In his last posting, Dave mentioned that statistic on Canada’s direct vs. indirect funding really jumped out of the STIC report. Another stat that really jumps out is something known as “Business expenditure on R&D (BERD) intensity.” BERD intensity is “the ratio of business R&D to a measure of output” – for example, business expenditures on R&D compared to the gross domestic product (GDP). This figure shows where Canada stands on BERD intensity compared to a number of other countries:
While many other countries have increased their BERD intensity, Canada’s has actually decreased. And, as the report points out, this isn’t because our GDP has grown so much, but rather because business expenditures on R&D have decreased in recent years:
Another way of looking at business expenditures for R&D is relative to “business value-added”1. This metric, which basically amount to how much of a “business’ resources is dedicated to R&D,” also shows that Canada lagging behind:
Taken together, this shows a rather unfavourable trend in Canadian businesses not investing in research & development – i.e, not contributing to innovation. We know from Dave’s last posting that Canada is not very good at contributing direct funds to research and my first posting in this series illustrated that while Canada is pretty good at getting PhDs trained, we are not so good at having jobs for those PhDs once they are done their schooling. Perhaps I’m being overly simplistic here2, but doesn’t this suggest that we need some way of encouraging more direct funding of R&D -and encouraging business to increase their investment in R&D – so that government, the academic sector and businesses are willing and able to hire some of those unemployed PhDs to do that R&D? As per usual, I don’t have the answers here, but just thought I’d put that out for some discussion!