It's a pleasure to be here with my colleague, Ken Doyle, from Polytechnics Canada. There are so many things to say, so I will keep my opening statement brief and to three key points.
We hope to bring a wider perspective on the innovation conundrum in Canada to your deliberations on intellectual property, a perspective that I have gained from serving on the Jenkins panel study of business innovation and from observing the unsung work of Canada's leading colleges and polytechnics when it comes to commercialization of research and industry innovation.
First, I wish to draw a clear line in the sand. Ownership and management of IP is not a problem when it comes to college-industry partnerships in commercialization. The obstacles created by IP ownership are typically found within the domain of the universities in Canada, not colleges. Colleges don't want to hold or own IP. It is expensive to acquire and expensive to manage. We are motivated by getting our students involved in the R and D projects, helping them to acquire innovation skills, and assisting small and mid-sized firms get innovations to market where they can exploit them commercially.
Our IP policies are simple. If a company comes in with IP, it leaves with it. If new IP is developed over the course of the project, the company gets exclusive rights to it. In any case, our policy is clear and stated in the agreement both parties sign before the project even begins. This is markedly different from university dealings, where disagreements and negotiations over IP can last for years, even after the project is completed. I hope that in your final report on the IP regime in Canada, you take note of this important distinction.
As the Jenkins panel reviewed the causes of weak business innovation in Canada, IP ownership was not the principal culprit. Rather, it was the exploitation of IP, the transfer of ideas to market that stood out as a principal challenge, among others. Report after report has noted that Canada has a high science culture and that we punch well above our weight when it comes to discovery research. The recent CCA report on the state of science and technology is another such report.
I do not have to name the problem further, but let me pause to suggest that one impediment faced by business is the lack of a coherent, collaborative, and responsive innovation ecosystem.
This is why I want to point out the slide from the Jenkins report, which is on the innovation ecosystem, an ideal picture in Canada. In this ideal slide, each actor has its own strengths and value-add: universities generating discovery research; industry generating demand for innovation; and intermediaries such as colleges, polytechnics, CEGEPs, or public and private laboratories solving the problem for the others.
Equally, within industry, there are widely divergent motivations between size and sector of firms. Understanding this motivation to innovate is what is needed, and we've done a poor job of this in Canada for two decades now. Once and for all we should acknowledge that universities are motivated by publishing and patenting, but that colleges are motivated by teaching and allowing students to make and break prototypes, and that Canadian companies are motivated by commercializing innovations and making money.
When we understand these divergent motivations, we will actually begin to recognize the differences, and more importantly, the differentiation within the academic system, or the industrial system, and even within governments.
A true ecosystem is made up of more than one kind of actor. In Canada, we have muddled all this up, ascribing similar motivations to widely different players. For some reason, for 20 years now, we've bet billions annually that game-changing innovations discovered in university labs can simply be pushed out on to industry for commercial exploitation. As other witnesses have told you, the returns on this investment simply aren't there and likely never will be.
In reality, industry and its customers identify problems, as you can see in the slide. They generate demand for R and D. We need more support for market pull. Government's role in business innovation is to facilitate partnership between industry and all R and D service providers, universities as well as colleges. Colleges and polytechnics engage students in industry innovation, enabling Canadian SMEs to speed their ideas to market.
Without consolidating industry-facing research support programs, continued calls to increase the size of the research pie are not likely to yield noticeable results.
Thus far, I have outlined the miscasting in the Canadian innovation ecosystem. My colleague, Ken Doyle, will now zoom in on two modest proposals we have for fixing the imbalance between discovery research and commercialization support. Through reallocating funds to industrial applied research that responds to market demand, the federal government can help more companies overcome the death valley of commercialization and become competitive. There are two fixes.