Here’s what’s still needed to drive innovation

In 2017, Canada launched the world’s first national artificial intelligence (AI) strategy. The Pan-Canadian Artificial Intelligence Strategy—led by the Canadian Institute for Advanced Research (CIFAR) and funded by the federal government—was created to help establish a robust national AI ecosystem by 2030. The ambitious goal was to accelerate AI research and education, spur the development of new technologies and firms, and promote the adoption of AI tools to drive innovation across multiple sectors of the economy. Five years on, how are we doing? What have we learned? The short answer to the first question is “extremely well.” Canada is now home to many top AI researchers and talented students, and nearly 1,000 AI startups, attracting more than $1.5-billion in venture capital. Canada ranks second worldwide in AI hires and fourth for “investment, innovation and implementation of artificial intelligence,” behind only the United States, the United Kingdom, and China. Earlier this year, the New York Times noted that the Toronto region’s tech sector was “quietly booming”—an apt description of Canada’s AI ecosystem as a whole. But it is the second question—what have we learned—that is perhaps more important as we look towards a post-pandemic future. Let me make three observations. First, the federal government appears to recognize the urgency of getting our national innovation policy right. The national AI strategy is an excellent example. Indeed, according to the Global AI Index, the Canadian government ranks first in the world for “depth of commitment from national government to artificial intelligence.” Emerging national strategies for biomanufacturing, life sciences, genomics, and quantum technologies are now developing along similar lines. The recently announced Canadian Innovation and Investment Agency (CIIA) provides further evidence of purposeful innovation policy. In establishing the CIIA, the government cited Israel’s Innovation Authority and the Finnish Funding Agency for Technology and Innovation, now Business Finland. Israel and Finland are among the Organisation for Economic Co-operation and Development (OECD) leaders in business expenditures on research and development (BERD), at levels multiple times higher than in Canada. With BERD investments stubbornly low in Canada—and well below the OECD average—CIIA could be pivotal in spurring the development and adoption of innovations in both new and traditional industries, while leveraging university research and talent to create broader prosperity. However, as CIFAR president and CEO Alan Bernstein and I wrote recently in the Globe and Mail, Canada’s innovation policy must embrace the entire innovation ecosystem, from fundamental research to the creation of new products, services, and companies. And it must do so by harnessing the distinct, but complementary, roles of the public and private sectors. Canadian universities have had remarkable success in spinning off startup companies. But universities remain institutions of advanced research and higher education, first and foremost. The private sector needs to enhance its ability to draw upon, develop, and deploy university research in economically and socially beneficial ways. Our innovation ecosystem must acknowledge this essential distinction and strengthen the connective tissue between academia and industry. It is the private sector, not universities, that will turn our ideas into gazelles or create the next unicorn. Second, public investments in advanced research and technology must build on our strengths and competitive advantages, while ensuring that we not ignore the bold investments other countries are making. We must embrace longer-term perspectives and tolerate degrees of risk beyond those of private markets. Decades of patient public investment into Geoffrey Hinton’s research on artificial neural networks at the University of Toronto by the Natural Sciences and Engineering Research Council of Canada and CIFAR led to extraordinary breakthroughs—which in turn spurred private investments in machine learning and revolutionized industry after industry. As with research into mRNA vaccines, the potential of deep neural networks was not always apparent to those outside the field. The research would transform society, but it took the private sector to do the transforming by leveraging pathbreaking academic research. My final observation is that talented people drive world-changing research, and capital follows talent. The Pan-Canadian AI Strategy and the researchers, students, investors, and entrepreneurs it has attracted have helped make the Toronto region the third-largest tech hub in North America. In fact, Toronto created more tech jobs between 2016 and 2021 than any jurisdiction in North America (and more than New York and Silicon Valley combined). The lesson is that existing and emerging researchers are the foundation of a growing knowledge economy. But funding to produce the next generation of talent in Canada is declining. Bolstering support for emerging researchers was one of the most significant recommendations of the 2017 Fundamental Science Review. As a recent report from the House Standing Committee on Science and Research underlined, recommitting to supporting the people behind Canada’s research ecosystem continues to be an urgent national priority. Governments are rightly focused on inducing Canadian businesses to invest in innovation. But the lessons of our AI successes are clear: this must happen alongside sustained public investments in university research, in growing the country’s research talent, and in championing partnerships between universities and industry. Meric S. Gertler is the president of the University of Toronto. His academic expertise is on the role of city-regions as sites of innovation in the global economy and the foundations for local economic success and prosperity. The Hill Times