By Peter Morand

 Peter Morand is a consultant in advanced technology management. He is the former Dean of Science and Engineering at the University of Ottawa (uOttawa) and past President of the Natural Sciences and Engineering Research Council of Canada and of the Canadian Science and Technology Growth Fund.

The author thanks Kyle Briggs, Innovator in Residence at UOttawa for his helpful comments.

During the past two decades there has been very little improvement in Canada’s poor performance in productivity and in business innovation.

There has been a lot of bluster about innovation by the federal government over the past few years, but a recent report by the Business Development Bank of Canada shows that the number of entrepreneurs in Canada is actually declining.

These statistics and the fact that the GDP, after adjustments for inflation, is roughly the same as it was in 1917, should be of great concern to all of us.

Let’s be clear: successful entrepreneurs and competitiveness in global markets are foundational elements of a vibrant and healthy economy.

To attract votes, politicians promise to cut taxes, make access to housing easier, beef up the health care system, provide for an aging population and, of course, improve Canada’s productivity performance.

The latter is the key for making good on the other promises. Therefore, Canadians should assess the new government on its commitment and leadership qualities to improve Canada’s productivity and to nurture a culture of business innovation in transitioning to a knowledge-based economy.

Why are many other countries ahead of Canada?

The simple answer is that governments in these countries are making wiser decisions in implementing policies that will sustain continued global competitiveness for the products and services produced.

In the words of Kyle Briggs, Innovator in Residence at the University of Ottawa, “they recognize that risk-taking is a necessity and embrace the idea that individual project failures are not a problem as long as programs are delivering long-term value in aggregate.”

In the U.S., the National Advisory Council on Innovation and Entrepreneurship, which reports to the Secretary of Commerce, has the mandate to develop a National Entrepreneurship Strategy to strengthen the ability of the U.S. to compete and lead as the world’s leading nation in entrepreneurship and innovation in critical emerging technologies. 

As well, the U.S. National Academies of Sciences and the affiliated U.S. National Research Council, created in 1863 and 1916 respectively, have established a high level of credibility and objectivity in their mission “. . . to improve government decision making and public policy, increase public education and understanding, and promote the acquisition and dissemination of knowledge in matters involving science, engineering, technology, and health.” 

It is relevant that grants to small businesses were put into effect in 1982 and the Bayh-Dole Act to protect U.S. intellectual property was enacted over 40 years ago.

Finland, Sweden and Singapore are other countries with a high ranking in the Global Innovation Index. Finland has a research and innovation council chaired by the prime minister with a membership that includes ministers as well as highly qualified innovation experts. 

Sweden’s innovation agency VINNOVA, whose mission is “to strengthen Sweden’s innovative capacity and contribute to sustainable growth,” relies for innovation advice from an international advisory board comprised of globally recognized experts such as Mariana Muzzucato, Banny Banerjee and Beril Andersson.

Singapore has several innovation advisory bodies to guide its strategic direction in research, innovation and commerce. Key among them is the Research, Innovation and Enterprise Council chaired by the former prime minister Lee Hsien Loong. 

It all boils down to having a “whole of government” approach which is lacking in Canada (see the Jenkins Report, Innovation Canada: A Call to Action, released in 2011) and in having advisory mechanisms with independent and highly qualified individuals on their respective innovation advisory bodies. 

Reality check for Canada

An insightful op-ed some months ago by The Globe and Mail’s Andrew Coyne raised concerns about Canada’s declining productivity (currently at 70 percent of the level in the U.S.).

The main reason for our slide in productivity is our dismal performance in business innovation which has been confirmed in a report, Evaluating Government Programs That Support Business Innovation: Framework and Principles, by the Conference Board of Canada,. 

Coyne pointed out that the impressively large number of innovation support programs introduced by the federal government in the last two decades have not succeeded in improving Canada’s productivity.

What is needed is a cohesive innovation strategy, not policy fragmentation (see excellent analysis on the CanInnovate website).

Why is it that although Canada spends more than most countries on higher education (as a percent of GDP), only a small percentage of research results are successfully commercialized?

Why is the number of entrepreneurs in Canada declining? Is it because of the catch-22 bureaucracy of derisking government support for early-stage startups?

Why is the government diverting funds from business innovation support to give huge subsidies to offshore companies when these have been shown to be a drag on the economy? 

To reverse these trends there is an urgent need to implement more effective and cohesive policies to strengthen Canada’s business innovation culture and improve productivity. 

Who are the players in Canada’s innovation ecosystem?

Canada is fortunate in having an impressive number of fourth-pillar organizations, postsecondary institutions and private sector companies that have many individuals who have hands-on experience and/or an in-depth knowledge of business innovation practices and entrepreneurship.

These are people who can offer credible advice and creative ideas to improve Canada’s productivity and business innovation. But there is a growing frustration among them that political leaders and government insiders are not listening. 

It seems that political leaders and government insiders are more interested in wasting money for trendy presentations by glib communicators who can talk a good line about business innovation but who don’t have the hands-on experience or understanding of business innovation to be credible.

The proof of the pudding is that the needle hasn’t moved much in our productivity over the last 20 years. 

One hopeful sign is the Council of Canadian Innovators (CCI) whose members are executives of successful advanced technology companies. In a recent open letter to federal party leaders, the CCI calls for “bold leadership, a serious economic strategy, and clear commitments to domestic capacity and long-term wealth creation.” Is anyone listening?

Mobilizing a viable innovation advisory capability  

The Jenkins Report recommended the creation of an Industrial and Innovation Council “to streamline over 60 federal innovation programs into fewer, more flexible initiatives.”

After a long delay this recommendation has morphed into the proposed Canada Innovation Corporation (CIC) to be operational by 2027. I’m sure this isn’t what was intended in the Jenkins Report recommendation.

Canada certainly doesn’t need yet another Crown corporation with an inherent bureaucracy that would duplicate what existing agencies and innovation programs are already doing. Hopefully, common sense will win out and CIC will not see the light of day.

To make a quantum leap in productivity and revitalize the economy, there must be the leadership for a “whole of government” commitment to make productivity and business innovation the top priority.

The next step is to create an Innovation Advisory Council (IAC) that would be chaired by the minister of Innovation, Science and Economic Development or, preferably, the prime minister. The members of IAC would be recruited from Canada’s large pool of individuals with proven credentials in business innovation and entrepreneurship. 

The first task of IAC would be to develop metrics to measure the effectiveness of Canada’s chaotic mix of innovation agencies and support programs and to advise the government on consolidating existing programs that are viable and terminating those that are not producing the desired results (as the Jenkins Report recommended).

Going forward, IAC would also advise government on accountability requirements for the expenditure of funds for innovation support. 

With all the economic challenges (including the attacks on free trade) that Canada is facing, it’s imperative to have in place an effective innovation strategy. Time is of the essence since Canada’s economic survival and the quality of life of all Canadians are at stake.

What worries me most is that the current political leadership and many of the government insiders do not have any actual experience in business innovation. This is a prerequisite for the formulation of sound innovation policies that will be the basis for a cohesive and effective innovation strategy for Canada.

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