Canada's innovation gap - The Globe and Mail

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Lampertina bookmarked on 2009-07-07 innovation canada globeandmail productivity technology resources economic_development konrad_yakabuski

Insightful (and often cutting) article on the status of innovation in Canada. Stephen Downes responded in a blog post, http://halfanhour.blogspot.com/2009/07/innovation-in-canada.html, basically agreeing, saying that we need a bit of free market and a bit of government direction as well, and that we (Canadians) need to wean ourselves from our corporate overlords.

In an aside, the G&M journalist (Konrad Yakabuski) notes that Canadians already log more work hours than Americans and are workaholics compared to Europeans - who innovate more and therefore, because they work smarter, don't need to work harder. As it happens, I was just wondering about Canadians and partying/ sociability over the beginning of July (what with Canada Day and Independence Day). Canadians are far less social than Americans, in my experience. For Canadians, sociability and partying means getting drunk - it always has, for as long as I can remember. Americans in this respect are actually the kinder, gentler people. Is it because of work?

Barring an extension of the workweek - Canadians already put in more hours than Americans and are virtual workaholics compared with Europeans - innovation is the only sure way for Canada to be more productive. It is the key to maintaining our standard of living and providing increasingly costly public services for an aging population.
"Canada is not being productive because it's not being innovative," said Robert Brown, chief executive officer of Montreal-based CAE Inc., the world leader in aircraft flight simulators and training. "A lot of innovation occurs at the interface with the customer. But when you look at the make-up of Canada's economy, with so much dependence on resources, there is less contact between [our biggest] companies and end users."
Strong governments in Asia and Finland, on the other hand, have been able to resist the self-interested demands of individual sectors, and have implemented country-wide innovation strategies that, while not without hiccups, ultimately increase the size of a country's economic pie over time.
The consequences of this global power shift could show up in lower pension benefits, substandard health care and rickety infrastructure for future generations of Canadians. Early signs are already apparent to discriminating eyes, such as those of Mr. Curtis, a former chief economist in the Department of Foreign Affairs and International Trade.

"We are declining relative to many other parts of the world," he said. "You don't really feel it unless you're cosmopolitan and travel a lot. You now stay at the three-star hotel instead of the four. But our cities - and the country as a whole - are quite clearly relatively less well off than before."
Where he sees languor in our policy apparatus, CAE's Mr. Brown detects an aversion to interventionist industrial strategy among governments. But as Canada has relied on the free market - auto bailouts notwithstanding - to determine its champions, governments elsewhere are actively nurturing their own winners.

"We seem to believe the free-market system will work, but no one else operates that way," Mr. Brown said. "If you rely only on market forces, you are going to react to what others are doing, rather than anticipating what is going to happen."
Research will become increasingly important to the competitiveness of Canadian auto plants as a strong loonie and wage concessions south of the border wipe out much of the edge they once held over U.S. facilities. But Washington's promise to provide $25-billion (U.S.) in loans to companies there to help develop more fuel-efficient cars threatens to widen the already gaping research chasm between each country's auto sector.

"Without comparable support in Canada, manufacturing capacity could follow the funding, taking engineering work and suppliers with it," warns the Academies report.

Still, foreign ownership is not the biggest reason for Canadian companies' R&D deficit. Despite a disproportionately large resource sector, compared with other developed countries, Canada has been a laggard when it comes to developing technology used to extract or process resources, or to blunt the environmental impact of such activities. Alberta's vow to plow $2-billion (Canadian) into the development of carbon capture and storage technologies is a start, but hardly a game-changing one.

"The failure of Canada to develop global export leaders in advanced machinery and equipment for the resource sector is one particularly telling indicator of the country's innovation shortcomings," the Academies report concludes.
The Finnish Miracle is an example of an economy emerging from the pits to overtake those it used to envy. It's hardly the first. In 1982's The Rise and Decline of Nations, economist Mancur Olson advanced the idea that countries whose economic foundations have been suddenly shaken or destroyed subsequently tend to grow and innovate faster than more stable nations. The reason? Such crises break the hold of vested interests on government policy makers; dramatic change becomes a question of national survival.
Mr. Olson cited the industrial resurgence of Japan and Germany in the postwar period to explain his thesis. While Japan and Germany prospered in 1970s, the economies of other developed countries, such as the U.S. and Britain, became bogged down in interest group politics, resulting in "institutional sclerosis" and slow growth.
- Lampertina on 2009-07-07
  
  But Germany and Japan (Germany in particular) also had a huge influx of post-war aid (Marshall Plan), which enabled them (Germany in particular) to rebuild its infrastructure.
Economically, we just muddle on

This link has been bookmarked by 1 people . It was first bookmarked on 07 Jul 2009, by someone privately.

07 Jul 09

Yule Heibel
Insightful (and often cutting) article on the status of innovation in Canada. Stephen Downes responded in a blog post, http://halfanhour.blogspot.com/2009/07/innovation-in-canada.html, basically agreeing, saying that we need a bit of free market and a bit of government direction as well, and that we (Canadians) need to wean ourselves from our corporate overlords.

In an aside, the G&M journalist (Konrad Yakabuski) notes that Canadians already log more work hours than Americans and are workaholics compared to Europeans - who innovate more and therefore, because they work smarter, don't need to work harder. As it happens, I was just wondering about Canadians and partying/ sociability over the beginning of July (what with Canada Day and Independence Day). Canadians are far less social than Americans, in my experience. For Canadians, sociability and partying means getting drunk - it always has, for as long as I can remember. Americans in this respect are actually the kinder, gentler people. Is it because of work?

innovation canada globeandmail productivity technology resources economic_development konrad_yakabuski
- Barring an extension of the workweek - Canadians already put in more hours than Americans and are virtual workaholics compared with Europeans - innovation is the only sure way for Canada to be more productive. It is the key to maintaining our standard of living and providing increasingly costly public services for an aging population.
- "Canada is not being productive because it's not being innovative," said Robert Brown, chief executive officer of Montreal-based CAE Inc., the world leader in aircraft flight simulators and training. "A lot of innovation occurs at the interface with the customer. But when you look at the make-up of Canada's economy, with so much dependence on resources, there is less contact between [our biggest] companies and end users."
- 7 more annotations...
- - Strong governments in Asia and Finland, on the other hand, have been able to resist the self-interested demands of individual sectors, and have implemented country-wide innovation strategies that, while not without hiccups, ultimately increase the size of a country's economic pie over time.
  - The consequences of this global power shift could show up in lower pension benefits, substandard health care and rickety infrastructure for future generations of Canadians. Early signs are already apparent to discriminating eyes, such as those of Mr. Curtis, a former chief economist in the Department of Foreign Affairs and International Trade.
    
    "We are declining relative to many other parts of the world," he said. "You don't really feel it unless you're cosmopolitan and travel a lot. You now stay at the three-star hotel instead of the four. But our cities - and the country as a whole - are quite clearly relatively less well off than before."
  - Where he sees languor in our policy apparatus, CAE's Mr. Brown detects an aversion to interventionist industrial strategy among governments. But as Canada has relied on the free market - auto bailouts notwithstanding - to determine its champions, governments elsewhere are actively nurturing their own winners.
    
    "We seem to believe the free-market system will work, but no one else operates that way," Mr. Brown said. "If you rely only on market forces, you are going to react to what others are doing, rather than anticipating what is going to happen."
  - Research will become increasingly important to the competitiveness of Canadian auto plants as a strong loonie and wage concessions south of the border wipe out much of the edge they once held over U.S. facilities. But Washington's promise to provide $25-billion (U.S.) in loans to companies there to help develop more fuel-efficient cars threatens to widen the already gaping research chasm between each country's auto sector.
    
    "Without comparable support in Canada, manufacturing capacity could follow the funding, taking engineering work and suppliers with it," warns the Academies report.
    
    Still, foreign ownership is not the biggest reason for Canadian companies' R&D deficit. Despite a disproportionately large resource sector, compared with other developed countries, Canada has been a laggard when it comes to developing technology used to extract or process resources, or to blunt the environmental impact of such activities. Alberta's vow to plow $2-billion (Canadian) into the development of carbon capture and storage technologies is a start, but hardly a game-changing one.
    
    "The failure of Canada to develop global export leaders in advanced machinery and equipment for the resource sector is one particularly telling indicator of the country's innovation shortcomings," the Academies report concludes.
  - The Finnish Miracle is an example of an economy emerging from the pits to overtake those it used to envy. It's hardly the first. In 1982's The Rise and Decline of Nations, economist Mancur Olson advanced the idea that countries whose economic foundations have been suddenly shaken or destroyed subsequently tend to grow and innovate faster than more stable nations. The reason? Such crises break the hold of vested interests on government policy makers; dramatic change becomes a question of national survival.
  - Mr. Olson cited the industrial resurgence of Japan and Germany in the postwar period to explain his thesis. While Japan and Germany prospered in 1970s, the economies of other developed countries, such as the U.S. and Britain, became bogged down in interest group politics, resulting in "institutional sclerosis" and slow growth.
    Yule Heibel on 2009-07-07
    
    But Germany and Japan (Germany in particular) also had a huge influx of post-war aid (Marshall Plan), which enabled them (Germany in particular) to rebuild its infrastructure.
  - Economically, we just muddle on

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