An innovation agenda
A regular reader of this blog asked me to comment on the new Conference Board report assessing Canada’s innovation track record. The Board gives Canada a D and ranks us 14th out of 17 countries.
The Conference Board used 12 indicators to measure innovation performance. From the summary:
The indicator choice was guided by the Conference Board’s definition of innovation as “a process through which economic or social value is extracted from knowledge—through the creation, diffusion, and transformation of knowledge to produce new or significantly improved products or processes that are put to use by society.”
Knowledge production is captured by indicators measuring the number of scientific articles, patents (patents by population and share of world patents), and trademarks.
The transformation of knowledge is gauged by indicators examining technology exchange (the technology share of total exports and imports), the share of gross domestic product produced by high- and medium-high-technology manufacturing, and the share of GDP produced by knowledge-intensive services.
Market shares of selected knowledge-based sectors (aerospace, electronics, office machinery and computers, pharmaceuticals, and instruments) examine, for example, the share of Canada’s aerospace exports in total 17-country aerospace exports relative to the share of Canada’s total economy exports in total 17-country exports.
The trademarks per million population is a new indicator this year. This is a useful indicator of innovation because it allows us to benchmark services sector innovations and non-technological innovations not captured by data on patents.
I’ll just make a couple of quick points:
For the most part I agree with the Conference Board – an innovation agenda is both public and private investment in R&D but also broader public policy to encourage innovation.
But to the chagrin of some, I don’t agree with the CBoC when they state this:
Innovation policies promote “creative destruction” of the old and hasten the transition to the new. Many of Canada’s industry sector policies are designed to preserve existing industrial production—such as forestry’s pulp and paper sector and auto assembly manufacturing—rather than generate new, highly innovative ones. In effect, these policies are short-term job protection policies that consume important resources that could be used to support long-term innovation. As a result, they work at cross purposes to innovation. Rather than shoring up fading oldsters, long-term innovation policies would help transform existing industries into new ones—such as turning the forestry industry into a bio-chemical sector—and would create new-to-world industries.
I have never understood the Toronto-centric fascination with this topic. Why can’t forestry, auto manufacturing, etc. be innovative? The implication of the CBoC and many think tanks is that innovative industries must be biotechnology or IT. I would suggest an innovation agenda should pivot off our traditional sectors rather than the oft recommended abandonment.
I think we all agree that bailing out failing business models is a bad idea – in any sector including biotechnology and IT but the forestry industry will always be needed in North America as long as we build homes, read anything in traditional print, heat our homes, etc. The public policy agenda should be about encouraging world class innovation in traditional industries not their elimination.
I think the CBoC would be wise to make a similar distinction because sometimes policy makers are literal thinkers.
Another point made to me was that the countries that rank high on the innovation scale have a long term commitment to innovation. As my colleague pointed out “Countries that made overall improvements since the 80s, none went from a “D” or “C” rating to an “A” rating in under a decade”. I have said before that we should avoid the marketing gimmicks “worst to first” etc. and set up the foundation that will have long term impacts. I am completely in favour of short term milestones – we need to be moving the ball down the field but in the business of transformation – things do take time.
Where does New Brunswick fit into this?
There are a few points. This should be a nationally driven thing. Many of the indicators are driven by federal policy but a national innovation agenda does risk putting provinces like New Brunswick at a disadvantage.
Example: When I asked a colleague of mine one time while something like 90% of the federal dollars from the sustainable technologies fund went to Greater Toronto area companies I was told “that is where they are located”. When I asked why New Brunswick companies only got $700k out of the $5 billion Technology Partnerships Canada fund (at the time) I was told there were not any good applications from New Brunswick. Same thing for federal R&D. When I asked why New Brunswick gets virtually no federal health research dollars, I was told there is no capacity here to receive it (i.e. the best researchers and infrastructure are not here).
My point is that an innovation agenda, from the vantage point of New Brunswick, needs to be about seeding innovation as much as nurturing it.
Gotta go to a meeting – ran out of time. Hope that last point sticks.