Honourable senators, it’s often said that knowledge is power. I don’t agree — it’s the application of knowledge that is powerful. The application of knowledge creates opportunities, jobs and prosperity. Those who master its application maintain robust growth in an increasingly complex world.

Why? Because increasingly complex products, systems and services are more difficult to imitate and deliver much greater customer value than alternatives. The ability to manage increasing complexity relies on the capacity to protect and commercialize intellectual property, or IP.

How is Canada doing in this global race to discover, protect and commercialize the globally competitive IP that will deliver increasing prosperity to future generations? Not good, according to Harvard University’s Economic Complexity Index.

Since 1995, Vietnam’s economic complexity has improved from one hundred and seventh in the world to fifty-second. China has moved from forty-sixth to seventeenth. Over that same period, Canada has slid from twenty-second to forty-third.

One of our challenges is that we have a historical reliance on unprocessed resources and products. Consider agriculture, where the Dutch are — pardon the pun — eating our lunch. Their complex value-added systems generate 74 times more export value per arable acre of land than in Canada.

Despite being a nation of innovators with a globally competitive research engine, far too much of our IP is commercialized elsewhere. Over the past 20 years, the number of Canadian-invented patents transferred to foreign firms has tripled from 18% to 56%. Think about it. Half of our IP is commercialized outside of Canada.

What do we get in return? Over the last six years, Canada’s annual investment in university-based research has only returned 1.2% per year in cumulative income on licensed IP. Something isn’t working.

While countries around the world have been increasingly monetizing their IP for decades, Canada has been going backwards. We’ve yet to master the skills needed to systematically compete in an increasingly complex global ideas economy.

One group that’s helping is called Innovative Asset Collective. They have temporary funding from Innovation, Science and Economic Development Canada as a pilot project in the clean technology sector. Over the past 18 months, the Innovative Asset Collective has successfully modelled global leaders like the Fraunhofer Institutes in Germany, the sovereign patent funds of South Korea, Japan and Singapore and the Office of International Intellectual Property Enforcement in the U.S.

The Innovative Asset Collective’s expertise and strategic partnerships address a long-standing weakness in our innovation economy — one that we must overcome if we’re to achieve our global potential. We have no time to waste. American businesses invest three times more per worker in IP than Canadian businesses, further widening the productivity gap. We must reverse this trend. We have the ability. We must find the determination to make it happen.

Thank you, colleagues.