S&T to drive 21st Century economy

Paul Martin has once again delivered a bellwether speech that contains a host of tantalizing clues on how the incoming prime minister plans to use innovation and science and technology to strengthen economic and social development. The September 18 speech to the Montreal Board of Trade comes nearly three years after Martin first unveiled a series of ambitious S&T targets that now form the basis of the current innovation strategy.

Entitled Building the 21st Century Economy, the remarkable address touched upon all of the policy cornerstones Martin has been developing in recent months, including new approaches to technology commercialization, cluster development, community-based innovation and picking technology niches where Canada can be globally competitive. The speech also added a global dimension, with an impassioned call to use Canada’s technological expertise to assist those in the developing world. (see related story on page 4).

Martin’s decision to highlight innovation in his first major speech in months demonstrates his affinity for this issue as well as his willingness to listen to others. There are many different suggestions on who is exerting influence on Martin’s thinking on innovation, but more than one source points to David Watters.

A former ADM economic development and corporate finance at the Finance department, Watters worked closely with Martin while the latter was Finance minister. He left government two years ago to form the Ottawa-based Global Advantage Consulting Group Inc. Watters reportedly travelled to Montreal last month to hear Martin’s speech and is working on a possible new mechanism or program to structure Canadian technology expertise around developmental issues.

While the potential for melding economic, social and foreign policy is gaining credence in certain Ottawa circles, the central economic themes of Martin’s speech garnered the most attention. Its emphasis on innovation and research-fuelled entrepreneurial drive drew kudos from several organizations, including the Information Technology Association of Canada (ITAC) and the Canadian Advanced Technology Alliance (CATA).

“We are energized and inspired by the depth of Mr. Martin’s understanding of the realities of the global, knowledge-based economy,” raved ITAC president and CEO Bill Bergen in a press release issued the day of the speech. “Equipping Canada to be a more competitive, innovative economy is an issue that transcends politics. It is an economic imperative. We couldn’t agree with him more.”

CATA was no less effusive in its praise of the Martin speech, although it did not issue an official press release. Barry Gander, CATA’s senior advocate public policy, says Martin was instrumental in the past in advising CATA to forge links between S&T and society, resulting in its ambitious series of Tech Action Town Hall meetings and subsequent report.

Gander says the speech took a “fine grained approach that made it touch ground”, distinguishing it from other policy announcements on innovation. CATA officials have scheduled a meeting with Martin in the next few days to thank him personally for the vision he demonstrated in his address, and will likely brief him on CATA’s forthcoming White Paper on innovation.

“We greatly applaud his speech. The overall tone is what we were delighted to hear,” says Gander. “Martin has shown that he has both vision and sand under the tires.”

If nothing else, Martin’s speech laid to rest persistent rumours that he was in favour of downgrading innovation as a government priority. The ITAC statement alluded to “considerable uncertainty lately about issues like innovation”, and others were also relieved to have those concerns alleviated.

“There were rumours that he may not be on side,” says Dr Douglas Barber, former head of Gennum Corp and author of a recently released report on the views of CEOs from R&D-intensive companies (R$, September 16/03). “I’m quite convinced that the innovation agenda has input from Paul Martin and (Finance DM) Kevin Lynch. If it dried up a bit in the last little while, it was more due to leadership issues than lack of energy on Martin’s part.”

NEW MECHANISM FOR COMMERCIALIZATION

For the first time, Martin has provided some specificity on the route he would take to stimulate commercialization and company growth. He acknowledges the contribution made by new organizations such as Westlink and more traditional vehicles such as the National Research Council and the Industrial Research Assistance Program. But in a challenge to those organizations, Martin asserts that “we have to go further” to bridge the gap between company formation and marketplace success. The speech strongly suggests that he is considering the creation of a commercialization vehicle and may use the Battelle Corp in the US or Germany’s Fraunhofer Institutes as possible models.

“We should do the same in Canada,” stated Martin. “Our goal should be to give our small-and-medium sized businesses the kind of support they need: from research to commercialization, from protecting their intellectual property to helping with financing.” ... We need structures that allow our small-and medium-sized businesses to sub-contract their research needs to regional, national and international laboratories.”

The suggestion of a new commercialization vehicle outside academia is likely to meet opposition within the university community. An attempt mollify that resistance is made when Martin argues that the impressive levels of support provided to university research in recent years should be maintained.

CALL TO LEVERAGE HEALTH CARE SPENDING

The Martin speech has also attracted considerable attention in medical and health care circles for its overall support for medical technologies. But Martin went further and endorsed Dr Henry Friesen’s recently articulated dual perspective on stewardship of both protecting Canada’s medicare system and capitalizing on the nation’s $112-billion annual expenditures on health care. Martin pointed to the Health Innovation Council (HIC) proposed by Friesen as an example of how Canada can “increase the productivity of our health care system, reduce our reliance on imported medical goods and services and develop new Canadian diagnostic tools, therapies and services”.

Friesen, the former president of the Medical Research Council and the chairman of Genome Canada, won’t comment on his HIC proposal. But it appears to be a mechanism for generating advice and direction to policy makers and industry on where the opportunities lie within the health care system for generating wealth and creating jobs.

ENVIRONMENTAL TECHNOLOGIES

Martin’s call to ramp up investment in environmental technologies and use proceeds from the sale of the government’s interest in Petro-Canada are invoking the influence of another prominent Canadian. Maurice Strong is well-known for his ambitious environmental exploits, maverick corporate leadership and support of Martin.

Strong was the first president of Petro-Canada and is currently a senior advisor to United Nations secretary-general Kofi Annan. Earlier this year, Martin accepted an invitation to join a UN task force that will explore ways of assisting small firms in developing nations. It will report to the secretary-general in November.

While Martin’s speech leaves many questions unanswered — such as potential changes to S&T governance mechanisms — its tone has created an atmosphere of optimism amidst a period of uncertainty. For that reason alone, its impact will be considerable in the months and years ahead.

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