Month: November 2016
Big Idea: Create a Set of “Canada 150 Goals and Prizes”
In June, Canada 2020 launched The Innovation Project, an initiative devoted to studying Canada’s innovation agenda – the risks, the opportunities, and key factors involved in making Canada a more innovative nation.
As part of this project, we asked Mike Moffatt, Senior Associate at Canada 2020 and Director at the Lawrence Centre at Western University’s Ivey Business School and Hannah Rasmussen, Director at Projection North and Professor at Western University’s Brescia College, to consider how to foster innovative growth in Canada.
Moffatt and the Canada 2020 team traveled to eight cities across Canada to hold roundtable discussions with key stakeholders representing sectors ripe for transformation. We are grateful for the thoughtful discussion and time these roundtable participants gave the effort. While the sectors themselves were very different, common themes emerged: talent and immigration, availability of venture capital and Canadians’ adversity to risk.
From their research and these roundtables, Moffatt and Rasmussen developed 10 Big Ideas for Canada. Canada 2020 will be releasing an idea a day on our website leading up to our 3rd Annual Canada 2020 Conference: The Innovation Agenda.
Each idea is thoughtful and detailed, and Canada 2020 hopes they will spur discussion and debate on the topic as we continue to explore innovation in Canada.
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Big Idea: Create A Set of “Canada 150 Goals” and “Canada 150 Prizes”
What is the idea?
Canada needs innovative thinking to solve some of the more difficult social and economic problems the country faces, such as:
- A lack of safe drinking water and substandard housing on First Nations reserves.
- A persistently large gender wage gap.
- Growing rates of fentanyl and other opioid addiction.
To tackle these problems, we recommend the use of goals and prizes, which we have adapted from both the XPrize Foundation and the United Nations Millennium Development Goals.
Recommendation: The federal government should identify a set of measurable national goals, the Canada 150 Goals.(1)
Canada has already set some of these goals. Canada’s commitment to reduce greenhouse gas emissions by 30 per cent below 2005 levels by 2030 certainly counts as a measurable national goal,(2) as does the prime minister’s commitment to “end boil-water advisories on First Nations reserves within five years.”(3) Canada’s goals should follow the SMART criteria :(4)
- Specific
- Measurable
- Achievable
- Relevant
- Time-based
Some of the UN Millennium Development Goals have been criticized for being unachievable or lacking measurability; the Canada 150 Goals must avoid such goals.
Recommendation: The federal government should create a set of Canada 150 Prizes, with large cash prizes for projects that will help meet these goals.
The prizes are different from the goals, but they should be related to them. One such example is Canada’s emissions goal, and the NRG COSIA Carbon XPRIZE:(5)
Goal: Reduce greenhouse gas emissions by 30 per cent below 2005 levels by 2030.
Prize: “The $20M NRG COSIA Carbon XPRIZE will challenge the world to reimagine what we can do with CO2 emissions by incentivizing and accelerating the development of technologies that convert CO2 into valuable products. These technologies have the potential to transform how the world approaches CO2 mitigation, and reduce the cost of managing CO2.”
In this way, the prizes assist Canada in achieving the final goals. Canada’s boil-water advisory goal could be matched with a prize for new water-treatment technologies, and the goal of reducing opioid addiction could be matched with a prize for treatment programs that prove to reduce addictions by a measurable amount.
These prizes would encourage investment of time and capital in finding innovative solutions to our goals and would incentivize Canadians to use their skills and imagination to solve some of the more difficult social and economic problems the country faces.
Recommendation: The federal government should ensure that Canada 150 Prize competitions are open to all Canadians.
Who will be responsible for administering the idea?
The Minister of Innovation, Science and Economic Development will be responsible for administering the Canada 150 prizes and identifying the formidable problems to be solved.
Recommendation: The federal government should hold open consultations with Canadians to determine the list of Canada 150 Goals and Canada 150 Prizes.
What mechanisms for accountability or measurement can be put in place for the idea?
One of the benefits of using a prize-based approach is that projects are only funded if they are successful, creating an automatic layer of accountability. The federal government must ensure that both the goals and the prizes have measurable criteria.
What failures is the idea trying to solve?
Regulatory Failure: A common theme that came up repeatedly in our roundtable was that governments were trying to do too much and were spreading innovation dollars around too thinly, rather than focusing on a few areas where it can realistically expect to succeed. There was a consensus that Canadian governments are too afraid to try to “pick winners,” and this aversion leads to a suboptimal use of resources. The Canada 150 Goals and Prizes are designed to “focus the mind” on a few key areas where Canada has the potential to be a world leader. By choosing specific problems to solve, we allow the government, firms and individuals to focus on developing and showcasing specific core competencies.
Risk Aversion: The Canadian government’s approach to risk aversion in the innovation sphere is to try to “de-risk” the space, by transferring risk from firms to governments. While appropriate in some circumstances, this approach does not teach Canadians how to take risks. Attaching large financial prizes to problems rewards risk-takers and creates an environment in which taking chances is more socially acceptable.
Evangelism: Canada currently has the world’s attention thanks, in part, to the international popularity of Prime Minister Justin Trudeau. By choosing specific problems to solve and by having large prizes attached to solving them, the prime minister can use his star power to highlight our innovative clusters to the world and make Canada “the place to be” for innovation.
Inequality of Opportunity: A large segment of Canada’s population is left out of government programs on innovation because they do not know how to navigate a complex regulatory environment. Using prizes that anyone can access opens up government-driven innovation to all Canadians.
What are the potential benefits of the idea and what are the costs?
Benefits: The approach of goals and prizes forces the government to focus on a few key priority areas. Furthermore, since prizes are only awarded for success, there is little financial risk for the government. If no innovation occurs, no prizes are awarded.
Costs and Risks: As with most, if not all, innovation programs, the government could end up paying for innovations that would have happened without the program. Furthermore, the government may choose the wrong areas as “winning” ones and fail to incent innovation in areas with a greater chance for success.
Will the idea increase economic inclusion and/or enhance autonomy? If so, how?
Economic Inclusion: Since many of the goals will be around assisting vulnerable populations, successful completion of these goals will lead to an improved quality of life, a lower cost of living and higher incomes for those in need.
Autonomy: We would recommend that when choosing the Canada 150 Goals, the government try to have at least one or two that would be autonomy-increasing if successful.
Footnotes
1 Canada 150 is in reference to 2017 being the 150th anniversary of Confederation.
2 Margo McDiarmid, “Canada sets carbon emissions reduction target of 30% by 2030,” CBC News, May 15, 2015.
3 “Justin Trudeau vows to end First Nations reserve boil-water advisories within 5 years,” Canadian Press, December 18, 2015.
4 Robert L. Bogue, “Use S.M.A.R.T. goals to launch management by objectives plan,” TechRepublic, April 25, 2005.
5 NRG COSIA Carbon XPRIZE, NRG COSIA Carbon XPRIZE Overview (NRG COSIA Carbon XPRIZE, 2016).
Big Idea: Creation of a Network of Cluster Research Centres
In June, Canada 2020 launched The Innovation Project, an initiative devoted to studying Canada’s innovation agenda – the risks, the opportunities, and key factors involved in making Canada a more innovative nation.
As part of this project, we asked Mike Moffatt, Senior Associate at Canada 2020 and Director at the Lawrence Centre at Western University’s Ivey Business School and Hannah Rasmussen, Director at Projection North and Professor at Western University’s Brescia College, to consider how to foster innovative growth in Canada.
Moffatt and the Canada 2020 team traveled to eight cities across Canada to hold roundtable discussions with key stakeholders representing sectors ripe for transformation. We are grateful for the thoughtful discussion and time these roundtable participants gave the effort. While the sectors themselves were very different, common themes emerged: talent and immigration, availability of venture capital and Canadians’ adversity to risk.
From their research and these roundtables, Moffatt and Rasmussen developed 10 Big Ideas for Canada. Canada 2020 will be releasing an idea a day on our website leading up to our 3rd Annual Canada 2020 Conference: The Innovation Agenda.
Each idea is thoughtful and detailed, and Canada 2020 hopes they will spur discussion and debate on the topic as we continue to explore innovation in Canada.
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Big Idea: Creation of a Network of Cluster Research Centres
What is the idea?
Clusters are beneficial because they allow for economies of scale, and access to skilled labour and innovation largely happens in geographic clusters of interrelated companies and institutions. In his 2014 report, Spencer 72 identified 230 separate geographic clusters in 21 different industries in Canada. This included a higher education cluster in Charlottetown that employed 2,066 people in 2011, the aluminum cluster in Saguenay that employed 3,687 people and the food and beverage cluster in London that employed 6,972 people. Firms in these clusters benefit from being in the same geographic region with shared local knowledge and a shared pool of talented workers.
However, there are large information gaps at the local cluster level, as clusters have very different needs and are facing very different challenges regarding innovation. Through the creation of cluster research centres, gaps in the cluster’s ecosystem will be identified, idea sharing will be increased, data will be collected and shared and regulatory failures will be identified.
Recommendation: The federal government should fund the creation of a network of cluster research centres across the country at universities within the geographic area of the cluster that would be required to provide a yearly set of deliverables to maintain their funding.
The deliverables for each cluster research centre would include the following:
Recommendation: Each cluster research centre must convene a minimum of one meeting per year with local stakeholders, including industry, academia and government, to network and share information and aid in the creation of reports and white papers on the challenges the cluster is facing.
Recommendation: Each cluster research centre must ensure they collect data, both qualitative and quantitative, about the cluster.
Recommendation: Each cluster research centre must, once per year, update (or create) a publicly available map of their local cluster ecosystem.
Recommendation: Each cluster research centre must, once per year, release a white paper with policy recommendations for governments.
Recommendation: Each cluster research centre must, once per year, report on the state of the cluster and identify possible gaps in the local ecosystem.
Recommendation: Each cluster research centre must, once per year, report on the local cluster’s best practices and those from other clusters.
Recommendation: Each cluster research centre must, once per year, report on what initiatives, if any, companies in the cluster have undertaken to increase the hiring of underrepresented groups, including women, visible minorities and Aboriginal Canadians.
Recommendation: Each cluster research centre must, once per year, report on the labour needs of the cluster, identify any skills training gaps in the sector and provide curriculum and co-operative education recommendations to universities, colleges and other educational institutions.
Recommendation: Each cluster research centre must, once per year, award up-and-coming young innovators in the local ecosystem.
Who will be responsible for administering the idea?
The development and ongoing administration of the cluster research centres will be the responsibility of the Minister of Innovation, Science and Economic Development and the universities and colleges where the centres are located. In his 2015 mandate letter to the Minister of Innovation, Science and Economic Development, the prime minister mandated the development of an Innovation Agenda that included expanding effective support for “the emerging national network for business innovation and cluster support.”73
What is the mechanisms for accountability or measurement can be put in place for the idea?
The requirement for a yearly set of deliverables to maintain funding provides accountability. Checks and balances must be put in place by the ministry to ensure the delivered materials are of acceptable quality. These deliverables will be made public to disseminate information and to ensure quality.
What failures is the idea trying to solve?
The cluster research centres are designed to address, either directly or indirectly, a wide array of market and regulatory failures that can occur in a cluster.
Thin Markets: Cluster markets are thickened by more workers and more firms. The research centres help increase the supply of labour through their recommendations to address skills training gaps,
as well as sharing of best practices to tap into historically excluded sources of labour. More firms can be created through the centres better matching start-ups with sources of capital to obtain funding. Both sides of the market can also be thickened through the advice the centers provide to governments on skills and funding gaps.
Externalities and Knowledge Spillovers: Knowledge spillovers will be created through the meetings assembled by the centre and by increasing “collisions” through the other activities of the centres.
The centres will disseminate best practices and other forms of knowledge that can be adopted by other firms.
Network Externalities and Co-ordination Failures: The cluster research centres create a geographic space for people in the cluster to meet, share ideas and develop new approaches.74
Evangelism Externalities: The cluster research centres act, in part, as a champion for the local cluster and should serve to promote the values of the cluster to other Canadians, enhancing the reputation of the cluster.
Regulatory Failure: One of the responsibilities of the centres is to address regulatory failures by providing regulators and lawmakers more local knowledge of and feedback about the cluster. A common complaint we heard from regulators in our roundtable was this: “We hear from 40 different cluster stakeholders about 40 different issues; we don’t know which problems are the most important.” Cluster research centres can provide “triage” guidance to regulators, so the most pressing priorities are addressed first.
Risk Aversion: One of the tasks of the centre is to provide awards to innovators and other successful risk takers, thereby creating role models and encouraging others to do the same.
Inequality of Opportunity: The cluster research centres will directly reduce inequality of opportunity by looking for bottlenecks that are excluding people from the local market. Additionally, these centres will look for ways promote companies that seek ways to diversify their hiring.
What are the potential benefits of the idea and what are the costs?
Benefits: These centres will help address skills shortage, and gets universities and the private sector used to working with each other. If these centres create stronger clusters, it not only benefits the workers and companies within the cluster but creates spin-off employment and prosperity in other local industries.
Costs and Risks: There is a financial cost to setting up and running these centres will cost money. Industry Canada recently funded a similar research centre at Western University with $1 million a year for five years. We estimate that each cluster research centre would cost between $500,000 and
$1 million a year to run.
Firms may resist participating in centres or may see them as a way to ensure the government enacts policies and approaches that benefit the industry but not the overall goal of the research centre. There is also the possibility of political interference with the work of the cluster research centres or in choosing which research centres get funded. The centres will need to have a level of independence to ensure this does not happen.
Footnotes
1 Office of the Prime Minister, Minister of Innovation, Science and Economic Development Mandate Letter (2015).
2 This is referred to in economics literature on co-ordination failures as a “Schelling point.”
Big Idea: Creation of Sector Specific Innovation Accords
In June, Canada 2020 launched The Innovation Project, an initiative devoted to studying Canada’s innovation agenda – the risks, the opportunities, and key factors involved in making Canada a more innovative nation.
As part of this project, we asked Mike Moffatt, Senior Associate at Canada 2020 and Director at the Lawrence Centre at Western University’s Ivey Business School and Hannah Rasmussen, Director at Projection North and Professor at Western University’s Brescia College, to consider how to foster innovative growth in Canada.
Moffatt and the Canada 2020 team traveled to eight cities across Canada to hold roundtable discussions with key stakeholders representing sectors ripe for transformation. We are grateful for the thoughtful discussion and time these roundtable participants gave the effort. While the sectors themselves were very different, common themes emerged: talent and immigration, availability of venture capital and Canadians’ adversity to risk.
From their research and these roundtables, Moffatt and Rasmussen developed 10 Big Ideas for Canada. Canada 2020 will be releasing an idea a day on our website leading up to our 3rd Annual Canada 2020 Conference: The Innovation Agenda.
Each idea is thoughtful and detailed, and Canada 2020 hopes they will spur discussion and debate on the topic as we continue to explore innovation in Canada.
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Big Idea: Creation of Sector Specific Innovation Accords
What is the idea?
The goal for this big idea is to ensure each sector in Canada has a coherent strategy to support innovation and that the federal government supports and participates in this strategy.
Recommendation: An innovation accord for key sectors of the Canadian economy should be created. These accords would promote a new relationship with the federal government and the particular sector and would facilitate policy coherence between levels of government and across departments, convening diverse stakeholders and leveraging funding. Additionally, an innovation accord would provide priorities, goals and measurements to determine sector success in innovation that results in economic inclusion and an enhancement of autonomy.
These innovation accords will focus on outcomes and practical commitments and consider areas such as policy design, funding arrangements and strengthening innovation within the sector.
The implementation of the innovation accords will be overseen by Innovation, Science and Economic Development Canada (ISED).
Each innovation accord will:
- Identify common objectives in an innovation strategy.
- Developaction-orientedplansforbothpartiestotheaccord.
- Measureprogressappropriatelyforbothpartiestotheaccord.
- Leverage funding from all levels of government to maximize support.
- Foster healthy competition among provinces while being flexible/asymmetrical to fit provincial innovation strengths and needs.
- Accelerate the federal goal of driving inclusive innovation.
At a minimum, we would recommend that the following sectors work with the federal government to create innovation accords:
- Life Sciences and Health Care
- Arts and Culture
- Manufacturing
- Agri-Food
- Finance
- Oil and Gas
Each accord represents a public commitment to be more open, transparent, consistent and collaborative in innovation. We believe that these accords will move the government and the sector towards greater mutual understanding and provide a framework within which innovation can be developed.
Recommendation: A working group should write each innovation accord with individuals from the Government of Canada and the sector. The members should be selected to reflect a cross-section of federal government departments and the sector. To ensure that a broad range of viewpoints within the sector are heard, consultations should be held.
These innovation accords will not compel the Government of Canada or the associated sector to work together; rather, they outline the values and principles that will govern the relationship when they choose to work together.
Who will be responsible for administering the idea?
The implementation of the innovation accords will be overseen by Innovation, Science and Economic Development Canada (ISED)
What mechanisms for accountability or measurement can be put in place for the idea?
These innovation accords will focus on measurable outcomes and practical commitments and consider areas such as policy design, funding arrangements and strengthening innovation within the sector. The development of measurements and accountability mechanisms will be a part of each accord.
What failures is the idea trying to solve?
Regulatory Failure: From an innovation perspective, the overarching goal of the innovation accords is to ensure that policy objectives of both the government and the industry sectors avoid conflicting priorities as much as possible and encourage the design of policies that encourage positive conse- quences for innovation. These accords will allow stakeholders in each sector and the government to work through regulatory failures stemming from a lack of coherence.
What are the potential benefits of the idea and what are the costs?
Benefits: Coherence would be created in Canada’s overall approach to innovation within each sector. This increased coherence allows Canada to compete globally in innovation in key sectors by creating a sense of stability and attainable goals.
Costs and Risks: A risk with these innovation accords is that industries could see them as a way to ensure the government enacts policies and approaches that allow the industry to make more profits without actually creating innovations, or creating innovation that decreases economic inclusion and autonomy. These risks can be avoided if there is careful consideration in the creation of the respon- sibilities for both sides of the accord and that overall progress is measured. Another risk is that these accords are simply words on a piece of paper and never meaningfully put into practice.
Will the Idea increase economic inclusion and/or enhance autonomy? If so, how?
Economic Inclusion: Economic inclusion should be an expressed goal of each accord. The accords should contain a section on how both the government and the industry will create wealth and employment opportunities for marginalized Canadians.
Autonomy: Where possible, the accords should consider finding ways to increase the control individuals and communities have over their economic outcomes, though in most cases we anticipate there is little the accords can do to address the issue.