Thank you, Mr. Chair.
Scientific progress is one of the key economic determinants of our future. Simply put, the ability of states to turn their intellectual capital into economic growth is now a key determinant of their technological, industrial and economic success.
Policy-makers need to acknowledge that scientific knowledge in science-based institutions is more than just a public good. It is an essential economic enabler in a world of increased geopolitical competition. Consequently, the ways we do science, how we empower our best scientists and researchers to do frontier work on the most pressing challenges we face, and how we facilitate that knowledge transfer in the real economy must become central to how we conceptualize our growth potential, as a country.
Canada has emphasized publicly funded research and development, or R and D, as a driver of its innovation policy. As a whole, the economic returns have been insufficient, as Canada's low productivity metrics over the last few decades show. Canada put too many eggs in that one basket. The goal of innovation economics is to amass innovation assets, IP, data and the talent that creates these, then exploit those assets when they are commercialized. Creating innovation assets and divesting them before commercialization, or losing out on the potential to grow companies to global scale, is a failure of innovation policy.
Currently, Canada does not have sufficient and adequate mechanisms to translate R and D and ideas into the real economy. No matter what financial instrument is deployed, public investments won't produce better outcomes if we don't change the way we think about, incentivize and produce innovation.
This misconception that innovation is primarily a process of technological adoption means that Canada is missing out on a considerable amount of economic wealth. That's why we need to build our capacity for large-scale applied and industrial research and create mechanisms for technology transfer.
The scientific model adopted after World War II is no longer an adequate framework for the current economic paradigm. In adopting this model, it was assumed that the transfer of public research to private businesses would be automatic. Today, we know that funding basic research is not sufficient to achieve better innovation outcomes.
Building conduits so that scientific knowledge generated in universities would translate into technological, industrial and economic advances is more difficult to achieve in practice than in theory. While the academic imperative to publish in prestigious scientific journals is important and should be encouraged, so should the creation of intellectual property. We simply do not produce enough patents in Canada.
The innovation ecosystem emerging from the last decades has been characterized by a deepening division of innovative labour between universities and private firms. Universities have been essentially tasked with focusing on research, while industry has been left with the application of science and technology. The problem is that using the output of university research still requires significant coordination and integration.
In the current configuration, the federal government provides funds for research and assumes this knowledge will naturally make its way to industry. It neglects all the necessary steps to commercialization, which are development, prototyping, testing, demonstration, product implementation and diffusion, which are necessary to complete the innovation process.
In the United States, the golden age of large industrial labs, such as Bell Labs, IBM, GE and DuPont, played a key role in the commercialization of R and D from the fifties to the eighties. Canada never cultivated that kind of R and D industrial capacity, or where it did, such as at Bell Northern, it has been lost. Ensuring that research is plugged into innovation networks is a critical function of an effective industrial policy.
We have long thought that R and D is innovation. From R and D to development through production, application and diffusion, the road to innovation is long and hard. An intentional industrial policy requires a new institutional infrastructure to support the modern application of science and technology in highly competitive and advanced industries and an approach focused on mandated missions.
Thank you, Mr. Chair.