The missing ingredients for fostering innovation amongst Canadian and European bioclusters

The missing ingredients for fostering innovation amongst Canadian and European bioclusters

The missing ingredients for fostering innovation amongst Canadian and European bioclusters

On April 10, 2018, as part of Toronto Health Innovation Week, we hosted a breakfast conversation featuring Ella Korets-Smith (Executive Director, TO Health!), Frank Béraud (CEO, Montréal InVivo), Lesley Esford (President & CEO, LifeSciences British Columbia), and Anaïs Le Corvec (Network Manager, Council of European Bioregions – CEBR). The focus of the conversation was how to grow their respective clusters through innovation, which the Institute posits is the result of the interaction between specialized support and competitive pressures, along with underlying enablers, including data and metrics, a culture of co-opetition and collaboration, and permission to innovate (see Exhibit 1).

Exhibit 1 Support and pressure drive innovation

A biocluster often includes a number of life sciences and health care sectors and the mix depends often on the existing strengths of each region. Toronto has a strong technology cluster, which is linked to the biocluster and many leading research centres. British Columbia has a “young, maturing” biocluster that is working with Seattle to scale up. Montréal has a well-balanced biocluster including medtech and pharma, while the European Union has lots of collaboration and talent because of its relatively porous borders. However different the regions may seem at first glance, the panelists found that similar missing elements, including specialized support and competitive pressures, are hindering the growth of their cluster.

Specialized support for innovation

One of the key specialized support elements is coordinated innovation policy. For Canada, this means all three levels of government working together, when necessary, to develop coordinated policies and strategies to support innovation. For example, this could mean a single biocluster strategy that allows for regional differences but aligned across the country. This could also mean coordinated inter-provincial trade and tax policies. This ultimately makes it easier for companies to do business across Canada and ensures that the country works collectively to win globally instead of any one province or territory going it alone.

Another challenge is a lack of critical mass in human capital (talent and managers). The strong bioclusters in San Francisco and Boston have a pooling of specialized talent and therefore companies have more choices when selecting their next CEO or mentor to help with scaling efforts. While it is easier for European bioclusters to recruit talent due to the ease of movement between countries, this remains a challenge for bioclusters, especially when net salaries are consistently lower than in the United States after the exchange rate is factored in.  

Risk capital was quickly mentioned at the event, and remains a crucial part of the innovation equation. Fostering innovation requires that governments and companies have funds (albeit a small percentage of their innovation budgets) for testing and experimentation especially when seed funding or scaling up capital are scarce. Where bioclusters are more formally organized such as the case in Montréal, it’s easier to work with the government to find this funding.

Competitive pressures for innovation

Sophisticated customers demand more innovative products and services. Bioclusters in Canada and in many European jurisdictions have the benefit of a single payer system and significant purchasing power to demand innovative products and services from companies. For example, in British Columbia, patients have successfully leveraged their power in clinical trials. Whereas consumers “vote” with their wallets, governments and consumers rarely demand better health care products and services that would place competitive pressure on the biocluster ecosystem, producing more innovation.

Of course, to ensure that innovative products, technologies, and services permeate a health care system, government must opt to be the first customer of new products and services, guided by flexible procurement rules and processes. This has been one of the most difficult issues to rectify, but it is necessary for companies to scale their operations to the point where they can export outside of Canada.

The panelists recognized the importance of having anchor firms lead innovations, but also noted the need for a competitive environment that will spur innovation. Many panelists identified how important anchor firms were in funding R&D and innovation and attracting other firms and talent to their region.

Key enablers for support and pressure

The permission to innovate is a key enabler, which must be government-led given that the public sector is the major customer and funder in a biocluster. Aligning systems and processes towards innovation also means rewarding experimentation and risk-taking. This culture of innovation necessitates a practice of collaboration or co-opetition in which competing governments and firms collaborate so that collectively, by pooling resources and sharing risk, they can work together on mutually-beneficial policy and cluster initiatives, respectively. But the panelists found that this must be done from the bottom-up, by first working within their respective clusters and then with their neighbours, instead of just with international jurisdictions, which all the bioclusters excelled at.

Finally, data and metrics support a biocluster ecosystem in decision-making and determining areas of growth and strength. By working together, creating a culture of collaboration, and procuring innovations created in home regions, the data produced become the stories and proof points that will help celebrate successes and build the value propositions of bioclusters.

The biocluster breakfast revealed that the missing ingredient that drives innovation remains collaboration. By meeting together, interacting, and creating an ecosystem, actors can work towards better innovation policy, a stronger talent pipeline, and more risk capital. The natural friction from co-opetition will also cause a virtuous cycle of more value-added products and services for customers (government and patients) to help firms scale up and compete globally while also achieving the common goal of improving the lives of patients.

Want to know more about clusters—including the biocluster—in the Toronto Region? The Institute for Competitiveness and Prosperity is hosting the 21st TCI Global Conference (TCI2018) in Toronto from October 16-18, 2018. TCI2018 is the leading global clusters event for business leaders, policy makers and academics to make unexpected connections for economic growth and shared prosperity.

An outline of the program as well as select speaker information is now available at:

Register for TCI2018 before July 2 and take advantage of our early bird rate (CAD$200 savings).

Written by Dorinda So

Photo credit: Wand_Prapan, istockphoto

Category: Talent, Businesses, Clusters, Health Care, Innovation