Shifting funding from indirect to direct private investment models will limit the capacity of small businesses to invest in innovation and make Canada less innovative in general.
Direct private investment is by nature focused on investing in a limited number of companies promising outsized returns. Direct public investment (i.e. grants) is vulnerable to the vagaries of bureaucratic decision making on what does and does not deserve investment.
A case and point is Canada’s SR&ED program, it’s democratic because any company performing eligible R&D activity based on objective criteria earns the tax credit.
As the Federal Government’s Advisory Council for Economic Growth turns its attention to innovation, including a review of the key innovation support programs, it will be important to embrace indirect, democratic models as a key to advancing Canada’s innovation potential.
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