eem@utai.UUCP (03/13/87)
It is widely accepted that Canada spends proportionally significantly less
on R&D than the U.S. Assuming that this is true (R&D expenditures are
tricky to estimate correctly) I have seen a variety of explanations:
1. Brain drain to the U.S.
2. Foreign-owned companies choose to perform R&D not in their Canadian
subsidiaries but in the US.
3. Canadian companies are a lot smaller that their US counterparts
and therefore have limited R&D budgets.
4. The Canadian economy depends to a large extent on the US for
technological know-how, and it can get away with it (or pay for it)
because Canada is well endowed with natural resources.
My own opinion is that all of the above are relevant explanations to
some extent and I was wondering what other people think. Comparison
with countries other than the US or Japan (e.g. France, Germany, Italy,
Sweden) could be useful.
Evangelos E. Milios CSNet: eem@ai.toronto.edu
Department of Computer Science ARPA: eem%ai.toronto.edu@csnet-relay
University of Toronto UUCP: eem@utai.uucp OR
Toronto, Ontario, {ihnp4,decvax,decwrl}!utcsri!utai!eem
Canada, M5S 1A4 CDNNET: eem@ai.toronto.cdn
(416) 978-8737,978-6114
--
Evangelos E. Milios CSNet: eem@ai.toronto.edu
Department of Computer Science ARPA: eem%ai.toronto.edu@csnet-relay
University of Toronto UUCP: eem@utai.uucp OR
Toronto, Ontario, {ihnp4,decvax,decwrl}!utcsri!utai!eem
Canada, M5S 1A4 CDNNET: eem@ai.toronto.cdn
(416) 978-8737,978-6114 brewster@watdcsu.UUCP (03/13/87)
>From: eem@utai.UUCP (Evangelos Milios) >It is widely accepted that Canada spends proportionally significantly less >on R&D than the U.S. Assuming that this is true (R&D expenditures are >tricky to estimate correctly) I have seen a variety of explanations: >1. Brain drain to the U.S. >2. Foreign-owned companies choose to perform R&D not in their Canadian >subsidiaries but in the US. >3. Canadian companies are a lot smaller that their US counterparts >and therefore have limited R&D budgets. >My own opinion is that all of the above are relevant explanations to >some extent and I was wondering what other people think. I think item 3 is relevant but is also often used as an excuse by management who prefer to maximize profits in the short run as opposed to planning for the long run. Item 1 obviously occurs, but I think that the true cause of low R&D in Canada is item 2; item 1 follows as a result of item 2. Try not to become a man UUCP : {decvax|ihnp4}!watmath!watdcsu!brewster of success but rather try Else : Dave Brewer, (519) 886-6657 to become a man of value. Albert Einstein
rgatkinson@watmum.UUCP (03/13/87)
In article <3124@watdcsu.UUCP> brewster@watdcsu.UUCP writes: >>From: eem@utai.UUCP (Evangelos Milios) > >>1. Brain drain to the U.S. >>2. Foreign-owned companies choose to perform R&D not in their Canadian >>subsidiaries but in the US. > Item 1 obviously occurs, but I think that the true cause of low > R&D in Canada is item 2; item 1 follows as a result of item 2. And therin lies the rub. I don't know about you, but I certainly see a better future for myself south of the border. A large fraction of my immediate friends graduating with me feel the same way. It's a vicious circle in some ways perhaps. Pesonally, my choice was easy. -bob atkinson
lyndon@ncc.UUCP (03/14/87)
Another problem to be dealt with involves government attitudes
towards R&D spending. The Alberta economy has centered around
oil and natural gas for much too long. As a result, two local
"hi tech" companies that I can think of have had their requests
for Gov't assistance rejected.
In one of these cases, substantial funding was arranged through American
investors. I heard a rumour that the gov't body that initially rejected
the funding request was so embarrased by how they were made to look that
they practically begged the company to accept *some* money...
The bottom line: If you can design Carbon based chips, Alberta will
give you a billion bucks no questions asked. But then again, who the
hell ever heard of Silicon, and what do you mix it with? [ :-) ]
--
Lyndon Nerenberg - Nexus Computing Corporation - lyndon@ncc.UUCP
"Fifty Thou a Year 'll buy a lot a beer"
(calgary,ubc-vision,vax135,watmath,seismo!mnetor)!alberta!ncc!lyndon
(pyramid,winfree)!ncc!lyndonlyndon@ncc.UUCP (03/14/87)
In article <864@watmum.UUCP>, rgatkinson@watmum.UUCP (Robert Atkinson) writes: > In article <3124@watdcsu.UUCP> brewster@watdcsu.UUCP writes: > >>From: eem@utai.UUCP (Evangelos Milios) > > > >>1. Brain drain to the U.S. > >>2. Foreign-owned companies choose to perform R&D not in their Canadian > >>subsidiaries but in the US. [ ... ] > And therin lies the rub. I don't know about you, but I certainly see > a better future for myself south of the border. I don't know about you, either. What is it SOB (South Of Border) that interests you so much? -- Lyndon Nerenberg - Nexus Computing Corporation - lyndon@ncc.UUCP "Fifty Thou a Year 'll buy a lot a beer" (calgary,ubc-vision,vax135,watmath,seismo!mnetor)!alberta!ncc!lyndon (pyramid,winfree)!ncc!lyndon
brewster@watdcsu.UUCP (03/15/87)
>From: brad@looking.UUCP (Brad Templeton) >Here's something I am sure some of you will find counter-intuitive. >One of the major blocks to Canadian R&D is excessive government funding of >R&D! Not necessarily excessive government funding, but excessive INCOMPETENCE in government funding, and at the risk of offending some people I'll provide two examples that I know of that may shed some light on this subject. Excuse the rambling nature of the following story, but it seems important enough to tell in some detail. First : I entered the Ontario Engineering Design Competition along with two other people a couple of years back. We had a complete design for an IBM PC-XT plug-in card that had a TMS32010 coupled to shared memory, a plan for software to run on this combination, and a good portion of the system was already implemented and running. This was before any other company had yet announced the same or similar product. We were among the first people who started working with the then just announced TMS32010 series, and this product was such an obvious one we were sure it would sell. The judges of the competition were from different corporations, with representation by all the biggies (IBM, DEC, GM, etc.). The judges were relatively gung-ho about our design, and about the market for the product in general. There was another project at this competition which was even more impressive. This project analyzed the soundness of large metal castings based on echo recordings produced by controlled impacts on the surface. The range of application was broad, and a functional demonstration unit using engine blocks was demonstrated. This project was obviously going to win the competition, and so we thought we were going to settle for second place. Now, the head judge of the competition was from a KW public institution associated with IDEA Corp, an institution charged with finding funds for "innovative" Canadian ideas as proposed by Canadian start-ups. Actual name deleted to protect the guilty. It turned out that the head judge had veto powers over the other judges, and in the final analysis, we ended up with an honourable mention, (first,second, and third place were announced), and the group with the engine block received nothing. Of all the winners not one was microprocessor related. The winner turned out to be a group that designed a metal brake, ie a device for bending metal. (No, the competition was not held in 1900, and yes you heard correctly, the winners designed a device for bending metal.) To this point the story sounds like sour grapes, we lost and were a little bit annoyed. The clincher of the whole story was at the awards dinner, where the head judge indicated why the groups who had won did so, and why some apparently reasonable projects were not held in high esteem by him. "The important thing for students and the researchers that lead these students to realize, is that as Canadians we must work on developing the technologies appropriate to the Canadian experience." Direct quote - "APPROPRIATE TO THE CANADIAN EXPERIENCE" This from a man charged with funding new Canadian start-ups. If someone wants to reinvent the wheel, this Canadian company can be funded by public money, if someone wants to work on "exotic high tech stuff" :*), like microprocessor development, then they are not reacting appropriately to the Canadian experience. As a side note, the TMS32010 IBM plug-in from Sky is virtually identical to our design (no personal communication, presumably we both just followed the same design rules). This product was announced about two months after the competition, and despite the fact that Sky is the leading company in the area of add-on array processors, several other smaller companies from the states were also able to enter the market. Now to the second part of the story. Approximately one year after this episode, I went to work for a small start-up in Waterloo who were developing a "high-tech device", which for the purposes of this discussion and in an attempt to keep within the framework of the "Canadian experience" includes anything that uses microprocessor technology back to the Intel 8080 or microcontroller technology back to the Intel 8048. The company was having trouble obtaining start-up funds from the previously mentioned institution in KW, presumably because of the high-tech angle. Given a severe shortage of funds the high-tech KW company then approached IDEA Corp in Toronto directly. It was then learned that there was a huge surplus of money in the IDEA coffers, as the institutions around Ontario who were supposed to be investing in new start-ups had not been following their mandate (presumably because the damnable researchers and entrepeneurs refused to adhere to the "Canadian experience"). The government of the day realized that this would be a bad political spot to be caught in and had just ordered IDEA to spend the entire pool of investment money PDQ. Given this opportune timing, the high-tech company I worked for got approx $100,000 for development purposes. The owner of the company now drives a brand new Mazda RX-7, and the company will never sell a single unit. The background of the company IDEA invested in : headed up by a person who flunked out of 2B elec eng, who had worked at BNR for two work-terms and saw an interesting development; but BNR had had several dedicated researchers working on the project for several years and barely managed to develop a working model, only to have BNR brass declare that there was no significant market for the device (which as a researcher at BNR certainly isn't the end of the world), but did indicate the lack of money-making potential of the device. Despite inadequate funding, inadequate equipment and materials to study the problem, and an inadequate theoretical background to understand all the issues involved, this person thought he could make a go of it. When BNR found out about this, they filed several patents on the device, and sent a letter saying that if this KW company ever tried to market anything resembling BNR's device, BNR would throw the entire weight of its legal staff behind a lawsuit to stop this KW company from entering production. And for the really bad news (:*), I checked out the market for this device while working at the KW company, and found out that there was no market to speak of in Canada and while there was a limited market in the States, no American distributor was even willing to discuss sales as a similar competing device, (functionally similar but based on a completely different technology) was just then entering the market in the US and they were priced way cheaper then just the production costs alone of the KW product. The pitch to IDEA was based on sales of over approx 3000 units/year within two years of funding. How was this carried out ??? The owner lied through his teeth, and IDEA did minimal background checking given the mandate of getting rid of this backlog of cash within a short timeframe. It took me three weeks to be firmly convinced of what was going on at this place, and then I quit. Canada has some distinct advantages over the US, one chief advantage is that I can walk home on the Sunnydale path without any fear whatsoever of being knifed or shot, (although if this your biggest fear you should move to Britain where the crime rate for these activities is much lower than in Canada). The other big difference being the safety net provided, but unless you plan with 50% certainty to use this net to its full extent, you are probably better off to essentially self-insure. Despite these potential advantages, I think that Dr. Polyani of UofT (Canada's most recent Nobel laureate) should be commended for his honesty in answering the paraphrased question "What would you tell the young researchers in Canada ?" by saying "Go south". In all due respect to some of the established and highly qualified people who have chosen to stay in Canada, it is my honest feeling that if you are young, have ambition, motivation and any talent whatsoever, the only rational alternative is to go to the States. Personally, the "Canadian experience", is not something that I plan to stake my career on. Disclaimer : points presented above concern real companies and are to the best knowledge of the author accurate in every detail. It remains possible that my limited knowledge may have led me to misunderstand some key points, and so anyone wishing to do business with any company resembling those mentioned above is advised to seek their own independent analysis of the company in question. I assume sole responsibility for this article, and wish to absolve U of Waterloo and all associated persons and enterprises from any litigation that might result. Try not to become a man UUCP : {decvax|ihnp4}!watmath!watdcsu!brewster of success but rather try Else : Dave Brewer, (519) 886-6657 to become a man of value. Albert Einstein
david@geac.UUCP (David Haynes) (03/16/87)
In article <3655@utai.UUCP> eem@utai.UUCP writes: >It is widely accepted that Canada spends proportionally significantly less >on R&D than the U.S. Assuming that this is true (R&D expenditures are >tricky to estimate correctly) I have seen a variety of explanations: > >1. Brain drain to the U.S. But the question is "Why?". I think the "brain drain" is more of a symptom than a cause. Most of the people I know who have gone to the 'states have done so because a) they are being offered a *lot* more money and b) the work is far more exciting/interesting. >2. Foreign-owned companies choose to perform R&D not in their Canadian >subsidiaries but in the US. And on the whole, this is the correct thing to do. As a business case, the U.S. market is far stronger (and larger) for high technology goods than is the Canadian market. In addition, Canadians have shown a strong trend toward accepting goods tailored for the U.S. market. Given these factors, why would any company do R&D in Canada? Maybe manufacturing, but not R&D. >3. Canadian companies are a lot smaller that their US counterparts >and therefore have limited R&D budgets. No, this doesn't work -- Japan spends far more than we do on a *per capita* basis. (In fact, I think we are ranked 6th or 7th in research dollars per capita --- this is a little fuzzy, it was on the radio about 2 months ago) >4. The Canadian economy depends to a large extent on the US for >technological know-how, and it can get away with it (or pay for it) >because Canada is well endowed with natural resources. It's more than that, Canadians are, by nature, conservative. They are not as willing to part with the amounts of money required to do serious R&D, especially with a strongly competitive neighbour to the south. The overall opinion seems to be one of "Why should we sink money into this R&D effort when there are probably 10 companies in the U.S. *all* of which are better staffed and funded, probably working on the problem right now. It's almost a point of self-induced inferiority. Canadians (in general) do not believe that they can compete with the U.S. in areas of technical development. With respect to "Getting away with it", I am not sure what it is *exactly* we are getting away with. As I see it, we are following an almost textbook example of supply and demand. We supply raw material, they supply processed material. Each for each other's demands. > >My own opinion is that all of the above are relevant explanations to >some extent and I was wondering what other people think. Comparison >with countries other than the US or Japan (e.g. France, Germany, Italy, >Sweden) could be useful. > >Evangelos E. Milios CSNet: eem@ai.toronto.edu >Department of Computer Science ARPA: eem%ai.toronto.edu@csnet-relay >University of Toronto UUCP: eem@utai.uucp OR >Toronto, Ontario, {ihnp4,decvax,decwrl}!utcsri!utai!eem >Canada, M5S 1A4 CDNNET: eem@ai.toronto.cdn >(416) 978-8737,978-6114 To me, it seems that you could paraphrase your question about R&D and place it in a purely Canadian context by asking, "Why is the most R&D development done in Ottawa or Toronto? (and maybe Vancouver)" Why not White Rock? Why not Sarnia? It seems clear from that context, that R&D is done where there is a large enough market to sustain it and that the amount of money spent in a particular area is proportional to the percieved size of the market. The Canada/U.S. comparison invokes feelings of nationalistic pride, but does not, in my humble opinion, really factor into the problem. -david- -- ========================================================================== David Haynes (utzoo!yetti!geac!david) Geac Computers International Inc. +1 416 475 0525 x 3420 350 Steelcase Road,Markham, Ontario, CANADA, L3R 1B3
brewster@watdcsu.UUCP (03/17/87)
>From: david@geac.UUCP (David Haynes) >To me, it seems that you could paraphrase your question about R&D and place >it in a purely Canadian context by asking, "Why is the most R&D development >done in Ottawa or Toronto? (and maybe Vancouver)" Why not White Rock? >Why not Sarnia? Ever since the success of Silicon Valley and Route 128 it has generally been held that high-tech development requires a fairly specific infra- structure. This usually includes a set of appropriate support companies, associated universities or think-tanks, well developed cultural environment (plays, theatre, etc), and pleasant living environment (schools, shopping facilities, open spaces, etc.) All four items can be found in Ottawa and Toronto (and Waterloo??), and this is not true of White Rock or Sarnia. >It seems clear from that context, that R&D is done where there is a large >enough market to sustain it and that the amount of money spent in a particular >area is proportional to the percieved [sic] size of the market. The Canada/U.S. >comparison invokes feelings of nationalistic pride, but does not, in >my humble opinion, really factor into the problem. In terms of high-tech products the minimal acceptable marketplace to target for is North America, and it won't be long until your product has to be targeted at a world market if it wants to succeed. The Canada/U.S. comparison is very relevant, since in the North American marketplace either country should be acceptable for development, but as it now stands most R&D occurs in the States. One possible solution to this is political. Canada could pass laws making it illegal for foreign countries to repatriate profits, but require that profits remain in Canada, which would lead to increased R&D in Canada. This is not the same as FIRA, which worries about foreign control. Under a repatriation scheme, foreigners could own as many or as large a portion of Canadian companies as they choose, the only limit being that any profits that they make from these Canadian operations must be used in Canada. The law could even be implemented in such a way that big brother in Ottawa need not constantly monitor your operations; ie if your profit remains in Canada tax occurs at the normal rate, every dollar of profit you decide to take out of Canada is taxed at twice the normal rate; you choose what you want to do with your profits. This is related to the situation in the U.S. where some states try to levy taxes on companies registered in their state, based on the companies world-wide profits. I am not sure, but I believe that this has been declared illegal, presumably because of the logic that you should be taxed in the area where profits are made. Try not to become a man UUCP : {decvax|ihnp4}!watmath!watdcsu!brewster of success but rather try Else : Dave Brewer, (519) 886-6657 to become a man of value. Albert Einstein
brad@looking.UUCP (03/18/87)
In article <3139@watdcsu.UUCP> brewster@watdcsu.UUCP (Dave Brewer, SysDesEng, PAMI, UWaterloo) writes: > One possible solution to this is political. Canada could pass > laws making it illegal for foreign countries to repatriate profits, > but require that profits remain in Canada, which would lead to > increased R&D in Canada. This is not the same as FIRA, which > worries about foreign control. This is the same. What is the POINT of owning a company in a foreign country if you can't ever make a profit from it in your own country. Unless you visit Canada frequently, you don't get to ever enjoy your profits and company, and thus they are close to valueless. This would just result in endless schemes and tricks designed to sneak the profits out -- large 'franchise' fees or 'management' fees etc. If you stop those, it just means the closing down of all Canadian subsidiaries. Companies would rather export over trade barriers to get half the profit than never be allowed to get any profit. PER CAPITA, WE ARE NOT AN INFERIOR COUNTRY! WE DO NOT NEED ALL THESE CRAZY LAWS 'PROTECTING' US. A common market would allow Canada to have all the economic strength, profitability, unique culture and R&D that areas of the US of similar size have. -- Brad Templeton, Looking Glass Software Ltd. - Waterloo, Ontario 519/884-7473
manis@ubc-cs.UUCP (03/18/87)
In article <3139@watdcsu.UUCP> brewster@watdcsu.UUCP (Dave Brewer, SysDesEng, PAMI, UWaterloo) writes: > Ever since the success of Silicon Valley and Route 128 it has generally > been held that high-tech development requires a fairly specific infra- > structure. This usually includes a set of appropriate support > companies, associated universities or think-tanks, well developed > cultural environment (plays, theatre, etc), and pleasant living > environment (schools, shopping facilities, open spaces, etc.) > All four items can be found in Ottawa and Toronto (and Waterloo??), > and this is not true of White Rock or Sarnia. Well, you're not going to get me to defend either White Rock or Sarnia, but I should point out that White Rock is about the same distance from downtown Vancouver that Framingham is from downtown Boston, and closer than the distance from San Jose to San Francisco. In fact, much of Vancouver's high tech is found in either Burnaby or Richmond; the latter is your classic suburb, and hardly has much in the way of plays or theatre. Back to the point about R&D. There are two reasons why BC isn't getting as much R&D as it should. First of all, the provincial govt's attitude to post- secondary education has been ludicrous (when the former Minister of Science, Pat McGeer, proposed a "Silicon Valley BC", he was also attacking faculty salaries at the post-secondary institutions as too high); contrast this with the situation in California, where the Governor, George Deukmeijian, was elected on a platform of education cutbacks; when he tried to reduce the budget of the University of California, he got so many representations from business about this that he relented. Things may change under vander Zalm and the new Socreds, but I'd have to say I'm cautious at best. Second, Canadian business only likes to bet on sure things. As a result, very few companies, even in our high-tech sector, have pure research labs of the sort maintained by GM, IBM, Bell Labs, or, in much smaller companies, DEC, or Wang. This can be seen in the Federal Government position that research funding should be tied to immediate economic benefits. This problem is related to the previous one: very few BC business leaders have called the Socreds to task on their terrible education policies. ***Disclaimer*** I draw my salary (such as it is) from a public post-secondary institution. ----- Vincent Manis {seismo,uw-beaver}!ubc-vision!ubc-cs!manis Dept. of Computer Science manis@cs.ubc.cdn Univ. of British Columbia manis%ubc.csnet@csnet-relay.arpa Vancouver, B.C. V6T 1W5 manis@ubc.csnet (604) 228-6770 or 228-3061 "BASIC is the Computer Science equivalent of 'Scientific Creationism'."
acton@mprvaxa.UUCP (03/18/87)
In article <3139@watdcsu.UUCP> brewster@watdcsu.UUCP (Dave Brewer, SysDesEng, PAMI, UWaterloo) writes: > Ever since the success of Silicon Valley and Route 128 it has generally > been held that high-tech development requires a fairly specific infra- > structure. This usually includes a set of appropriate support > companies, associated universities or think-tanks, well developed > cultural environment (plays, theatre, etc), and pleasant living > environment (schools, shopping facilities, open spaces, etc.) > All four items can be found in Ottawa and Toronto (and Waterloo??), > and this is not true of White Rock or Sarnia. From your last statement it is fairly obvious that you have never been to White Rock which is less than a 35 minute drive from Vancouver and is even closer to other Vancouver suburbs. I spend a lot of time in the White Rock area and it sure has Toronto and Ottawa beat for a pleasant living environment. As to the other areas of a cultural environment etc you are making a comment on the Vancouver area, or for that matter any large metropolitan area in general, and that has more to do with ones own personal view on these sorts of things then any real difference in what is available. As an example of this cultural feast we can both go and watch last place hockey teams in action. However, I think that in Canada research takes place where it is easiest to get money and government contracts. That just happens to be a lot easier to do from Ottawa and Toronto then from any place else in the country. Donald Acton
chapman@fornax.uucp (03/18/87)
> > Another problem to be dealt with involves government attitudes > towards R&D spending. The Alberta economy has centered around This of course is a major factor in the US. The US government pays out phenomenally large R&D subsidies/grants in the form of "defence" contracts. The is a major stimulus to R&D. I think if we gave out commeasurate subsidies for basic research we would be doing a lot better.
brewster@watdcsu.UUCP (03/19/87)
>From: acton@mprvaxa.UUCP (Don Acton) >From your last statement it is fairly obvious that you have never been to >White Rock which is less than a 35 minute drive from Vancouver and is even >closer to other Vancouver suburbs. In fact, I wasn't even aware that the White Rock to which you referred was in B.C. Apologies to all White Rockians who may have been slighted. Try not to become a man UUCP : {decvax|ihnp4}!watmath!watdcsu!brewster of success but rather try Else : Dave Brewer, (519) 886-6657 to become a man of value. Albert Einstein
sahayman@watmath.UUCP (03/19/87)
Since nobody has spoken up for Sarnia yet, may I add that it seems to be a nice enough place to live, right on the lake and everything.