brad@looking.UUCP (03/14/87)
In article <3655@utai.UUCP> eem@utai.UUCP (Evangelos Milios) 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: > >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. Here's an excellent case for free trade. In our current protectionist economy, Canada consists of thousands of companies that either either Canadian owned miniature versions of US firms, or firms whose names are XYZ (Canada) Ltd. Bad for R&D and the development of Canadian innovation A free trade economy features world class companies plus the usual regional service corporations. Thus we give up some sectors of an isolated economy in exchange for being best in other sectors. This is the essence of trade and business. Why be a generalist (mediocre at everything) when you can be superb at a smaller number of things and buy the rest with the income you derive from your superiority? Free trade means Canadian R&D and a chance for Canadian companies in all areas from technological to cultural, to be world class. --------------------- 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! Consider Graham Software Corp., given $5 million in IDEA Corp. grants to be a software publisher. They went around and acquired good Canadian products (including mine. If I had known they had that much government money I would not have done it.) and signing contracts for exclusive rights. Then they squandered all the money (from $7 million to debt in just over one year), damaging the products and the companies who made them, then tying up the rights as things fell apart. General damage to the Canadian software industry is high. Add to that Xanaro, the original makers of Ability. They used SRTC deals to raise money, hired good Canadian talent, and then went bankrupt. If a US firm hadn't been willing to bid high on the product it would be dead today. Canadian software publishers are getting a bad reputation as government funded incompetents. If you give people money that they didn't earn, they don't respect it and it gets wasted or misused. The more you need a grant, the less competent you are in the eyes of real investors using their own money. All this free money seduces even the most honest into ruin. A general bad image gets developed for Canadian companies. My rule is that no company should accept more than 1/2 their pre-grant expendetures from the government. As taxes take around 1/2 the GNP, this simply cancels your taxes. Beyond that is bad. -- Brad Templeton, Looking Glass Software Ltd. - Waterloo, Ontario 519/884-7473