The IPL newsletter: Volume 20, Issue 417

The Intangible Shift: Changing Gears to Compete in the New Economy

Daniel Munro & Creig Lamb, Brookfield Institute for Innovation + Entrepreneurship
This report is co-authored by Daniel Munro, Director of Policy Projects for the Innovation Policy Lab. The report provides an introduction to intangibles, such as data, digital services, brands, design, marketing, and firm-specific training. The report discusses the significance of intangibles as increasingly driving economic growth, as well as the issues they raise for policymakers, business leaders, and other stakeholders. It also launches the Intangible Shift research series, which will examine key challenges and opportunities associated with the shift towards an intangible economy. The project aims to provide decision makers across Canada’s public and private sectors with clarity on how the rules of the economy are changing and to identify key policy and business strategy changes that can help position Canada for success.

President Trump’s FY 2021 Budget Commits to Double Investments in Key Industries of the Future

US Office of Science and Technology Policy
This release summarizes the recently announced investments in science and technology contained in President Trump’s FY 2021 budget. The budget ‘prioritizes the Industries of the Future, and commits to double R&D spending in nondefense artificial intelligence (AI) and quantum information science (QIS) by 2022.’  The release stresses that ‘President Trump is the first President in American history to include AI and QIS as Administration R&D priorities.’

Canada is Open for AI Business – Some Fear Too Open

Éanna Kelly, Science|Business
This article summarizes tensions associated with the rapid growth of Canada’s Artificial Intelligence (AI) sector. The report notes that ‘the country is in the midst of an AI boom, with Google, Microsoft, Facebook, Huawei and other global heavyweights spending millions or even hundreds of millions of dollars on research hubs in Quebec, Ontario and Alberta.’ This article summarizes how these investments have sparked a debate as to whether Canada is ‘too open’ for business: ‘while many see this as a sign of success, others are worried about researchers and intellectual property being swallowed wholesale.’

Report: Intellectual Property in Ontario’s Innovation Ecosystem

Expert Panel on Intellectual Property, Report to the Government of Ontario

This report from the Expert Panel on Intellectual Property responds to the Government of Ontario’s request to “develop an action plan for the development of a provincial intellectual property framework that fully exploits the potential benefits of Ontario’s investments in research and development and maximizes the role that Ontario’s innovation intermediaries can play in supporting this framework.” Created in Spring 2019, the Expert Panel is part of the Government of Ontario’s efforts to “review, update and implement policy objectives that advance the prosperity of Ontario in the contemporary economy.”

The Expert Panel was chaired by Jim Balsillie, former co-CEO of Research in Motion (now BlackBerry). Innovation Policy Lab Affiliated Faculty Shiri M. Breznitz was one of the four other members of the expert panel, including Myra Tawfik, Dan Herman, and Natalie Raffoul. In preparing the report, the panel researched best practices from relevant jurisdictions around the world and conducted 14 in-person consultations, with participation from over 110 individuals and more than 80 organizations.

The report stressed the central role played by IP and data in the digital economy, noting that intangible assets now comprise over 91% of the S&P500.  The report’s introduction stressed that “IP and data are now the world’s most valuable business and national security assets.” Success in this intangibles economy differs from traditional supply chains in that “the economy of IP and data features intangible value chains where companies compete on staking positions based on their IP and data assets and use those assets to expand their ‘freedom-to-operate’ while limiting competitors.”

Within this context, Ontario’s GDP per capita has been steadily declining, while Canadian patenting activity has fallen behind peer countries. Jim Balsillie framed the overall importance of the province’s role in ensuring full exploitation of publicly-funded IP, noting that “IP is, by definition, a government-granted exclusive ownership right to an idea, and continued leadership from the Government of Ontario is critical to the success of these recommendations.”

ISSUES:

The panel synthesized the following issues from the consultation process:

Accountability: Less than half of the Regional Innovation Centres and support intermediaries who participated in the questionnaire portion of the engagement had an explicit mandate related to generating intellectual property. The panel concluded that “more must be done to ensure that all participants in Ontario’s innovation system prioritize the development of IP capacity, programming and related activities and expertise if they are to yield economic outcomes for the province.”

IP Expertise & Education: The panel heard that many organizations in Ontario’s innovation ecosystem lacked IP expertise and capacity, often times leaving them “with little choice but to either discourage active IP generation or direct entrepreneurs to use external legal counsel.” All stakeholder groups called for improved education with respect to IP literacy, through the development of “curriculum and modules that can be easily accessed regardless of location, funding or internal capacity.” This support was recommended for technology transfer office staff, employees in support intermediaries, students, entrepreneurs, directors and advisors.

Funding and resources: The panel heard that low levels of commercialization of publicly funded knowledge is often due to a lack of direct funding and resources for IP commercialization and protection. The panel summarized the issue by noting that “increasing the availability of funding and resources to de-risk the further development of early stage innovations through proof-of-concept/prototype development would allow institutions enhanced leverage in their negotiation with industry partners.”

RECOMMENDATIONS

The Panel noted that “in thinking about, discussing and debating the themes identified above, we were guided by this question: how can Ontarians benefit from IP generated by government funded research?” The panel made the following recommendations as part of a ‘Made-in-Ontario’ approach:

Capacity-building: IP literacy & Centralized provincial resources:

“A) That a standardized web-based IP education curriculum be developed to achieve the essential learning outcomes. This IP education program should be mandatory for any individual or entity who receives public funds in support of entrepreneurial activities. It should be offered for free or at a nominal cost, available on demand and easily accessible throughout the province.”

“B) To address the issue of access to necessary expertise across the ecosystem, the Government of Ontario should create a centralized provincial resource to provide consistent, sophisticated legal and IP expertise & education. The province should convene a group of experts to develop and implement this recommendation, as well as establish the necessary metrics for monitoring outcomes.”

Accountability:

“The Government of Ontario should appoint a Special Advisor to assist in the development and implementation of a standardized governance framework for all innovation and entrepreneurship support organizations receiving public funds that have the potential to generate IP for the benefit of Ontario’s economy. This framework should provide clear direction on: organizational mandate and transparency, conflict of interest policy, board membership skills matrices, and metrics for management performance.”

Structure:

“All commercialization entities (such as Tech Transfer Offices) within research organizations that receive public funds should have a clearly defined mandate regarding their roles and responsibilities in generating IP for the benefit of Ontario’s economy. The mandate should be accompanied by a plan that accounts for issues of institutional alignment and capacity to fulfill this mandate. The Ministry of Colleges and Universities should create a mechanism for commercialization entities to identify their comprehensive IP policies where they exist, their intention to create them where they do not, and to articulate perceived gaps inhibiting commercialization outcomes.”