The trouble was, more than a decade had passed since SARS infected millions of people around the world. As Hotez explained in his 2020 testimony before the U.S. House Committee on Science, Space and Technology, “By the time we completed manufacturing the SARS vaccine there was no longer interest in SARS as a public health threat. There was no transmission of SARS anywhere, and we could not attract further public and private investments to carry this through clinical trials and licensure.” Had investments been made, he added, “we potentially could have a (COVID-19) vaccine ready to go.”
The innovation gap isn’t the infamous valley of death that early ventures face after initial growth. Rather, it happens earlier, at the pre- and peri-incorporation phase, when discoveries are not yet validated in the market and often face regulatory hurdles that address existing problems using antiquated solutions. It is the gap between fundamental research and investable ventures where innovation backs up against a lack of funding.
Focusing these resources on research institution-based startups, meanwhile, has proven to maximize success rates. The 2020 Mind the Gap Report from the Minnesota-based Innovosource consultancy reveals that these ventures are more likely to realize a liquidity event and have more staying power than non-university investments at the seed stage, with eight per cent eventually going public, compared to 0.07 per cent for non-university startups, and 68 per cent surviving after 20 years.
The bad news, for Canada at least, is that other countries are bridging the innovation gap by investing heavily in the pre-equity landscape. Canada’s 2021 federal budget is helping the country play catch up with announcements such as $708 million for the Mitacs internship program, and $90-million over two years for ElevateIP, but more must be done in the pre-incorporation space.
The innovation pipeline begins with research, and it’s crucial we nurture early-stage ventures and their development through the support systems proposed by the 2021 budget. By leveraging federal and provincial “Build Back Better” plans, we can support ventures emerging from strong research institutions.
The COVID-19 pandemic has propelled us far beyond our predicted future. We’ve rapidly transformed as a society, simultaneously increasing our reliance on technology and innovation. When it comes to the importance of early-stage venture creation, the time for debate and anticipation is long gone. We need to act, and we need to act now.
Canada must bridge the innovation gap to prevent key discoveries from being overlooked.