Some seven months after having announced its intentions in the budget, the Canadian government launched a review yesterday of its programs that support business R&D. A six-member panel was named and tasked with taking the next year to study the effectiveness of public support for private-sector R&D, with the underlying aim of coming up with some solutions to Canada’s lagging innovation and productivity levels. Ranking 16th in the 23-member OECD for its BERD-to-GDP ratio,* Canada has a lot of work to do on its private-sector support for research and development. Our businesses just aren’t keeping up with their international peers when it comes to investing in new ideas. In comparison, our public-sector support for R&D is quite enviable: Canada leads the G7 (though not the OECD) in higher-education expenditures on R&D. Yet there are myriad government programs to support businesses that want to gamble a bit on discovery.
So why the disconnect? I think the problem, on a large scale, is a philosophical issue. We just aren’t promoting a culture of innovation. Sure there are pockets of communities in which novelty is celebrated, where having a vision is welcomed. But this is far from ubiquitous.
The inclination to create, to solve problems and come up with new ways of seeing the world is just not pervasive enough in our culture. We need to celebrate - and moreover reward - those among us who question established orders and work to redescribe the world in workable new ways. And this has very little to do with money. I would not disagree that financial backing makes a huge difference in whether an idea can get off the ground, but it is a very narrow view indeed that sees money as the only factor in promoting innovation.
Case in point: the BERD figure indicates a ratio of financial allocation only: it quantifies how much a country’s business sector spends on R&D relative to the country’s GDP. What it doesn’t measure is output: how much R&D actually gets translated into viable technologies to improve people's lives. Nor does it measure the depth and impact of those improvements.
So, aside from making strategic budget allocations, what are governments to do? Well, for starters, they can adopt open data policies and get information online, in machine-readable formats, for everybody to use. Innovation requires having access to raw data, and providing those data is something inexpensive and easy that governments can do to give people access to the tools they need to create. Several cities have already started doing this. It may take a while before the effects are substantially measurable, but the point is, liberating government data is a big step towards fostering a culture where everyone can be thinking about innovation. To provide easy access to factual, statistical information is to equip people with the building blocks of new ideas.
*****
*BERD refers to “business expenditures on research and development”. This statistic means that Canadian businesses are behind the middle of the pack when compared to their OECD peers on how much they spend on R&D.
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You've obviously thought about this/know more on the subject than me, but thought I would throw in a few thoughts on why Canadian R&D and innovation lags. I commented to Frank about a year ago something along the lines of "I've been hearing Canadian politicians talk about the new economy/the knowledge economy for 20 years now, but where is it? When I started hearing it, we were resource extractors with a manufacturing base, now we are resource extractors with a crumbling and declining manufacturing base. Oh, and RIM. the Canadarm of our times.
ReplyDeleteThat resource extraction just doesn't need a lot of R&D compared to other sectors is one reason our innovative competitiveness lags. It's an advanced, mature sector too - you're not likely to see too many advances in mining, oil or gas coming from 3 plucky undergrads in a garage.
It's hard to foster a culture of innovation in a society with an extensive social safety net, I think. I'm not quite sure why this is, maybe it's several effects of financial security combined. I think there is a general feeling of you can live a pretty good life with a minimum of effort in Canada, which is nice, but hardly lights a fire under one's ass to make it in life. Call it the comfy alternative that beckons us away from innovation.
Maybe what government could do to foster innovation is less building a new bureaucracy of Cara's and Duncan's and more things like, say, eliminating payroll tax for enterprises with less than 5 employees or the corporate tax rate for enterprises under $50K in revenue.
Nice blog!
Duncan