Richard Hawkins and Cooper Langford

A 12-step plan for Western Canada

By Richard Hawkins and Cooper Langford

Across Canada, ‘innovation' is nailed to the masthead of every Provincial economic strategy. There is growing social as well as political consensus that in order to sustain our high quality of life, we need to enhance our basic and applied research capabilities and create new types of knowledge-based industries. Many actions have been undertaken at provincial and federal levels and in industry. But are we succeeding? Do we have the right conceptual tools even to plan and monitor our progress? Or are we chasing rainbows — setting unrealistic goals, missing obvious opportunities and investing in dead-ends?

The First Banff Innovation Summit concluded on October 1 2006. It was called to take a critical look at these issues and to re-assess the problem of how to ensure a prosperous future for the four Western Canadian provinces in an increasingly competitive and rapidly globalizing innovation system.

The Banff Plan has 12 steps, each of which critically re-assesses a key issue: to unlock the creative potential of Western Canada and elevate it to a position of leadership, both in Canada and globally.

CHALLENGING INNOVATION POLICY MYTHOLOGY

There is broad agreement that knowledge and innovation are closely connected, but also that innovation is the application of an idea, not its creation. Over several decades, however, both federal and provincial research and innovation policies have become encrusted with many myths and shibboleths about these relationships. Often this has resulted in one ineffective policy following another. Or much worse, it has impaired our ability to spot and build upon policies that actually have worked.

Here are a few of the more provocative challenges to conventional wisdom:

* We consistently confuse the production of new technology with innovation.

* R&D and innovation are not the same.

* Venture capital is not appropriate for all types of new enterprises.

* Patenting new knowledge from university labs has never been a major direct source of economic growth.

* The vast majority of university researchers do not make successful entrepreneurs.

* Patents protect inventions, they do not produce innovations.

* Not all innovation that involves technology involves new technology. Instead it involves new applications and combinations of existing technologies.

* Service industries play a major role in innovation. They can be major sources of innovation in their own right, but also they are a conduit via which new knowledge from many sources is transferred into the market.

* The capacity to innovate depends upon the capacity to create diversity.

* In the knowledge economy, there are few if any location advantages beyond achieving a competitive capability to create, combine and apply knowledge.

The above statements reflect many of the currents in contemporary thinking about innovation and most of them have been substantiated empirically. But all of them run precisely contrary to long established assumptions and beliefs that there is a direct or linear relationship between science and R&D, or an exclusive link between innovation and the production of new technology.

THE 12 STEPS

1. Bringing the industry-government relationship into the open

Before we can begin to create the most positive possible environment for innovation in Western Canada, we must acknowledge the necessity for cooperation between the public and private sectors and explore creative new ways of developing this relationship to our advantage.

2. Taming the elephant

In all four western provinces, the resource sector is the elephant in the room. The resource industries can be expected to innovate and to stimulate innovation, but they are not sufficient platforms upon which to build provincial or regional innovation strategies. Their value in this context lies in their organizational and managerial resources and in their knowledge of global markets.

3. Climbing the value-added ladder

Growth and prosperity can be sustained only by producing higher value goods and services. Climbing the value added ladder would be stimulated greatly by building an explicit value-added expectation into every natural resource exploitation plan and into every intellectual property strategy.

4. Adding value by building cooperation

In Western Canada, the value-added problem is often exacerbated by characteristically low degrees of cooperation between producers, or between provincial and municipal jurisdictions. There are enormous opportunities to explore consortium models in Western Canada.

5. Encouraging paradigmatic thinking

Paradigmatic thinking goes hand in hand with the development of effective cooperative practices, the boundaries of which may extend far beyond inter-Provincial cooperation. Thinking about innovation in paradigms or between paradigms greatly increases our stock of value-added options.

6. Diversity and the value-chain

Innovation for competitive advantage requires more than taking an obvious next-step forward in an existing value chain. Often it means also taking the next step but one, or even two or three. It also requires that we direct our steps to adjacent value-chains.

7. Growing and retaining innovation capacity

To develop effective strategies for growing and retaining innovative firms, we need to focus less on size and more upon sustainability and global positioning. We must encourage more regional companies to find crucial value-chain nodes that are not linked to the geographical location of the company, but to the intellectual capacity of their highly qualified personnel to add value and to capture markets. We need also to enlarge our definition of the innovative company beyond technology and regard all services as potential sources and stimulants of innovation.

8. Enhancing the university-industry relationship

The higher-education system should be engaged with the social and economic development of our communities in all possible ways. But the focus must stay with the overall contribution that educational institutions can make. University education underpins the knowledge economy. University research is essential for innovation and greater resources should be devoted to it. But we should not let concerns about patent licensing and spin-off companies divert our attention from providing all students in all fields of study with practical opportunities to experience the innovation process first hand.

9. Money, money everywhere…

The resource elephant may be part of the reason that we do not appear to be able to finance more new ventures. In terms of building new knowledge-based enterprises, every natural endowment is a two-edged sword. Innovation is not stimulated unless every investor, public and private, is prepared to absorb failure as well as success.

10. Boosting innovation performance

First and foremost, innovation requires breadth of vision and commitment from the community as a whole to take risks, experiment and accept change. Top-down and bottom-up initiatives are not incompatible and indeed may reinforce one another. However, top-down initiatives can be effective vehicles for mobilizing creative resources at the community level.

11. Creating a culture of innovation – passing the ‘taxi driver' test

In Saskatoon, so many taxi drivers have taken so many fares between the airport and the Canadian Light Source that now automatically they talk about the synchrotron to every visitor. The highest priority is to create a culture of innovation in Western Canada and that the first challenge in bringing this about is to change many of our attitudes and generally to create a climate of experimentation and openness to change that inflects every walk of life at every level of society.

12. Western Canada in a globalizing research and innovation system

The problem is not how to integrate Western Canadian enterprises into a global system, but how to integrate more of them.

The challenge is for us to produce and exchange new ideas, practices and technologies at a level that is competitive with the rest of the world, but also to produce a positive balance of trade in ideas and knowledge so that we are retaining more value to the region than what we are exporting.

Richard Hawkins and Cooper Langford are professors with the Science, Technology and Society Program, University of Calgary. This article is an edited version of a much Banff Plan for Western Canada. It can be viewed at www.thecis.ca.