An Innovation Agenda for Canada?

With inspiration from the new governor general, will Canada finally close its innovation gap?

The coat of arms for Canada's new Governor General, His Excellency the Right Honourable David Johnston, uses the Latin motto Contemplare meliora. Translated, this powerfully calls on all Canadians “To envision a better world”. The crest’s more subtle and sophisticated imagery of binary code, books, astrolabes, unicorns, and a candle communicate a vision for a country based on learning, knowledge, exploration, imagination, technology, and enlightenment. While the crest symbolizes Johnston and Canada’s historical connection to the monarchy, all Canadians should see it as a clear signal about what Canada must focus on for the future: innovation.

“Reinforcing learning and innovation” was one of three pillars Johnston discussed during his installation speech earlier this month. By all accounts, our new GG is one of the best people in the country to put these topics on the radar. An accomplished academic who has led some of Canada’s best universities, he knows what he’s talking about. I was fortunate to meet him many years ago and I can attest to all the descriptions of his genuine and gracious character, and his knack for communicating knowledge in a way that is relevant to people. I am convinced that these attributes also make him a credible champion for innovation to motivate Canadians to get down to work and live up to their potential in this area.

Canadians need more voices pushing us to hone our skills, take calculated risks and make smart investments in order to turn ideas into economic benefits. We need inspiration, ambition, work ethic, and fire in the belly. We urgently need to create a new culture, community and economy based on innovation. We can‘t afford to live off the economic legacies of the past. We can’t continue to use more to produce less and to pay more to get less, and still expect businesses to hire people and governments to deliver services.

Already we have voices warning us about our shortcomings in the area of innovation, including that of reputable public policymakers such as former Clerk of the Privy Council the Honourable Kevin Lynch. Lynch is advancing the debate about innovation because of the “absence of any serious public discourse in Canada about productivity.” He says it’s time that we “face some uncomfortable facts … that we work harder and harder [and] use our natural resources faster and faster, while the [productivity] trap keeps us less rich, less able to provide public goods, and less competitive.”

In a February 2010 speech to the Winnipeg Chamber of Commerce, the governor of the Bank of Canada, Mark Carney, also spoke about productivity: “Slower productivity growth means that the rate of potential growth – the speed limit, if you will – of the Canadian economy has fallen … and this lower growth rate could translate into a cumulative loss of income over the next decade of almost $30,000 for every Canadian.”

Other leading organizations such as the the Science, Technology and Innovation Council, the Council of Canadian Academies, and the Public Policy Forum, have also weighed in on the innovation issue. In its 2009 report card measuring how well Canada is creating a high and sustainable quality of life compared with 16 of the wealthiest countries in the world, the Conference Board of Canada gave our country a D in innovation.

Meanwhile, the media has been making an effort to demonstrate the links between innovation and job creation, job security, health and social-service funding, quality of life, and standard of living, not to mention the ability of Canadian companies employing Canadian citizens to succeed.

The Globe and Mail’s Jeffrey Simpson described Canada's productivity problem as a business innovation problem and says that doing more university and private-sector R&D “is certainly part of the productivity challenge, but only part.” Maclean’s magazine’s Colin Campbell asserted that “Canada may be a wealthy, wired, well-educated place, but it is also quickly becoming one of the western world’s technological backwaters.” The Globe’s Konrad Yakabuski bluntly wrote that “policymakers seem strangely unmoved even as Canada's productivity stagnates.”

How can Canada overcome its innovation deficiency? The government has a part to play, but this isn’t a problem that can be fixed only with funding. That's why two developments in the last two weeks are important.

First, the business-led Coalition for Action on Innovation in Canada put forward recommendations on what we can do right now. I interpret that the Coalition’s 10 main ideas fall into three categories: smarter money, education reform, and new partnerships.

The "smarter money" category includes suggestions on improving Canada’s R&D tax credits for companies, creating new co-investment funds for direct investment in emerging companies, and government procurement that incentivizes product and service innovation. "Education reform" targets a more entrepreneurial system of intellectual property rights, a 90-per-cent high-school graduation rate, more master’s and doctoral graduates, and the retention of foreign students as permanent residents. "New partnerships" involves the participation of business executives in government R&D funding decisions, a council to advocate about innovation, and networks and pilot projects to support individual entrepreneurs and entrepreneurial clusters.

Second, following up on the commitment it made in the 2010 budget, the federal government announced the creation of a panel of eminent people to review federal R&D initiatives. This panel will release a report this time next year, after it has taken a comprehensive look at tax incentives such as the Scientific Research and Experimental Development program, programs that directly support businesses, and those that support R&D through councils and agencies. From an outsider’s perspective, it seems that all the necessary ingredients for progress in innovation are on the table. It will be interesting to see if this is a recipe for a cultural and structural change in how we approach innovation. We should be observant if this can also help us face our major challenges in health, energy and the environment.

In the economic and political arenas, big things happen on purpose and for a reason. With a new Governor General who understands the importance of innovation, new and constructive ideas from the private sector about the government’s role in innovation, and a new review of how the federal government can work with businesses and post-secondary institutions to improve innovation in Canada, is it possible that the building blocks for an ambitious innovation agenda have been put in place?