Research and Development

Today’s global economy is led by innovation. Knowledge is the primary resource that enables innovation and the primary source of this new knowledge is research.

Although national policies may set the stage, the primary locus for robust innovation is at the regional level. Sustained job and wage growth depend on upon maintaining a dynamic regional environment that generates new knowledge and incubates companies that invest in innovation. In highly successful regions, innovation is concentrated in industry clusters that produce higher average wages, productivity, and rates of business formation, and powerful new synergies among disciplines, professions, institutions, businesses, and governments where none existed before.

However, while a region may have the necessary raw ingredients, it cannot assume strong cluster development will follow. Clusters are as much a product of regional culture, organization and initiative, as they are of concentrated talent and investment. City regions across the globe are mobilizing aggressively to develop and grow such clusters, working hard to attract international firms and investment to their jurisdictions. This competition is characterized by a ‘winner take all’ dynamic. When a new cluster forms, it becomes more difficult for a comparable cluster to form elsewhere, thereby reducing the ability of trailing regions to catch up.

Notwithstanding its very significant research strengths, the Toronto region has historically not been an aggressive contestant in this high stakes battle. While other metropolitan areas have been rapidly mobilizing to foster greater innovation, investing significant resources to build their R&D; capacity, and using these and other incentives to attract international research driven companies, the Toronto region has largely been a passive bystander, with the result that:

  • The region is leveraging about half the public research dollars per capita of provinces like Alberta, BC and Quebec
  • Our commercialization efforts are lagging behind those of competing regions, not just in the US, but here in Canada
  • Venture capital financing for early stage initiatives continues to decline disproportionately in Toronto, and is overly concentrated in information and communication technology, with little available financing in our area of greatest breadth and strength – biotech and life sciences research
  • There is no coordinated effort to aggressively market the Toronto region internationally as a premier R& D location despite our enormous strengths and competitive advantages in this regard. Current R&D; focused economic development efforts in the region are largely under funded, disconnected, and often competitive.

The Toronto region should aspire to be a world-leading centre for research and research-driven industries. A coordinated research and development initiative for the Toronto region – one that capitalizes on the capabilities of our universities, colleges, teaching hospitals, government labs and research-based companies – will enable us to vault the Toronto region into the front ranks of regional research centres internationally.

Research institutions in competitor cities and regions have already forged such alliances and are reaping the benefits. Since 1990, for instance, the Georgia Research Alliance – a partnership of Georgia’s six research universities, the business community and the state government – has fostered high-tech company growth, attracted over three dozen world-leading scientists and their teams to the state, solidified Georgia’s reputation as an advanced technology state and become a force for local job development.

Collaboration offers many benefits. In many fields, the costs of funding research have become prohibitively high for any individual institution. Through collaboration, our research institutions can be more effective at attracting public and private funding to finance strategic infrastructure, keep it up-to-date and share the benefits of these investments as broadly as possible.

Collaboration will also allow us to attract and retain more leading researchers as well as the highly specialized technical expertise that is needed in many areas to optimize investments in high-cost research facilities and equipment. The Toronto region has specialized expertise in biotech and medicine, information technology, software, telecom, materials science and many other fields. However, in many sub-fields, acquiring the critical mass to specialize is very expensive and exceeds the current capacity of our individual institutions.

Finally, collaboration will help us access the risk capital needed for commercialization through more aggressive marketing of our research and institutions outside the Toronto region. A recent analysis of biotechnology activity in the 51 largest U.S. metropolitan areas, for instance, found that the industry is heavily concentrated in nine regions, all of which excel because they have two factors in common: their strong research capabilities and their ability to convert that research into commercial activity.

The Toronto region’s strong research capacity, the expanding role of life sciences, and growing public interest in science present opportunities for the region to develop a niche market in scientific tourism and conferences. Collaborating to promote the Toronto region as a leading international research conference centre and developing related attractions like the Ontario Science Centre will boost our reputation as well as our tourism industry.

Recently, the Governments of Ontario and Canada have made several investments which will assist in meeting the goals of expansion, clustering, and commercialization. Ontario continues to invest on the creation of the MaRS Centre, slated to be one of North America’s most concentrated clusters of biomedical research and expertise, located in downtown Toronto. In June 2004, the provincial government announced a new Commercialization Strategy. The first step will invest $63 million to link public research institutions with companies that can move research out of labs and into the market. Universities, colleges and hospitals will receive $27 million to help them identify promising research and make it investor-ready; and institutions will receive $36 million to help them establish pools of seed capital. In the 2004 Budget, the Government of Canada invested in research and development through funding increases to granting councils, universities and research hospitals, to Sustainable Development Technology Canada and to Genome Canada. In addition, $80 million was earmarked to support the commercialization of research. Finally, $270 million was set aside for new investments in venture capital financing by the Business Development Bank of Canada and the Farm Credit Corporation.