Report Provides Canadian Government with Recommendations to Strengthen R&D Policies

The Canadian government must focus its research and development (R&D) support efforts on "the goal of growing innovative firms into larger enterprises, rooted in Canada but facing outward to the world and equipped to compete with the best," according to Innovation Canada: A Call to Action — a new report commissioned by the Honorable Gary Goodyear, the Canadian Minister of State for Science and Technology. The authors contends that Canada has a solid foundation to build its knowledge economy. The country maintains several strengths including a strong financial sector, "attractive" corporate tax rates, a diverse, well-educated workforce and significant natural resource endowments. However, they cite empirical evidence that shows Canada lagging behind other highly developed countries including the U.S., several European Union members and some East Asian countries.

Developed by an expert panel — comprised of individuals from the private sector, the sciences and academia — the report highlights six recommendations to strengthen federal R&D programs that support business and commercially oriented R&D:

• The creation of an Industrial Research and Innovation Council (IRIC) to deliver the federal government's business innovation programs;
• The simplification of the tax credit system to support small- and medium-sized businesses;
• Business innovation should become a core objective of government procurement;
• The transformation of the institutes of the National Research Council into a series of large-scale, collaborative centers involving business, universities and the provinces;
• The establishment of a Business Development Bank of Canada to help high-growth innovative firms access risk capital; and,
• A clear federal voice for innovation and work with the provinces to improve coordination.

The authors contend that these recommendations will lead to a more effective and efficient allocation of the almost $5 billion worth of R&D funding provided by the Canadian government every year. However, they also emphasize the importance of complementary efforts to strengthen these policies — especially as they relate to encouraging the competitive intensity. The report also calls for the development of state-of-the-art procedures for evaluation across the potential suite of programs.