Thank you, Mr. Chairman. I appreciate the opportunity to be here.
I'm the CEO of the Alberta Research Council, as was mentioned, and also the chair of an organization just launched called Innoventures Canada, which is bringing together research and technology organizations that kind of live together in the middle space in Canada. As of this week, it looks like we have 20 or so of those organizations, representing probably 85% of the work that's done in Canada in this space, and we're very excited about the potential contributions we're going to make to the country.
I'd like to make three points today. The first one is that obviously productivity and competitiveness are important challenges. Second, there really is a disconnect between research investment and business outcomes. Third, research and technology organizations have proven the value of market-based models for helping Canadian companies create value and improve the value of research investments. We need your help to do more.
We all know that economic sustainability is linked to the ability of companies to deploy technology. Technology can certainly help mitigate environmental impacts, help companies grow, and generate exports and jobs--all the things that I think you, as parliamentarians, want to have happen.
You mentioned China. I just returned from China on the weekend. When you watch their pace of development, it certainly gives cause for concern and for thinking. It's easy, as you can see in China, to catch up by taking and using technology from other places in the world. It's harder to be in front of the innovation paradigm, where you actually have to be constantly creative and constantly innovative.
The challenge Canada has, of course, is that our balance of trade is heavily skewed toward the resource sector. Although we do have trade in other areas, if you look at the net balance of trade, the positive values come predominantly from energy and forestry. Our innovative products and services, in terms of manufactured goods, largely are in a negative or, at best, an even balance.
With all the challenges you've heard about manufacturing employment, the question is how we help companies that actually produce the goods and services become more successful. The public expects investments in R and D to be successful and to contribute to wealth. The government has made major efforts to increase investment, which is occurring. As I understand it, investment in academic research in Canada puts us at about number five in the world now, and that level of investment has been increasing steadily for several decades. But if you actually look at our economic performance and try to correlate the two, at the same time, we've fallen economically to number thirteen, and we've fallen in competitiveness to a rank of number sixteen in the most recent report.
The challenge we have is that the stock-in-trade of academic research is ideas and highly qualified people, both of which are very important. But unless they're actually taken up, used, and deployed commercially, they really are of little value other than for the researcher, if I can use that terminology. Successful innovation is all market-based. Wealth is created by companies, so R and D has to be linked to the needs of business. People who do not have market and managerial knowledge and know-how and an understanding of industry are often unable to help. This is where the Canadian innovation system is deficient.
If we look at the rest of the world, we find that every successful innovative economy has acknowledged that and has created special organizations to live in this mid-space, the space between the idea--the discovery part of the world--and the application or deployment part of the world. In Canada, we're sadly deficient in those areas. Our balance is inappropriate, and as we would describe it, we've created an innovation dumbbell, in a sense, with a high level of activity on the discovery end and a high level of activity on the using end, but not enough in between to connect them effectively.
Research and technology organizations do provide that. So we created I-CAN as a step toward a more effective Canadian system of innovation. Our challenge, of course, is that I-CAN members, by their nature--many of them are regional or provincial--are ineligible for many federal funding programs. Most of them have small, what would be called A-base or core funding. They're very market oriented, generating typically 70% to 90% of their total income from industrial contract work, so they are connected. The challenge is how to increase that.
The final thing that I-CAN has done is this: by bringing together the national capability into a single organization, we were able to identify projects and opportunities that none of us could take on independently. If there's time in the discussion period, I'd like to explore a little bit about how some of those kinds of projects can help things like greenhouse gases and that sort of thing.
So thank you, Mr. Chairman, for this opportunity.