Innovation Canada: A Call to Action

Filling the GapsChapterFilling the Gaps7This chapter addresses the third and finalquestion in the charge to the Panel: “What, ifany, gaps are evident in the current suite ofprogramming, and what might be done to fillthese gaps?”The Panel is firm in its belief that the key toaddressing Canada’s well-documented businessinnovation challenges — including thesignificant commercialization gap — is tostrategically target efforts to support the growthof innovative firms into larger enterprises. It isonly by growing Canada’s innovative firms thatthe country’s business sector will achieve thescale required to become an innovation leaderon the world stage.Although many gaps can be identified in apolicy area as broad as the support of businessinnovation, an overriding consideration of thePanel is to ensure that programs respond toindustry’s “demand-pull” as a primary means ofhelping innovative firms grow and prosper — achallenge that was raised repeatedly in thePanel’s consultations. Three issues in particularstood out. How can the federal government’sown procurement needs be used to fosterinnovation? How can business imperatives beaddressed through large-scale, business–academic–government research collaborations?And how can risk capital be structured torespond to the needs of innovative firms at allstages of their development? Stakeholders toldthe Panel that addressing these issues wouldhelp meet the needs of firms seeking toinnovate and create value.Consistent with these views, an analysis by theOrganisation for Economic Co-operation andDevelopment (OECD forthcoming) of theinnovation systems of several countries identifiesweaknesses in Canada related to limited public–private research collaboration, difficulty intransforming knowledge into commercialapplications, and a low volume of venturecapital activity. Threats identified include adeclining trend in the funding of entrepreneurialventures. The same study also notes the dearthof “demand-side” measures — such as thosethat aim to strengthen the private sector’sutilization of innovation inputs — in Canada’smix of innovation instruments. Procurement isthe major demand-pull stimulus available togovernments to complement the large existingarray of supply-side programs.Broadly similar findings have been reported byother panels that have examined the innovationproblematique in Canada. The Council ofCanadian Academies highlighted the need to“improve the climate for new ventures so as tobetter translate opportunities arising fromCanada’s university research excellence intoviable Canadian-based growth businesses”(CCA 2009, p. 12). It also noted that Canadaranks low internationally for “governmentprocurement of advanced technologicalproducts” (CCA 2009, p. 78). The Expert Panel7-1