Silicon Valley North #28                                       February, 2001


The Way I See It… by Michael C. Volker


The case for Canadian Leadership in Innovation


As Canadians, we tend to be somewhat self-deprecating when it comes to our talent for innovation. No matter which study or report you read which compares Canada’s research and development expenditures to those of other countries, the findings are usually disappointing.


For example, if you use the oft-cited GERD/GDP ratio (i.e. Gross Expenditures on Research and Development to Gross Domestic Product), Canada ranks in the fifteenth spot at 1.61%, behind Australia, Iceland, and Norway and well behind the U.S.A. at 2.84%, Finland at 3.11% and Sweden, in the number one spot at 3.70%.


Provincially, B.C. and Alberta had (in 1997) the lowest provincial GERD/GDP at just under 1% as compared to Massachusetts which had the highest rate at 5%. While a comparison based on GDP may be unfair, due to the diverse and still largely resource-driven western economies, both the growth in R&D expenditures and the magnitude thereof pale in relation to other jurisdictions.


Yet, we innovate like there’s no tomorrow. This is particularly evident in British Columbia. A recent KPMG study, “The State of the High Technology Sector in B.C.”, concludes that although the recent growth of this sector with respect to economic output and employment has been spectacular, many of the innovation indicators, in particular research and development expenditures have been below average, especially in comparison to the U.S. However, B.C. led Alberta and Ontario every year from 1993 to 1998 in terms of the number of US patents awarded to its top two institutions – the University of B.C. and Simon Fraser University.


And the commercialization record is impressive. UBC and SFU have spun-off more than 150 companies in the past fifteen years. Last year alone, 17 new companies were formed. Based on new companies created per million dollars of research expended, these institutions have ranked in the top 10 in North America for several years running.


A decade ago there were no $100 million technology companies in B.C.. Now there are a dozen. Companies like PMC Sierra, MacDonald Dettwiler, QLT Inc., Westport Innovations and Creo Products would not exist without strong R&D underpinnings.


Of the $14.5 billion spent on R&D in Canada, B.C. accounts for only $1 billion.

Although we often blame high personal taxes for the brain drain, I suspect that the lure of well endowed R&D laboratories and budgets south of the border is what really draws talent away. Case in point: UBC spinal cord researcher Hans Keirstead’s move to California. The generously funded Reeve-Irvine Research Centre made his UBC lab look like it was part of an “inner city high school”. The opportunity to do serious research was just too good for him to pass up.


Last September, Finance Minister Paul Martin showed real leadership by calling for a three-fold increase in R&D to $47.5 billion by 2010. For far too long, our goals have been too timid. One Ottawa “joke” I heard goes something like this: “From 1.5% to 1.5%: My 25 years in Canadian Science Policy”. It’s time for a dramatic change.


Industry players recognize this. Innovate B.C. is the umbrella name for a variety of private and public sector organizations which collectively see innovation as being a key to B.C.’s success in a global market. At a recent B.C. Business Summit, the vision for the province’s economic potential reflected the role that science and technology will play in the future. Specific milestones included targets for the growth of high tech industry, promoting the diffusion of technology from research to application and the importance of a strong research and development infrastructure. However, the stated five-year goal of a one-quarter increase to 1.125% is embarrassingly modest. Compare this to Paul Martin’s goal. Normally, we would expect industry leaders to set the pace! A much bolder shift in our local mind-set is needed.


The way I see it, considering our impressive track record in this country given our limited investment, just imagine what could be achieved with such a mind-set change. Let’s not lose too many more Keirsteads!


Michael Volker is a high technology entrepreneur and director of Simon Fraser U's University/Industry Liaison Office. He oversees Vancouver’s Angel Technology Network and is a director of the BC Advanced Systems Institute and the Vancouver Enterprise Forum. He may be reached at