Thank you, Madam Chair.
I am pleased to be back before this committee as you study how to promote and grow private sector investment in research and development in Canada.
Polytechnics and institutes of technology are experts in partner-driven problem solving, helping organizations of all sizes adopt new technology, implement new systems and commercialize new products. They offer space, equipment and expertise to businesses that either lack their own R and D capacity entirely or stand to benefit from additional external support. In short, they are Canada's innovation intermediaries, and they make research and development activity attainable to the many rather than reserved for the few.
To undertake this work, polytechnics engage faculty and students in industry-designed projects of all descriptions. Businesses bring them a problem to be solved, a process to be streamlined or a product to be prototyped and tested. When the collaboration is complete, the intellectual property rests with the business partner, leaving it in the hands of people who create jobs, sell products and grow the economy.
This is research with a defined purpose and recognized economic value. It is also the sweet spot for private sector investment in R and D. For every $100 polytechnics receive in federal research investments, business partners contribute $72. By comparison, this country's elite universities leverage less than four dollars for every $100 they receive.
There are important reasons for these differences. Discovery research is responsible for things we haven't even begun to recognize as having economic value. Applied research, on the other hand, puts those discoveries to work.
Artificial intelligence is a great example. In the early days of AI research, it was theoretical—science fiction. It was the same with plug-in cars, 3-D printing and autonomous robots. These are great ideas and interesting research questions, yet the value of AI won't be realized until companies of all sizes have found ways to integrate it into their operations.
Robots need a purpose. Even the widespread use of electric vehicles is a challenge given Canada's geography and cold climate. This is where the real-world application of research becomes an economic engine, and this is where private sector investment ramps up.
To grow R and D investment in Canada, I urge you to consider the value proposition of the entirety of the research ecosystem. We sink billions of dollars into discovery research but spend precious little to spur adoption and experiment with implementation. In a country of small and mid-sized businesses, particularly one where the government prefers to buy from established firms overseas rather than its own innovators, it is hard to bet the store on an interesting idea.
Many smaller firms have limited technical staff, inadequate facilities and tight budgets. The risks of going it alone are significant. According to a recent Statistics Canada report, post-secondary institutions are well positioned to serve as innovation catalysts. More than 19,000 small and medium-sized enterprises pursued this type of support in 2023.
Approximately 10% of those SMEs were served at one of Canada's 13 polytechnic institutions. More than half said their collaborations increased their R and D capability, 48% indicated this work improved their competitiveness, 26% gained access to new markets and 21% reported increased productivity. At the same time, more than 18,000 students were part of these projects, developing Canada's innovation-enabled talent pipeline.
Once businesses engage with supports at polytechnics, they tend to come back for more, often at their own expense. Simply put, polytechnic applied research de-risks innovation and supports companies on their R and D journeys.
If the federal government wants to see more private sector investment in research and development, it needs to enrich the programs that enable it. We continue to undervalue this part of the research ecosystem, investing less than 3% of federal resources in polytechnics and colleges. It isn't that the private sector isn't interested in R and D, but we've done a poor job of activating the near-to-commercialization end of the R and D ecosystem. We could do much better.
Thank you for inviting me to be here today. I look forward to your questions.