Adam Holbrook

One size does not fit all...

By Adam Holbrook

Officials at Industry Canada are preparing a White Paper on industrial innovation and policies promoting innovation in Canada. It is expected the Paper will be based on the principle that, if Canadian industry can become more innovative, the economy will grow and all Canadians will benefit from this growth. This neo-classical view of innovation is a sound argument and is the intellectual justification for investing in studies of industrial innovation. Canada needs to improve its economic position, particularly vis-à-vis the United States. We are the cheapest place to do business in the G-7, yet we appear to be unable to capitalize on this competitive advantage.

Unfortunately, the neo-classical view has gaps that could seriously compromise the outcome of the policy review. Innovation, in the sense in which it is usually used in industrial policy documents, particularly by the Organization for Economic Cooperation and Development (OECD), is technological innovation applied both to products and processes. Josef Schumpeter identified, in addition to technological product and process innovation, three other types of innovation: organizational innovations, marketing innovations and innovation in the acquisition of new resources.

Should Industry Canada’s White Paper address these other forms of innovation? Probably not. But then it must be made clear that the Paper will address only technological innovation, and that its policy recommendations will be similarly circumscribed.

This leads to a second point: it is easy to confuse investments in technological innovation with investments in S&T and more particularly R&D. Investments in S&T and R&D are undoubtedly elements of technological innovation, but they are only part of the process. Technological innovation may originate from a number of sources, many of which are not technology-based.

Nor is innovation restricted to technology-based industries of the manufacturing sector. Innovation can, and does, occur in the resources sector, smoke-stack industries and all parts of the services sector. The analysts at Industry Canada will need to identify and discuss those elements of the national system of innovation that cannot be addressed simply by putting more money into Canada’s S&T system.

This leads to the final and perhaps greatest area for concern. Industry Canada’s policy mandate is national in scope, and its policy prescriptions will have force across the country. But innovation in Canada, because of its size, diversity and cultural variations, cannot be described as a single national system of innovation. We have a number of regional systems of innovation. This view was institutionalized recently by the Social Sciences and Humanities Research Council when it funded the Innovation Systems Research Network. The Network was recognized by Industry Minister Brian Tobin, who formally opened its research program at the inaugural meeting in Toronto last month.

Industry Canada’s White Paper should address Canadian innovation strengths and weaknesses on a regional basis. It appears Statistics Canada has found from the data collected in its 1999 survey of innovation, that not all regions of Canada are equally successful in inventing, adopting and adapting new technologies despite Industry Canada’s efforts. A nation-wide policy might well cure problems in one region but might exacerbate other problems in another. In the Paper, Industry Canada could take a leadership position by developing policies directed at individual regions experiencing particular problems. Will Industry Canada come up with a regionally diverse and regionally sensitive Paper on innovation? In the past, it has not always done this. All we can do is hope that in the White Paper, the department will recognize that one size does not fit all and that a nation as diverse as Canada requires diverse responses.

Adam Holbrook is associate director of the Centre for Policy Research on S&T at Simon Fraser University in Vancouver, and a member of the management committee of the Innovation Systems Research Network