Ron Freedman

Hats Off to the Bureaucrats

By Ron Freedman

Industry Canada and HRDC bureaucrats deserve praise for keeping the innovation policy ship of state afloat through stormy political seas. Surviving a fiscal downturn, last-minute ministerial changes, central agency meddling, and internecine party warfare, the Government of Canada’s new innovation strategy (Achieving Excellence: Investing in People, Knowledge and Opportunity) boldly outlines 10 federal priorities and 15 explicit short- and long-term targets. As a broad-based strategy, it covers the important bases: knowledge performance, skills, innovation environment, and community-based innovation.

The strategy confirms the government’s intention to “at least double” federal investments in R&D by 2010. Bravely, it also outlines 15 targets: e.g., “By 2004, significantly improve Canada’s performance in the recruitment of foreign talent” and “Through to 2010, increase the admission of Master’s and Ph.D. students at Canadian universities by an average of 5 percent per year”. Whether you’re a fan or a critic of the details, Achieving Excellence is a significant improvement over the previous 1996 S&T Strategy exercise, which was long on rhetoric and short on specifics — or results.

Achieving Excellence goes against smart political thinking by including a set of specific targets by which the government’s performance will be judged. True, it contains ample “wriggle room” (e.g. “By 2010, rank among world leaders in the share of private sector sales from new innovations”), but many of the targets are concrete and measurable (e.g. “By 2010, rank among the top five countries in the world in terms of R&D performance.”).

The next step is for the government to launch into six months of consultations on the strategy, and hopefully, have some concrete proposals ready for inclusion in next year’s budget. Self-doubt being a fundamental part of the Canadian character (think back to our Olympic hockey angst), criticisms of the strategy will surely emerge. Here are some obvious concerns:

Knowledge Performance

* Universities are on track to be the largest financial beneficiaries of the strategy (indirect costs, commercialization, scholarships, increased support for the granting councils). Plenty of input measures but where are the output measures?

* FINE (Federal Innovation Networks of Excellence) is fine as a way of doing business, but there’s no clear articulation of an updated role for government science. How can the government overcome its reluctance to invest in its own institutions? Would we have a nanotechnology institute without National Research Council?

Skills

* Approximately 60% of Canadians have no post-secondary education. Students’ post-secondary choices are pre-determined by Grade 10. More (scholarship) money for graduate students is great, but how do we expand the eligible pool?

* Should we link enhanced scholarship support for Canadians and foreigners to their willingness to stay in Canada? Should we provide automatic residency for foreigners who successfully complete their studies?

* Who is going to build the classrooms and labs for the new crop of graduate students? Where’s the dialogue with the Provinces?

Innovation Environment

* We’ve already got the (second) most generous R&D tax regime in the world. It hasn’t noticeably improved our GERD performance. Before we expand it we need to know if it’s working, and for whom (large companies? SMEs?).

* No discussion of novel incentives for industry, such as extending the exploration flow-through share model to knowledge industries. How will we overcome Finance’s paranoia about special treatment?

* Harmonizing federal and provincial tax systems to support innovation is a great concept. Maybe we should tackle the easy stuff first, such as making BC wine available in Ontario liquor stores (and vice versa). (We’re still working on that one.)

Community-Based Innovation

* The strategy is in love with clusters. In fact, with 10 targeted for development there is the potential for one per province. How convenient. What are the feds actually prepared to do to create and nurture these clusters? “Governments at all levels (will) work together to stimulate the creation of more clusters of innovation at the community level.” After you Alphonse.

* It’s nice that the strategy proposes to provide funding to “smaller communities to enable them to develop innovation strategies”. What about the large cities that actually drive the economy?

It’s easy to take cheap shots at the strategy. Like all documents of its type, it had to make compromises and smooth over inconsistencies. In setting out visible targets it’s taking great risks, and for that alone is worthy of support. The strategy is a good starting point and warrants vigorous discussion and debate. Hats off to the dedicated individuals in Ottawa who got us this far. Whether or not the strategy takes root now depends as much on us as on them.

Ron Freedman is a partner in The Impact Group and co-publisher of RE$EARCH MONEY