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Resource industries should be central to Canada’s innovation policy

Innovation expert argues the resource sector is “among our most economically significant knowledge industries.”

by Peggy Berkowitz

Canada is without a doubt an innovative society, but it has lost its way in trying to understand how its major industries innovate, says Richard Hawkins in his recent paper Looking at Innovation from a Uniquely Canadian Perspective: The Case for a New Alliance of Practice, Policy and Scholarship (PDF).

“It is not productive to think about national innovation performance as a kind of statistical horserace, especially not for policy purposes and especially not in Canada,” began Dr. Hawkins, a professor and holder of the Canada Research Chair in the Social Context of Technology at the University of Calgary. Instead, he proposes that “we reconsider the terms of reference for this debate in the specific context of our own industrial history and composition.”

At times critical of our lack of research-informed policy but also full of optimism for Canada, the paper argues that Canadian policies for innovation haven’t kept pace with emerging knowledge about the innovation process and how it creates wealth and prosperity. Canada’s innovation performance is often misunderstood because the comparative indicators used worldwide to measure innovation aren’t oriented to the characteristics of this country’s major industries: the oil and gas sector, other natural resources, and certain services, especially financial.

“Our key advantage is that we are both a resource-based economy and a knowledge-based economy,” he wrote, and the resource industries are “among our most economically significant knowledge industries.”

But Canada’s federal and provincial strategies for innovation don’t speak the language of the country’s major industries. What’s needed, he says, is to reconnect academic knowledge with the industry base and with government by forming stakeholder groups, and also to do a national audit of what we know about innovation and see what we need to learn.

“Let’s find out where the knowledge gaps are,” he said in an interview with University Affairs. “Let’s be honest about it. And let’s not assume that Canada’s future is the iPad. Because it isn’t.

“Our future is creating a society in which all the knowledge that we produce has a fair chance of producing some value that sticks in a place where it’s produced! That’s the goal of an innovation policy.” And, although technology is certainly important, “we’re not going to accomplish these goals simply by throwing money at R&D.”

Dr. Hawkins’ paper seems to have made an impact in Ottawa, just weeks after it was released by the Institute for Science, Society and Policy at the University of Ottawa – the ISSP’s first published paper.

“I’ve been surprised by how positively this has been taken up” by people at senior levels of government and government agencies, he said.

Dr. Hawkins, a political scientist, returned to Canada seven years ago (he earned his BA and MA at Simon Fraser University) after working as senior scientist in innovation policy at one of Europe’s largest research services companies, the Netherlands Organization for Applied Scientific Research. In Europe, he also acted as a consultant on innovation to global agencies including the European Commission, the U.K. department of industry and the OECD, and was a senior research fellow at the University of Sussex, where he’d earned his PhD. He is a fellow at three Canadian research institutes.

It’s easy to see why his words might resonate with policy makers. He argues that Canada is more innovative than it thinks, and the reason may be in our resource and services industries, especially oil and gas.

“If you look at Canada’s national economic performance, we’re doing far better than all but two or three percent of the countries in the world. We have a prosperous economy, it’s reasonably stable. We have the highest human development index in the world.”

Calling himself a “true believer” in the proposition that growth comes from innovation, he said that Canadians simply couldn’t have the standard of living they enjoy through any other explanation. “Of course we’re innovative.”

Unfortunately, we don’t yet understand how we’re innovative. “I’m baffled from that. I’ve spent most of [the last] seven years trying to figure that out.” One possibility, he said, is that Canada has “a lower business R&D profile because an awful lot of our major industries that are responsible for driving this growth don’t register on the innovation surveys as being R&D performers. The resource industry typically doesn’t.”

In other words, innovations made by the oil and gas industry aren’t captured in surveys about Canada’s innovation performance: “The R&D indicators are pretty much oriented to companies like RIM.”

Two recent studies, by the Canadian Council of the Academies and the Jenkins panel, are both of high quality, he argued, but even these base their conclusions on “empirical evidence drawn from conventional input indicators” like R&D investment, patents and technology adoption.

Dr. Hawkins uses an early-20th century definition of innovation that he says remains valid: its role is to create new value from new combinations of both new and existing factors. One of the first steps on the road to a successful innovation policy is to start to gather the appropriate data on a micro level in the largest industries, he maintained.

He noted that while Canada has some really “first-class scholarship” in the field of innovation, it isn’t being picked up by policy makers. This “lack of appetite for knowledge” is “not just at the federal level, and not just this government. I think this is a problem that’s been developing over successive governments over a number of years.” Some provinces, especially Quebec, are “way more advanced in their thinking about how policy can drive industry” than the federal government, he added.

One recommendation he would offer governments is to “stop confusing basic research done in universities and other national labs with R&D. That is not R&D, the way an R&D manager thinks about it.”

R&D in industry is a very high-risk venture, said Dr. Hawkins, who spent most of his career working with and “around” industry. “We should be letting industry run that process, not government. Industry knows when they need R&D and when they don’t, when it’s an advantage and when it isn’t. … They don’t take these kinds of risks lightly.”

Basic research, on the other hand, “is the one area that government can invest upstream, reasonably risk-free and not at a huge cost, where the spin-offs are enormous,” he said.

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Comments on this Article

The resource sector has a very different view of R&D. They consider that looking for resources in a different part of the world to be innovative; looking with a different or non standard set of tools to be innovative. Then looking at the vast amount of data collected and choosing a place to drill for resources required innovative decision making. The cost of drilling the hole is also considered a "research" expense. None of these tasks are considered R&D in the traditional sense, yet they can create wealth, new businesses and new communities.

Posted by Richard Smith, Apr 18, 2012 4:11 PM


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