possible, many more highly trained people with the appropriate skills and attitudes, both to do much more R&D and to produce many more Canadian innovations for world markets.

But given Canada’s economic history, we have to achieve all this without two important capabilities enjoyed by the countries with which we compete: 1). extensive and well developed corporate research, e.g.: in the US, 70% of researchers — some 750,000 — work in 15,000 corporate labs, and 2). not-for-profit institutions specifically charged with connecting research to the market, such as the Fraunhofer organization in Germany, Batelle in the US, ITRI in Taiwan. We have only NRC that is a significant player. It does excellent work, but in my opinion it is far too small for the size of our economy.

UNIVERSITY RESEARCH WILL BE KEY

The Canadian effort will depend very heavily on our universities, both for training the needed people, and for getting much of the research done — the R, not the D. That dependence is already established. In 1995 Canadian universities performed 4.9% of Canada’s industry-funded R&D — the largest percentage by far in the G-7 (Italy was second at 2.5%); in 1997 industry funded 11.8% of university R&D — also the largest percentage by far in the G-7. (Germany was second at 7.5%.)

University research in the natural sciences and engineering can lead to important innovations. Project research in partnership with industry leads to incremental innovations that reach the market relatively quickly and support existing industries. Basic research can produce radical innovations. It takes much more time, but it can lead to entirely new products that change the way we live and work and new companies to produce them. In both cases, capturing the benefit for Canada is still a big challenge. “Invented in Canada” must mean “Made in Canada” much more often than it has in the past, and this means that we must become better at the commercialization of the results of university research.

THE STRATEGY: LEAP-FROGGING

I think that one more matter needs to be considered, namely the strategy to be followed in making new investments. The easy thing to do might be to put a bit more money into everything we now do, to do a bit more, a bit better, a bit faster. I call that strategy “playing catch-up”, and I don’t like it very much, no matter whether public or private funds are being invested.

A better strategy, at least for research, would be to maintain a strong and diverse base of research and look for promising areas where Canadians have already achieved such excellence that additional focussed investments will allow us to leap into world leadership. I call that “strategic leap-frogging”.

Implementing a leap-frogging research strategy will not be easy, not because we will be unable to identify where to leap from and in what direction, but because strategic leap-frogging will require much more political will than playing catch-up on a wide front.

Nevertheless, I am convinced that it is the right thing to do.

Is “strategic leap-frogging” also a good national R&D strategy that includes more D as well as more R, and more innovation to derive benefits from R&D? I would have to be persuaded that it isn’t, even as I recognize the difficulties. But rather than list the obvious detailed obstacles, I want to point out the main challenge that must be our spur to action.

The world is not standing still. Countries in the first fourteen places are working to stretch their lead over us, and those in 16th and lower to overtake us. Many in both groups will succeed, and our standard of living will decline, unless Canada acts promptly, strategically, and adequately. I believe that the government’s target of 5th place together with the innovation strategy can be the catalysts for that action.

Dr Thomas Brzustowski is president of the Natural Sciences and Engineering Research Council.