A professor directs research with students in a laboratory at McGill University in Montreal in October, 2022.Roger Lemoyne/The Globe and Mail
Peter Singer is professor emeritus at the University of Toronto, co-founder of Grand Challenges Canada and former special adviser to the director-general of the World Health Organization.
The latest federal budget includes $1.7-billion for attracting international talent, a welcome investment in a country where we struggle to turn scientific discoveries into innovations that drive economic growth.
The investment, the budget says, ought to attract more than 1,000 international researchers to the country. It will require a shift in culture to turn Canada’s impressive scientific track record into productivity.
Work by biologist Pieter Cullis at the University of British Columbia on lipid nanoparticles enabled mRNA vaccines for COVID-19. The University of Toronto’s Dan Drucker helped pave the way for GLP-1 obesity drugs like Ozempic. British-Canadian researcher Geoffrey Hinton helped spark the artificial-intelligence revolution. These discoveries are all worthy of the Nobel Prize (which Mr. Hinton has already been awarded) and have had enormous social and economic benefits. But the economic benefits captured in Canada have been limited – often by factors beyond the control of these outstanding researchers.
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The budget calls Canada’s productivity – which drives wages and jobs – “persistently weak,” and points out “if Canada’s productivity growth had matched the U.S. from 2017 to 2023, the median income of a family with one child would be nearly $11,000 higher.” If we do not fix this trend, our kids will be poorer than we are, and our sovereignty – which we have belatedly discovered is based on economic independence from the United States – will be at risk.
The twin drivers of productivity are infrastructure and innovation. The government has made a good start on infrastructure. The budget reaffirmed the first five “major nation-building projects,” and invests tens of billions in infrastructure.
What about innovation? The budget contains a suite of tax and venture capital measures, as well as research and development investments in artificial intelligence, climate and defence.
But this is where the investment in international talent could be better targeted to recruit scientists who have started and grown successful companies elsewhere.
The talent strategy could also serve as the pathfinder for the types of supports that are needed to keep companies in Canada. Large companies like Google (in the case of artificial intelligence), Novo-Nordisk (for GLP-1 drugs) and Pfizer (for mRNA vaccines) tend to capture the economic value of discoveries. Canada has few large anchor companies, and those formed around discoveries often move to the U.S. when they are mid-sized. To address this problem, the talent strategy could require that the government’s grant funding would be converted into an equity share should this occur.
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Imagine that in five years Canada would have dozens of extraordinary scientists starting and growing companies with an intentional strategy to capture the economic benefits for Canada. This would not only generate significant economic activity, but also change the culture of science from one that values discovery alone – and there is an important role for such research – to one that also values successful commercialization.
Such a talent strategy could be complemented by redesigning some of the ways science is funded. Surprisingly, one of our most practical models to turn innovative ideas into impact is found in Canada’s international development strategy. Over the past 15 years, the non-profit Grand Challenges Canada (GCC) has supported more than 1,500 innovations in 100 countries. The lessons learned could improve Canada’s innovation performance.
When I was CEO of GCC, many innovators told me they had not been able to receive support from traditional scientific-grant funding agencies. Some of our investments – and the entrepreneurs behind them – helped to spawn successful Canadian companies, such as AlayaCare, which eases patients’ journeys between home and hospital and KA Imaging, which developed a new X-ray technology. An Indian company – Molbio Diagnostics – became a billion-dollar diagnostics firm.
Canada’s system supports early-stage research well but drops off when projects need to scale. By contrast, at the early stage, GCC provides grants, selected using peer review by scientists and innovators. But at the transition-to-scale stage, GCC selects projects using an investment committee that combines scientists with venture capitalists and designs bespoke funding, combining grants with debt and equity.
For the growth stage, GCC was an anchor investor in the Global Health Investment Fund, a for-profit impact investment fund that provided both financial and social returns. One investee company, Eubiologics, later became the only supplier of the cholera vaccine to the global emergency stockpile when supplies dwindled. This approach helps cushion the risk of being an entrepreneur.
These proposals on talent and funding have this in common: they are ways to reinforce Canada’s culture of innovation. As management guru Peter Drucker famously noted, culture eats strategy for breakfast.