Scholars have long known that ideas matter to public policy. Policy ideas are shared beliefs about cause-and-effect relationships that motivate government action. Certain ideas may persist for a long time, whether or not they are accurate or effective. They recur in policy debates even if they are shown time and again to be faulty. That we need more university-industry collaboration in Canada, and that governments should do something about it, is one such idea.
Usually those espousing this belief assume that there is a gap between business and higher education that is detrimental to innovation. University-industry partnerships are thus framed as a solution to the problem of helping firms innovate.
There are multiple problems with this idea. First and foremost, the assumption that universities do not collaborate with industry in Canada is wrong. Take one widely used indicator – research and development activities funded by industry. The share of industry-funded R&D in Canadian universities hovered around eight percent over the past couple of decades. That may not sound like a lot, but it has been consistently higher than the equivalent figure for American universities, which has fluctuated at around five percent in the same period. And no proponent of stronger university-industry partnerships in Canada is claiming that there is a similar problem in the United States.
Another misguided assumption is that stimulating more (or better) university-industry partnerships will fix the problem of increasing the rate of innovation among Canadian firms. In short, that is a far more complex problem, which relates to factors well beyond the scope of research partnerships.
It is important to keep in mind that firms that significantly invest in university research are the ones with the resources and the know-how to do so. This tends to happen more frequently in science-based industries, where those who lead corporate R&D seek out academic researchers in relevant disciplines with complementary expertise. For industry, in addition to specific research projects, access to the latest scientific ideas as well as to potential recruits among graduate students are common advantages gained from ties with academic laboratories. For university researchers, partnerships provide not only funding but access to specialized equipment, data, and the problems that are important in industry, which can be stimulating for faculty and provide good opportunities to graduate students.
Finally, those keen on encouraging university-industry partnerships should bear in mind that there has been no lack of policy action to promote such activity in Canada – quite the opposite. Federal governments of different political persuasions have supported this agenda for the past four decades. In spite of that, business expenditures on R&D have declined and the R&D intensity of Canadian industry is about half of the OECD average. Not only is business R&D investment in Canada lower than in other industrial economies, but it also happens (to a large extent) in sectors that are not research-intensive. Reflecting on this situation, a recent Council of Canadian Academies report concludes that:
The trend towards increased collaboration and partnerships between industry and higher education institutions combined with flat business expenditures on R&D in the higher education sector remains a puzzling anomaly that is not fully accounted for in existing data or research available to the Panel.
Arguably, there is no pressing argument for promoting more university-industry collaboration through public policy, as the conditions are already in place for these partnerships to form. They are certainly not a quick fix for addressing the laggard performance of Canadian industry in innovation. In fact, what we need is greater knowledge of the effectiveness of the multiple policy tools in place that seek to stimulate innovation out of collaborative R&D, as they may not always be delivering what is expected.
The Australian Government’s response to similar issues is to change research policy including the priorities of the peer research granting councils to get universities to do increasingly applied research.
As a result the proportion of Australian university research that is pure basic has fallen from 40% in 1992 to 23% in 2016.
An interesting observation I’ve made is that the push for university-industry collaboration may well be undercutting the growth of industry R&D in Canada. I have personally witnessed several instances of university labs in engineering faculties which use collaborative research grants and (generally low) student salaries to undercut private companies offering similar research services. These professors run their lab in a model like an R&D consultancy company, but use the university both as a safety net and as a way to lower labor costs. Its no wonder that private R&D has a hard time competing with that, and that we don’t see much growth in the private side. This is merely anecdotal, but as you say, the issues around private R&D investment in Canada are complex, and it is worth questioning whether these collaboration grants actually foster innovation in Canada in the ways that they are intended to.