Canada’s lopsided innovation policy needs greater focus on industry uptake of technology: Study

Canada’s innovation policy “needs to significantly change course” if it hopes to boost R&D investment and productivity, as well as convince Canadians that innovation can address societal needs. That’s the conclusion of a new study by the Montreal-based Institute for Research on Public Policy, titled A Costly Gap: The Neglect of the Demand Side in Canadian Innovation Policy.

Authored by European innovation policy expert Jakob Edler, the paper contends that current initiatives – including the federal Innovation and Skills Plan – focus too much on generating new technology and innovation through R&D tax credits, subsidies, and venture capital, rather than addressing the broader issue of low uptake and market demand for leading-edge technologies.

For innovation policy to succeed, it says government needs to intervene on the demand side to ensure the market is ready to absorb innovation. This requires policies that target not only those producing knowledge and innovation, but also potential end users, including public agencies that can drive technology demand through procurement.

“Canada’s innovation policy needs to address these demand-side problems, and more effort should be made to mitigate what businesses consider to be the biggest obstacles to innovation: uncertainty and risk,” says Edler, executive director of the Fraunhofer Institute for Systems and Innovation Research, Karlsruhe, Germany.

The European Union’s Innovation Partnership program, which links pre-commercial and strategic procurement, is held up as an example for Canada to consider. Promising models here in Canada include the Digital Technology Supercluster and the Ocean Supercluster, which the study says are driving demand by matching industry-specific needs – mostly those of large multinationals – with industry innovators.

“The superclusters’ plans to link suppliers to customers for co-generation and to build up markets, and the Economic Strategy Tables’ proposals for innovation-oriented regulation and strategic procurement to spawn new markets must be encouraged and rolled out properly, complemented by further means to support the demand for innovation,” the study states.

Edler concludes that linking societal purpose and economic benefit should be the guiding focus for a future-proof innovation policy in Canada.

R$