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Impediments to innovation: twenty years on.

Impediments to Innovation: Twenty Years On

Twenty years ago, in November 1969, the Science Council of Canada established its first Committee on Industrial Research and Innovation. Chaired by the late Pierre Gendron, this committee was asked to inquire into impediments and incentives to innovative activity in Canadian industry. In time, it reported back to the council, which then busied itself with the preparation of one of its best-selling reports, "Innovation in a Cold Climate", which appeared in October 1971.

The impediments section of this report mentioned the following as characteristic of the situation in the manufacturing sector of Canadian industry:

-- an inadequate technology base;

-- limited domestic market size, and limited access to foreign markets;

-- a poor climate for investment;

-- inadequate management skills;

-- improper location of industry;

-- tariff and non-tariff barriers;

-- the sub-critical size and stability of the industry teams responsible for innovation; and

-- the negative aspects of the operations of foreign-based multinational companies in Canada, and the lack of Canadian multinationals.

To remove the impediments, the committee, the council and the report called for the federal government, in collaboration with the provinces, to develop a coordinated industrial strategy which recognized the significance of innovation, and which gave priority to industries with high innovative potential.

Twenty years later, late in 1989, no such strategy is formally in place, although elements of it appear to be, and there has been a lot more discussion between the federal and provincial governments. To a greater or lesser degree, all of the listed impediments are still with us.

The 1971 report also called on the federal government to use its significant purchasing powers to help innovative companies. In 1984 the Task Force on Technology Development chaired by Dr. Wright recommended the same thing. The report called for the use of major programmes (then one of the science policy buzz words) in the stimulation of technological innovation in industry, but perhaps the only one of this kind has been in space.

And the report called for more dialogue between the government and the industry, and with the provinces. In recent years there has certainly been more dialogue and new institutions have been established -- for example, the National Advisory Board on Science and Technology and the Council of Science and Technology Ministers. There have been several conferences, a national science and technology policy (if not a strategy) has been proclaimed. The (little lamented) Ministry of State for Science and Technology has been absorbed by the old Industry/Regional Expansion Department presumably, after much discussion with the industry, to make the new Department of Industry, Science and Technology into the kind of leading agency in the fight to remove the impediments to innovative activity in Canadian industry that would make the Gendron Committee members -- if they were still around -- jump for collective joy! But will it?

The initiative and changes just mentioned have been made by the present government, but it is a little early to turn in a report card. There has been much less reluctance to do this with regard to what the government has not done. For example, it has not boosted R&D expenditures so that the national percentage of GDP figure -- the apparent yardstick of national science policy health -- could rise significantly above its accustomed value of 1.3 or thereabouts. It has also been accused of increasing the numbers of impediments to technological innovation in industry. For example, the Unsolicited Proposal Programme was cut in the most recent federal budget. Increasingly, the R&D assistance funds that are available are to be allocated to partnerships between industry and the universities or government laboratories rather than to companies. The communications tax has been increased to 11% leaving the impression that the Department of Finance is not sympathetic towards innovation in the communication business. The provinces are not blameless. They are having problems removing their own non-tariff barriers. In fairness, however, some provinces have apparently done more to foster innovation in industry than the federal government. And while the feds stopped the abuse of the SRTC tax incentive by canceling the programme, nothing has been put in its place. Then there is the business of the NRC budget cuts although, again in fairness, the IRAP programme has not been treated similarly.

One constant in industrial life, then, is the continuing existence of impediments to innovation. Another is that one side will go on blaming the other for this. Someone, or some department or some mandarin or politician or minister is always to blame. In the reverse direction, industry as a whole, or a sector of it, or a company (usually a branch of a foreign-owned multinational) is to blame. If the blaming would stop, might not more of the impediments go away?

A good crisis might help, like the energy one of 10 years ago, or the global environmental one quickly coming into sight. Unfortunately such crises sometime give rise to wrong-headed measures by governments and precipitous action by industries or companies. The heat of the crisis may not be the best of times for good decision-making.

Well-directed pressure might help, especially if it is applied militantly and heavily and with cries of injustice ringing in everyone's ears, and especially in those of cabinet ministers and members of the Commons. There are pressure groups representing industries and companies and they have done battle in the past, with limited success. But no strong pressure group from the science and engineering communities -- whose members do the technical parts of technological innovations -- has been successful in the larger field, although there may have been limited successes. And it is not yet certain that the federal government will accept the advice given it by NABST. (If it had, then the amount of research support for the universities would already have risen significantly, deficit or no deficit.)

In fact, it may be fair to ask whether -- even with its positive initiatives -- this present government really believes in science, technology, research, development, engineering and innovation. It is indeed the first government to have two engineers as ministers responsible for science and technology, and they have two former ministers (one an engineer) as colleagues in cabinet, whose present responsibilities include matters scientific and technical. It is indeed the first government to shake up its own R&D institutions and their managements, and to insist on the building of closer and better links to industry. Yet it gives the impression that its real priorities lie elsewhere in fields unrelated to the creation of wealth and well-being, to which innovation can be directed. In other words, there is rhetoric -- and there is reality.

It may also be fair to ask whether -- even with its successes in the world's markets and with innovations such as the Canadarm -- the industry sector really believes in these same things. The North American lack of patience with badly performing bottom lines is evident in Canada (in contrast with Japan, for example), the small numbers of manufacturers actually doing research or innovation, and the takeover fever among the bigger players all add up to scepticism in this regard, even although the rhetoric may be less in evidence.

Then there is the general public, which buys the Japanese and other foreign-made high-technology products because it can afford them, which finds science and technology too mysterious, and which has no heroes among Canada's distinguished researchers and innovators. The public seems also to give its ear more readily to single issues than to those that pervade society.

It is tempting to list all of the pros and cons of the innovation picture and to ask governments to remove the latter. But two problems come immediately to mind. The first is that governments alone cannot remove all of them. The industry and the people have their roles to play. The second is that any list would be so long that removal could take a very long parliamentary session to fix -- even if the politicians could face the task -- and the bureaucrats would be uncomfortable with its complexity. It makes more sense to make the changes over a longer period, except that events and elections may get in the way.

It is also tempting to support the Science Council's recommendation for the development of a coordinated industrial strategy. It makes a lot of sense since it would likely reinforce the pros and help counteract the cons. But it would be one of a number of strategies (for example, resource development, health and welfare, defence, environment) and would not be applicable evenly across the country. And the individual provinces could have different strategic priorities. On the other hand, such a strategy might be stated simply and, relatively speaking, non-controversially. Unfortunately, neither the Council nor its Committee went on to explain what they had in mind for such a strategy.

It makes little sense in most cases to solve 1989s problems with 1969s technology (there will be exceptions). In the same way, 1989s technology may not help with a lot of problems in 2009 -- another 20 years on. As has been noted above, the situation now with regard to impediments to innovation is not the same as it was 20 years ago. But in 1969 there were incentives, too, as there are now, and as there will be in the future. Perhaps a simple strategy, emphasis on the incentives, an absence of crises requiring precipitous action, and a whole lot less blaming will improve things over time. But for all of these, the ball is in the politician's court. It is as Speaker John Fraser once told his guests from the scientific community: "Like it or not, it is here in the House of Commons that the important decisions are made."

Wilson is a former President of the Engineering Institute of Canada and is now a consultant just outside of Ottawa.
COPYRIGHT 1990 Chemical Institute of Canada
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Author:Wilson, Andrew H.
Publication:Canadian Chemical News
Article Type:editorial
Date:Jan 1, 1990
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