Building the innovation policy framework

By Peter Harder

The following is a slightly edited transcript of a speech made to a Canada Foundation for Innovation dinner for its board of directors and invited guests on February 10/03.

Oliver Wendell Holmes once wrote that frequently it takes a great deal of effort to achieve the inevitable. And I’ve been thinking a lot about that quote as I’ve thought about tonight. I believe that at the end of this decade when we look back at what we’ve accomplished together in Canada in the area of innovation and knowledge investment, we will say ‘Well of course, it was so obvious’. But it wasn’t obvious when we started down this course. And it still isn’t obvious to too many Canadians.

I believe that we’re on the cusp of a new era of consensus in terms of public policy coherence. I would like to suggest that there are three areas of convergence that will make us look back and say, ‘Well it was inevitable’. But it really truly hasn’t been.

The first that is it all starts with fiscal responsibility. The capacity of government to make new choices required it to address the difficult task of restoring the federal fiscal framework. That has been not an easy task to accomplish, but it’s opened up new doors of public investment of which the Canada Foundation for Innovation is one very significant beneficiary. But it is not alone. I believe that we all have an interest in ensuring that the integrity of the fiscal framework is something in which we can share the common objective, because the benefits are for the public good and are absolutely the basis of public policy choice.

I had the opportunity to meet with the prime minister of Sweden this afternoon. Sweden has a very successful social democratic government and the prime minister began his remarks by saying that the foundation of Sweden’s public policy is public finance. They too have gone through some of what we have gone through. But the point he made, and it’s the point I would argue that progressive governments everywhere are making, is that fiscal integrity is the basis of new opportunity and choice.

The second area of public consensus is that economic space is greater than political space. In our context, we have the unique Canada-US connection. But this consensus really acknowledges that the world economy is the marketplace for our ideas and for our products. And that causes a different structure of thinking in science, in business, in public policy.

The third area of public consensus — or ought to be consensus — is that it really is all about the knowledge economy. And the knowledge economy is premised on the first two, that is to say fiscal integrity and an awareness that your economic space is greater than your political space.

But it’s also saying one thing more. It says that the role of the state is unique in a knowledge economy, in that it must provide the policy framework that attracts capital, ideas and people from around the globe. It is tolerant of new ideas, hospitable to difference and diversity, and recognizes that the infrastructure of the knowledge economy is indeed the human capital, that the linkages between university investments, research investments and economic growth and quality of life are absolute.

Now that seems so obvious doesn’t it? And Oliver Wendell Holmes was right. Frequently it takes a great deal of effort to achieve the inevitable And you are part of the effort that will make it seem inevitable when at the end of this decade we look back and say ‘It was just so logical’. And it wasn’t.

I would like to congratulate you for the effort you make in changing the minds and lives of all those who must buy into this notion that the future for our children and for ourselves is a world that’s bigger than our political state. A public policy framework that determines to be fiscally responsible, and an acknowledgement that in our world it’s all about the knowledge economy, stupid.

Peter Harder is deputy minister of Industry Canada.