E. Richard Gold is associate dean (graduate studies) and James McGill Professor at the McGill Faculty of Law, and a retired programmer and technology lawyer.
If the Canadian economy is to grow, we must break through the glass ceiling holding our companies back. What we've been doing for the past 30 years – taking a hands-off approach to policy, increasing intellectual property protection to meet the needs of foreign companies and burdening our universities with a mandate they cannot fulfill – is failing our innovators and our economy. We need to set aside bad policies and develop a made-for-Canada approach. Critically, we must educate our young people to creatively manage risk in a global ideas economy.
The Globe's continuing Signs of Change series highlights just how much our economy has changed, even in fields such as mining, oil and gas, manufacturing and retail. Since the early 1990s, our economy has had more to do with ideas than with things. Yet, Canada suffers not only from the absence of an innovation policy, but from trade deals that bind us to intellectual property rules and other strictures that help our competitors, and a lack of business investment in research and development.
One of our largest failures is in not confronting exactly how disruptive the ideas economy is. My experience as a technology lawyer is that companies fail not so much because of the technology, but because they try to compete against last year's rather than next year's. They adopt old-economy business models. And they are unable to master the tools needed to manage the risk of innovation. Learning how to deploy these tools – to make and manipulate intellectual property law, regulations and international standards – separates the countries that succeed from the rest.
Unfortunately, Canadian universities have not adequately engaged in the needs of the ideas economy. When I left computer programming to enter management, I turned to law school rather than management. I realized that the future of the tech industry lay in the domestic and international rules on protecting ideas, contracting and taxation. I was disappointed, however, that in the law schools, no thought was given to the ideas economy. Virtually no professor taught intellectual property and how it relates to the ideas economy. I had to learn this by myself.
Rather than developing critical skills to assess strategic aspects of IP, my generation swallowed heavy doses of assumption and myth. It was only when I began my doctoral studies that I discovered that the supporting evidence was missing. Yet our policy framework was entirely built around these myths.
Today, most law schools have at least one IP professor, but they don't adequately prepare students, firms and policy makers to think strategically. While ideas and intangibles make up the bulk of our corporate assets, IP is not a required course in any law school in Canada.
Our business schools do no better. While they teach strategy, they have yet to come to grips with IP's realities. Understanding the potential and the limits of IP, strategic games of bluff and the threat of litigation is critical to anyone engaged in commercializing ideas. We teach none of it.
Beyond teaching, we keep asking our universities to start up companies and expand the economy through patenting and licensing.
Yet most of our universities lose money in this, and the few companies that survive do so largely because of public subsidies. None are world players; those that succeed leave Canada.
That's because universities are lumbering beasts, ill adapted to the quick pivots and strategizing necessary to take an idea to market and scale it. Yet, successive governments load university researchers with obligations to develop market strategies and engage in commercial transactions.
Here are a few of ideas of how to move forward. Universities need to concentrate on teaching the role, economics, strategy and uncertainties of innovation in technology and non-technology sectors. More specifically, we need to engage our law, business and policy students in the games that aggressive firms play with IP – how to resist them, exploit them and obtain concrete benefit for Canadians.
For example, we need to teach them to follow the lead of the Children's Hospital of Eastern Ontario (CHEO) in standing up to foreign patent bullies. In that case, a U.S. firm threatened the Ontario government with patent infringement (on patents of a kind now invalid in the U.S.) when the government proposed allowing Canadian hospitals to administer a genetic test to Canadians within our public system. In developing a novel agreement that can easily be extended to all genetic tests in Canada, CHEO has ensured patient access to cutting-edge technology. In doing so, it was also created a competitive edge for our firms in drawing on the large data sets.
Universities should resist the pressure to patent and license and, instead, pursue creative arrangements with business and non-business partners to create knowledge, such as know-how and local networks, that would be costly to reproduce in other cities or regions.
Finally, we need to provide power to our firms and institutions, in the form of corporate defence pools or sovereign patent pools that give an edge to Canadian researchers and companies.
We need to build a sophisticated capacity, because all innovation economies already have theirs. This capacity starts with teaching our students, business and public leaders about IP's strategic role in the global economy.
Signs of Change is an ROB series about Canada's economy and its shift away from resources.