Conference Board to Canada: start innovating
Conference Board of Canada
report on socio-economic performance
It’s here — the Conference Board of Canada says Canadians don’t innovate enough, and when they do, they don’t follow through.
Surprised? We’re near the bottom of the scale amongst the 17 OECD countries.
How Canada Performs: A report card on Canada (free download, requires registration)
Here’s the framework they use — four key elements to innovation:
- Creation: Generating new knowledge or significantly improving existing knowledge (C/D)
- Diffusion: Communicating and sharing knowledge (D)
- Transformation: Developing new or significantly improved products and processes; adopting or adapting knowledge for specific purposes; and transforming knowledge (A)
- Use: Commercializing and delivering or implementing new or significantly improved products or processes (C/D)
The key deficiencies are in patenting ideas and the use of licensing to acquire rights or generate revenues — the flow of knowledge seems to be a slow trickle. A lack of diversification from resource- and labour-intensive industries also weighed down Canada’s ranking, as these are no longer a sustainable source of competitive advantage in the global economy (BRIC are taking over in these areas).
Key take-home: the ideas and the knowledge are there, we have to do better at getting it out and bringing it to the world, for both our own and the world’s benefit. Building a business isn’t being greedy, it’s simply converting technology to a form from which broader society can benefit.
Canada also ranked very poorly on the environment, yet do we not have some of the leading environmental technology in the world being developed right here? Simple fix, it seems to me…
Mike Bales is an intern with the MaRS Venture Group, focused on the commercialization of new technologies in healthcare.
[...] Read alongside this the Conference Board of Canada’s sobering How Canada Performs: A Report Card on Canada (in which Canada’s innovation policy and performance was ranked a dismal “D” — see Mike’s post, “Conference Board to Canada: Start innovating”) and two things become immediately clear: [...]
Posted by: MaRS Blog - Innovation and Commercialization in Canada » Blog Archive » Can The US — and Canada — Avoid an Innovation “Gathering Storm”? on June 21st, 2007 at 10:26 am
How do we address this challenge (Conference Board of Canada’s report “How Canada Performs,� that graded Canada a “D� in innovation) and turn it into a positive opportunity that will encourage and highlight the abilities and talents within this great country? We have the talent, capabilities, and education proven by our “A� grade in the Education and Skills domain within this report. However, if these skills are under utilized this human resource will naturally move to other countries = brain drain.
Canada can lead the world in R&D and innovation and achieve an “A� rating. We can do better than simply copying the innovative strategies of other leading countries. We need to develop our own innovation strategy that leverages the resources that make us unique.
Rather than investing solely in the creation of new “high technology manufacturing� companies, Canada should consider placing greater emphasis on investing in our existing primary resource industries to advance them from their perceived low- to-medium technology status to world leaders in innovation. We need to leverage these resources and begin investing in innovative and efficient ways of harvesting, processing, and sustaining these valuable assets. Focusing on turning our primary resources into prosperous and sustainable “high tech� industries will help Canada to achieve the respect in the world’s innovation community that it deserves.
Posted by: Tim Burke, P. Eng. on July 4th, 2007 at 2:38 pm
Interesting post Mike, it took me a little longer to find the CBoC report.
There is another interesting report that you and your readers may want to check out. the report is by Joseph Rotman of U of T and an excellent analysis of innovation in Canada. Here is the link:
http://strategis.ic.gc.ca/epic/site/epc-gdc.nsf/en/h_tq00013e.html
My key take awayfrom the report is that there are two sides to innovation, supply and demand. Education, Science, Technology and Research would all be on the supply side. Commercalization and marketplace know how are demand side.
Canadians do an admirable job at supply side but struggle with the demand side of the formula.
Posted by: ian Graham on July 10th, 2007 at 1:06 am
Thanks very much for your comments, gentlemen. I read an article recently that used the evolution of the oil industry as an example of poor innovation (I really wish I could find the article again!!). It pointed out that innovative advances that saved the industry often came from outside the industry, not internal initiatives. The point being, yes we have lots of really smart people in Canada, and yes we have a terrific comparative advantage over other regions of the world due to our tremendous natural resources, however innovative developments do not naturally arise from large companies in mature, developed industries. In fact there was another report published by the Conference Board of Canada in 2001 entitled “Investing in Innovation in the Resource Sector” that highlights this as a key issue — one of the main obstacles to innovation in the resource sector is that industry leaders see innovation as an expense rather than an investment. And yet, that is exactly what is needed to remain competitive and maintain the long-term advantage from natural resources. Could this be contributing to why Canadian resource firms are being snatched up by foreign competitors of late? They’re falling behind technologically, trading at a low multiple, and so represent a good acquisition opportunity? (I have to admit, I have absolutely no basis nor expertise to support these speculations.)
So I absolutely agree with your suggestion, Tim, that Canada needs to “leverage these resources and begin investing in innovative and efficient ways of harvesting, processing, and sustaining these valuable assets.” The need arises from Canada being a high-cost location to work and from resources being limited in supply — we need to recognize these limitations, starting with initiatives like those undertaken by Ontario, encouraging the use of resource-related innovations through its green energy programs (although apparently there remain some tax issues to be resolved: http://www.thestar.com/Business/article/204253). Obviously, this sort of program needs to extend much further to encompass the broader resource-based industries.
The innovation report you mention, Ian, also highlights a key difficulty in developing new technologies: if mature companies in established industries are not the source of innovations, that means that risk-seeking entrepreneurs are. These people rarely have deep pockets, however (unlike some of those mature companies), and so access to capital is perhaps the most significant barrier in developing the demand side of the innovation equation. Canada desperately needs to overhaul its regulations on the movement of foreign capital so that risk capital (typically angel and venture financing) is more readily accessible to support legitimate new innovations.
Posted by: Mike @ MaRS on July 12th, 2007 at 2:22 pm