Last week I had the good fortune to attend the Canada and the OECD: 50 Years of Converging Interests conference in Ottawa. The event was sponsored by the Public Policy Forum and featured many notable speakers who addressed not only the history of Canada and OECD (I didn't know that, for a brief spell, we were the only/first member as we were first to pay our fees), but also the implications for our interactions with the OECD, and why the OECD is such an important instrument for public policy.
The conference echoed some interesting thoughts and conversations I've been party to recently regarding Canada's innovation engine, and what one colleague stated as "a failure to engage the wheels." That is, we have a high performing R&D engine, but the wheels are not fully engaged to ensure that this R&D translates inventions into innovation and market value (social and economic). The R&D translation component - the clutch - is what we are starting to engage in earnest across the country with our renewed focus on business innovation.
Speakers at the OECD conference spoke a lot about Canada's enviable tertiary educational attainment rate (first in the world, though demographics are apparently unseating us there in favour of South Korea). Every speaker who mentioned this, from OECD Secretary General Angel Gurria to BMO's Kevin Lynch, failed to say that this includes what the OECD calls both Type A (university) and Type B (college/vocational). All the speakers focused solely on university attainment, which the facts do not support. As I wrote last year, we are first only when we include colleges and polytechnics; we are 11th (now 12th I believe) for university attainment. We need to recognize the role of college and polytechnic education in Canada, and work toward better integration of our capacity to strengthen our economy through our industry-focused programs. It's worth noting that, in the 9 polytechnics, we educate half a million people per year (25% FT, 75% PT), and that 20-22% of these people already have a university degree.
Barbara Stymiest, RBC, Group Head, Strategy, Treasury & Corporate Services, gave a very good introductory speech on the need to engage industry in R&D so that government does not drive innovation in the economy. Governments have a role in promoting and providing open and active environments to encourage innovation and the sharing of ideas. This is the basic premise of applied research and experimental development. As Stymiest put it: "We need to train our business people, researchers and government people to be entrepreneurs, not just employees." We need more private sector engagement and leadership to drive innovation from the demand side, rather than government's supply side or providing the talent pool for the private sector.
We can call this demand-driven innovation, which includes user-driven innovation and the engagement of producers and consumers in the diffusion of innovation.
Secretary General Gurria outlined the OECD's perspective on "green growth" a theme of the conference. Green growth is the only responsible growth, he said: It's not a matter of austerity versus growth; rather, it's a matter of responsible growth, and this growth is green growth. To this end, all OECD member states must identify the skills learners need and what skills the economy needs for future growth. There is "untapped potential" in all areas of the green economy, and our education systems need to encourage innovation skills with an eye toward sustainability broadly in order to realize future markets and opportunities that will continue to develop world wide. This points to a differential between what employers want and what employers need. GBC's work in this area is notable, as we are providing employers the employees they need with the requisite skills. We need to push further as a country and ensure our employers can recognize the need to invest in the skills for the future as well.
This last point was made very forcefully by most of the speakers I heard at the conference. It further supports the government's (and the education sector's) role on the supply side of the innovation economy, which includes encouraging business innovation as well as being the compass on the growth potential of the future. The panel discussion on Innovation for Growth addressed this directly. The speakers were Alistair Nolan, Senior Economist, Structural Policy Division, OECD, Chad Gaffield, President, Social Science and Humanities Research Council, and Amit Chakma, president of the University of Western Ontario.
Nolan outlined the OECD's innovation strategy and focused on the "intangibles issue" - those components of an innovation system that are not easily measured or articulated (like the soft skills GBC provides for example). Measuring innovation is imprecise, Nolan told the audience, and we face the necessary challenge of decoupling innovation from resource depletion. For example, patents are only one way to measure R&D output. Digital business models, art, design trademarks are increasingly more important for realizing latent innovation potential. "Entrepreneurship serves as a carrier for innovation and innovative ideas" Nolan said, and "public research institutions require reform to enhance and encourage R&D links with firms." These statements echo many ideas posited by Polytechnics Canada at the recent annual conference, where we focused on innovation and entrepreneurship skills development, and our role in fostering business innovation. On this front, according to Nolan, "we need to understand more about the complex trade offs in public R&D commercialization and firms." This means a more thorough understanding of what kinds of R&D investments translate more effectively into downstream innovation uptake. This is the clutch of innovation.
UWO's Chakma spoke directly about the supply side of innovation, confining his remarks to the university sector, but he did call for a "national project" whereby we direct science into certain sectors. This is a positive view of Canada's limited capacity to be all things to all areas of science. While we can encourage innovation and R&D into any and all areas, we would do well to be proactive in our spending to ensure we can maximize future potential and play to our strengths.
SSHRC President Chad Gaffield gave an overview of people-centred innovation, a topic I've been promoting since I first heard Gaffield speak on this topic last year. Gaffield reminded the audience that there is no longer a linear flow of idea to invention to the market. we are moving into a multi-directional flow of ideas (c.f. user-driven innovation) that is a transition from making (20th Century) to using (21st Century). My post a while back on thinking, making and innovation literacy points to the recent Globe article that outlines the need for a more nuanced approach to skills, including the science, technology engineering and math mixed with social sciences, humanities and the arts and design. All are necessary for increasing our innovation and entrepreneurship capacity. Integration and connecting digital technology, content and literacies, and business innovation and social innovation are core aspects of a 21st century people-centred innovation. People-centred innovation is about demand, not supply Gaffield reminded us.
Kevin Lynch's lunch time keynote was instructive here as well. Echoing comments he made at the Incremental Innovation conference a couple of weeks ago, Lynch reminded the audience that "pervasive globalization is both the opportunity and the challenge of the present age." The OECD is key to global guidance and Canadian policy setting in an interconnected, global innovation economy. It is the charting of the future course that the OECD speaks to, informing government policy as to what's next in the global economy.
08 June 2011
Innovation <clutch> transmission, or, Supply and Demand in the Innovation Economy
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