Quebecers in their basement have often been described as indestructible “patents”. However, the expression no longer holds. In 15 years, Quebec has gone from a model student to a dunce in patenting and intellectual property. Worse still: the province is also losing its innovative companies. That’s cause for concern.
In any case, this is the reaction of Éric N. Duhaime, researcher at the Institute for Research in Contemporary Economics (IREC). “It’s very worrying,” he said. We have developed a capacity for innovation, but we fail to take advantage of it. Quebec tends to remain a kind of innovation subcontractor for large foreign companies. »
Based on an analysis of the American Patent Office (USPTO) database, the Quebec researcher says he notes in a report he published Thursday a major drop in inventions patented in Quebec and which remain Quebec property.
Thus, at the beginning of the 2000s, Quebec stood out for a large number of patents obtained by individuals or companies here. At the time, for every patent won in Quebec by a foreign company, two patents were obtained by local interests. Then, from 2006, the fall. In 2020, the proportion has more than reversed: only 40% of patents whose inventor is from Quebec are held by Quebec organizations.
In 15 years, Quebec has gone from the best to the worst performance in intellectual property retention among all G7 countries. And it is especially glaring in the technological sectors.
A two-step escape
A second form of exodus also harms the increase in Quebec’s collective wealth: the organization observes a flight of Quebec businesses — or at the very least of their property. “The results for all companies are relatively balanced, but if we target more emerging and technological companies, we see a negative imbalance,” says Éric N. Duhaime.
Over the past 10 years, Quebec companies have carried out 47 mergers or acquisitions of emerging foreign companies. Meanwhile, 58 emerging Quebec companies were the target of a similar merger or acquisition transaction by a company established outside the province. This negative balance is also particularly obvious in the technological sectors, indicates IREC.
The Legault government will have to take notes: its investment strategy in research and development does not do much to correct the problem, indicates the IREC researcher in his report. The trend goes against the ambitions of the Prime Minister, who wishes to increase the collective wealth of the province, in particular through greater retention of brains and innovators on its territory.
“We are not taking full advantage of the innovation value chain,” summarizes Mr. Duhaime. We have created jobs in innovation, we are creating new technologies, but we are not retaining all the value created here. And that’s a huge problem. »
Who benefits from innovation?
Quebec updated its five-year innovation research and investment strategy (SQRI) in spring 20222 for the close friends). The ink on this document has barely dried when IREC is already calling into question its proper functioning. Its main flaw: it “takes into account measures which date back more than two decades”, writes the institute.
These measures are the stimulation of research and development through tax credits, subsidies granted for the transfer within companies of inventions made in public institutions and the consolidation of venture capital following the Silicon Valley model, in UNITED STATES.
However, they do not allow the intellectual property produced here to be retained in the country, says IREC. In fact, they favor multinationals with deep pockets, like the famous GAGAM, rather than SMEs and young businesses on which much of Quebec’s economic innovation is based.
The IREC also criticizes the government for its inability to concretely quantify the impact of its innovation strategy. “Considering the scale of resources and efforts devoted, it is dismaying to note that there is no official mechanism ensuring the systematic collection of data on technology transfer with regard to universities and public research centers in the Quebec,” writes Éric N. Duhaime.
However, a solution exists to reverse the trend and give Quebecers the taste for patenting again: review the framework for intellectual property to ensure that public research centers — universities, most of the time — receive better compensation from the share of companies born from their inventions. This could take the form of a more active participation in their share capital, suggests IREC. Or, conversely, more room could be made for open scientific research, where innovation produced in Quebec would be pooled, for the benefit of local businesses.
“This would allow us to escape from the current logic of technological monopolization and control which does not benefit Quebec in the long term,” concludes Éric N. Duhaime in his report.
In short, it should probably be patented differently.