Leveraging our research excellence

Canadian researchers have been flying under the radar as far back as the 19th century. The discovery of the light bulb is the most profound example. In 1874, Canadians Henry Woodward and Mathew Evans patented a design for an incandescent light bulb but failed to secure enough investment to cover the high cost of production. Thomas Edison swooped in and bought out the Canadian patent to create the light bulb we know today. As a result, Woodward and Evans largely disappeared into the obscurity of history.

Fast forward to today and Canadian researchers are still not maximizing the potential of their inventions. How can they take their ideas and create them into viable products that benefit society?

The way to do this is through an innovation-based economy that mobilizes Canada’s top researchers in the educational sector to create new products more efficiently and regularly. Canada’s higher education institutions have not emerged as an economic powerhouse capable of maximizing returns to Canadian taxpayers because of our shaky track record in converting research excellence to competitive products and services in the marketplace.

It is clear that Canada is trailing behind when it comes to innovation. When compared to key innovative economies in the Organization for Economic Cooperation and Development (OECD), between 2001 and 2020, Canada slipped from being ranked 16^th among the 36 OECD countries to the 21^st ranking. The country’s gross domestic expenditure on research and development (GERD) intensity slipped from 2.02 per cent in 2001 to 1.7 per cent in 2020, while it increased across OECD countries from 2.1 per cent to 2.68 per cent in the same duration.

To be competitive in the global marketplace, Canada can’t depend solely on the private sector. In 2022, the total research and development expenditure of four main R&D spender firms (Amazon, Alphabet, Meta, and Apple) in the U.S. was US$163.6 billion (C$211 billion). By comparison, in Canada where the relative absence of large firms drives down private sector contributions, total GERD spending was C$48.2 billion, to which the private sector contributed C$28.23 billion. In other words, those four firms spent more than quadrable Canada’s overall R&D spending. However, when it comes to R&D in higher education, our universities contribute close to 35 per cent of the total GERD compared to 11 per cent in the U.S. and an average of 16.46 per cent for the OECD countries.

However, it is not due to lack of research quality that Canadian researchers have not been able to commercialize their findings and prop up postsecondary institutions as leading economic contributors. Canadian researchers accounted for more than three per cent of the world’s top 10 per cent of most-cited scientific publications in 2016, placing Canada seventh among OECD’s economies with the largest volume of top-cited scientific publications. The country also regularly occupies leading positions in terms of the number of scientific publications in international databases and the number of Nobel laureates. In the last 13 years alone, seven Canadian scientists have received the Nobel prize. Lack of investment is not the problem either. Canadian policymakers have been pouring resources into the creation of university spin-offs. A 2008 survey identified more than 178 governmental initiatives that represented an expenditure of C$3.2 billion dollars, established to promote economic utilization of scientific research.

In my opinion, the real issue is lack of understanding of uniqueness of universities’ spin-offs and the motivations of the academic entrepreneurs leading them to the market. We have been concentrating on adopting best practices from new product development in industry and trying to apply them to our university spin-offs. In the 2022 budget announcement, Canada committed to enhance its support to innovation through the Strategic Innovation Fund by adding up to C$1 billion over six years starting in 2024-25. It is imperative that we recognize the unique challenges facing the commercialization of research and find novel ways to address them.

University spin-offs typically originate from curiosity-driven research. Their existence does not respond to real market needs and their design is not informed by market feedback or insights. The lack of actual demand for new technologies or new spin-offs is an inherent market risk. Another key risk inherent in university spin-offs is the technology risk. There is a big difference between showing that a technology can work in a lab and developing a market-ready product or service. In existing large companies, teams of marketers, researchers, designers and specialists survey the markets, engage with customers and inform the development of new products, none of which is readily available to university spin-offs.

Besides the market and technology risks, another reason university spin-offs struggle is the lead entrepreneur tasked with taking the technology to the market. Government initiatives have typically focused on incentivizing academic inventors – who happened to be university faculty members most of the time – to lead commercialization activities. Academic inventors, however, rarely see such activities as worthy research pursuits. In addition, developing intellectual property policies that financially benefit both researchers and universities did not lead to more commercialization activities or increased interest from the inventors either. Finally, policymakers have neglected that the combined pressure to produce world-class research output and to offer our youth the best possible educational experience remains in place for faculty in charge of spin-offs.

We need to develop a better understanding of the complexities of commercializing curiosity-driven research and how to take inventions to the market. We need ideas and incentives to inspire our faculty members to engage in commercialization. We need to provide resources, policies, tools and mechanisms to help them balance their traditional roles of research and teaching with the role of entrepreneur. Some of these resources, including alumni and graduate students eager to acquire marketable skills, already exist in our universities – we just need to find the right ways to mobilize them. Some resources will need to be integrated from outside the university, such as practitioners who can play the role of advisors and mentors for our entrepreneurs.

The good news is that there is recognition of what we all need to do collectively to change our destiny. There is a recognition that it will take all of us working together to make a difference. We truly believe that we have all the ingredients to succeed, we just need to put it together. A recent example of such a collaborative and engaging approach is the Lab2market program piloted since 2020.

In collaboration with Dalhousie university, Toronto Metropolitan University launched the Lab2Market Program, a nationwide program that empowers researchers to take their inventions to the market. Guided by the top business experts and subject matters experts in the private sector, the program has helped researchers raise more than $15 million in funding to turn their passions into viable ventures. Over its three years of existence, funded and supported by 10 different governmental agencies, 16 universities worked together to deliver 30 cohorts, supporting 495 researchers from 33 different universities nationwide.

Such programs that allow all stakeholders to work together towards a common goal is our only chance to change the Canadian innovation narrative. It is time to chart a new course where all stakeholders are working together towards one common goal which is a stronger innovation-based economy, built on the shoulders of a strong ecosystem capable of translating our world-class university research into products and services that can improve our living standards, sustain our planet and strengthen our global competitiveness.

Tarek Sadek is executive director of the Innovation Boost Zone at Toronto Metropolitan University.