Industry Committee on May 14th, 2015

[Martin Lavoie]

It is a business decision. You can do a cost-benefit analysis. However, taking out a patent costs money and takes more than just a couple of days. It generally takes longer in Canada than in other countries, and it is typically very expensive. We do not necessarily need more patents, but we can perhaps commercialize more patents in Canada.

The last time I consulted the Canadian patent database, if I am not mistaken, I saw that more than 350 university patents had been issued in the past two years. I found one that had been commercialized: a curling broom that had been commercialized for the Canadian team at the Olympics in Vancouver. I think that came from the University of Western Ontario.

[Annick Papillon, NDP, Québec, QC]

I would like to talk some more about this very important article.

Representatives of the University of Toronto say that U of T is in a class with the likes of MIT and Stanford University when it comes to research and development. However, Stanford University has generated $1.3 billion U.S. in royalties on its intellectual property. The Massachusetts Institute of Technology issued 288 U.S. patents last year alone. The University of Toronto generates less than $3 million Canadian in annual income and averages eight patents a year. That is not much compared to the American universities.

What can we do so that our universities are more competitive with American universities?

What do you think, Ms. Cukier? You talked quite a bit about how universities lag behind.

[The Chair, Conservative, David Sweet]

Be very brief, please.

[Prof. Wendy Cukier]

It's complicated.

[The Chair, Conservative, David Sweet]

All right.

I will move on to Mr. Miller.

The last three speakers have five minutes each.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you very much, Mr. Chairman.

To all the witnesses, thank you very much. I'm filling in at the industry committee today and I think this is a fascinating topic.

I believe, Mr. McKay, it was you who talked about drones, or maybe it was Mr. Lavoie. It came up earlier.

I'm going to come at it from the agriculture side. It was not very many years ago that the GPS came out. Now, basically, once a farmer has programmed a certain field in there, he starts in at the end and everything after that.... I do want to say that actually farmers picked up on that technology a lot more quickly than I might have thought.

As far as the drone side of it is concerned, where is this going to go? We know a good use of drones is that farmers can use them, for example, to map out fields. They can use them to look for the emergence of new seed, weed control, and everything. Can you comment on what future uses they may have?

[Colin McKay]

Martin brought up drones, but I'll make a comment and then turn to him. My comment is that I'm really glad you brought up the agriculture industry, because for Canadians it's difficult to translate the impact of digital media and digital technology to what we consider an economy dominated by natural resources, and agriculture really has seized on the importance of GPS and the importance of cheap sensors that allow you to understand the soil on your farm to a degree where you can moderate acre by acre your fertilizer input and your other inputs.

It's that sort of data-driven decision-making that we bemoan in the manufacturing industry and other SMEs. I would be scared to step into the cab of a modern tractor, because I suspect it's much more complicated than my office, and I work at Google.

Drones are one of these technologies where they're in their infancy, and as I suggested, we see them with a bit of trepidation and fear, as well as ambition. They have very practical applications in terms of delivery to remote areas, efficient delivery of small products, and then, as you point out, they have the sort of surveillance and oversight uses that allow you to keep control of a very large, expansive property as a landowner.

I'll make one more comment and I'll turn it over to Martin. The advantage of drones may not be in the tool itself, but the fact that the manufacturing techniques and the understanding of technology around them are impelling a lot of individuals to explore them as a technology and as an the expression of their interest in manufacturing and technology.

[Martin Lavoie]

I would even extend in agriculture what we've seen a lot recently from the United States and from Japan, what we call the agri-robot. They're not necessarily drones, but agri-robots. I've seen all kinds of applications right now. From Japan there are robots picking fruit. Any activity that is labour intensive will essentially be disrupted by a robot at some point, because labour is the most expensive part of most businesses here if you're labour intensive. Picking fruit is one of them.

In the past we could never change the feel of a human being. Is that strawberry ready? Is it red enough? Yes, I'll pick it. The vision systems and the touch systems of the robots were not advanced enough, but now they're getting there. A robot can make a decision now as to whether it is ready.

You have to extend that to more than drones. Drones are great for mapping. They're great for surveillance, but I think you're going to get more and more of these robotic solutions in agriculture. Is it a good thing or a bad thing? It's a good thing if you're the owner of the farm, but maybe a bad thing if you're a Mexican worker coming here during the summer to pick fruit.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Mr. Chairman, I want to stay on the theme of drones. We talked about some of the good things that can come out of it, but usually in anything there are some bad things. We have an article that I read or saw on social media not very long ago about a drone that was flying around high-rises and basically the article was saying it was like a peeping Tom that was out there.

How does industry, and how does government, deal with that? Is there any way we can prepare for that kind of thing or do you deal with it as the situation arises?

[Prof. Wendy Cukier]

I think it's like anything. Fertilizer can be used for good and it can be used to make bombs.

Going back to one of my earlier points, I think with all of these technologies it's going to be critically important to think about the impacts, both positive and negative, the policy implications, and some of the issues that you raised.

I thought you were going to raise the security issue, because that's a whole other set, given the potential military application of drones. I think it's a very good point for a group of parliamentarians to be thinking about exactly what you raised.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Miller.

Now, Mr. Masse, you have five minutes.

[Brian Masse, NDP, Windsor West, ON]

I want to take up on that with regard to drones. Sorry, I've been in and out of the room. I've been dealing with a couple of things, domestic things, so I apologize for missing some of your testimony. I don't like to do that, but I have.

I'd like to go into the agricultural sector with the robots. I was really curious about what you were saying. How sophisticated can they get and then how quickly can they get into the market and still be useful? What would their life cycle be like in terms of before they get supplanted or would that happen?

[Martin Lavoie]

Right now, what you see are start-ups in the U.S. that are building those robotic applications for agriculture. They're not publicly traded companies yet, and it will be expensive for a while so that very few people will actually be able to afford one of those robots.

It's a bit like drones today. You will probably see a lot of companies that will start buying them and licensing them at some point as they do with drones right now, offering a service, because not everybody can actually afford a drone. It's still going to take a while, but now today's technology is so rapid it can advance.... Who knows? It could be there in maybe 10 to 20 years.

[Brian Masse, NDP, Windsor West, ON]

Okay.

I'll put this across the board here. With regard to moving products to market, if we get into more assertive attempts to do that, could we be picking winners or losers, or could we be undermining current investors who maybe have already done their own research and development and have a product out there right now? If the government comes in with tax incentives, or cash, or helping universities get it to market, what do we do about those scenarios? Are they likely? Once they have their moment in the sun, do we still continue to do the same for others who might supplant them?

[Prof. Wendy Cukier]

I think you raise a good point. It's very hard to pick winners. I think that's why partnerships across sectors are absolutely critical. We've not seen a hugely successful track record when any particular sector, particularly government, with due respect, says we're going to invest in those people but not others. I think we need coherence in our policies and our strategies, particularly with a non-partisan lens around job creation and those opportunities to attract investors in job creation to Canada.

[Colin McKay]

The model that certainly is prevalent in our industry is encouraging as many companies as you can, particularly through partnerships, whether it be through incubators or accelerators, and helping companies work through the skills they need to progress beyond their engineering innovation, their business skills or their marketing skills. It's really to create a dynamic community of businesses, recognizing that there will be successes but there will be many more failures.

The real lesson learned from that process is that a failure is not a hard stop. The entire process builds a community of support for the entrepreneur and their employees that they can then use to take the lessons learned and build upon them. That's how you grow a community of interest into an industry. Jobs then follow that as well.

[Martin Lavoie]

I can make one suggestion.

One thing I've noticed is that large multinational corporations that have venture capital arms tend not to be present in Canada. That's something we should maybe target. Think of the Xeroxes, the GMs, the GEs—they have huge venture capital arms with offices across the world. It seems like Canada falls under the U.S. thing, and not a lot of entrepreneurs can actually access it. I think it would be interesting to have those companies establish offices here. These large multinationals would be good to commercialize those products. They already have a portfolio and a sales force across the world.

[Brian Masse, NDP, Windsor West, ON]

You bring up a good point in that the challenge we have is that we don't have the decision-makers often at the table in Canada here.

[Prof. Wendy Cukier]

Exactly.

[Brian Masse, NDP, Windsor West, ON]

We're really going to have to work on that, because their interests may lie elsewhere. In fact, we could have innovation done here that then is exported somewhere else to be produced. I'd rather be a manufacturer still than a passive vessel.

That's all I have.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Masse.

Mr. Lake.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you, Mr. Chair.

Thank you once again.

Colin, perhaps I can come back to you. There's a lot of talk of big data these days. As you know, I have a 19-year-old son with autism. Google has a partnership going on right now with Steven Scherer, one of the top autism researchers in the world, working out of SickKids in Toronto. He’s just fantastic and is working with Autism Speaks out of the U.S. on a $50-million project called MSSNG. Basically it's looking at the genome of thousands of families living with autism.

I won't get you to talk specifically about that project, because that would be pretty specific, but maybe you could talk about big data: what it means and what the possibilities are for us in that area.

[Colin McKay]

I think the undercurrent to the comments you've heard today rely not just on a conversation about big data but also the idea of scalability. Put simply, big data is this transformation we've had from having to buy a very expensive personal computer with very little capacity in the 1980s to being able to buy as much capacity as we need with the click of a button and the use of a credit card online.

It means that people who have an insight, like Steven in Toronto, and need the resources in order to conduct large-scale research on very large problems don't have to go out and buy computers. They don't have to go out and build data centres. They can scale up their experiment as they need, using these resources. In this case, we donated that computing power to the autism society.

In terms of disruptive technology, which we've been talking about, this is the barrier to entry that has disappeared. Whether you're a young individual or you're someone in your twenties just coming out of university or you're in fact mid-career, you now have access to not just the computing power but also the manufacturing technology, 3-D printers and so on, to start a business and to iterate it very quickly, because you're not investing in the heavy equipment and you're not investing in the technology that ties you to an existing business plan.

That's the secret to big data. You now have easy and cheap access to the tools. You have easy and cheap access to the insight. You also have the ability to change your business and change your products when it becomes evident to you that something needs to happen.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Actually, I was going to come to you anyway, Wendy, because I see a parallel between what Colin's talking about and what I saw at the digital media zone at Ryerson, where you have all of these incredible people working on app development, or whatever it might be that they're working on. But again, the world is wide open to them to use what other people have developed to turn out fantastic groundbreaking new products, innovations that all of us are going to benefit from. It seems there's a real opportunity there for them that didn't exist before.

[Prof. Wendy Cukier]

We're partners with OMERS, the pension fund, and the Ontario Centres of Excellence in a big data incubator called OneEleven that's focused on financial services, because there's a plethora of products.

The thing about big data is that it also raises lots of privacy and security issues. Coming back to technology adoption, we're working with Thomson Reuters, a big data analytics firm with 90 data scientists, holograms, wonderful displays of consumer behaviour, and the managers are making the decisions they've always made. Again, big data is a perfect example of an incredibly powerful technology that we're not using effectively. We have to crack that nut before we're going to achieve the benefits, whether it's in health care or commerce.