Since 2006, at least a dozen major reports about innovation in Canada have come to three identical conclusions. First, future growth and prosperity depend upon innovation. Second, Canada is not very good at it. Third, what we are doing about it is not working. Such conclusions attract broad political and industry agreement. But it has been nearly two decades since any federal government has taken substantive coordinated action on this file. And as we enter an election year, there is little indication that any of the contenders have this issue on their radar.
The Harper government’s view is that innovation is a business responsibility. Businesses will naturally innovate provided that the fiscal conditions are favorable and that trade is not impeded. (Not to mention the largest R&D tax subsidies in the OECD.) Their position is at least coherent. But it is also futile. There is no evidence that such remote measures have any specific or predictable impact on innovation. All they really say to innovators is that the Canadian government is disengaged from their challenges and goals.
Accordingly, Canada’s standard input indicators (R&D expenditures and the like) have hardly budged since 2006, except to creep downwards. Our output indicators are even less promising. Export trends are skewed towards undifferentiated commodities (manly energy) and away from the specialized, high value-added manufactures and services that signal genuine upticks in innovation performance. So in terms of enhancing Canada’s innovation profile, on these and a host of related indicators, the government has scored basically nul points. And if their perspective does not change, no new strategy is going to improve the score.
So given that the growth-productivity-jobs triad is linked so directly to innovation, why heading into an election are the other parties not attacking hard on this exposed flank? Instead, their positions are incoherent, most grazing aimlessly among emotive but largely peripheral issues. Or worse, as with NDP Leader Thomas Mulcair’s “Dutch disease,” they signal a worryingly poor grasp of the relationship that must be forged between resources, manufacturing, and services in any future Canadian economic strategy.
So upon what foundation might a positive political debate be constructed? A good beginning would be to correct the myopic obsession of current policy with inventing and commercializing new technology. Such inputs are important, but they form only one relatively small piece of a huge puzzle. Technology is an input—innovation is about outcomes. Creating and sustaining them requires that vision, leadership and organization be coordinated at many levels, most of them unconnected with technology as such. It is here, not in the laboratory, or the boardroom, where Canada has fallen down.
It is ironic that most of the jurisdictions Canadian policy makers now look to for more effective innovation models—the U.S., the Nordics, Israel, Korea, Japan and even China—follow precisely the same models that once we ourselves pioneered. In the past we deployed them very successfully to build major globally competitive industries in agriculture, biotech, computing and communications, aerospace and many other sectors. The oil sands, arguably the biggest innovation in recent Canadian history, and strongly implicated in virtually all of the few positive economic indicators we have seen since 2006, is likewise a product of exactly the kind of visionary and interventionist industrial policy that the Conservatives seem to find so toxic.
Effective innovation policies are not just about R&D subsidies or encouraging university researchers to become entrepreneurs. Neither are they just about SMEs, intellectual property or venture capital. They are about coordinating, aggregating and leveraging public resources over the longer term to facilitate transformation in existing industries and the emergence of new ones. Growth is sustained by the spinoffs and spillovers from these adjustments. Effective innovation policy entails whatever is necessary at any given time to promote this outcome, a principle that all of our major competitors understand very well.
So maybe it is time to get back with our own game. Perhaps innovation is the “blue water” issue that budding political contenders seek. How they stack up on it would perforce signal a clear choice for voters between different views of how an economy delivers prosperity and what concrete actions different parties would deploy to make this happen.
Richard Hawkins PhD is professor of science, technology and society at the University of Calgary, senior fellow at The Centre for Innovation Studies (THECIS), and fellow of the Institute for Science, Society and Policy (University of Ottawa). He has authored more than 100 scientific publications and reports on science, technology, and industry policy and has extensive international experience as a policy consultant for clients including the European Commission, the OECD, the World Bank, and Industry Canada.
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