The release in Waterloo last week of the federal government's policy statement, Mobilizing Science and Technology to Canada's Advantage, highlights the importance that governments attach to the commercialization of science and technology, what we would call the "innovation imperative."
The message is wrapped in perennial political optimism, but the underlying thrust foreshadows a major challenge to Canadian prosperity. Given that the Canadian economy seems robust at present, the forward-looking urgency at the federal and provincial level is often overlooked.
There is near-uniform consensus among commentators and politicians that 21st century success rests on understanding and responding to the promise of science and technology. China's economy surges largely on the basis of low-wage, low-regulation industrial activity -- but even China's leaders are investing heavily in advanced education and research.
India is several steps further along toward the new economy, as North American fears about outsourcing and the transfer of high tech jobs to South Asia attests.
The new realities have changed the formula for economic success. Canada has long relied on abundant natural resources, proximity to the United States and favourable trade arrangements with our American friends.
Winners in the new economy -- like Finland, Ireland, Japan and South Korea -- emphasize the commercialization of science and the creation of innovation-based societies. This, in turn, requires a different approach to education, research and business.
Ontario's government clearly gets it. That Premier Dalton McGuinty held onto the research and innovation portfolio in his own government sends a powerful message about the importance he assigns to this field. Recent investments in biotechnology, alternative energy and basic science all point in the right direction at the provincial level.
The federal government got the core idea some years ago, leading to the Canada Foundation for Innovation, Canada Research Chairs and related programs.
Observers had worried the Conservatives would back away from investments that, while substantial, barely let Canada hold its own in the global competition. The science and technology strategy shows that the Stephen Harper government understands the importance of this field, albeit with a greater emphasis on the private sector than in the past.
But looking at the background to these federal and provincial policies reveals some powerful and worrisome messages about Canada's place in the global innovation economy. Consider just five emerging themes:
Investments in research at universities have not yet produced the expected commercial returns. Universities are being challenged to reorient their approach to commercial engagement and to produce more spinoff companies, patents and jobs. Governments have hoped that investments in academic research would produce the desired outcomes, but they clearly require and expect closer academic-industry collaboration.
Waterloo Region is a national leader in this area. It was not by happenstance that the prime minister came to Waterloo and the Perimeter Institute to announce the science and technology policy.
Government commitment to science and technology has not been matched by the private sector. Canada spends a substantial amount on public sector research -- it is a world leader in this area -- but business has not brought a great deal of money to the table. There are many explanations, including our long standing role as a branch plant economy, and some very notable exceptions, particularly in the Waterloo region. The reality, however, is that this country has too little venture capital and corporate investment to respond to the new opportunities.
Canada is not a particularly receptive market for scientific and technological innovations. This is partly due to our regulatory barriers and the absurd complexities of inter-provincial trade. Many of our most innovative firms find their markets outside of Canada and struggle to generate Canadian interest. Governments, importantly, have not yet assumed the role of exemplars in the use of emerging technologies.
Canada is not an effective international trading nation. We do reasonably well in the United States -- although our place there is not assured -- but have difficulty elsewhere. Individual companies do brilliantly overseas. As a collective, Canadian firms have not adopted the competitive and aggressive approach that is necessary for global success.
The country continues to pay too little attention to the digital economy. Many observers, burned by over-enthusiasm for the dot.com boom, have been slow to recalibrate their assessment of Internet and digitally-based business. Attention is paid to the hardware and software side, but much too little to the fast-growing digital business and digital content field. Ontario, foremost in Canada, has realized that digital business is crucial to the country's future. One hopes that the rest of the country pays attention.
Innovation is not one of a series of options available to government and business. It is the imperative of the new economy, requiring a fundamental change in mindset across Canadian society.
We are in the midst of the fastest, most comprehensive and hardest to anticipate scientific and technological transition in world history. In the coming years, information technology, nanotechnology, biotechnology, quantum computing and digital creativity will bring countless commercial and social changes and threats.
We have the human resources to compete with the best in the world. As a nation, we do not yet have the innovative spirit and commitment necessary to hold our own on the world stage.