Running the last mile on innovation policies
Eunice Mercado-Lara
In terms of economic growth, little is achieved when the innovations developed are not translated into products within a market. It is by identifying real industry demands and tangible market applications that Canada can capitalize more on the already invested resources and installed capacity for innovation. For me, the last mile of any country’s innovation processes is at the scaling and the commercialization stages of the new technological developments.
For over 20 years, Canada invested between 1.5 and 2% of its GDP in Research and Development activities (between 22 and 26 billion USD each year). Nonetheless, there has been a decrease in performance concerning Canada’s ranking on the Global Competitive Index (GCI) score relative to other countries in the OECD. The ranking largely underscored Canada’s deteriorating performance relative to other member countries. In 2019, Canada was down to 14th place on the GCI, compared to its 12th place in 2018. Canada also ranked 12th in business dynamism and 16th in innovation capacity.
According to The Conference Board of Canada, there is a strong need to enhance the coalition and commercialization of innovation in Canada’s system, which I named the last mile effort. I couldn’t agree more; I have been studying innovation ecosystems for over six years, and, systematically, both scientific and economic development policies operate as independent entities. Within the OECD economies, the largest concentrations of public investment are located in scientific research processes. The linkage between industry and research centers, the commercialization and the scale-up processes of startups traditionally are left out of the public agenda. It seems to be taken for granted that innovations will naturally find their ideal customer by themselves.
In the absence of government efforts to articulate the innovation ecosystem, these actors (startups, researchers, entrepreneurs, founders) have organized themselves to find collaboration opportunities. Between pitch competitions and demo days, they look for spaces to expose their solutions to potential investors or potential customers.
In early March, I participated in Creative Collisions, an event organized by Montreal New Tech to link firms to concrete technological demands, ready to initiate business relationships with startups that could meet those demands in a focused way. This is the opportunity for startups and researchers to showcase their technology solutions before potential partners and understand first-hand the realities and the challenges of the industries. At the same time, industry players have the chance to discover and identify new technology solutions, IPs, talent and other tech innovation resources.
I noticed that there is a hunger among entrepreneurs and startups to collaborate with these key players, and opportunities to interact with them are scarce. It is here, at the commercialization stage, within the innovation process, where I identify a policy vacuum. It is a government failure investing significant portions of the country’s GDP and believing that startups and entrepreneurs, -navigating within the Dead Valley Curve-, will organically find a way to reach potential customers and capitalize such public investment. Incentivizing these interactions to partner with the industry at the commercialization stage can optimize the exploitation of existing innovation capabilities.
The open and collaborative environment strategically created within Creative Collisions can no longer be taken for granted within the innovation process. What I experienced last week was beyond random serendipity but conscious and professional match-making for economic development. This experience, to me, makes me validates the need for more actors focused on materializing these last mile innovations by helping them to reach out to potential markets. Countless innovations that benefited from public resources have died because they did not find a market outlet. Said actors could make all the difference between a thriving or failing startup.
In short, Canada is clear in its desire to build an economic growth model based on innovation and technological development. For more than two decades, it has made a sustained investment in the scientific development stages, yet little innovation has been achieved. Beyond the incubation and acceleration processes, government actions are needed to empower innovative companies and entrepreneurs to access capitals (Series A and B) and timely market access to capitalize these last-mile innovations into the country’s economic growth. Just as the Executive Director of the Council of Canadian Innovators, Benjamin Bergen, pointed out in the previous Creative Collisions in June 2020, “…oil prices have shown that Canada can no longer rely on its natural resources dividends to pull us out of this crisis. For this crisis, it will be innovators scaling and building billion-dollar companies that will ultimately return us to a place of prosperity.”
Eunice Mercado-Lara. Policymaker in science and technology issues since 2015. She has developed as a professional within the innovation ecosystems of Canada, the United States and Mexico. She is convinced open innovation practices are the most efficient way to accelerate scientific development and economic growth.
