Innovation key to close Canada's productivity gap
The average Canadian worker contributes about $10,000 less to national gross domestic product each year than the average American worker
University of Alberta president Indira Samarasekera guides one of Canada’s most research-intensive universities.
By now, it’s a cliché: work smarter, not harder.
Yet for Canada, the reverse is often true. Canada ranks among the world’s Top 5 nations for prosperity but its workers lag many developed nations in generating rewards for their efforts.
Workers in the United States, The Netherlands, Belgium, Germany, France and Italy are more productive, based on gross domestic product (GDP) per hour worked. Compared to workers in the U.S., our per capita GDP shortfall has more than tripled in the past 30 years and verges on $10,000 a person each year.
“For each hour we work in Canada, we generate less value from our efforts than our counterparts in the United States,” said a recent study by the Institute for Competitiveness and Prosperity. “This prosperity gap is a productivity gap, and the productivity gap is an innovation gap. We are laggards in creating economic value per hour worked.”
The Jenkins report on Canadian innovation, submitted to the federal government in October 2010, has a similar message.
“Studies have repeatedly documented that business innovation in Canada lags behind other highly developed countries,” the Jenkins report said. “This gap is of vital concern because innovation is the ultimate source of the long-term competitiveness of business and the quality of life of Canadians.”
Canadian business expenditure on research and development has been falling since 2006 and now sits lower than it did in 2000 when it was merely an average performer in the OECD.
That means for Canada, even if private sector R&D expands, university-based research remains critical to economic prosperity.
The total value of all R&D performed in Canada in 2009 was just under $30 billion — and that amount was almost evenly split between business ($15.2 billion) and the public sector including higher education ($11.2 billion) and government ($3 billion), Jenkins reported.
Universities “perform the great majority of basic research, although basic and applied research activities are increasingly intertwined,” the Jenkins report said.
Researchers at the University of British Columbia and more recently the University of Northern B.C., have advanced the province’s forestry industry through both technological and forest management innovation. UBC attracts the greatest amount of forestry research funding of any university in Canada.
In the province next door, oil producers around Fort McMurray still rely on the “hot water method” developed in 1925 by University of Alberta engineering professor Karl Clark for the commercial production of heavy crude oil from oilsands — and today some 800 industry and university researchers continue to explore ways to curtail the industry’s environmental impact.
Revolutionary cattle breeding programs established by UAlberta animal geneticist Roy Berg in the 1960s made Alberta a world leader in the beef industry with a 30- to 40-per-cent increase in beef production.
Innovative thinking about social and economic issues, rather than technological advance, has also wrought change in recent decades — such as the restructuring of B.C.’s commercial fishery and forestry sectors as a result of government inquiries led by UBC resource economist Peter Pearse.
Roger Martin, dean of the University of Toronto’s Rotman School of Management, believes we can narrow Canada’s prosperity gap by spurring innovation through, among other things, restructuring taxes to encourage more private sector research and development, expanding international trade, implementing technology changes in business, and greater investment in education.
“One of the challenges for Canada is getting higher business R&D and business innovation activity generally,” Martin said in an interview.
Government and university R&D are helpful — “and they’re helpful in every modern economy but I don’t think that they can save the day,” said Martin, who is also chairman of the Institute for Competitiveness and Prosperity.
“Hopefully at their best, universities are working on farther-out stuff which may not have obvious practical implications. It’s only relatively infrequently that somebody’s own personal curiosity happens to be what everybody else’s curiosity is, and therefore creates something fabulously interesting to all those other people.”
Meanwhile, he wonders if Canada’s business sector is taking full advantage of the opportunities that the university R&D sector creates. More effective collaboration between businesses and universities could bring more commercially viable new products and services to market.
“I think we’re still a little bit too stuck on the notion that you can (support) R&D that’s done at a university and if you push it far enough, hard enough, you’ll commercialize it. I think that is more like pushing on a string than we’d ever like to believe,” Martin said.
“What we need, to a much greater extent, is somebody aggressively pulling (innovations) out of the universities. That’s when somebody outside the university says ‘Our customers need the following ... and wow, I see this thing at the university that I could pull out.’
“That is more likely to be successful than commercialization offices at universities saying ‘OK we think this invention is great and we are going to put more money behind it and we are going to keep pushing and pushing and hopefully (the private sector) will find something useful to do with it. That just rarely works.”
Martin’s Institute for Competitiveness and Prosperity has suggested that when a university works within a “regional innovation system” such as a provincial economy, then the benefits flow to the private sector where they can be commercialized and “drive economic progress.”
“Historically, people have thought of forest products as an old-economy product — it’s low value-add,” Paul Davidson, president of the Association of Universities and Colleges of Canada (AUCC), said in an interview. “But, in fact, through the benefit of research and innovation you see improvements in the supply chain, you see new products, development of new markets, and developing new policies and regulations to ensure that the forest sector is globally competitive and globally innovative.”
“One of the challenges for Canada is getting higher business R&D and business innovation activity generally,” Martin said in an interview.
Government and university R&D are helpful — “and they’re helpful in every modern economy but I don’t think that they can save the day,” said Martin, who is also chairman of the Institute for Competitiveness and Prosperity.
“Hopefully at their best, universities are working on farther-out stuff which may not have obvious practical implications. It’s only relatively infrequently that somebody’s own personal curiosity happens to be what everybody else’s curiosity is, and therefore creates something fabulously interesting to all those other people.”
Meanwhile, he wonders if Canada’s business sector is taking full advantage of the opportunities that the university R&D sector creates. More effective collaboration between businesses and universities could bring more commercially viable new products and services to market.
“I think we’re still a little bit too stuck on the notion that you can (support) R&D that’s done at a university and if you push it far enough, hard enough, you’ll commercialize it. I think that is more like pushing on a string than we’d ever like to believe,” Martin said.
“What we need, to a much greater extent, is somebody aggressively pulling (innovations) out of the universities. That’s when somebody outside the university says ‘Our customers need the following ... and wow, I see this thing at the university that I could pull out.’
“That is more likely to be successful than commercialization offices at universities saying ‘OK we think this invention is great and we are going to put more money behind it and we are going to keep pushing and pushing and hopefully (the private sector) will find something useful to do with it. That just rarely works.”
Martin’s Institute for Competitiveness and Prosperity has suggested that when a university works within a “regional innovation system” such as a provincial economy, then the benefits flow to the private sector where they can be commercialized and “drive economic progress.”
“Historically, people have thought of forest products as an old-economy product — it’s low value-add,” Paul Davidson, president of the Association of Universities and Colleges of Canada (AUCC), said in an interview. “But, in fact, through the benefit of research and innovation you see improvements in the supply chain, you see new products, development of new markets, and developing new policies and regulations to ensure that the forest sector is globally competitive and globally innovative.”
At present, the challenge for universities is to do more work with relatively fewer resources. Faced with an aging population, Canada has been spending more per capita on health care than education since 1998.
Meanwhile, he said, “provincial operating support per student is actually half what it was in 1977.”
“In the last 10 years, Canada’s universities have welcomed, and absorbed, and are educating 350,000 more students. That would be like taking the largest (post-secondary) institution in each province and building it again,” Davidson said.
In a pre-budget submission last October to federal Finance Minister Jim Flaherty, AUCC asked the Harper government to consider a 10-per-cent increase ($110 million) in funding to research-granting councils — including National Sciences and Engineering Research Council and Canadian Institutes of Health Research — “to strengthen core discovery research programs.”
On top of that, it asked for an additional $40 million for research-granting councils to “increase emphasis on international research collaboration, through their existing programs.”
Small- and medium-sized enterprises account for 75 per cent of private sector employment in Canada (compared to 50 per cent in the U.S.), and lack the resources to conduct their own research or hire forward-thinking university grads without federal assistance, the report added. It recommend a $15-million investment, matched by the private sector, on internship opportunities.
“We recognize it’s a tight fiscal climate and there are tough choices to be made, but it’s important that there be continued investment as a signal to Canada’s researchers that this is a place to do good research, and to be involved in the innovative economy,” Davidson said. “And also as a signal to the world that this is a place to conduct research, be innovative, and frankly to attract investment.”
Data published annually by NSERC indicates that, since 2008, UAlberta has led Can
adian universities in funding for research chairs, specifically industrial research chairs.
“Research and development is absolutely the lifeblood of the knowledge economy and for a province like Alberta that depends heavily on energy resources and agriculture,” Indira Samarasekera, president of University of Alberta, said in an interview.
“Much of Alberta’s prosperity has benefited from the knowledge and the people that the University of Alberta has been instrumental in creating.”
Samarasekera, who was vice-president of research at UBC before moving to Edmonton, noted that UAlberta branded itself as an international hub for innovative research.
“We have, by the way, more (research) chairs than any university in the country, many of them largely in engineering although we do have chairs in science and in agriculture, life and environmental sciences,” she said.
Oilsands technology and agriculture development have been the drivers but the university also pursues innovation in areas including medicine, nanotechnology, software design and environmental science because “that will allow Alberta to transition someday from being largely an energy-producing province to one that has a burgeoning and strong high technology sector.”
Meanwhile, he said, “provincial operating support per student is actually half what it was in 1977.”
“In the last 10 years, Canada’s universities have welcomed, and absorbed, and are educating 350,000 more students. That would be like taking the largest (post-secondary) institution in each province and building it again,” Davidson said.
In a pre-budget submission last October to federal Finance Minister Jim Flaherty, AUCC asked the Harper government to consider a 10-per-cent increase ($110 million) in funding to research-granting councils — including National Sciences and Engineering Research Council and Canadian Institutes of Health Research — “to strengthen core discovery research programs.”
On top of that, it asked for an additional $40 million for research-granting councils to “increase emphasis on international research collaboration, through their existing programs.”
Small- and medium-sized enterprises account for 75 per cent of private sector employment in Canada (compared to 50 per cent in the U.S.), and lack the resources to conduct their own research or hire forward-thinking university grads without federal assistance, the report added. It recommend a $15-million investment, matched by the private sector, on internship opportunities.
“We recognize it’s a tight fiscal climate and there are tough choices to be made, but it’s important that there be continued investment as a signal to Canada’s researchers that this is a place to do good research, and to be involved in the innovative economy,” Davidson said. “And also as a signal to the world that this is a place to conduct research, be innovative, and frankly to attract investment.”
Data published annually by NSERC indicates that, since 2008, UAlberta has led Can
adian universities in funding for research chairs, specifically industrial research chairs.
“Research and development is absolutely the lifeblood of the knowledge economy and for a province like Alberta that depends heavily on energy resources and agriculture,” Indira Samarasekera, president of University of Alberta, said in an interview.
“Much of Alberta’s prosperity has benefited from the knowledge and the people that the University of Alberta has been instrumental in creating.”
Samarasekera, who was vice-president of research at UBC before moving to Edmonton, noted that UAlberta branded itself as an international hub for innovative research.
“We have, by the way, more (research) chairs than any university in the country, many of them largely in engineering although we do have chairs in science and in agriculture, life and environmental sciences,” she said.
Oilsands technology and agriculture development have been the drivers but the university also pursues innovation in areas including medicine, nanotechnology, software design and environmental science because “that will allow Alberta to transition someday from being largely an energy-producing province to one that has a burgeoning and strong high technology sector.”
“I would say if you look across Canada, the University of Alberta has distinguished itself by virtue of being able to be at the frontiers, a pioneer in some of the very key strategic areas of importance to Canada. It is a conscious decision.
“We are one of the Top 20 engineering schools in North America. We have grown very rapidly and it is in direct response to the enormous needs of the industry sector in Alberta.”
Rather than rely solely on a licensing and commercialization office, “industry sectors are partnering with the university, and are in and out of our labs and therefore getting access to that technology in a far more dynamic way than the sort of ‘Let’s throw it over the wall and see who catches it’ approach.
“If you take, for example, the oilsands, enormous strides have been made in reducing the water required by the oilsands. The energy required by the oilsands is down by a third. There have been enormous improvements in tailings ponds and so on, with fairly likely scenarios where we may not have tailings ponds in the future at all because of the use of new solvents. All of this research has had roots at the University of Alberta through many of these chairs. That goes back 30 years, almost.”
The payback for the university, she added, is that research-based collaboration with industries ultimately benefits students.
“These industries provide significant funding for scholarships for students, internships in the summer which then connect them again with job opportunities — everything from environmental areas, which young people are very passionate about, to technology sectors wherever they may be across the province.
“Lester Thurow, who is a great economist out of MIT, said that much of economic growth in the last 60-70 years, certainly since the 1950s, has been due to technology change and new knowledge.
“That is really what we call innovation. It’s the application of new knowledge to create new economic opportunities or possibilities. If you take that as a given, then the response of universities is to create that kind of new knowledge from absolutely basic research where no one has any clue about where that knowledge may apply, to more applied research where the results could be beneficial in five to 10 years.
“We work right across the spectrum, and the entire spectrum is important because oftentimes basic research gives you absolutely unexpected outcomes that you very quickly translate into technology.”
ssimpson@vancouversun.com
“We are one of the Top 20 engineering schools in North America. We have grown very rapidly and it is in direct response to the enormous needs of the industry sector in Alberta.”
Rather than rely solely on a licensing and commercialization office, “industry sectors are partnering with the university, and are in and out of our labs and therefore getting access to that technology in a far more dynamic way than the sort of ‘Let’s throw it over the wall and see who catches it’ approach.
“If you take, for example, the oilsands, enormous strides have been made in reducing the water required by the oilsands. The energy required by the oilsands is down by a third. There have been enormous improvements in tailings ponds and so on, with fairly likely scenarios where we may not have tailings ponds in the future at all because of the use of new solvents. All of this research has had roots at the University of Alberta through many of these chairs. That goes back 30 years, almost.”
The payback for the university, she added, is that research-based collaboration with industries ultimately benefits students.
“These industries provide significant funding for scholarships for students, internships in the summer which then connect them again with job opportunities — everything from environmental areas, which young people are very passionate about, to technology sectors wherever they may be across the province.
“Lester Thurow, who is a great economist out of MIT, said that much of economic growth in the last 60-70 years, certainly since the 1950s, has been due to technology change and new knowledge.
“That is really what we call innovation. It’s the application of new knowledge to create new economic opportunities or possibilities. If you take that as a given, then the response of universities is to create that kind of new knowledge from absolutely basic research where no one has any clue about where that knowledge may apply, to more applied research where the results could be beneficial in five to 10 years.
“We work right across the spectrum, and the entire spectrum is important because oftentimes basic research gives you absolutely unexpected outcomes that you very quickly translate into technology.”
ssimpson@vancouversun.com
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