To use the analogy of tourism, Canada must look at investors as global travelers and consider the types of “amenities” that will attract them. As with hotels, which compete for tourists with things like free Wi-Fi, free breakfast, and gyms, countries must compete at each stage of the “buyer’s journey” to investment.
It is essential Canada match up against other nations in terms of our tax policy, intellectual property regime and commercial environment.
Fortunately, we have some positive attractors already in place. Among these are federal government initiatives such as our competitive corporate tax rate, Scientific Research & Experimental Development Tax Incentive Program and the Industrial Research Assistance Program. The venture capital and the investment provisions in Budget 2017 are also attractive. In addition, the non-profit Genome Canada, Centre’s of Excellence for Commercialization & Research program, and business growth accelerators such as MaRS, the Centre for Drug Research & Development and the NEOMED Institute, along with dozens of organizations located in every province are all positioned to help Canada attract the investment and business expertise we need to move ahead.
But, as the competition for investment dollars in the biotech sector increases, it is essential that Canada match up against other nations in terms of our tax policy, intellectual property regime and commercial environment. As well, our regulatory system must maintain science-based decision making, be ready to understand and support new technologies and methods of development and build expert capacity for the long term.
The cost of ignoring or failing to adequately support these competitive elements could be catastrophic.
Investment capital is key to drive biotech innovation forward to commercialization, but the type of investment required demands a special type of investor. The risk profile and extended length of time to reach full market potential attract only patient and specialized investors, and attracting them is one of the biggest challenges facing Canada. We must be as globally competitive as possible to gain the attention of investors for Canadian biotech projects.
The Mobility of Capital and Intellectual Property
If we do not remain competitive, early-stage companies will go where the investment is. Unlike mining, forestry and oil and gas, biotech is a relatively portable business; the primary asset for biotech companies is their intellectual property. Research and development, clinical trials and manufacturing can all be done elsewhere, so if companies are unable to attract investment to Canada they will move. Ultimately, Canada will get the final product back, but in the meantime we will miss out on the economic and social benefits of hosting its commercialization.
But, if we get it right, and Canada becomes a sought-after destination for biotech investment capital, companies in the sector will be able to grow and become commercial and that will lead to more entrepreneurship and ongoing growth.
As a result, the biotech sector will generate more value in the Canadian economy, increased employment, a better environment and healthier citizens. We will have an abundance of well-paying, highly skilled 21st-century jobs and a diversified economy.
This report showcases some of the success stories and positive conditions that help position Canada to succeed in this important venture. The opportunity is there for us to grasp.