Why government needs a balanced approach in supporting the entire innovation pipeline

Mark Henderson
April 20, 2022

One of the recent federal Budget’s most astute observations is its acknowledgement of the fine line between innovation support and business development.  This definitional nuance is key to the fiscal blueprint’s heavy emphasis on innovation as opposed to scientific discovery, as reflected in the cool reception it received within the post-secondary community.

Ideally, the Budget would have contained significant new funding for both innovation and research but the immense pressures on the government from pandemic response and climate change to housing and childcare likely made such a proposition fiscally untenable.

The argument for the Budget’s business-friendly, supply-side investments is that competitor nations are already spending on initiatives to help their companies grow and become more globally competitive.  Low levels of investment in R&D, innovation and labour productivity measures by Canadian business has long been of concern to policymakers, placing Canada in a position of playing catch-up in a rapidly-evolving and highly competitive global marketplace.

Related article: Innovation expenditures dominate federal Budget with observers hoping discovery science will be addressed in future years

The Canada Growth Fund and the new Canadian Innovation and Investment Agency are the most high-profile of the dozens of Budget measures that aim to achieve a net-zero economy by 2050 and as the budget notes, “make it easier for Canadian businesses to innovate and become global leaders in the industries that will grow our economy and create new jobs.” Initiatives to protect Canadian-generated intellectual property (including consideration of a patent box) assist researchers in taking their inventions to market, and new support for clusters all serve to bolster the innovation-centric Budget.

R&D and scientific discovery are obviously crucial elements of any viable environmentally sustainable growth strategy. Budget documents contend that Canada already has “high levels of fundamental research occurring in world-class universities and colleges; and a talented workforce that is among the most highly educated in the world … With the right investments (Canada) has the potential to become a world leader in technology and innovation”.

Yet many observers – particularly within academia – don’t buy the Budget’s either-or approach to research and innovation. They contend that there’s an urgent need now for more research to enter new markets, increase existing ones and combat climate change.

This is where the importance of the Liberal-NDP alliance becomes apparent. If the pact between the two parties holds until the next scheduled election in 2025, there are three more Budgets in which increased research funding can be provided.

Increased pressure must be applied to the governing Liberal party and its junior partner to ensure that the research pipeline – whether it comes from universities, colleges, not-for-profit institutes or business – is replenished and in a more coherent, strategic manner than has been displayed to date. Let the lobbying begin.

Mark Henderson is a senior correspondent with Research Money.

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