Greater industry-academic alignment will benefit Canadian productivity: report

Canada's productivity and innovation performance can be significantly improved if dramatic changes are made to the incentives and funding models for university-based researchers who work with companies to commercialize their research. A new report from the Conference Board of Canada (CBoC) asserts that greater alignment between academic research and industry needs will accelerate commercialization of research and lead to greater employment opportunities for graduates and postdoctoral fellows.

Entitled Bridging the Gap: Linking Public Investments in Research to Business Innovation, the report by Michael Grant, CBoC's director of research, industry, and business strategy, says Canada requires a complete rethink about how we incent academic researchers. The goal is to better align industry with research that's valuable for companies seeking to introduce new products and processes into the marketplace.

"Academics are like public servants. Many go into it for security, not productivity, commercialization or innovation," says Grant. "We need to change their pay structure or status."

The status quo, he says, is ineffective as existing programs intended to encourage collaboration between academia and industry are too scripted, contributing to what he terms a second Valley of Death.

"The term is usually applied to companies that want to continue R&D in the marketplace through commercialization ... This one is the way we fund R&D. Large amounts of money go to higher education as well as (tax credits) but they don't work together so it's another Valley of Death," says Grant. "Commercial solutions that companies are working on are very specific but university research is disconnected from customers."

Current programs encourage "R&D Junkies"

Current government programs — in the words of technology guru Denzil Doyle — create "R&D junkies" by excluding "other activities that result in the commercialization of ideas". Grant acknowledges that innovation is a complex process in which multiple lines of inquiry crystalize into something concrete but often in ways that are difficult to quantify. But he's convinced that rather than study the issue further, a better approach would be to experiment with various incentives and funding models at a small scale. If any show tangible results, they could be scaled up.

The report also recommends encouraging greater academic-industry collaboration with commercialization as the end goal. It points to Automotive Partnerships Canada (APC) as a model in which both industry and professors are sponsors of research focused on "specific commercial innovations". It also cites the Ontario Centres of Excellence's collaboration voucher program as having considerable merit.

"If the roughly $5 billion that governments spend on higher education research could be better linked to the $5 billion in support of business innovation, then Canada might realize more out of its entire portfolio of funding." — Conference Board report

The report is less enthusiastic about the suite of federal Networks of Centre of Excellence programs and Alberta Innovates. He contends they are driven by academic research priorities even though the funding is awarded based on industry-defined challenges. By developing more programs such as APC and the Consortium for Research and Innovation in Aerospace in Québec, the academic-industry interface would be more productive.

"These kinds of programs could be expanded to put Canadian companies on the same footing as other companies that contract research," states the report. One model the report cites is an intermediate-level research institute along the lines of the German Fraunhofer-Gesellschaft. Fraunhofer comprises more than 60 semi-autonomous research institutes ... The institutes are market-responsive, getting most of their funding directly from private and public sector clients in the form of research contracts.

The appeal of the direct commercialization of ideas is best demonstrated by the difference in the sale of academic intellectual property and research contracts. Canadian university IP revenue from all sources in 2012 amounted to just $70 million while research contracts in which companies engage researchers to solve specific challenges bring in close to $1 billion annually.

The report notes, however, that research contracts with academia tend to be conducted by large firms, and it recommends that universities and funders "can do more to encourage more interaction between small businesses and university researchers".

The report argues that greater academic-industry collaboration would result in greater utilization and rewards for the highly skilled talent Canada produces. A 2013 survey found that two-thirds of responding postdoctoral fellows earned less than $45,000 per annum. Counteracting this would require a greater emphasis on entrepreneurship "as a realistic career path for PhDs.

"A McGill engineering professor I spoke with says there's no recognition for collaboration with industry which is often tougher than writing research papers," says Grant.

The Conference Board report was funded by a syndicate of organizations and companies (see chart) and is available for purchase at www.conferenceboard.ca.

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