Recent Research: Encouraging Business R&D and Innovation

The first report from Canada's new Science Technology and Innovation Council (STIC) concludes in the State of the Nation 2008 that the status quo is not good enough and more has to be done to sustain the country's innovation system.

Established by Prime Minister Stephen Harper in 2007, Canada's STIC is the equivalent of the President's Council of Advisors for Science & Technology, or PCAST, in the U.S. Most of State of the Nation 2008 presents a statistical case for why Canada must be more aggressive in its innovation policies through comparison with other industrialized countries using more than 50 indicators of performance. In addition, the report profiles several regional and national efforts within Canada that are supporting innovation.

The report suggests Canada is losing ground to other countries that are more actively supporting science, technology and innovation and that Canada's standard of living is likely to drop over the long term as a result - unless action is taken now.

The opening sentence sums up why every government - federal, provincial/state or regional - must actively embrace tech-based economic development policies:

"Strength and leadership in science, technology and innovation is the price of entry to full participation in the knowledge-based global economy of the 21st century."

STIC qualifies its conclusions and recommendations. Citing a lack of conclusive data on which policies were most effective, the advisory panel avoided suggesting specific activities over others.

Nevertheless, whether or not analysts understand what levels or types of research investments are most beneficial to a company and what types of incentives best encourage industrial research, STIC can conclude it does know Canadian businesses that engage in R&D are more productive and have greater sales of new products than those firms that do not. Unfortunately, despite offering businesses one of "the most advantageous innovation tax incentives" in the world, business R&D investment has remained fairly constant for four decades. The challenge for the government is to identify how to encourage more business research investment.

Additionally, knowledge is still forming about types of collaboration that best foster innovation whether it is between businesses and universities or business-to-business research partnerships. But STIC concluded more collaboration is vital to strengthening the global competitiveness of any of Canada's industrial and economic sectors.

The risk for any governmental body, Canadian or U.S., can be paralysis through inaction waiting for information to be collected and analyzed for statistical significance. The first report from STIC says in the knowledge-based global economy, Canada may pay a heavy price if it stands still.  

State of the Nation 2008 is available at: http://www.stic-csti.ca/eic/site/stic-csti.nsf/eng/Home.