The most NET NEW jobs in the Canadian economy are created by new, self-funded, knowledge based businesses. There is a significant lack of working capital available for early stage, relatively high risk, small businesses that are not ready for traditional financing or Angel and VC funding. The highest demand and lowest supply of working capital occurs early in the life cycle of a new, knowledge based business and between traditional financial institutions and Angel funding. Improving access to working capital for early stage, bootstrapped small businesses is essential to supporting job creation in the Canadian economy.
Access to sources of working capital to support new, self-funded and bootstrapped small businesses is the number one impediment to job creation in Canada today.
- Develop a new program similar to “Canadian Small Business Financing Loan” by Industry Canada but, for working capital.
- Tax-free cashing of RRSPs for founders of early stage small businesses to fund their business.
Move toward direct and demand-driven business innovation models.
Both direct funding of innovation and movement toward demand-driven innovation should help to improve innovation in Canada and lead to improved productivity.
Recommendation #2 – Shift from indirect to a smaller number of direct innovation programs.
- Implement entrepreneur innovator credits which provide innovation credits directly to entrepreneurs and innovators who can then choose which service providers they want to work with.
Recommendation #3 – Implement demand-driven innovation model.
- Implement a demand-driven innovation model that provides more control and incentives to the businesses which commercialize products, services and knowledge.
Recommendation #4 – Establish meaningful outcome-oriented metrics for R&D expenditures.
I agree with the Expert Panel that focus has to shift to demand-driven policies and there has been much progress in EAP 2012 and 2013. Canadian innovation policy needs to move more rapidly toward a true demand-driven model with more meaningful measures of success. While there is progress toward the optimal conditions in the Canadian innovation ecosystem, adoption of a broader, more distributed and open network, with commercializing entities playing a more active role, will further improve productivity.
- Move toward a commercialization model that integrates Research, Knowledge Transfer and Industry. Each stage of the knowledge mobilization chain should have both input and output metrics that gauge productivity.
Recommendation #5 – Move toward demand-driven commercialization model.
I disagree with the assertion of the Expert Panel that business is underperforming when it comes to innovation while academia has been having a wider degree of success. Canadian businesses are far more innovative and productive than they are being given credit for because measurement techniques for BERD are not an accurate reflection of true business activity and don’t take into account key macro-economic shifts. Higher education is perhaps less productive than “Paradox Lost” postulates because spending is being used as the primary measure of success.
- Require researchers to find a private sector commercialization partner to validate technology and/or research intended for commercial applications.
- Ian Graham