Good morning, Chair, members of the committee, and thank you for the opportunity to represent Sustainable Development Technology Canada, or SDTC, an independent, arm's-length foundation founded and funded by the Government of Canada to help commercialize innovative clean technologies through financial and non-financial support. Our mission is to act as the primary catalyst in building a sustainable development technology or clean tech infrastructure in Canada, with a funding allocation from the government to date of just over a billion dollars, which we operate through two funds. They are complementary, operate close to the market, and address gaps in the innovation chain, most notably the pre-commercial funding gap otherwise known as the valley of death, which I understand the committee discussed at some length last week.
When we talk about clean technology, we mean innovative products or services that simultaneously reduce financial and environmental costs while driving better performance. They have a beneficial impact on the economy, on the environment, and society as a whole. They translate into economic opportunities, both rural and urban. They drive exports, job creation, health, and quality of life for all Canadians.
The clean tech industry is global. It's an export-driven industry. In fact, if you looked at clean tech SMEs, you would find that they are nine times more likely to export than SMEs, generally speaking. It is a large market that's growing quickly, from $100 billion in 2006 to $1 trillion in 2010, and it's expected to triple to $3 trillion by 2020. The Canadian share of that market, currently at about $9 billion, is expected to increase more than sixfold to $60 billion by 2020, at which point our market share would have increased from just under 1% to 2% and direct Canadian employment would go from 44,000 jobs to 126,000 by 2020. In 2020, the clean technology sector would be the third largest global industrial sector. It's a large market, growing fast, and a very lucrative opportunity for Canada.
As the market has grown over this period of time, the amount of intellectual property that's been developed has similarly been increasing, which is reflected in the chart on slide 5. You can see the number of patents that have been filed in key clean technology sectors, which from 2001 to 2009 have tripled. That's a 14% compound average growth rate during that period, which is double the growth rate of patents, generally speaking, throughout the world during the same period of time.
Intellectual property and clean tech are very important issues, and as a result we're very encouraged to see the Canadian Intellectual Property Office introducing a program to foster investment and expedite commercialization in clean tech, joining countries such as Australia, the U.K., the U.S., and other countries with similar programs. As export-based companies, Canadian clean tech companies generally patent their technologies abroad first, usually in the U.S., sometimes Europe, and then in Canada. The patent prosecution highway, which was introduced in Canada, has been very helpful in terms of expediting applications that have begun elsewhere, in other countries. Similarly, the Patent Cooperation Treaty, or PCT, of which Canada is a signatory, has also been very helpful for clean tech companies in terms of filing international patents.
Lastly on this topic, all SDTC companies must have their IP secured before we fund them. It's a very important issue for us in our due diligence, and it's also something we help them with through our funding of their projects.
In preparation for the committee, we went to a number of our portfolio companies, which now number over 220. I asked their views on this topic, which we wanted to reflect to the committee. I wanted to highlight six points. The first is that clean tech companies are indeed taking advantage of the patent prosecution highway. Second, the new CIPO clean tech program has limited awareness, but it is growing in the clean tech community. Third, the strong IP protection that is in place here in Canada has helped companies compete abroad. Fourth, most companies register their patents in the U.S. first and Canada second. Fifth, universities have inconsistent IP licensing rules, which are quite difficult to navigate, and that has inhibited the commercialization of clean technologies out of those environments. Lastly, the cost to patent and defend the IP, regardless of its origin, is high and the timelines are lengthy.
That brings us to our recommendations, sourced from the SMEs we have funded—over 90% of the companies we funded are SMEs. The first recommendation is to make it easier and cheaper for these SMEs to enforce their patents and to efficiently deal with infringement issues.
A couple of mechanisms that could be helpful are non-judicial administrative procedures, rather than having to go to litigation. Secondly, if litigation is necessary, have litigation caps to reduce the cost. This could include expanded financial support and advice for SMEs as they obtain their patents in a provincial program. One model to consider is the Alberta vouchers program. Thirdly, increase awareness of the CIPO clean tech program. Four, work to simplify university and government lab IP rules. And lastly, reduce delays in the prosecution and granting the patents, and if there are delays, implement a version of the USPTO's patent term adjustment calculation.
Thank you very much for the opportunity. I look forward to your questions.