Bureaucracy and Innovation: Mortal enemies or long-lost lovers?

How the Canadian Innovation Corporation (CIC) can strengthen our Innovation sector 

At a recent networking event, I got caught up in a conversation with a clean technology innovator in the transportation section. After an insightful thirty-minute conversation about accessibility gaps in the Toronto transportation grid, they concluded that their project would never see fruition in Canada even if it garnered a lot of international attention. I was puzzled; if their claims were valid, they offered a net-zero solution that could complement the current system in place at a fraction of the cost to other green energy transit ideas in the market. When asked when they hoped to bring their product to market, they replied: “there is no governmental backing for the development. Bureaucracy does not support disrupters.” *

There is a long list of bureaucratic attempts in Canada to fuel our innovation sector, yet our penchant for innovation programs have been at most semi-successful. The Government of Canada’s announcement earlier this year of a blueprint for the Canada Innovation Corporation (CIC) – an “outcome-driven organization with a clear and focused mandate to help Canadian businesses across all sectors and regions become more innovative and productive” – may be the experimental R&D shift needed to finally marry bureaucratic and business priorities. 

There is a historical conflict in the juxtaposition between bureaucracy and innovation. Victor A. Thompson wrote to this effect in 1965 highlighting the common belief held by behavioral scientists that bureaucratic forms of organization were highly efficient but held low innovation capacity. He argued that this was in part due to companies centering their decision and controlling systems in a process-centric way. Yet, innovation is about people: those who make it possible and those who benefit from it. The Canadian Innovation Corporation may well serve as a bridge between bureaucracy – the governmental machine of the public – and business innovators – whose market decisions are incentivized by the public. 

The crux of this bureaucracy-innovation paradigm is reflected in the reaction of the Council of Canadian Innovators, a group made up of CEOs from growing Canadian technology-based companies. Although welcoming the announcement, they emphasized the importance of establishing the agency’s mandate and its leadership. As noted by the group’s chief executive, Benjamin Bergen: “The CEO and the board should really come from industry and understand how to take an idea, convert it into intellectual property and then commercialize that idea.” He also noted that selecting someone from the incubator/accelerator ecosystem or a bureaucrat would not aid Canada in climbing the OECD (Organization for Economic Co-operation and Development) innovation ranks. This is not just a matter of control; it is about process. Whoever is at the helm of this initiative must understand the market in which innovation operates and how to combine opportunity with the structural demands of a government supported organization.  It is not a zero-sum as illustrated by Mr. Bergen. The CIC should root its leadership in collaboration by building on its receptor capacity. In other words, individuals leading the agency would not only have their thumbs on the pulse of the innovation industry but also be empowered by a governmental structure and partnership. In creating a dedicated organizational structure centered on industry leaders we allow the space for the creative development and experimental sector to flourish. This does not limit the fact that the CIC should also utilize institutional knowledge within its leadership, especially when it comes to governmental decision-making processes. The CIC could escape the transitory nature of its predecessors by striking a balance: a tortoise and a hare approach may bring out the best of both approaches. 

Canada is not the first country to make the logical jump towards innovation agencies centered on the process of experimentation. In the United-Kingdom,  Innovate UK helps businesses grow via the “development and commercialization of new products, processes and services”. The agency’s mission statement recognizes that their work is situated in an “innovation ecosystem that is agile” and adapts its programs and funds accordingly. The CIC’s blueprint also emphasizes the importance of building their operations around innovation’s nimble nature. To quote the document directly, the CIC “will operate with more flexibility than the existing suite of programs, and with an ability to quickly adapt its programming to address emerging challenges and opportunities that are presented to Canadian businesses”. Therefore, by adopting an experimental governance approach, the bureaucratic structure of the CIC could fulfill the flexibility demands from the R&D industry. Bureaucracy is often associated with the concept of innovation or creative stifling. This is in part because innovation is susceptible to rapid changes in demands or ideas. Yet, in this present case, the CIC seeks to (1) operate independently, and (2) confine its influence in the sphere of financing and advisory services. In building the agency for reactionary measures, Canada is prioritizing the accessibility of consistent funds for Canadian businesses and, more importantly, acknowledging their volatile interests. If successful, the CIC could exemplify an innovation policy where the spheres of innovation’s creativity and bureaucratic regulations co-exist. 

There is a long-standing innovator’s dilemma in the Canadian public sector; A mutual understanding of irreconcilable differences between our bureaucracy and  innovators. However, innovation policies should not be boiled down to the two settings of “agile” and “stable.” What matters is the capability of an organization’s (not an individual’s) configuration and its ability to evolve. And the CIC, at its core, is willing to “experiment with different approaches.” If the agency can leverage the country’s productivity and economic growth with business investments in R&D and technology adoption, we may yet see a re-equilibrium in the innovation sector. And for this, Canada and its disruptors will be all the better.

* For confidentiality reasons, the name of the individual and company have been retracted from this op-ed