Canadian Seed Trade Association Snapshot of Private Innovation Investment in Canada s Seed Sector

Transcription

1 Snapshot of Private Innovation Investment in Canada s Seed Sector seedinnovation.ca

2 In 2018, the Canadian Seed Trade Association (CSTA) completed its Investment Survey. The survey, conducted every five years, is the most comprehensive snapshot of private seed sector research and development in Canada. The data provides insights into research investment today, projections into the future, barriers to innovation and demonstrates the effect of policy and market changes on investment decisions. FINDINGS The 2012 survey found that three crops corn, canola and soybeans made up 89% of private research investment in Canada (and canola alone was 64% of industry expenditure). Five years later there is far greater diversification, as research investment in wheat and pulses has increased dramatically. Those two crops combined now make up almost 20% of private research investment in Canada. Research diversification isn t just about cutting up the pie differently, overall research expenditures have grown significantly over the last five years. In 2012 the sector spent $101M on private research, and CSTA forecasted modest growth of 1% by However, the latest data shows that private research expenditures have grown to $171M in 2017, a 56% increase over five years ago. Research investment projections are strong: with projected further growth to $179M by 2022, driven particularly by projected growth in soybean and wheat research. Compared to 2012, absolute investment has increased for every crop kind. Major increases are found in wheat, a 237% increase over 2012 expenditures, and pulses, which went from almost no expenditure in 2012 to $12.7M in When asked to rate the most significant barriers to further innovation respondents answered that a shortage of resources available for investment (linked to a lack of value creation models), Canada losing out to other, more attractive, international jurisdictions, and concerns over intellectual property are factors that must be addressed. The message is clear: collectively, we need to do more to make Canada an international destination of choice for research and development. $171 million research investment in 2017 $180M $135M $90M $45M Total research investment historical and projected to 2022 ($M) 56% investment growth since 2012 ABOUT THE SURVEY This survey asked CSTA members for their current and projected research expenditures by crop kind, descriptions of the types of research activities members are engaged in and for views on barriers to innovation. Respondents represent the diversity of CSTA membership: with companies ranging from less than $1M to well over $150M in annual sales in Canada. Overall, the seed innovation industry represents over $3.2B in annual sales in Canada, providing us with a broad and diverse picture of seed research and development.

3 CONCLUSIONS Canada boasts a robust and healthy private investment landscape, with increasing investment overall and strong projections for the future. Research diversity is increasing, with more money being put into more crop kinds and we hope to see this trend continue. Small, medium and large enterprises are investing and competing. Survey results show that companies of every size are investing in innovation. We are seeing indications that intellectual property protection (including UPOV 91 ratification) can foster more investment; Canadian-based research programs and Canadian producers are benefitting. There is still work to be done on value creation: investment levels in canola are very high, but Canada has a major gap when it comes to private investment in cereals research and development. There is great potential there. Private Research Expenditure in Canada Breakdown by Activity Type Traditional plant breeding - 45% License or royalty payments for genetics to breeders and developers within Canada - 21% Trait development - 15% Variety evaluation (screening for registration or commercialization) - 13% Approval of traits - 3% $ License or royalty payments for genetics to breeders and developers outside Canada - 3% $ Canola Wheat Soybeans Corn Pulses Barley Forages Investment share by crop kind $25,000, $50,000, $75,000, $100,000 RESEARCH - 54% Scientists on pre-breeding - 4% Scientists on plant breeding - 9% Technicians - 17% Support - 4% 55.9% 14.7% 10.2% 9.3% 5.7% 1.9% 1.3% JOBS AND THE SEED SECTOR Survey respondents reported that their companies employed over 2,300 people in Canada, with 54% of those positions involved directly in research. Summer staff - 20% SEED SALES - 22% PROCESSING - 18% PRODUCTION - 6% See chart on page 4 for complete breakdown

4 BREAKDOWN OF INVESTMENT PROFILE BY CROP KIND (over $1M annually) Soybeans: Projected Investment Wheat: Projected Investment Barley: Projected Investment 23,983,000 22,245,400 3,029,750 18,986,000 20,759,250 2,645,000 Soybeans: $18.9M to $23.9M Wheat: $20.7M to $22.2M Barley: $2.6M to $3M Corn: Projected Investment 19,192,600 Pulses: Projected Investment 13,433,000 Canola: Projected Investment 94,815,000 94,095,000 18,398,000 12,768,000 Corn: $18.3M to $19.1M Pulses: $12.7M to $13.4M Canola: $94.8M to $94M 1,864,196 Forages: Projected Investment 1,825,000 BARRIERS TO INNOVATION Survey respondents ranked the most significant barriers to further innovation, and these results provide a roadmap of the priority issues to resolve in order to stimulate even more research and product innovation in Canada. Forages: $1.8M to $1.8M The most identified barrier is budget constraints. Not surprisingly there is a direct correlation between available resources and the scope of innovation, which underscores the need for effective value creation mechanisms. Market conditions are also a major factor, and are largely beyond control. Commodity prices shift, planted acreages fluctuate and mergers and acquisitions amongst companies can all affect investment decisions. Canada is a competitor in a global innovation investment market, and several respondents reported that their parent companies had chosen to invest in other jurisdictions. This shows that barriers to investment aren t just a lost opportunity, they can benefit Canada s competitors. Companies also reported difficulty in finding partners with whom to innovate, and shortages of the skilled labour required to drive advanced research. Finally, intellectual property concerns are viewed as an important barrier to innovation. Where intellectual property rights are not clear, not understood, or not enforced, innovation suffers.

5 HISTORICAL INVESTMENT BY CROP KIND: CSTA INVESTMENT SURVEY RESULTS (projected) Canola 7,100,000 30,500,000 41,900,000 64,800,000 94,815,000 94,095,000 Corn 2,800,000 7,900,000 4,800,000 16,540,000 18,398,000 19,192,600 Soybeans 700,000 2,600,000 3,900,000 9,570,000 18,986,000 23,983,000 Other Oilseeds 1,250, , ,000 Cereals 1,500,000 2,300,000 3,300,000 8,378,000 24,175,250 26,157,150 Wheat 6,160,000 20,759,250 22,245,400 Barley 1,680,000 2,645,000 3,029,750 Other Cereals 538, , ,000 Forages 300, , , ,000 1,864,196 1,825,000 Pulse Crops 235,000 12,768,000 13,433,000 Special Crops 100, ,000 1,000,000 1, , ,000 Vegetables 100,000 Other 1,600, ,000 1,600, ,000 Total 14,200,000 45,300,000 57,000, ,314, ,444, ,100, (projected) If you have questions please contact the CSTA office at seedinnovation.ca