Matthew S. Miller and Leyla Soleymani are professors and biomedical researchers at McMaster University who also hold senior administrative positions related to innovation and commercialization.
Unprecedented changes in U.S. trade policy, including new tariffs, continue to roil economies around the world.
In response, our federal and provincial governments are turning to projects that create Canadian jobs and use materials from Canadian industries.
The federal government’s signature “nation-building” initiative has dominated headlines, with plans to speed approvals for projects of national interest. The Liberal government is hinting that its coming budget will balance austerity and investment.
In the centre of the chaos, an immense opportunity lies waiting to be exploited: We can take advantage of the increasingly hostile climate in the United States toward the life sciences sector.
Opinion: Doug Ford is barking up the wrong tree with his ban on animal research
Leadership and policy turmoil in the U.S. Food and Drug Administration, Health and Human Services, and National Institutes of Health, or NIH, have already shifted investments in R&D and clinical trials to other jurisdictions.
There has been some discussion that Canada should encourage a “reverse brain drain,” by recruiting disenfranchised U.S. researchers.
However, Canada’s problem is not a deficiency in talent. Per capita, Canada consistently ranks in the top 10 globally for academic publications and citations. The key difference between top U.S. academics and their Canadian counterparts is resources.
The budget of the NIH – the primary government agency for funding U.S. health research - was about US$48-billion last year. The Canadian Institutes of Health Research, Canada’s NIH equivalent, had a budget of roughly $1-billion. Even considering population differences, the U.S. invests almost five times more.
Canada’s capacity for innovation is one of its greatest strengths, with massive promise for major economic returns.
In the U.S., academic and research institutions have driven some of the most successful innovation hubs in the world.
Canada depends on innovation to keep its leadership position internationally, to ensure a high quality of life, to deliver universal health care and to protect the environment.
Unfortunately, Canadian innovation is sagging under the weight of declining productivity, below-average new patents, businesses spending less on R&D, and the manufacturing sector lagging in automation and exports.
However, there is good news. Canada scores high in three areas that signal significant potential:
- Innovation capacity – an economic system’s ability to foster and maintain innovation.
- Research intensity – a large proportion of highly qualified research personnel, especially in STEM fields.
- Early-stage entrepreneurial activity – planning and starting new businesses − though it does need to improve at scaling up existing businesses.
In the U.S., the life-sciences sector generates roughly US$2.9-trillion, about a tenth of its GDP. Canada’s life-sciences sector contributes only about $82-billion to the Canadian economy, roughly 2.6 per cent of GDP. The opportunity for growth is immense.
Canadian research scientists are recognized globally not only for their excellent work, but also for their ability to do more with less. Imagine what they could do for Canada with more resources.
Instead of attracting foreign multinationals to set up in Canada, what if we committed ourselves to an innovation pipeline that creates homegrown successes?
Such successes are more likely to create high-quality jobs, generate further investments in innovation, and support the development and retention of the next generation of innovation leaders.
Opinion: Yes, Canada has brain-drain. But Canadians abroad often find it hard to come home
Building a more robust innovation pipeline here in Canada will be challenging. It will require committing more resources to creating intellectual property, developing advanced-manufacturing capabilities that will build products of the future, and incentivizing industry to invest in R&D, including academic R&D.
The results could make Canada an innovation powerhouse.
But where will the money come from? The commitment to increase federal defence spending to 2 per cent of GDP is necessitating budget cuts across almost all other departments.
However, as the Carney government itself proclaimed, increased defence spending can also be an investment in Canada’s economic resilience.
Opinion: How to fund increased defence spending? There’s nothing wrong with borrowing
The U.S. Department of Defense has been a major funder and procurer of science and technology, investing more than US$1-billion annually in basic medical research.
The U.S. Defense Advanced Research Projects Agency spends an additional US$4-billion yearly, directing a significant proportion toward the life-sciences sector. If Canada were to take a similar approach, it could considerably bolster Canadian innovation within an existing funding envelope.
At a moment when U.S. policy shifts are destabilizing one of the world’s most profitable sectors, Canada can become a global hub for life-sciences innovation and manufacturing.