Madame la présidente,
The successes of science that have ended up having transformative impacts on our society arose thanks to funding of curiosity-driven research, which also trains the needed talent, followed by mission-oriented R and D.
As an example, in my own career, I've worked on deep learning that has fuelled the current AI revolution. These advances were made possible by really broad investments in curiosity-driven research on neural networks, much before the applications became a possibility. Then that was followed by major industrial investments in R and D.
In many cases, government funding has been crucial in our society to kick-start major innovation-driven sectors of the economy. A really well-known historical example is that of the DARPA funding that created the Silicon Valley ecosystem.
However, the profit motive of industry is not always sufficient to get this transfer to happen, because it's not always well aligned with the needs of society. This process whereby we rely on industry to create the innovations that follow the basic research doesn't always work, particularly in areas such as health, environment, education or social justice, which are typically the domain of the government.
I'm going to tell you about one really striking example that I know all about, and that is antimicrobial resistance, which means bugs that are mutating to become resistant to our drugs. For example, we're now facing bacteria that we don't have any drugs to defend ourselves against, and it's going to get worse. It's already costing Canada billions per year and it's going to increase tenfold over the next two decades. Right now, there are already 1.2 million deaths per year globally. That's projected to grow to 10 million deaths per year. That's comparable to COVID-19 or more, and the costs globally are going to grow to $100 trillion U.S.—that's a projection, of course—if we don't do anything.
You would think that the pharma industry would develop the required drugs to protect us, but it's not happening because of a complicated market failure that makes it not profitable for industry to do the required R and D to protect us. Similarly, there are other related market failures that happen in other areas where we need R and D—for example, to fight climate change. Generally, there's a lack of innovation culture and innovation investments regarding government-funded services.
Of course, government is already investing a lot in R and D funding for industry as well as academics, but usually it's based on the formula of matching funds with contributions from industry. That's advantageous, because it makes it easier to choose what projects to fund. Presumably, if some company thinks it's worth putting in money, then it's probably not a bad idea. Unfortunately, that process discards missions such as the ones I mentioned, for which there's a really important social value but not a sufficient profit incentive.
For academics, there has been movement on the side of NSERC Alliance funding, which helps to fund academic research when there is a non-profit involved, but this kind of funding is not really focused on the sort of strategic missions that I think governments should be thinking about. On the other hand, for government funding of industry R and D, like the superclusters or R and D tax credits, there's really nothing to try to focus the investment on for these kinds of social missions, because they also rest on this cost-sharing method.
It's really crucial for governments to provide the necessary incentives. It could be financial, regulatory or both. What I mean by “regulatory”, for example, is that increasing carbon pricing is going to create innovation to fight climate change, so we can develop a new sector of the economy, springing from an ecosystem of innovators, to solve these socially important problems. We need to do that in a way that combines both our strengths in academia and the more mission-oriented culture of the private sector.
I can understand that it may be difficult for government to decide on which projects to consider—