Immigration and Innovation
Briefing Deck: The contribution of
immigration to Canada’s innovation
system
The Innovation System
Framework conditions of the innovation system include:
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Public Research Support: support for high quality research
Public/Private Coordination: collaborations between private concerns and publically
supported research to facilitate take up innovations i.e. commercialization
Finance: tax subsidies and incentives for private firms to conduct innovation related
activities (e.g. R&D), as well as venture capital to support new enterprises
Market Conditions: access to technology, competition policy, savvy users to drive
demand
Openness: to foreign investment in research
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All framework conditions are affected by these key drivers of innovation:
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Money
People (HQP)
Research Activity (R&D)
Innovation in Canada: A Snapshot
Overall, Canada is a middle of the pack innovation performer
• In some critical indicators we fall behind the OECD average:
Business expenditure on R&D – Canada 1.05%, OECD average 1.59%
M&E investment – 13th in OECD
Firm collaboration for innovation – only 5% of large firms, as opposed to 45% for Finland
Science and engineering degrees as a % of all degrees - 21st in OECD
• In other indicators we fall behind our key competitors:
Venture Capital / GDP – only ½ the relative size of US investment
Researchers in the workforce – 8.2 R&D personnel per thousand employed, as opposed to
9.6 for the US
Masters and PhD graduate levels – lower than Finland, Germany and the UK
• In some indicators where Canada is (or appears to be) a leader, our
position is not very strong:
Public support for higher education R&D – strong, but possibly reaching a plateau
Tertiary education attainment – Canada has high overall tertiary attainment, but lower
levels of university attainment
HQP – Highly Qualified Personnel
• HQP play key roles in every element of the
innovation system as:
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Students
Researchers
Managers and Executives
Entrepreneurs
Venture Capitalists
Policy Developers
Intellectual Property Lawyers
Immigration as a Source of HQP
Immigration can contribute to the Canadian stock of HQP in two ways:
(1) foreign & international students studying in Canada, and (2) skilled
foreign workers relocating to Canada permanently or temporarily.
Canada has averaged approximately 250,000 immigrants a year over
the last 5 years. Of these, approximately 150,000 (2008) were
economic class migrants and their immediate family. Approximately
1/3 of the economic class are selected on the points system, the
remainder are spouses or dependents.
Canada also allowed 370,000 (2008) temporary workers to fill short
term labour market needs.
Foreign Students by Destination
Canadian Statistics
•Canada welcomed approximately 62 000 foreign and international students in 2006, a growth of
5000 over the previous year
•14.8% of all tertiary students are foreign citizens
•39% of students in advanced research programs are foreign citizens (more than half of whom are
not Canadian residents)
•Canada is a destination country for foreign students, but not the top destination.
Source Countries of International Students in Canada
Japan Mexico
1%
1%
France
7%
United States
12%
Other (non-OECD)
52%
China
18%
Other (OECD)
6%
India
3%
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Canada has shown growth in the number of foreign students attracted, but this growth still lags
behind key competitors. (Year 2000 = 100) Year 2007: Canada – 140, Aus – 200, UK – 158
Canada has a comparable or higher percentage of its international student population enrolled in
Science and Engineering (S&E) and associated programs (26%).
11.4% of international students in Canada are in advanced research programs. This is lower than
the US (15.9%), comparable to the UK (11.9%) and higher than Australia (4.1%).
Canada has varied sources of its international students. The largest source continent is Asia (42.4%),
followed by Africa (16%), Europe (15.1%), North America (12.1%) and South America (8.8%).
Competition for Foreign Students
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Canada has a strong need for foreign students, and we compete with many leading
S&T countries to attract them. Canada competes primarily with English language
countries for market share – The US, UK and Australia
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International students are drawn to magnet centers, and to recruit international
students areas of education and research where Canada leads must be championed.
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International students tend to base their selection of international schools upon the
quality of education. Only when educational opportunities are generally comparable
does cost (tuition) become a factor.
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Finding a job after graduation may be a key consideration for international students.
International students in Canada report significant difficulties in finding employment
after graduation, and many intend to leave Canada for their home, or a third country,
to pursue career opportunities. For international students in advanced degrees this
may be compounded by lower demand for PhDs in Canada than in the US.
HQP Migration
• Canada relies heavily on immigration for population and labour force
growth.
• Based upon the current structure of the resident population by 2015 the
size of the 15-19 cohort (entering the labour force) will be only 80% of the
60-64 cohort (leaving the labour force). The growth rate of the Canadian
born work-force has been projected to hit zero in as early as 2011.
• Immigration also contributes substantially to the stock of HQP. 31% of
highly qualified personnel in Canada are foreign born.
• Immigrants contribute overwhelmingly to the number of advance degree
holders in Canada, which is particularly important given Canada’s low
domestic output in this category.
HQP Migration
Based upon 2001 census data:
• Most PhD holders in Canada were not born here. Half (50.3%) of PhD
holders in Canada are immigrants. This grows to 60% when nonpermanent residents are included.
• These PhDs are heavily concentrated in S&E. In 2000, S&E PhDs accounted
for nearly 2500 of the approximately 3000 immigrant PhDs.
• Between 1991-2000 there were nearly 23 000 immigrants with PhDs,
representing 1.5% of the total immigration activity over the period.
• Between 1991 – 2000 China was the largest source of PhDs with 25.5%,
up from only a 3.6% share over 1961 - 1970. The United States was the
source of only 5.9% of immigrant PhDs, down from a high of 24% over
1971-1980.
Entrepreneurs and Investors
• Canada competes to attract foreign investment into the domestic
innovation system, as well as endeavoring to attract immigrant
entrepreneurs and investors.
• Immigrants serve as conduits for foreign investment and trade by
maintaining linkages with their countries of origin.
• Immigrants also contribute to the growth of another segment of the
HQP stock in Canada – entrepreneurs.
• Studies have shown that along with higher levels of education,
immigrants to Canada also have a higher propensity to become
entrepreneurs. However, these entrepreneurs face challenges in
conducting their unique brand of transnational innovation, such as financing
and regulatory framework compatibility across countries.
The Impact of Immigration on
Innovation
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It is difficult to quantify the impact of immigration on innovation – though it is
clear that foreign born HQP are an indispensible part of the innovation-related
labour force.
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HRSDC/SSHRC/Industry Canada research suggests that immigration, if properly
targeted to attract and retain highly skilled personnel, could offset the decline in
GDP that would otherwise result from the reduction (ageing) of the labour force.
• Certain international studies show that:
– foreign students increase university research publishing in S&E
– immigrants are over represented (2:1) in metrics such as founding leading
high-tech companies, patent applications and Nobel Prizes
– International students, particularly at the graduate and post-graduate levels,
have positive spillover benefits for domestic students, and act as agents of
knowledge diffusion throughout the innovation system
Policy Implications
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The Canadian immigration process currently has four classes of economic immigrants under
which highly skilled workers may fall:
- Federal Skilled Worker
- Canadian Experience Class
- Quebec Skilled Worker
- Provincial Nominee Program
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The Federal Skilled Worker class has traditionally been the largest. However, it currently faces
a serious backlog, and wait times averaging 63 months. In the coming years the Provincial
Nominee Program (PNP) and the Canadian Experience Class (CEC) are projected to overtake
the federal skilled worker program to account for the bulk of economic applications (if no
changes are made to current programs). Citizenship and Immigration Canada projections for
2012 are 40,000 PNP and 26,300 CEC.
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The Canadian Experience Class fills a vital need to be able to transition temporary residents
(e.g. international students and highly skilled foreign temporary workers) into permanent
residents. However, the class is new, and it remains to be seen how effective it will be.
Programming
• Programs to attract world leading talent (e.g. Canada Research Chairs)
have seen some tremendous success in recruiting international
researchers and expatriate Canadian researchers – 31% of current chair
holders were recruited from outside of Canada. Other programs, such as
the Vanier Scholarships, attract world leading graduate students. A key
drawback of these programs is their limited focus on the academic sector.
• The ability of highly qualified immigrants to enhance innovation in Canada
is contingent upon recognition of their foreign earned credentials. New
programs to assist applicants with foreign credential recognition in Canada
have been undertaken. The development of a national framework in this
regard is also underway. These initiatives, however, are recent and only
beginning to be implemented.
Issues
• Some of Canada’s most significant innovation problems lie in the private
sector. Lower demand for high-skilled individuals in Canada is indicative of
this problem, as most HQP do work in the private sector. Immigration of
high skilled individuals may not be able to address this issue directly.
• Immigrants face a negative mismatch rate of 60%, compared to 39% for
Canadian born residents. This underutilization of immigrant expertise is
likely detrimental to the national innovation system.
• There are serious gaps in the available knowledge of how immigration
contributes to private sector innovation and entrepreneurship.
Questions for Discussion
Foreign and International Students
How can Canada better attract foreign students to study in Canadian
universities, particularly in advanced research programs?
• Considerations:
– Tuition, quality of education, language of instruction
What changes are necessary in order to encourage more foreign students to
stay and work in Canada after graduation?
• Considerations
– Post-graduation work permit process, lower demand for highly qualified personnel
means Canada loses potential immigrants to other countries, incentives for employers to
hire international graduates
Questions for Discussion
Entrepreneurs
What can be done to attract and support immigrant entrepreneurs,
particularly in innovation intensive sectors?
• Considerations:
– Tax policy, federal/provincial co-operation on labour mobility and credential recognition,
transnational entrepreneurs
How can government programs which support innovation be more easily
accessed by immigrant entrepreneurs?
• Considerations
– Existing programs are general in nature, or support specific sectors or regions
Questions for Discussion
Highly Skilled Temporary Workers
What can be done to attract greater numbers of highly skilled temporary
workers to Canada, and to encourage them to become permanent residents?
• Considerations:
– Current system for processing temporary applications may not be internationally
competitive
Identification of Priority Applicants
How can the immigration system be improved to ensure that the skilled
immigrants Canada needs are accepted when they are most needed?
• Considerations
– Using Ministerial authority to ensure that applications are processed to reflect the
labour market needs for skilled labour in Canada (i.e. frequently updating list of skilled
occupations)