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Transnational entrepreneurs help commercialize bright ideas, says researcher

By Dana Yates

Howard Lin

Initiatives that support cross-border innovation could spark productivity, says researcher Howard Lin, who studies transnational entrepreneurs.

This is one in a series of Best of Research News from the past year. This story was originally published in September 2010 and has been updated.

"Stunningly poor" - that was how the Conference Board of Canada described the country's innovation performance in 2008. A few years later, the problem remains largely the same, but one Ryerson University researcher may have found a unique solution: transnational entrepreneurs.

Xiaohua (Howard) Lin is a professor and co-director of the International Research Institute in the Ted Rogers School of Business Management. He is also principal investigator of the project Transnational Community as Innovation Linkage, a joint venture with students and faculty from Tsinghua University in Beijing. Tsinghua is widely considered an equivalent of the Massachusetts Institute of Technology.

Through extensive fieldwork, the researchers identified how Canada could benefit from the expertise of Chinese immigrant professionals. "Technological innovation, and particularly commercialization, is the key to the long-term, sustainable development of Canada," Lin says. "But in this area, we fall far behind other G8 and G20 countries. So we need to find new ways to increase our productivity."

Part of the problem is a scarcity of Canadians who can carry out innovation activities, from creating knowledge to transforming it into practical products in the marketplace. The answer, Lin believes, involves partnering with other countries - or to be exact, the expatriates of other countries.

For example, some highly educated Chinese entrepreneurs in Canada wish to help their adopted homeland, and to maintain existing connections with venture capitalists and companies in China. Those organizations can help support the research and production of Canadian- or Chinese-born ideas, helping to develop them into profitable technologies. In turn, those products would achieve greater commercial success through access to not only Canada, but also millions of Chinese consumers and other massive markets around the world. (Canada's population is too small to solely support the commercialization of innovations.) 

This offshore R & D process has already proven successful in the pharmaceutical industry. For instance, when a transnational entrepreneur bases his or her business in Canada, and then conducts testing and development in China, the benefits for Canadians are health-care savings and tax revenues. Furthermore, there is potential for expansion in other sectors, including green energy, agriculture, and information technology. The major roadblock, Lin believes, is a lack of big-picture thinking. 

"Canada is trying to solve the innovation problem on its own, but there are limitations," he says. "We simply don't have many venture capitalists who are willing to fund tech-ventures here, and much of our talent goes to the United States. We need to start seeing the idea flow as a two-way street. Both Canada and China can benefit from transnational entrepreneurialism."

To achieve that goal, he continues, Canada must reconsider its policies and regulations. Rather than leaving transnational entrepreneurs to fend for themselves, Canada must engage with immigrants' countries of origin, and create initiatives that support cross-border innovation activities. What's more, Canada must develop frameworks for international innovation and collaboration on such issues as intellectual property rights, taxation and citizenship.

The researchers have already presented their findings at several academic conferences and research seminars in Canada and China. The project's preliminary findings have caught attention among academia and policy makers in both countries.

Transnational Community as Innovation Linkage received seed funding from the Ryerson International Initiatives Fund (RIIF). The RIIF was designed and managed by Ryerson International to provide seed funding for faculty to develop international research projects and pursue further funding. As a result of the RIIF grant, Lin was able to secure a $98,000 grant from the Social Sciences and Humanities Research Council of Canada.