Industrial Research: The Crucible of Innovation

The deliberations superintended by the Canadian Science Policy Centre (CSPC) seek to answer a fundamental question – how can Canada’s innovation system be improved?  These deliberations are important as the long-term prosperity of our nation is largely dependent upon the effectiveness of our innovation system. Prevailing outcomes are sub-optimal, notwithstanding the substantial effort and public investment devoted to the support of innovation in Canada.

Let us begin with several basic assumptions: the economic performance of major international players today is supported by a regime of industrial policies and programs; the capacity to innovate is a central driver of wealth generation of the world’s leading economic powers; primary measures of economic performance include comparative trends in GDP per capita, labour productivity, international competitiveness in key sectors and generation of IP (it is by these measures our national report card shows we are lagging).  An additional observation relates to the theme of this CSPC exercise.  We are alive in an era where global powers are becoming more explicit in their use of mercantile and military power.  The trend towards the unilateral exercise of authority can overshadow multi-lateral cooperation and has illuminated the vulnerabilities of Canada.

We, the national network of Canada’s leading Research Technology Organizations (RTOs), contend that directing more attention to enable increased levels of R&D by Canadian enterprises and strengthening our industrial research capabilities could result in material improvements in the performance of our innovation system.  

To elaborate upon this assertion, let us examine one of the primary goals of a high-functioning innovation system – the capacity to transform ideas, concepts and knowledge into stress-tested commercial products, services and processes which provide benefits that users are willing to pay for.  RTOs are purpose-built to undertake projects with private sector partners to design, test, de-risk and scale the development and delivery of solutions that address technical challenges.  Adjudication of projects is done with rigour.  Projects are defined and initiated by corporate partners that proceed if and when they are able to justify investments in the work.  In addition, projects undertaken in collaboration with public agencies may generate social and environmental benefits.

This transformational stage in the innovation value chain is directly linked to building competitiveness and improving productivity in sectors that include forestry, mining, agriculture and renewable/conventional energy production.  Together these sectors generate a major part of our national exports.  Strengthening our national capabilities to undertake industrial research, particularly in these sectors, provides direct incentives to corporate partners to increase their investments in R&D, which is a clear goal of policy makers.  Undertaking industrial research in concert with RTOs enables corporate partners to leverage their expertise, capital equipment and know-how in a cost-effective way.

The performance of an innovation system is measured by its results, in short, the outcomes that meet the test of the market.  To generate sought-after results we need to pay close attention to operational effectiveness – the capacity to execute.  The work of industrial research is all about execution, specifically, the adaptation, adoption and diffusion across the economy of technical solutions undertaken in collaboration with corporate partners. 

To summarize, an effective innovation system generates a range of outcomes that include solutions that have a positive market impact.  A high functioning system needs to adopt processes that enable smart decisions about which projects to support.  This decision-making is guided by reliance on the business case test undertaken by partners that co-invest in projects – an analysis that requires an understanding of the use case and customer needs.  These and related decisions need to be made at the speed of the market. Innovation is a dynamic, creative, interconnected and interdependent process.  The system that supports the intertwined behaviours of innovators works best when aligned with these impulses and is designed with an in-built adaptive capacity that compels iterative course correction in response to trends, new ideas, opportunities and challenges. Handoffs and transitions in the support of the development of solutions and products need to be made as seamlessly as possible.  In short, we need a system that supports making the right decisions quickly, provides guidance to facilitate development, focuses on execution and outcomes, uses incentives to motivate smart behavior, learns from its mistakes and has an evidence-based mechanism for pruning out failing initiatives.

Canada’s Research Technology Organizations are dedicated to strengthening the technological capabilities of Canadian-based enterprises to help them in their efforts to build world-class products and solutions.  Participation in this open dialogue intended to focus thinking on the revitalization of our innovation system is undertaken to help us figure out how we can best proceed to unlock the opportunities of tomorrow and address the challenges that lie ahead.