Thank you, Mr. Chair. I'm joined today by my colleague, Patricia Hawkins, our business manager with respect to innovation services at the Xerox Research Centre of Canada, XRCC. It's a great pleasure to be here today on this important study.
Maybe we could begin by saying that we're representing Xerox Corporation, Xerox Canada. Xerox is a multinational that operates in over 160 countries around the world and employs 140,000 individuals, including 4,000 here in Canada. We offer services and product in every region of Canada, and we have assigned a compelling research mandate to Canada.
Innovation is a critical success factor for Canada's economic resilience and long-term sustainable development. Strategic investments in applied research and commercialization are critical success factors for innovation. Innovation is the difference between good ideas and great market-facing outcomes.
Nearly four decades ago, Xerox Corporation promised to make strategic investments in Canada's knowledge infrastructure by establishing a leading research centre right here in Canada. Today Xerox Corporation is the only multinational business process and document management company in the world conducting value-added advanced materials research in Canada.
As a leading information technology company, and one of the top 100 R and D spenders in Canada, Xerox continues to attract talent to Canada from around the world. Given Canada's inviting socio-economic framework, highly reputable post-secondary institutions with internationally recognized competencies in materials science, physics, chemistry, engineering, and related research, Xerox sees Canada as a natural platform for innovation.
Although there are many aspects of our established industry-leading technologies that many of you may be familiar with, there are a whole host of Xerox innovations you are most likely not familiar with.
A little-known example of this is our work in spectrum photonics, which ultimately led to the development of an argon-based laser imaging technique that transformed human identification technology and enabled advanced fingerprinting now used by law enforcement agencies worldwide. The Xerox Research Centre of Canada is also responsible for inventing emulsion aggregation marking technology, which is the world's first nanotechnology-enabled product for the printing industry.
Another promising technology invented at the XRCC, in conjunction with our research center in Palo Alto, California, is printed electronics. Printed electronics allows microelectronic circuitry to be printed on a whole range of materials using, among other things, nanosilver jetting technology. The applications have relevance for logistics, inventory management, interactive packaging, smart packaging, and developments that have high economic and environmental impact. Among other things, this enables us to convert ordinary pieces of fabric or paper into documents capable of computing intelligence. This is yet another breakthrough attributable to the R and D conducted at the Xerox Research Centre of Canada. This technology is the basis of an innovative, and potentially transformational, collaborative research interaction between Xerox and Canada's National Research Council.
In order to enhance Canada's continued economic resilience in the 21st century and beyond, results-based private sector investment in value-added R and D and commercialization of research is mission critical. As an enabler, information communications technologies have productivity-enhancing impact across all industries. Most important, although the ICT industry represents less than 5% of Canada's GDP, ICT companies like Xerox drive nearly 35% of all private sector R and D spending on an annual basis. The ICT research community is therefore uniquely positioned to leverage and extend the impact of established, value-added R and D investment, infrastructure, and talent in the interest of developing a robust innovation ecosystem in Canada.
A challenge to the innovation ecosystem is the relationship between business and post-secondary institutions. Where an institution has been engaged in a research project generating intellectual property that may, in future, be useful in a product, there is an expectation that the institution should share in the reward when the ultimate product goes to market. While educational institutions do generate significant and valuable ideas, in most cases commercialization of ideas involves several billion dollars of infrastructure, substantial additional R and D, product integration, market development, and even market creation. Nearly all of these risks represent exposure undertaken almost exclusively by private sector enterprise.
Universities may therefore need to adjust expectations to reflect the real value of the role in the value chain; otherwise, businesses that can undertake their own R and D will continue to limit their post-secondary research collaborations to basic research unless win-win intellectual property policies are in place. Effective risk sharing is the key. In any case, tax policy instruments such as the scientific research and experimental development credit have buttressed the business case for R and D related foreign direct investment in Canada, thereby stimulating original and incremental R&D.
Equally important is the significance of the deduction and credit to reduce the general cost of business. That includes mobilizing the results of the research and business activities that benefit from them. The recently announced reduction of the SR and ED tax credit significantly weakens the business case for foreign direct R and D investment in Canada. Having said that, Xerox continues to leverage the Canadian advantage through the global materials Rand D mandate assigned to the Xerox Research Centre of Canada, which generates well over 160 patentable ideas every year—that's three inventions per week—and funds collaborative research at 14 research intensive universities across Canada. We also hire 40 university co-op students from across Canada to work and learn alongside some of the world's most talented researchers at the Xerox Research Centre of Canada.
At the end of the day, what matters most are the measurable, differentiating outcomes associated with these efforts. It's worth noting that every digital output product we offer worldwide through sprawling market channels contains technology that was invented and/or developed right here in Canada at the Xerox Research Centre of Canada. We are the only multinational company in the world in our competitive community of practice that features a Canadian innovation platform of this nature so prominently within our global value chain. This has helped establish Xerox Canada as the single highest performing operating company in the world for Xerox Corporation, which, as I mentioned earlier, operates in 160 countries around the world.
Clearly, Canada creates value through innovation, but together we can do much more.
Thank you, Mr. Chair, and members of the committee.