Read the report: U15 Canada – Driving Innovation (February 2025)
Introduction
Canada stands at a crossroads. Global pressures are mounting, including an accelerating digital transformation, AI-driven disruption, increasing geopolitical uncertainty, and the shift toward a decarbonized economy. These pressures are reshaping industries and economies at an unprecedented pace. Canada must secure our collective economic and technological sovereignty without dependence on previously reliable partners. This will require a serious effort to address productivity, create wealth and grow economic opportunities for people and businesses in Canada.
More than ever, a country’s economic prosperity is tied to the ambition and ability of its businesses to develop, adopt, and deploy new products, processes, and technologies. This ability depends on highly qualified, talented individuals who can tap the global pool of knowledge to propose innovations for specific companies and communities. Canada can no longer rely on importing innovative ideas and technologies to address the needs and challenges of Canadian industry. We need to retain and attract highly qualified talent in Canada with the knowledge and expertise to ensure we remain resilient and adaptable in an uncertain future. It is time to build home-grown prosperity.
Canada has the capacity and potential to succeed through these transformations, but our economy faces distinct structural conditions. The country’s economy is heavily reliant on small and medium-sized enterprises (SMEs) and multinational subsidiaries, making it vulnerable to shifts in global trade, investment patterns, and technological disruptions. This reliance has been dramatically exposed by the threat of trade wars and disrupted international supply networks. The 21st century is making clear that domestic capacity must underpin economic security and national sovereignty.
Companies face uncertainty, talent shortages, and limited access to growth capital, all of which undermine Canada’s capacity for innovation-led growth. The good news is that Canada’s leading research universities are well-positioned to help strengthen the innovation ecosystem. As highlighted in U15 Canada’s recent paper, Developing Talent: Canada’s Leading Research Universities and How We Close the Talent Gap, these universities are essential to attracting, developing, and retaining the talent Canada needs. They also account for over 75% of all industry-sponsored R&D, helping thousands of companies innovate and spinning out world-leading startups that will fuel the industries of tomorrow. By providing solutions Canadian businesses need, leading research universities help drive innovation and accelerate the adoption of new products, processes, and technologies, including AI and other digital tools.
Canada already has many of the foundational elements for a successful and vibrant innovation system. The priority now must be to scale promising industry-academic collaborations, reinforce Canada’s research commercialization pipeline, and develop a cohesive national strategy that aligns government, industry, and academia with a shared goal of delivering growth, productivity, and impact for Canadians. Doing so will enhance Canada’s innovation capacity, accelerate technology adoption, and secure long-term economic prosperity in a time of rapid change. The result will be a stronger, more prosperous, and resilient Canada.