The Untapped Technological Patent-ial of Canada

Canada is capturing less than half of its technological potential, allowing for groundbreaking research and innovations to sit unused or to be scooped up by foreign companies. A recent World Intellectual Property Organization report on making innovation policy work for growth and development featured a graph showing Canada’s untapped technological potential and the results are stark: Canadian researchers generate far more research in areas such as electronics, information communication technologies (ICTs), chemicals, and biopharmaceuticals than the industry is patenting.

Figure 1 estimates the number of patents Canada should have if it were an average developed country with an advanced innovation ecosystem and had Canada’s academic research output. It shows potential output in sectors, given the current outcome in said sectors.

Figure 1: The tapped and untapped technological potential of Canada

This shows significant gaps between academic outputs and what industry can commercialize in sectors like electronics, information communication technology (ICTs), semiconductors and optics, and biopharmaceuticals, which are all highly specialized sectors with technologies that have the potential to be highly lucrative for the firms that commercialize them.

There are two possible reasons for this disparity between actual and potential patents. The first could be that Canadian academics are publishing research papers that are misaligned with what the Canadian industry needs. If this is the case, more should be done to realign university research toward industry needs.

As noted in the Centre for Canadian Innovation and Competitiveness’ recent report, it is not enough for Canada to simply focus on basic ingredients of innovation like scientific publications or STEM graduation rates and hope that technologies and firms come out the other end of the innovation assembly line. National success comes from alignment between research and industry needs.

Some may argue that it is simply the nature of academic research to be conducted free from interference and that the knowledge created from university research ought to be democratized and available for all to use. But in an increasingly competitive global economic environment, government and universities must recognize that segregating academia in an ivory tower away from the greater national conversation on innovation and productivity should be eschewed in favour of mobilizing the best and brightest minds the country has to offer in helping solve Canada’s economic challenges.

There are many ways to do this. Mission-driven research programming, as described in last year’s Report of the Advisory Panel on the Federal Research Support System, or like the European Union’s Horizon Europe program, is one such tool. Though mission-driven research is frequently discussed in reference to grand challenges, such as solving climate change, there is nothing preventing Canadian governments from identifying winning the global techno-economic competition as the mission they want to solve, as opposed to broader missions that have to do with the fate of humanity.

Alignment could also be nurtured by increasing funding and uptake on existing programs like Natural Sciences and Engineering Research Council of Canada’s Alliance grants, which provide grants to researchers working on collaborative projects with private, public, and not-for-profit sector organizations. Canada could also copy the United States’ Industry-University Cooperative Research Centers program that provides funding to universities contingent on matching funding from industry.

A second reason for these disheartening results could be that Canada has a great deal of potential to commercialize technology from academic research, but universities are doing a poor job of it. As we also noted in the above report, Canadian universities lag behind U.S. ones in this regard.

The graph could suggest that Canadian universities are doing a poor job in transferring technology to companies compared to universities in other jurisdictions. In fact, according to data from AUTM, American university technology transfer offices licensed patents at, on average, three times the rate of Canadian universities in 2022. Canada’s top-performing tech transfer office at the University of Toronto made in licensing income less than half of what New York University, which by no means is the top performing university in the United States by commercialization. McGill University, the birthplace of plexiglass and the world’s first search engine, had roughly the same number of invention disclosures as Arizona State University. Universities putting more emphasis on commercializing technologies could go a long way toward ensuring that Canadian technological potential is harnessed.

The simplest thing the federal government and provinces could do is tie a meaningful portion of university funding to commercialization results in Canada. Universities that succeed in this would get more money, while universities that do not would see funding cuts. It would be up to each university to figure out how to perform better.

In addition, governments could encourage collaboration and permeability between academia and industry by looking towards Denmark’s industrial PhD program that grants students PhDs through their work in developing high-quality research that has business-related significance and effect, and is funded jointly by individual companies and universities. Such a program could create industry-academia linkages at the foundational level and potentially train a new cohort of PhDs accustomed to collaboration and cross-pollination across sectors.

The graph above should be a call to action—actual technological potential is slipping through the metaphorical hands of the Canadian innovation ecosystem. Either Canada is failing to develop potential technologies in highly lucrative sectors due to a failure in technology transfer and industrial policy, or Canada has a fundamental disconnect between the outputs of the research ecosystem and the needs and capabilities of industry. It is likely it is both. It is time for Canadian policymakers to stop sticking to the status quo so preferred by Canadian universities and recognize that this is a recipe for technological stagnation. It is time for government policy to be bold so that Canadian research output does more than simply go into scholarly journals or help companies outside Canada.