Consultation phase key to success of government innovation strategy

Guest Contributor
February 27, 2002

Long-awaited documents produce mixed reaction

The federal government will take at least another six months before deciding upon what new initiatives will stem from the release of its innovation strategy papers. The proposed consultation phase — culminating in an early fall national summit — suggests that Ottawa has established an ambitious agenda to prepare for the next Budget cycle. Details of the innovation strategy must be developed and refined and new programs or fiscal measures will be hotly debated during that time, with technology clusters, government S&T, a competitive corporate environment and commercialization likely to be high on the priority list.

The simultaneous release of the innovation papers on February 12 caps a long and frustrating period in which the documents constantly changed names, experienced repeated delays and endured endless re-writes, the last by bureaucrats at the Prime Minister’s Office. The papers’ contents were widely known to the S&T community in Ottawa and early versions were obtained and reported on by RE$EARCH MONEY (R$, November 28/01), resulting in an official unveiling bordering on anticlimactic.

It comes as little surprise then, that reaction to the strategy has been largely lackluster, with many observers citing a lack of new policy or program thrusts, as well as the obvious massaging of the contents to bring them in line with the current priorities of the Liberal administration. But there’s a consensus that the new push for innovation is far superior to the S&T Strategy of the mid-1990s, which has essentially gathered dust in the ensuing years.

The focus of the most substantive of the two papers — Industry Canada’s Achieving Excellence: Investing in People, Knowledge and Opportunity — is on improved S&T governance, skilled labour, intelligent capital, competitive tax and regulatory regimes and vastly increased R&D spending by all sectors. While the thrusts are not new, they remain critical building blocks to any sound innovation strategy. But many of Canada’s competitors have or are developing strategies with similar elements, prompting many to ask whether the strategy has what it takes to significantly improve Canada’s productivity and standard of living.

The lack of detail in both the Industry Canada paper and Knowledge Matters: Skills and Learning for Canadians, the companion document from Human Resources Development Canada, has generated divergent opinion amongst many in the S&T community. One observer who did not want to be identified, described both papers as “pretty soft and mushy”, with few new or contentious ideas. “It’s a mushy start to it all. Every possible contentious point has been fiddled with and resolved,” he says. “ But the papers lead to the next stages which will hopefully lead to issues of substance.”

Like earlier versions of the documents, increased productivity and skills development remain the central focus of the strategy. Also maintained is a strong emphasis on collaboration with other levels of government and key sectors contributing to innovation. Two initiatives outlined in earlier versions — covering a portion of the indirect costs of university research and funding for CA*net 4 — have already been dealt with in the last Budget, suggesting that there is a strong internal momentum to enact proposed measures as soon as possible.

The Industry Canada paper is being described by recently installed Industry minister Alan Rock as a blueprint for economic growth . The nascent strategy paper is composed of four main elements (see box) that the government contends are required to successfully propel Canada into the knowledge economy of the 21st Century.

Innovation Paper Themes

  1. Create and commercialize new knowledge

  2. Develop skills for the new economy

  3. Provide the right business and regulatory environment for innovation

  4. Strengthen communities to attract new investment and opportunities

Flowing from the four main themes are 10 goals and 15 targets that the government will seek to reach within defined time periods (see page 3). They comprise the meat of the document, which embraces everything from additional investments in university research and more graduate students to an explicit endorsement of a technology cluster strategy and venture capital investment on par with the US.


“It has good objectives but it is somewhat light on detail and spread over far too long a period. Canada still lags the world by many indicators so we should take drastic measures and do them sooner,” says John Eckert, president of the Canadian Venture Capital Association and managing partner of McLean Watson. “There wasn’t as much emphasis given to the private sector as there should have been. The private sector has to make it happen. The government’s role should be infrastructure, tax rates and regulation. The rest will take care of itself.”


A comparison of the final documents with earlier versions reveal that much of the stronger language has been removed, with a positive spin often applied to wording that could be construed as negative. In the earlier version obtained by RE$EARCH MONEY, section headings referencing the Knowledge Gap, Skills Gap and Innovation Environment Gaps have been removed and replaced with more benign wording. The final version also gives far more prominence to fiscal and regulatory measures that the government has already implemented.

Most agree that the importance of incenting industry to increase its research performance and productivity must be a central thrust of Ottawa’s emerging innovation strategy. Dr Howard Alper, vice-rector at the Univ of Ottawa and president of the Royal Society of Canada, says getting Canadian industry to enhance its research activity is a “major challenge” but he points to one proposed initiative which he contends is an positive first step.

“The recommendation to establish a national award recognizing private sector innovators is a good signal. We have to reward innovators,” he says. “We’ve also got to enhance industry research in-house and not by outsourcing. We have to start looking at new programs. We’re still very low in industry research and we need some new initiatives.”

Alper’s overall impression of the papers is positive, particularly the willingness to continue increasing support to the post-secondary sector. He points to the target of increasing Master’s and PhD students, technology clusters, new commercialization measures and endorsement of the Canadian Academies as strong indications that the government is heading in the right direction.

“This is written in a very different way from the S&T Strategy. It contains a number of very specific recommendations and the basis for those recommendations are very well articulated and reasoned,” he says. “But the papers were supposed to be released months ago. At this point there’s nothing left to say but let’s do it.”

Alper says the consultation phase is critical in determining whether the strategy will ultimately be successful and urges the government to ensure that discussion is targeted to specific questions. If executed properly, consultation “could be very useful” in obtaining valuable input from the S&T community at large.


Knowledge Performance

1) Vastly increase public and private sector investments in knowledge infrastructure

2) Ensure that a growing number of firms benefit from commercial application of knowledge


3) Develop the most skilled and talented labour force in the world

4) Ensure that Canada receives the skilled immigrants it needs

Innovation Environment

5) Address potential public and business confidence challenges before they develop

6) Ensure stewardship regimes and marketplace framework policies are world-class

7) Improve incentives for innovation

8) Ensure that Canada is recognized as a leading innovative country

Community-Based Innovation

9) Governments work together to stimulate creation of more innovation clusters at the community level

10) All governments cooperate and supplement efforts to unleash full innovation potential of communities across Canada, guided by community-based assessments of local strengths, weaknesses and opportunities

Source: Achieving Excellence: Investing in People, Knowledge and Opportunity - Industry Canada

Innovation Paper — Targets

Knowledge Performance

1) Rank among top five countries in the world in terms of R&D performance, by 2010

2) At least double the Government of Canada’s current investments in R&D, by 2010

3) Rank among world leaders in share of private sector sales attributable to new innovations, by 2010

4) Raise venture capital investments per capita to prevailing US levels, by 2010


5) Increase admission of Master’s and PhD students at Canadian universities by an average of 5% annually, through to 2010

6) Implement the new Immigration and Refugee Protection Act and regulations, by 2002

7) Significantly improve recruitment of foreign talent, including foreign students, both by permanent immigration and temporary worker programs, by 2004

8) Increase the number of adults pursuing learning opportunities by one million, over the next five years

Innovation Performance

9) Fully implement the Council of Science and Technology Advisors’ guidelines to ensure the effective use of S&T in government decision making, by 2004

10) Complete systematic expert reviews of Canada’s most important stewardship regimes, by 2010

11) Ensure Canada’s business taxation regime continues to be competitive with other G-7 countries

12) Substantially improve Canada’s ranking in international investment intention surveys Community-Based Innovation

13) Develop at least 10 internationally recognized technology clusters, by 2010

14) Significantly improve innovation performance of communities across Canada, by 2010

15) Ensure that high-speed broadband access is widely available to Canadian communities, by 2005

Source: Achieving Excellence: Investing in People, Knowledge and Opportunity - Industry Canada

From a policy perspective, at least one expert on S&T policy questions the value of a document which calls itself a strategy while calling for an extensive period of consultation. Dr John de la Mothe, a professor with the Univ of Ottawa’s school of management and a Canada Research Chair holder in innovation strategy, says that many of the indicators presented in the documents are misleading while others are absent altogether, particularly those for quality of life and standard of living.

“There’s a lot of analysis but no over-arching theoretical framework. It’s an updating of questions we’ve seen for 20 years,” says de la Mothe. “It’s long overdue but it’s not delivering on Program Review commitments which promised better horizontal coordination. The government has done many good things but I don’t get a sense of them here. It’s underwhelming and short on specifics.”


Although specific directives or timetables for the first wave of initiatives are absent from the documents, it’s evident that a plan will be executed barring vociferous opposition during the consultation phase.

Insiders close to the decision makers say it’s almost certain that commercialization is at the top of the government agenda. It will include an enhanced role for the National Research Council’s Industrial Research Assistance Program, as well as Technology Partnerships Canada. There’s also a strong possibility a new vehicle is being considered, and may be among several commercialization proposals submitted to government in recent years.

The Industry Canada document also identifies three initiatives that will apparently be implemented regardless of what emerges during the consultation phase — indirect costs of university research (building on the $200-million fund announced in the last Budget), support for institutions to identify intellectual property with commercial potential, and further increases in funding for the granting councils.

All three initiatives fall within the academic sector and are prefaced in the document with the proviso that “The Government of Canada has committed to implementing”. This stands in contrast to the other stated targets which are all prefaced with the words “will consider”.

The government has established a dedicated web site where copies of the documents can be obtained. It will also use the site for feedback during the consultation phase. So far no information on the consultation phase has been posted. The address is:

RE$EARCH MONEY made several requests to speak with the minister of Industry about the innovation papers but they were unsuccessful.


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