While Canada’s weak productivity performance is not a new phenomenon, its impact is beginning to show more than ever.

Families are struggling with inflated living expenses, reduced job security and the high cost of housing, leaving many feeling as though they are falling behind. Small and mid-sized companies – the backbone of the economy – are burdened by long-standing capital investment challenges and rising operational costs, bogging down their ability to lead an economic expansion.

All signs point to the need to fire up Canada’s innovation engine. Postsecondary institutions can help.

According to Statistics Canada, Canadian R&D investment as a proportion of GDP lags that of other G7 nations. This contributes to a productivity gap that undermines competition and hinders economic growth.

Research and development activity is crucial for businesses that want to remain competitive and grow. Yet, cost is a barrier for most of Canada’s small- and medium-sized companies. This is where the applied research developed by polytechnics and colleges offersa leg up, allowing companies to test new technologies, explore new business ideas and grow their bottom line.

Large multinational companies can afford to bet big on their R&D ideas but, for small businesses, even a relatively modest investment can be a risk.

Applied research bridges the gap between innovation and commercialization. In addition to lowering the upfront costs of research, it helps businesses overcome obstacles to growth, reduces the risks associated with technology adoption and creates new jobs. That’s good for Canadian productivity.

A recent report found that research conducted at Canada’s polytechnics generates a return of $8.09 to $18.49 for every dollar invested. Business partners retain the intellectual property generated by collaborative projects, ensuring they can take new products, services and prototypes to market. Research findings are not left sitting on a dusty shelf.

The results of applied research are compelling and the benefits widespread. Businesses that partner with polytechnics say they are more likely to invest in further R&D. Adopting new technology or moving a prototype into production becomes a whole lot less risky.

This arrangement not only helps business partners benefit from low-cost research and related productivity gains; institutions integrate new insights into their programing, improving and updating curriculum to inform the next generation of innovation-enabled talent. Students who participate in applied research projects not only gain real-world experience but establish connections with prospective employers.

The wider implications are productivity improvements from which all Canadians benefit, driving quality of life in Canada and ensuring businesses are more capable of capital investment. That means more jobs and higher paycheques.

Despite an impressive list of benefits, applied research is chronically underfunded. Less than 3 per cent of the federal investment in academic research reaches polytechnics and colleges and, even when new funding is earmarked, it comes in short-term bursts.

This stands in the way of tackling a range of pressing challenges – the widespread adoption of electric vehicles, construction and housing innovation, finding pragmatic ways to implement artificial intelligence and improving health care systems. These and other priorities are being addressed every day in cutting-edge facilities on polytechnic campuses across Canada, all in partnership with companies who will take this knowledge into the market.

Investing in applied research and supporting businesses looking to grow is a critical strategy for kickstarting innovation in Canada, renewing our competitiveness on the world stage and addressing the economic inertia that has been holding us back.