Canada’s innovation agenda – can moon shots work?
February 7, 2017
Elizabeth May. O.C., M.P.
Productivity isn’t everything, but in the long run it is almost everything. - Paul Krugman, The Age of Diminishing Expectations (1994)
It is not worth the ink to repeat the ways in which Canada has fallen behind in productivity. We can recite the stats of how we lag compared to other countries, how our R and D are not delivering and how the largest Canadian businesses tend to stash their cash rather than reinvest. The pile of “dead money,” so dubbed by former Bank of Canada Governor Mark Carney, is evidence of the unwillingness of big corporations to put money back into their enterprises, nor to fund innovation.
While the economic literature details many ways in which innovation is an indicator of productivity with various theories of how tightly bound are the concepts, there is no doubt that innovation is a factor in the productivity equation.
Clearly, the Trudeau administration wants to be seen as addressing this critical problem. If we do not innovate, we sabotage our economic future.
In my own riding of Saanich-Gulf Islands, there are an amazingly diverse crowd of technology leaders and innovators. Quester Tangent sells its on-board computer diagnostic “positive train control” to rail lines in China, Europe and the US, but not yet in Canada. (Had this system been on board the fuel train at Lac Megantic, the tragedy would never have happened.) Meanwhile, in an unassuming building in Saanichton, is a high tech innovator in diagnostic screening. Redlen Technologies grows crystals and slices them wafer thin for applications in spotting everything from tumours to bombs. To use the technical terminology, Redlen makes high resolution Cadmium Zinc Telluride semiconductor radiation sensors and radiation detection modules. Last year, they cut a deal with the medical arm of Hitachi. What they do is brilliant, but it takes capital.
The most recent winner of the Green Business of the Year Award, Empire Hydrogen, has perfected the technology to slash polluting emissions from diesel engines. In an elegant and simple application, a small metal box, on the side of the truck, using only distilled water and the action of the engine itself, generates hydrogen to dramatically reduce fuel consumption and harmful particulates. It pays for itself in months. It should be installed on every truck in Canada.
Like most innovators, owner-inventor Sven Tjelta has had to fund the company’s development out of personal savings and bank mortgages. So the question is: how can governments help? Can we set in place incentives for our risk-averse banks to step up? Can we fund large pots of venture capital?
When it comes to green and clean tech, Sustainable Technology Development Canada has a great track record. But it is geared to the early stages of establishing that a new technology can work. Commercializing that winning technology still has gaps and hurdles.
So is the new buzzword hope of “moon shots” the way to go? It will be exactly what is needed if it operates to put great Canadian products on the front shelf. If Canadian investment can be matched with the cutting edge companies that are already out there, ready to sell to the world, but hampered by lack of capital to scale up, it could be exactly what is needed. We should also heed the warnings of Jim Balsillie and ensure our intellectual property protections are up to scratch to protect our great companies in a more predatory global marketplace.
The innovation agenda is an exciting one. My top recommendation to Minister Bains is to pick up the phone and talk to the businesses that are doing the work. Ask them what would help them the most. And then do it.
Article originally published in The Hill Times, available here.