Wednesday, June 03, 2009

The Missing Link of Canadian Research & Development

Private sector oddly missing from Canadian R&D

Writing in an op/ed column in the Globe and Mail, Preston Manning makes some very interesting points about research and development funding in Canada.

Manning wisely portrays the decision over how the federal government's $13 billion will be distributed as a fusion of science and economic policy, and equally-wisely notes that how the government spends this money will have important impacts on the health, economic prospects, and life quality of Canadians.

Interestingly enough, Canada's total expenditure on research and development is dwarfed by the total expenditure of other OECD countries. Yet Canada's public research and development sector -- taking place in universities and hospitals -- is among the best financed in the world.

Instead, the questionable state of Canadian R&D seems to actually be the result of lax financial commitments by the Canadian private sector.

Too many private sector companies, it seems, lack innovation strategies that will lead to the development of new products and technologies that overall improve the value of the Canadian economy, making Canada more competitive in the global economy.

This is actually quite a different tale from the one told by many who insist that the Conservative government actually cut science funding in the 2009 budget -- whereas, in fact, the government merely shifted money between funding agencies.

Manning also noted that there seems to be confusion between the government and researchers regarding how the government will distribute science funding -- an issue that Manning recently addressed to Prime Minister Stephen Harper.

"When [researchers] don't understand the process and the structure, I think there's suspicion," Manning noted. "Was somebody else lobbying better than I was lobbying, or do they like this more than that? I think when you don't know the process or the structure, you can misinterpret motives and why things happen the way they do."

Another obstacle to collaboration between government and private research, however, seems to be a notion that the private sector has no obligation to invest in R&D because the government will do it for them.

Those companies that have embraced this idea certainly aren't doing themselves any favours. A company that declines to develop new technologies and new products are companies that will instead be chasing new developments by their competitors -- far from an ideal situation for any profit-seeking company.

It's troubling to think that a surplus of Canadian companies don't seem to understand the importance of investing in R&D, even through public/private partnerships.

Without involvement by private companies it becomes difficult to transfer new technological developments from the laboratory to the market, as Manning alludes.

Not only do companies that don't invest in R&D not do themselves any favours, but they don't do the market any favours either.

There is a public solution to Canada's research and development dilemma, and interestingly enough it doesn't lay with government. It lays with individual Canadians and Canadian investment funds to invest in Canadian R&D companies, and favour investment with companies that conduct R&D in Canada.

Although investors may not be as powerful at this specific point in time as they once were -- the stark decline in investor confidence has clearly taken some of the punch out of the clout of various investment funds -- Canadians can still look to the future and future opportunities to speak with their investment dollars, and use those dollars to vote in favour of Canadian R&D.

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