According to 2013 OECD statistics, Canada spent double of the average OECD country, and over 2.50 times spent by USA on higher education.  In contrast, Canada’s business expenditures on R&D were below the OECD average.

Although business R&D spending accounts for the majority of R&D spending, Canada is unusual in its high-proportion of higher-education R&D spending.


It would seem that as compared with the OECD average, Canada is not leveraging higher-education R&D spending to business R&D spending, which is more likely to produce tangible innovations, such as new products, services, or processes.

“This investment in higher education is not nearly matched with R&D investments in the Canadian industry itself, which leaves a gaping hole in the planning process. We have a vastly smart work force with a shrinking base of opportunities in the Canadian economy.” says Vijay Kalra, CEO of SR&ED Funding Consultants Inc., a Toronto based consulting firm.

This pattern of R&D investments in Canada shows there is a large challenge facing the country – intellectual underemployment.

effects of intellectual underemployment

It is an alarming sign and Canada is at risk of lagging behind in commercialization unless ways can be found to better link higher-education research with business opportunities. The government must address this problem soon to neutralize what is costing billions of dollars annually to Canada.

Vijay Kalra says, “Clearly, with the trends as they stand, reducing the scope of programs like SR&ED by Canadian government as was done in 2012 is both counterintuitive and counterproductive.”

He says, “By creating such a large, intellectually advanced work force, the Canadian government, along with the private sector, should encourage more business R&D as well as increase Government Intramural Expenditure on R&D (GOVERD). With Canadian dollars at such a low point, the government should also be doing everything to attract companies and R&D opportunities from all over the world.”