The IPL newsletter: Volume 18, Issue 358

New Thinking on Innovation: A CIGI Essay Series

Centre for International Governance Innovation
Innovation is the puzzle at the heart of the knowledge economy. Unlock its secrets, and innovation will drive productivity and, in time, standards of living. Yet it remains a conundrum for many small open economies. In Canada, productivity has been stubbornly flat: in 2015, it stood almost exactly where it was 30 years earlier in 1985 — leading to a preoccupation with policies that stimulate innovation. In the coming weeks, a series of essays will marshall new thinking on innovation, and bring together a community of scholars and practitioners who offer fresh approaches for Canada and for the global economic cooperation system. The essays explore three distinct themes. The first theme is the role that international trade plays in stimulating innovation — a central argument being that as the centre of gravity shifts from goods and services to ideas, the way countries negotiate trade deals must also change. The second theme is the role of domestic policy, with an emphasis on the impact of patent regimes and intellectual property strategies on competitiveness. The third theme is how global processes led by, for example, the World Trade Organization and the Group of Twenty, might foster a climate in which the innovation strategies of smaller countries might be accommodated. CIGI hopes the ideas contained in this first set of essays stimulate a discussion, at home and abroad, on how the engine of prosperity in the twenty-first century — innovation — can best be stimulated to serve the widest set of needs possible.

Investing in Canada’s Future: Strengthening the Foundations of Canadian Research

Advisory Panel on Federal Support for Fundamental Science
This report accordingly outlines a comprehensive agenda to strengthen the foundations of Canadian extramural research. It recommends legislation to create an independent National Advisory Council on Research and Innovation (NACRI). Working closely with Canada’s new Chief Science Advisor (CSA), the new council would raise the bar in terms of ongoing evaluations of all programming. The report also recommends wide-ranging improvements to oversight and governance of the four agencies, including the appointment of a coordinating board chaired by the CSA. Other changes would promote life cycle oversight of national-scale research facilities, and improved methods for initiating, reviewing, and renewing or terminating contribution agreements with external non-profit entities operating in the research realm.

FINDINGS ON RESEARCH FUNDING

Canadian gross domestic expenditure on R&D from all sources relative to GDP (GERD intensity) has been declining slowly over the last 15 years, as contrasted with our G7 peers and key east Asian nations. Worldwide, including non-OECD nations, we are no longer in the top 30 nations in terms of total research intensity. HERD is a subset of GERD related to extramural research conducted by institutions of higher education and affiliates. In 2014 Canada’s HERD intensity was seventh in the OECD, but highest in the G7.

This higher standing compared with overall R&D spending is often linked to the growth in federal research spending that started in 2001, and seems at odds with the extensive concerns about funding that we heard from scientists and scholars. However, in 2015 almost 50 per cent of HERD in Canada was funded by universities and colleges themselves, while the federal government contributed only 23 per cent. Internationally this is a highly anomalous situation, and it is having adverse effects on both research and higher education across Canada.

As well, growth in federal spending was matched by growth in the number of people engaged as researchers at Canadian universities and colleges. Thus, in constant dollars, granting council funding per researcher has been in steady decline since 2008-09. We examined a number of international peer jurisdictions and found no evidence that there was either unusually fast growth in Canada or that there is now a uniquely Canadian glut of extramural researchers. Indeed, for doctoral-level graduation rates, Canada ranked 22nd among 35 comparator OECD countries in 2013; contrary to popular belief, Canadian enterprises in the for-profit and not-for-profit sectors are hiring PhDs at a rate commensurate with rising graduation rates.

The years from 2006-07 to 2013-14 also saw a shift in funding away from independent research, be it basic or applied, that allows individuals or teams to define their topics and/or the structure of the research collaboration. We estimated that scholars, scientists, and trainees wishing to pursue fully independent research work saw a decline of available real resources per researcher of about 35 per cent in that period.

PERFORMANCE MEASURES

There are many possible measures of the quality and impact of science and scholarly inquiry. Two commonly used are summarized here: bibliometric analyses of publication counts in indexed journals and profiles of major prizes and awards. Canada’s publication output is growing, but, according to a December 2016 update from the Council of Canadian Academies: “Production of publications in most fields of research in Canada grew more slowly than the world average in 2003–2014. This is a change from the 2012 report, which noted that half of the fields grew more quickly than the world average in 1999–2010.” As a result, Canada’s global rank in total research output dropped, from seventh in 2005–2010 to ninth in 2009–2014, as Italy and India moved ahead. Examining numbers of recent publications in Nature and Science, the two flagship journals of basic research, Canada ranked 8th among nations, with only 1 Canadian institution in the top 20 worldwide, and 2 more in the top 100.

Citations, which occur when publications are referenced in articles by other scientists and scholars, are a proxy for impact of Canadian-authored work. Canadian papers were cited at a rate 43 per cent higher than the global average in 2009–2014, standing commendably in the top six nations globally. However, our growth rate ranked 15th, suggesting again that Canada is stalling relative to peers. Examining the numbers of publications in the top 1 or 10 per cent worldwide for frequency of citation, on a per capita basis Canada lags other small nations such as the Netherlands, Sweden, and Switzerland.

Canada’s performance in winning international prizes is trailing traditional powerhouses such as the U.S. and U.K. It is also well behind Australia, which now outperforms Canada on several other measures. In recent decades, twice as many Canadians have won research-related Nobel prizes while working in the U.S. as have been awarded to Canadian-born or foreign-born scientists working in Canada.

FINDINGS AND RECOMMENDATIONS: EXTRA BRIEF

The writers of the report emphasize that the summary of findings and recommendations below is highly abbreviated. It would be irresponsible for any secondary summary or other interpretation of our report, let alone policy action, to depend solely on this précis rather than on careful reference to the full text.

Broad Oversight and Rigorous Evaluation
Based on consultations and its own research, the Panel concluded that Canada’s federal research ecosystem, despite many strengths, is weakly coordinated and inconsistently evaluated, and has not had consistent oversight. Further, the links between extramural and intramural research should be strengthened, as should federal-provincial-territorial (FPT) collaboration. The current external advisory body, the Science, Technology and Innovation Council (STIC), has no independent reporting authority and a constrained disciplinary mandate. The imminent appointment of a new Chief Science Advisor (CSA) for Canada is a major step forward, but more needs to be done.

Selected Recommendations:

• Wind down the STIC and replace it with a new National Advisory Council on Research and Innovation (NACRI);
• NACRI should be mandated not only to review proposals to create new third-party delivery organizations, but also to guide the periodic review processes for all existing third-party organizations, and advise as to the continuation or modification of their contribution agreements;
• The Privy Council Office, working with departmental officials and the newly appointed CSA, should examine mechanisms to achieve improved whole-of-government coordination and collaboration for intramural research and evidence-based policy-making;
• CSA convene a Special Standing Committee on Major Research Facilities (MRFs), chaired by an eminent scientist. This body would provide advice on the life cycle of federally supported MRFs, extending from a peer-reviewed decision to initiate an MRF, through budgeting, planning, and construction, then periodic reviews of effectiveness, and finally a decommissioning plan;
• Strong FPT collaboration is essential if Canada is to compete internationally. The CSA, with advice from NACRI, should take the lead in promoting a shared agenda on matters of national concern. Ongoing interactions and annual in-person meetings should be established to strengthen collaborative research relationships among FPT departments with major intramural or extramural research commitments;
• The Government of Canada should propose and initiate planning for a First Ministers’ Conference on Research Excellence in 2017, both celebrating and cementing a shared commitment to global leadership in science and scholarly inquiry as part of Canada’s sesquicentennial celebrations.

The Four Agencies: Strengthened Core, Better Coordination
The granting councils and CFI have made a vital contribution to Canadian science and scholarly inquiry. However, while assorted self-commissioned evaluations have occurred, the Panel could not find any broad external review of the federal agencies and research ecosystem since the 1970s. It is perhaps unsurprising that the Panel heard and read concerns about coordination, governance, strategy, budgeting, and programming. For example, while there is some apparent congruence in the conceptual basis of the Discovery (NSERC), Insight (SSHRC), and Foundation (CIHR) programs, success rates, funding levels, and peer review practices have all diverged across those programs to a degree that is hard to explain based on disciplinary differences alone.

Selected Recommendation:

• The Ministers of Science and Health should mandate the formation of a formal coordinating board for the four agencies, chaired by the CSA, with membership including agency heads, department officials, and external experts;
• The Government of Canada should direct the new Coordinating Board to develop and harmonize funding strategies across the agencies, using a lifecycle approach that balances the needs and prospects of researchers at different stages of their careers;
• The Board should also create a mechanism for harmonization as well as continuous oversight and improvement of peer review practices across the three councils and CFI, starting with a common set of guiding principles or values for peer review;
• There should be concerted efforts to address equity and diversity issues while maintaining standards of excellence;
• The three granting councils should collaborate in developing a comprehensive strategic plan to promote and provide long-term support for Indigenous research, with the goal of enhancing research and training by and with Indigenous researchers and communities.

Strategic Clarity and a Multi Year Plan for Renewal
The Panel’s overall conclusion is that independent science and scholarly inquiry have been underfunded for much of the last decade, as the federal government has concentrated resources on innovation-facing and priority-driven programs. In reaching that conclusion we considered the small and declining share of HERD attributable to the federal government; Canada’s anomalous dependence on institutional subsidies to carry the extramural research enterprise; and our declining research performance on multiple measures, as compared not just with traditional powerhouses, but with smaller nations such as Australia and the Netherlands.  A major boost to funding for the ecosystem is urgently needed, with shortfalls affecting research operating grants, personnel awards, reimbursement of the institutional costs of research, and operations and maintenance of specific types of facilities. 

Selected Recommendations:

• The federal government should rapidly increase its investment in independent investigator-led research to redress the imbalance caused by differential investments favouring priority-driven targeted research over the past decade. The recommended investment is $485 million, phased in over four years, directed to funding investigator-led research. This is an increase of about 30 per cent on the $1.66 billion envelope currently committed to direct project funding for both priority-driven and investigator-led research.
• The Government of Canada should direct the new Four Agency Coordinating Board to amend the terms of the NCE program so as to include the fostering of collaborative multi-centre strength in basic research in all disciplines. This would mean, inter alia, removing requirements for knowledge “exchange and exploitation” and expectations of funding self-sufficiency for some competitions;
• International collaborations have become the norm in research. A stronger mechanism is needed for funding smaller- and mid-scale collaborative projects so that Canadian agencies and researchers can be more effective partners and participants in global science and inquiry;
• Multidisciplinary research continues to grow in prevalence and importance. More must be done—not only to welcome and fairly review multidisciplinary proposals, but also to ensure that individuals working in convergent fields (e.g., health law, medical anthropology, design) are not orphaned.
• The Government of Canada should shift CFI to a stable annual budget scaled at minimum to its recent annual capital commitment (currently around $300 million per year).