IP is key to changing the course of GDP growth in Canada

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The global tech industry has had a tough few months. Venture capital funding is down 42 percent globally, according to research by Prequin, and job losses across the sector have topped 150,000. For politicians and job seekers alike, this may feel like a moment of reckoning, a bubble that has burst, but technology isn’t going anywhere. Strong balance sheets, strong teams and strong intellectual property (IP) they are what survives.

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Unlike the dot.com crash of 2000, which challenged the adoption of new technologies, this latest crash in technology valuations is about separating fiction from reality among those who create new technologies.

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Co-author, Sally Daub, experienced the tech downturn of 2000 and 2008, and during those periods built ViXS, a leading semiconductor company in the competitive video chip space. One thing that helped her company survive through the ups and downs of the technology market was the value of strategically protecting the company’s IP and using that strategy to strengthen the brand’s position. As an investor, Sally continues to see IP as one of the cornerstones of starting and building a successful company, and something founders need to do early on.

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Since 2000, the global technology economy has rapidly expanded beyond North America and Europe, where today’s global technology economy is truly global. Think of Israel, South Korea and Brazil. Cutting-edge technologies and cutting-edge technology companies are emerging everywhere.

Canada should be well prepared to succeed in this increasingly global economy given our world-class research institutions and vibrant start-up environment. Despite these advantages, however, at the end of 2021, the Organization for Economic Co-operation and Development (OECD) predicted that Canada would be dead by 2030. GDP growth from 38 member countries, all of which are considered high-income economies. Something is wrong with our economic policy and corporate strategy if we can’t figure out how to turn large core assets into growth and prosperity.

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The key to correcting this recipe is a more strategic and much better funded approach to creating and commercializing IP. Of the companies in the S&P 500, 91 percent of the total value of $22 trillion is attributed to intangible assets, while in Canada, less than 10 percent of Canada’s economic drivers come from intangible assets. And the problem seems to be growing.

Canada filed 1,370 fewer patents in 2021 than in 2005, according to the Canadian Intellectual Property Office. Despite much talk about the importance of intellectual property, our innovators and researchers are not following through on the action. As a result, our domestically created intellectual property too often ends up in the hands of foreign companies, leading to the growth of corporate headquarters elsewhere, thereby losing the downstream benefits of developing IP into full-fledged products in Canada. These dismal growth numbers are part and parcel of the approach that has put the results of our research funding into the hands of others. We cannot continue on this path.

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For example, Tesla has made large investments in battery technology developed in Nova Scotia that has been largely publicly funded, giving the company significant control over the technology’s use. Huawei was able to secure 5G technology for just a million dollar payment, and now we’re seeing similar funding moves to gain access to other critical Canadian technology, including quantum.

Canada can and should lead the world in new technologies in areas such as automotive, medicine, life sciences and the AI ​​and quantum technologies that enable it. Yet we cannot be content to be creators of knowledge. We must strive to be the commercial owners of these innovations. That’s why the Government of Ontario recently launched Intellectual Property Ontario (IPON) and why the two of us contribute, among other things, as board members. IPON is the first provincial agency in Canada dedicated to helping researchers and businesses maximize the value of their intellectual property and strengthen their ability to grow and compete in the global economy. Our prosperity in Ontario, and more broadly across Canada, is tied to whether we can stop maintaining the status quo and be competitive and strategic when it comes to intellectual property. This will directly increase the prosperity of current and future generations in our country and indicate a better course that will not lead us to dead GDP growth among OECD countries as predicted.