Introduction

WD's mandate

Western Economic Diversification (WD) is a federal government agency responsible for diversifying the economy of Western Canada. WD supports a strong emphasis on innovation as a means to achieve economic development and diversification leading to wealth creation. ¹

Innovation is considered to be central to a region's prosperity and quality of life. A strong and vibrant economy that fosters and rewards innovation allows research organizations and companies to thrive and succeed. Western Canada has many of the elements of an innovative economy, but these elements face continued challenges and require continued support as they develop and grow. WD plays a key role in the support of these elements, as it works with partners from a range of government, industry and other organizations to strengthen Western Canada's innovation system.

Innovation in life sciences

Innovation in life sciences has long been identified as an important area in which to focus investment in research and development. Innovation in life sciences research increases knowledge of how life works at the cellular level, and contributes important discoveries that improve human health, agriculture, horticulture, food processing, and industrial manufacturing.  Because life sciences have such wide-ranging applications, WD's investments in life sciences have resulted in important contributions being made to industries and communities across Western Canada.

Innovation in life sciences research produces a broad spectrum of societal benefits, including:

• Development of treatments for human disease and physical disabilities
• Advances in agriculture that increase yields and reduce environmental impacts of farming
• Improvements in animal health, food quality, and safety
• Production of healthier and more nutritious food
• Introduction of sustainable industrial applications that reduce the use of non-renewable resources, reduce or eliminate toxic wastes, lower green house gases and reduce the consumption of energy and raw materials
• Improvements in forest health and wood quality, thereby ensuring industry viability.

Innovation in life sciences is also pursued because of its economic contribution. As an economic driver, the pursuit of innovation in life sciences creates employment, generates revenues and contributes to the tax base. The real payoff comes when research becomes a commercial success generating even greater economic returns.

Jurisdictions that do well on innovation measures typically score higher on quality of life indicators and have highly educated workforces earning higher average wages. As noted in the Conference Board of Canada's recent report, How Canada Performs: A Report Card on Canada, Canada does not generally score well on criteria used to measure innovation. The report states clearly that as a nation, Canadians are risk averse and not entrepreneurial, important factors in the creation and advancement of an innovation culture. The Conference Board report echoes themes explored in this study regarding the need for greater investment in research that leads to the commercialization and adoption of innovative technology, and highlights the need for organizations such as WD which are willing and able to support research in innovation.

Motivation for this study

WD has identified the need for an impact assessment of its investments made in support of the development of the life sciences cluster in Western Canada. This study encompasses the investments made by WD during the six-year period from April 1, 2000 to March 31, 2006. During that period, WD approved 359 projects in Western Canada's life sciences cluster, with total funding commitments of approximately $161 million. Project recipients represented a broad spectrum of interests, including industry associations, academic and research institutions and not-for-profit organizations with mandates to support the development of life sciences.

Of the 359 projects, 154 projects valued at $131 million or 81 percent of total investments, were included in this study. Excluded from the study were projects granted funding under the Conference Sponsorship Program (CSP), Canada Foundation for Innovation Support Program (CFI-SP), and First Jobs in Sciences & Technology (FJST).

Definition of life sciences

In this report the term "life sciences" is defined as biotechnology, and includes the diverse range of applications that apply biological methods and techniques to produce new products and services.

The Organisation for Economic Co-operation and Development (OECD) defines biotechnology as "the application of science and technology to living organisms, as well as parts, products and models thereof, to alter living or non-living materials for the production of knowledge, goods and services. ²

The range of biotechnology applications crosses a diverse range of industries from health care to heavy industry. In this study, WD's investments reflect this definition of life sciences, and can be broadly categorized as follows:

• Health care applications – biopharmaceutical drug development, and medical assistive devices and equipment
• Agricultural applications– crop biotechnology, forest biotechnology, animal biotechnology, and aquaculture
• Food applications – nutraceuticals, functional foods, herbal supplements, and food additives
• Industrial and environmental applications – bioproducts, biofuels, industrial enzymes, and the use of microbes for hazardous waste treatment.

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¹ Western Economic Diversification Canada, 2005-2006, Report on Plans and Priorities, Stephen Owen, Minister of Western Economic Diversification and Minister of State (Sport) pages 30-31.

² Organisation for Economic Co-operation and Development (OECD), www.oecd.org/about/0,3347,en_2649_37437_1_1_1_1_37437,00.html