Canada is full of ideas, but poor on innovation: Canada scores a ‘D’, Switzerland an ‘A’—What’s the difference?

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Recent press, based on several studies, draws attention to Canada’s poor performance in innovation.

The Canadian Council of Academies released an inaugural report, The State of Science and Technology in Canada, in 2006 and, in 2009, a more detailed assessment: Innovation and Business Strategy: Why Canada Falls Short.

In the same year the council completed its study on Better Research for Better Business that focused on the need for adoption of advances in management and administration in Canadian business. Now, the Council has embarked on another study that builds on the Council’s inaugural report of 2006, expected to support the development of public policies on science and technology across all levels of government and inform domestic and international investors, as well as universities.

The 2009 report provided no real new conclusions, some new analyses, and few answers to the Canadian innovation malaise. The study is worth reading for its new analyses and some insights, but misses important points as to how to get Canadian ideas through to innovation.

Blaming the private sector for the malaise is finger-pointing. That so many studies are thought to be needed indicates that Canadian business and innovation has problems. The Conference Board of Canada’s recent Report Card on Innovation gives Canada’s grade as just above failing, at a “D”. It again points its finger at malaise in the private sector, but also at innovation praxis. Do those studies delve deeply enough to suggest a productive and innovative way ahead?

Will this new introspection be any more useful?

Innovation and its implementation can be visualized as a self-sustaining advancing process whereby superior ideas generate innovations that have potential to be implemented with expectation of returns on the investment, some of which initiate more ideas and innovations. Each phase of advancement has three focuses: idea, innovation, and implementation, which need to be smoothly and directly connected for innovation to succeed in contributing to the local, national and international economy.

In the process of R&D, first comes the idea, big or small, radical or incremental, but it needs to be a superior idea. It is still just a twinkle in the eye of the inspired. The idea must be explored as to feasibility and practicability (F&P). The potential value of the idea for innovation must be assessed.

The assessment asks the questions of ‘can something be made, changed, improved or redesigned to make the process or industry into which it fits more efficient, cost effective and profitable, or allow for business expansion?

To proceed from the idea, prototypes are required, along with some preliminary financial analysis and business planning.

Canadian problems in the advancement of innovation are partially addressed by the studies in place that stress the inertia brought about by private sector conservatism and foreign ownership.

From idea to F&P, programs such as the National Research Council of Canada’s IRAP (Industrial Research Assistance Program) can serve well. It requires earnest money from the innovator, but is flexible and helpful, even if not hugely magnanimous. The costs for protecting IP fall to the innovator: An investment decision (venture capital), perhaps with backers, must be made. If the Inspiree works in academe, government, or industry the institution may choose to invest.

Canada’s Natural Sciences and Engineering Research Council (NSERC) has its I2I (Idea to Innovation) granting program. Unfortunately, the “idea” part of the program has become all but forgotten and with it, the link to MP. An innovation must be close to marketability for ideas to qualify for funding.

NSERC’s I2I program is not alone in this fault. Others, too, including “angel investors”, expect a WP to be the starting point to funding further R&D. “We support only innovations that are closer to being marketed” is a usual, discouraging and Pollyanna refrain. The very-hard-to-get private sector investment into the early stages of F&P requires high-risk venture capital, even if modest. The link from idea to WP is lacking for want, or at least wanting for lack, of appropriate funding from granting agencies and industry, despite proof of function in principle and action, and of the value of the idea along the F&P route.

The national Scientific Research & Experimental Development tax incentive program (SRED) helps the private sector seriously consider R&D in-house and extramurally. First, though, private companies must have realistic views of what innovations can be accomplished and implemented, over what period of time, and at what cost. Then they must have faith or confidence in what they support.

So far, the path seems somewhat promising even if not easy. But, now come major Catch-22s that inhibit the path to MP and WP. Canadian granting agencies and academic institutions encourage the entrepreneurial spirit. But, what wet blankets extinguish the entrepreneurial flame?

An academic involved in R&D, with ideas and protectable IP is encouraged to establish a company based on the ideas, proof of concept, possibly conceptual model prototypes, etc. on the line of idea to MP and WP. Woe betides that entrepreneurial soul! Having launched the company, that soul finds further application for R&D funds is forbidden by agency and institutional policies because of potential perceptions of fiscal conflict of interest and of sole procurement policies.

The second Catch-22 is the close to uniform insistence of the granting agencies that research be coupled and endorsed by matching funds from the private sector. If the R&D is cutting-edge, why do granting agencies assume that a conservative private sector has sufficient vision to see as far as a technologic cutting -edge and also defer to that conservatism as being capable of strategic long-term innovation?

There may be inertia and conservatism on the part of Canada’s private sector in investing in home-grown innovation, but the broken path from idea to innovation, with its chasms, pit-falls, faults, missing steps, bureaucratic impediments, and misdirecting sign-posts, is less than attractive to the Canadian innovator. To try to understand and fix the route from the idea focus to the WP focus, Canada needs to look to a model, the only country with an ‘A’ on its Report Card: Switzerland.

Late last year, I toured Switzerland with a group from the U.S., India, France, and Canada to view green technology. We are sure that all is not perfect in Switzerland, but the tour was an eye-opener for how the three phases and focuses for idea to innovation are interlinked in Switzerland.

The group visited academic institutions and saw how ideas were being pursued to WP in educational and training settings.

Student and professorial enthusiasm was rampant. Private sector institutions functioned effectively, mostly as think-tanks. Some companies, big and small, had their own R&D divisions with different emphases on the three phases. Most emphasized prototype improvement and manufacture.

Throughout the trip and wherever we went, it was evident that new ideas are hugely valued. It was also evident that getting those Ideas to WP is a top priority. With WP and F&P proven, getting a new product to market is of paramount importance. Some companies ‘do it all’ while others collaborate along the route.

Academics, inventors, innovators, implementers, investors, manufacturers and marketers work together in forwarding green technology in Switzerland.

Paradoxical, ill-considered and incomplete policies seem not to plague the Swiss in innovation as much as they do Canadians. I do not know if government funding for innovation is easier or more difficult to get in Switzerland than in Canada. What is clear is that Swiss performance in innovation is to be emulated.

Yes, Canada has some strong innovation incentives, such as are noted. The upshot is that Canada moves ahead far more slowly than other countries that enjoy greater coherence of policy, administration, and management of R&D. Canada must change its practice of treating the three phases as solitudes and view the stages from idea to marketed innovations as a continuum or transition of activities all closely interlinked and collaborating. Canada needs facilitators and fewer meddlesome managers, bothersome bureaucrats, and dysfunctional inter-conflicting rules to pay primary attention to integration and harmonization within its overall innovation strategy.

Remember that when innovative Canadian ideas and research opportunities are lost, there is a downward cascading effect through that sector. Competitors are handed an immense advantage and may emerge successful in a global economy. As researchers, we have read research discoveries in journals form other countries and said, “My ideas and experiments were better conceived than those, but we simply had no opportunity to conduct the research because of absolutely no available funding.” The loss is permanent. Funding agencies and programs also often support conservative research that has already run its course, and no further discoveries will emerge. The world of innovation requires that inferior ideas and research are replaced as quickly as possible with superior ideas and research. 

Peter G. Kevan FRSC is Professor Emeritus at the University of Guelph, Scientific Director of the NSERC-funded Canadian Pollination Initiative, author of many scientific papers, book chapters, and the like. He holds several patents and is involved in several projects based on university-industry linkages.

Jack T. Trevors is Full Professor in the School of Environmental Sciences at the University of Guelph and a fellow of several science academies. He is an editor-in-chief and editor of several science journals, author of many scientific papers, book chapters, especially in the areas of applied and environmental microbiology. He also is involved in several projects based on university-industry–government- linkages.

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