Hand in Hand The role of government laboratories in Canada’s system of innovation John Marrone
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he Government of Canada has been investing in science and technology for close to 100 years. National S&T institutions such as NRC and CANMET are closing in on their 100th anniversaries and the Geological Survey of Canada, the grandaddy of government S&T institutions, is over 150 years old. Work performed by government laboratories has resulted in numerous world-class scientific and technical advances as diverse as the development of rust resistant wheat, pacemakers, and computer animation. What is less well known is that the work from government laboratories, and by extension, government S&T experts, has filled important gaps in the innovation system, and thereby helped assure economic development and industry competitiveness. Government S&T experts have also assisted in regulatory, public safety, and policy-making functions by providing authoritative, non-partisan information to government. The Speech from the Throne to open the first session of the 37th Parliament of Canada (2003) recognized the importance of R&D in assuring continued economic growth and competitiveness with our main trading partners. With the goal of moving Canada from 15th place to 5th in R&D investment as a percentage of GNP, the Government of Canada provided a significant infusion of funding into university R&D. This resulted in renewed effort and interest in
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research from this sector and propelled Canada to the top of the G8 with such support. On the downside, Statistics Canada data shows that even with tax incentives such as the SR&ED, the expansion of class 43.1 accelerated depreciation of assets and other financial incentives, private sector investment in R&D remains low. Although such incentives help in mitigating economic risks, they do not help industry mitigate the performance risk of adopting new technologies. Furthermore, since many knowledge and technology-based companies do not become profitable for many years, tax incentives have little or no immediate cash value. Government labs help mitigate technology risks faced by companies in areas of public benefit, and as such, represent one more way that governments provide direct assistance to industry. Figure 1 graphs the progress of technology from early R&D to market acceptance and identifies the different contributions made by
… we find government labs working with industry along the full spectrum of the innovation curve.