The Importance of Safeguarding Our Intellectual Property

This week on the Voice of Business, we are diving into an important yet often overlooked topic: Intellectual Property (IP). IP refers to creations of the mind, like inventions or artistic works, which are increasingly important in today's growing "ideas economy." This economy is centered around intangible assets like software, technology, and digital innovations. Recently, Jim Balsillie, former co-CEO of BlackBerry, discussed on CBC the urgency of safeguarding Canada’s intellectual property in our evolving economy.

We encounter intellectual property every day, from the apps we use—like Facebook, Netflix, or Microsoft Office. We also observe our reliance on IP with Tesla’s autonomous driving systems or user interfaces with our phones. For business owners, it’s essential to protect their IP, as it shields their innovations from competitors and creates potential revenue streams through licensing agreements. However, many businesses, particularly those in the tech sector, underestimate the importance of protecting their intangible assets.

Balsillie’s podcast appearance emphasizes the consequences of not prioritizing IP protection, which are evident in Canada’s lagging productivity. He warns that foreign companies are buying Canadian-owned IP, which could push Canada to rank last among OECD countries in terms of productivity. According to Balsillie, the issue isn’t who invents these technologies, but rather who owns the rights to them. As more Canadian IP is sold to foreign companies, the potential for foreign entities to shape the future of Canadian industries grows. This could lead to significant changes, including headquarters relocating outside of Canada and essential jobs being outsourced abroad.

The elephant in the room, Balsillie notes, lies in the lack of a legislative framework that incentivizes businesses to retain their IP domestically. On top of that, there’s a gap in educating corporations about the value of IP and how to manage it effectively. He highlights how other countries, such as China, are far ahead in patent filings for technologies like artificial intelligence. China has filed 400,000 AI-related patents, while Canada on an industry wide scale has filed roughly 40,000. This further illustrates how other countries are actively protecting their innovations, giving them a competitive edge in the global market.

Balsillie also draws attention to the sharp growth of the intangible economy, which now makes up for 92% of the value in the Standard & Poor's 500 index—up from just 17%. This rapid growth will only continue, making it even more important for Canada to protect its intellectual property. He argues that Canada must foster a more attractive business environment to encourage companies to hold their IP rather than sell it to foreign competitors. While he doesn’t go into detail, Balsillie suggests we should learn from international models of legislation regarding IP retainment.
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Another concerning trend is the growing number of Canadian pension funds being invested abroad. Balsillie points out that if our own investors are placing their money outside of Canada, it should be a wake-up call that our market is not offering the support needed for businesses to grow and thrive. Addressing this issue requires a multi-faceted strategy that includes educating businesses about IP and creating a market that rewards innovation and encourages companies to keep their IP in Canada.

Finally, whether you are a large tech company or a small local business it is important business owners are aware of the advantages of their IP rights. Not only does keeping IP retain jobs in Canada- it also boosts our economy. Balsillie stresses the need for a comprehensive strategy to educate businesses about the benefits of protecting their intellectual property and fostering an attractive market environment. By doing so, Canada can ensure its productivity stays competitive and holds onto its valuable innovations!

The Voice of Business Column is made possible thanks to the support of Mark’s and can be found at pkchamber.ca