12 Thoughts on Innovation

So, here we are. A week to go before the federal budget. It’s late March, but it’s snowing and -15C in Ottawa so the budget doesn’t feel as late as it might otherwise.

12 thoughts on innovation:

  1. There’s a Canadian tendency to complain about innovation policy, particularly around how little our politicians understand what it really means. Let’s stop it.

First, it’s just generally tiresome to be so urbane and pedantic — particularly about something as arcane as innovation policy. Second, we need to realize that we’re talking about two very different and distinct things when we talk about “innovation policy”. On the one hand, there’s actual innovation policy as economists and policy wonks understand it. Policy meant to encourage innovation, which increases productivity and competitiveness, and results in lower prices, higher wages and a higher standard of living. This is a very big deal and is something we need to figure out.

On the other hand, “innovation policy” is also being used as politically-acceptable shorthand for “high-tech industrial policy”. This is the sort of innovation policy that leads to suggestions about coding skills, STEM investments, and clusters in AI, quantum computing and so on. The first use of the term is about making our existing economy more productive. The second term is about building a different sort of economy. There’s overlap, but they’re fundamentally different concepts.

  1. It seems there is a certain amount of disagreement within the federal government between those who want the “Innovation Agenda” to be about the former and those who want the “Innovation Agenda” to be about the latter. And the result is the current logjam/mashup.
  1. “Industrial Policy” has a seriously negative reputation in Canada, conjuring memories of state intervention in the economy of the 60s and 70s. Canada has been proudly free-market in its industrial support for a couple generations now, though there are calls for this to change. The UK is dipping its toes back into industrial policy, though with the gong-show that is post-Brexit UK economic policy, who knows what will happen there.
  1. Speaking of the UK, they released their spring budget last week. If a Canadian government were interested in promoting skills, talent, and technology they could perhaps have a look. There is £270 million in targeted R&D investments in things like electric vehicle batteries, AI and robots, and drug manufacturing (ahem, industrial policy). Impressively, there is £160 million in fellowships for early- and mid-career researchers – in “areas aligned to the Industrial Strategy”. The UK’s Campaign for Science and Engineering is cautiously impressed.
  1. The UK budget also commits £90 million over four years to support an additional 1,000 PhD spaces. 400 of these will be committed to “strengthen collaboration between business and academia through industrial partnerships”. Sounds awfully familiar.
  1. The UK budget also targets 85% of the new PhD funding to STEM disciplines. Look, I have a PhD in Biochemistry and I think science is awesome. But I’m starting to worry that our laser-like focus on STEM is overshooting the mark and missing the point. There are two issues: first, students in Arts, Social Sciences and Humanities aren’t cloistered away with quills and quires. They’re learning all sorts of digital and technical skills that are perfectly suited for today’s workforce. Second, given that we’re all worried about automation, aren’t the really technical jobs the ones most likely to be automated? To prepare for a world of robot labour, shouldn’t we be focusing on the human skills? Like those that are taught in the arts, social sciences, and humanities?
  1. Full marks to my colleague and friend Alex Usher for his unrelenting calls for the Naylor Report to be tabled. There’s certainly frustration around Ottawa that this hasn’t yet been released, but also a resignation that this is how politics works. We’ll get to see it after the budget, at which point it will be too late to ask for new spending this year.
  1. In fact, the Naylor report is just one part of an important upcoming few months where this government is going to have to establish its mark on research and innovation strategy. In addition to the Science Review panel, we are on the cusp of important decisions on a Chief Science Advisor, new leadership at CIHR and CFI, the budget, and the Innovation Agenda.  Yes, it’s been a tumultuous year for politics, especially for a realtively new government still finding its feet. But now it’s time to demonstrate some leadership and direction for Canada’s research enterprise.
  1. Speaking of the Innovation Agenda, the results of the consultations by esteemed Canadian innovation leaders were quietly released on Dec 22. It seems most of us missed it. The big take home message is that the government’s agenda should focus on People, Technology and Companies. Fair enough, it not exactly earth-shattering. But then it devolves into a confusion around clusters, digital and clean technology and workforce diversity. If this is the agenda, perhaps it’s best left on the shelf.
  1. Not that there are any shortage of smart people advising on how to do innovation, including the recent announcement of Ivey prof Mike Moffatt as Chief Innovation Fellow at ISED. Moffatt co-authored some big recommendations in a recent 2020 report on innovation. (aside: Moffatt had me at the creation of a Parliamentary Coherence Officer. Not sure it’s the right mechanism, but it’s definitely the right idea. We could do more for innovation in Canada by removing barriers than by investing more dollars.). Moffatt joins some real innovation heavyweights on Dominic Barton’s Growth Council who are also advising. No shortage of advice in Ottawa these days.
  1. Speaking of the Growth Council, their second set of recommendations are worth revisiting ahead of next week’s budget. I actually quite enjoyed the paper on innovation. Though I’m still not entirely sure what “innovation marketplaces” look like in practice, the group has it right that our big issue isn’t the creation of innovation, it’s adoption. There’s little innovation advantage in developing quantum computers if 85% of Canadian executives admit they don’t take full advantage of existing technology.
  1. More confusing is the Growth Council’s skills recommendations: the creation of a FutureSkills Lab. Goofy name aside, what’s this about? Fund pilot initiatives, identify and fill gaps for labour information and inform government policy. Isn’t that already the mandate for Employment and Social Development Canada. I’m confused.

That’s it folks. We’ll see if I can come up with another 12 thoughts on innovation next week. I’m sure I’ll have plenty of thoughts after the budget…

Rob

March 14, 2017