Innovation Paper sets the stage for wide consultation leading to new strategy

RE$EARCH MONEY Exclusive

Increased productivity and skills development are being offered up as the two central objectives in the quest to move Canada into the top ranks of the world’s most innovation nations. The declaration is contained in the federal government’s long-awaited Innovation Paper, which is being selectively circulated for comment in draft form. RE$EARCH MONEY has obtained a copy of the draft document and it spells out in considerable detail how Ottawa plans to develop an innovation strategy. While consultation with the provinces, industry, universities and other key players is repeatedly highlighted, the quasi-prescriptive paper clearly defines the federal role in stimulating innovation as strategic and indirect.

The paper acknowledges the leadership role of the business sector in improving national innovation performance, with post-secondary institutions providing much of the research and development and highly qualified personnel (HQP). For its part, government’s role is supportive, providing an environment conducive to innovation while making key strategic investments and training HQP.

It also confirms the permanent split between the Innovation Paper and its counterpart for skills and learning — the latter championed by Human Resources and Development Canada. The Innovation Paper was originally intended to include both economic and skills innovation, but difficulties in generating a document that encompassed both elements resulted in the current two-track process. A draft of the HRDC paper was covered in a previous issue of RE-$EARCH MONEY (R$, September 24/01).

In the Innovation Paper, the aggressive focus on the so-called innovation gaps frames the document’s modus operandi. As observers of Canadian S&T know all too well, Canada dwells near the bottom of the G-7 in terms of R&D performance, which the Paper attributes to “performance gaps in the creation, adoption and commercialization of knowledge, the supply of highly qualified personnel (HQP) and the innovation environment”.

The Paper argues that filling the knowledge gap is essential for firms seeking to become more innovative. To encourage the commercialization of knowledge, the government is proposing to increase funding for existing programs, targeting specific technologies such as information and communication technology, biotechnology, advanced materials and others. Commercialization would be encouraged through increased investment in the Industrial Research Assistance Program and an increase in venture capital through the Business Development Bank of Canada.

The second avenue of attack on the knowledge gap would be achieved by “vastly increasing public and private investment in knowledge infrastructure to improve Canada’s R&D performance”. Supporting targets underpinning the strategy are:

• Rank among the top five countries in terms of R&D performance by 2010;
• Double federal investments in R&D by 2010;
• Triple the proportion of Canadian-based company sales attributable to new innovations by 2010;
• Raise venture capital investments per capita on par with the US by 2010; and,
• Have high-speed broadband access widely available to Canadian communities by 2004.

The latter objective has been the focus of considerable discussion among the S&T community — debate exacerbated by the current economic slowdown and the imposing cost ($1-1.5 billion) of extending broadband to rural and remote communities. Industry minister Brian Tobin has made the broadband issue a major focus of his fall campaign to convince colleagues that the Innovation Agenda must continue to be a priority of government.

Good news for the research community is contained in the Innovation Paper’s inclusion of CA*net 4 as a major priority. Backed by CANARIE Inc, CA*net 4 has been in front of government for more than two years but has yet to receive a commitment of funding. In response to the delay, CANARIE has issued a request for information to solicit interest from private sector companies which may be interested in forming a consortium to bid on the project, estimated to cost approximately $150 million (R$, August 1/01).

SKILLS DEVELOPMENT BACKED

In the area of skills, the Innovation Paper urges prompt action to ensure that Canadian industry has an adequate supply of HQP, although it falls short of endorsing a strategic approach to stimulate specific sectors.

But it does include a host of proposed measures in the areas of immigration and the production of new graduates, and addresses the issue of indirect costs as a way to assist post-secondary institutions in the increasingly complex and expensive aspects of conducting research.

Of all the S&T-related initiatives pitched to government in the past 18 months, few have gained more momentum than the issue of the indirect costs of university research, prompting speculation that the issue could be addressed in next month’s Budget.

Although new to federally sponsored university research, indirect costs would almost certainly be funded through existing mechanisms such as the granting councils, thereby avoiding the introduction of new programs as agreed to by federal and provincial S&T ministers (R$, October 10/01).

(Recent media reports contend that the Budget will indeed address indirect costs, with an infusion of hundreds of millions of dollars, as well as increasing the funding of the Canadian Institutes of Health Research. Those reports also allege that the broadband initiative will have to wait for future funding opportunities.)

An increase in funding for industrial cluster activity would also build on an existing initiative, namely the National Research Council’s Atlantic Innovation Strategy. New areas to be targeted would be existing concentrations in the areas of photonics, nanotechnology, network security, high-speed computing and others.

The Paper states that the goal of its cluster strategy is to establish 10 internationally recognized technology clusters by 2010, adding that the process is complex and time-consuming. Given that sources of competitive advantage tend to be localized, it calls upon players in the innovation system to coordinate efforts.

The role of the federal government in fostering innovation is spread throughout the document, but two specific new initiatives are proposed. The first is aimed at increasing federal science capacity via a new program tentatively called Federal Innovation Networks of Excellence (FINE). The program would see federal departments partner with other innovation players and compete for funds assigned to specific areas of research (see page 8).

The second initiative is the creation of a national academies of science, which has been forcefully backed by Dr Gilbert Normand, secretary of state for Science, Research and Development. Tentatively entitled the Canadian Academies, the new body would be arm’s length from — but funded by — government and provide advice for new areas of investment, regulatory regimes and the formation of new science-based frameworks (R$, July 16/01).

The Innovation Paper also highlights the recently released framework for incorporating S&T decision-making into government policy and regulations (R$, June 9/00). As proposed by the Council of Science and Technology Advisors, the framework contains several principles: early issue identification, inclusiveness, sound science, transparency and openness and review. A sixth principle — uncertainty and risk — is not mentioned.

Other sections of the Innovation Paper address issues such as the need to brand Canada as a location for investment and the importance of keeping Canada’s business taxation regime internationally competitive.

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