Canada has long struggled with commercializing technology. Too often, the products of science and research done within our borders ends up being sold or commercialized elsewhere. In a Research Money article this month, Yvan Couture at Primal AI went as far to say that Canada has had the mindset of a “branch plant economy,” where Canada gets local jobs but none of the benefits of intellectual property based in the country. A notorious and often-cited example is the sale of Element AI to ServiceNow, an American company, after it received millions in public and private investment in Canada.
Now there seems to be a stronger push to address the problem—and perhaps the winds are shifting. BDC Capital, the investment arm of the Business Development Bank of Canada, recently launched a new $200-million deep tech venture fund to invest in underfunded areas to enable companies to commercialize and scale. The Government of Canada is putting $80 million into cybersecurity centres of expertise, including centres that focus on commercialization. The 2021 federal budget, meanwhile, is putting $185 million towards the commercialization of AI and another $90 million to create ElevateIP, a program to provide start-ups with expert IP services, as our correspondent Jessica Galang reported.
This week, our senior correspondent Mark Lowey reported on the funding going towards intellectual property initiatives in Budget 2021, the largest federal investments in IP to date. While the business leaders and IP experts he interviewed said Canada hasn’t done enough to integrate IP generation into the R&D process, they agreed that these investments are a major step towards boosting Canada’s global competitiveness.
There are also bright spots in private funding. Venture capitalist John Ruffolo has launched a new $500-million fund targeting later-stage, fast-growing Canadian companies, where he sees gaps in funding. Canada has recently seen rapid growth of number of its tech companies based in the country—such as Shopify and Wealthsimple—and many more IPOs on their way, as the incoming CEO of Communitech Chris Albinson noted recently in the Globe and Mail.
Canada still scores poorly compared with other OECD countries on patent registrations, commercialization of IP, and medium-term growth of emerging companies, and all of these efforts will be tested by economic realities. At Research Money, we’ll be closely following this push to see where it leads.