Train More PhDs to Lead — and Break Canada’s Innovation Gridlock

Canada’s innovation economy depends on highly-trained talent — and we’re squandering it. We have the researchers in fields like AI, biotech, and quantum; but we need more of them to be ready to lead their teams and organizations.

Canada can move quickly on some innovation blockers

Canada is stuck in a rut of low productivity. A lack of domestic innovation solving domestic problems means firms are unpracticed at adopting innovations, further reducing demand for domestic innovation. Many of the roadblocks are understood – there are familiar gaps in business R&D spending, innovation adoption, and management practices.

A rut is the last place we need to be.  A trade war with our closest trading partner means that  trading patterns and supply chains need to change quickly.  The goals we share as a country demand innovation for the economic growth to build infrastructure, secure our nation, and provide prosperity for Canadians.

While there are structural and financial factors which change slowly, the gaps in R&D spending, technology adoption, and management practices are interlocking skills issues. We can make progress on all three issues, and quickly, by giving more of our PhDs targeted training in management and leadership.

Decades of underinvestment in management capability has hurt us

Up to 30% of the total factor productivity difference between Canada and the US comes from a gap in management practices. This is not a new observation.  An Institute for Research on Public Policy paper from a decade earlier describes the problem and shows it wasn’t new then.  Canada trails the US in management training however evaluated – MBA attainment, executive education, or other measures.

Indeed, in-house training as a whole lags — a report from the Conference Board of Canada shows training spending per employee is at 81% of US levels.

Improvements have been made, and rapidly. The same report shows that the spending levels were at 57% only a decade earlier. This shows we can move quickly when needed. But decades of underinvestment in management leave long-standing capability gaps.

Even the best generalist managers struggle to lead deep tech R&D functions today

Consider how challenging it is for Canadian generalist managers and leaders to choose how to direct R&D investment and new technology adoption.

The pace of AI research has increased 18-fold since 2018. Quantum volumes, a measure of the capabilities of quantum computers, have increased by four orders of magnitude since 2020. Biotech, robotics, clean tech — all these fields are moving with dizzying speed.

The international competitive business landscape is moving almost as quickly; our volatile situation with our largest trading partner, even more so. Organizations must now pivot and reassess their R&D development and technology adoption plans, in response to complex scientific and business environment shifts, faster than ever. 

In this environment, helping R&D teams gather, curate, and prioritize promising new directions, then supporting their execution, is absurdly challenging. Even choosing which technologies or ideas to consider adopting is hard, and supporting the adoption harder still. Our generalist leaders of firms need peers — not team members, peers — who are deeply expert in the relevant fields.  They need colleagues who can quickly distinguish between hype and genuine breakthroughs, assess their relevance, and help connect them to strategically-important emerging business opportunities and challenges.

Leaders with R&D backgrounds invest more in R&D and boost technology adoption

R&D investment is risky, but having leaders with relevant expertise at the helm reduces that risk. International studies show that firms with leaders who have relevant expertise invest more in R&D — this has been seen in Chinese pharmaceutical companies, high-tech firms, and 221 research-intensive US firms.

Similarly, relevant expertise boosts adoption of new, externally-developed technologies. What’s more, that expertise not only increases adoption of new technologies, but is complementary to that adoption, making the adoption more successful and effective.

This complementarity can be seen in foreign-owned firms in Canada, which are known to have higher productivity, due in large part both to their adoption of higher technology and better management practices.

We’re not taking full advantage of our top talent

Canada has many potential leaders with a PhD and a relevant R&D background, but they haven’t been supported and systematically put in positions where they can drive innovation and adoption.

In Canada, PhDs are abundant and under-utilized. The 10,000 PhDs project out of the University of Toronto shows that although PhDs commonly go into the private sector after graduation, fewer than 19% are in the private sector after 20 years, and many not in their field of study. Fewer still are in management or leadership positions.

This isn’t due to lack of interest on the PhD’s part. As someone who works with PhDs becoming first-time managers, I see this daily — they are willing to step up into management and leadership positions.

When they do, their advanced collaboration skills (mentoring, working in large cross-disciplinary efforts, stakeholder management, thinking in long timescales) make them strong candidates for directors or executives later in their career. They’re strong on systems thinking, analytical depth, uncertainty tolerance, and growth mindset.

But they initially struggle as they lack the foundational skills of operational, directive people management, have difficulty understanding the needs of the larger organization, and struggle with working to tight timelines. These are skills and behaviours that were irrelevant — or even discouraged — in academic training.

This leads to predictable and persistent challenges if unaddressed. In a comprehensive 2017 study comparing R&D managers and leaders and those in other divisions,  R&D leaders were ranked consistently highly in being creative and innovative.  However, they struggled in almost every other area — especially early in their careers.

That’s Doctor Boss, actually

The same study shows that those who succeed and grow into more senior roles become strong, well-rounded leaders. This shouldn’t surprise us; PhDs definitionally have demonstrated the ability to quickly learn new skills, behaviours, and knowledge.

Unaided, however, career advancement is much slower than the PhDs would like. In Canada, it’s slower than we can currently afford.

These potential leaders have the advanced, hard-to-teach skills. However, they need help with the basics. The basics are the easiest to teach.

Training specialized for the existing strengths and current gaps of PhDs speeds up their development as managers and leaders. Building strong foundations — developing lines of communication, giving good directive feedback, delegating and letting go of tasks (a particular challenge for a cohort that has prided themselves on their technical skills) — can be uncomfortable for our PhDs, but with guidance and support, they can master these skills quickly. That modest starting point already allows their more advanced skills to shine.

Help them lead

This past decade has shown that we can rapidly improve generalist training (such as employee training budgets and MBA adoption) when called to do so. Let’s keep going.

In 2018, the Council of Canadian Academies convened an expert panel on improving innovation management throughout the Canadian ecosystem. The report has powerful suggestions for us on how to enlist our Universities in this process. Many of those approaches could be directly applied to our PhD training program.

But we don’t have to wait. We can start today by training our current PhDs on the job, supporting them in growing their responsibilities, and giving them specific training that matches their current strengths and gaps.

We need to pivot our economy on timescales never seen in peacetime, to meet our long-unfulfilled potential in business R&D. If we want to lead in innovation, we must invest in leadership amongst our innovators. Train them. Promote them. Let them lead.