Jim Balsillie is the former co-chief executive officer of Research In Motion Ltd.
Among slogans and political advertising this election season, one line is curiously missing: “Get Rich From Your Ideas!” Even the leaders’ debate devoted entirely to the economy showed that our political leaders have no interest in addressing innovation. The words “entrepreneur” and “innovation economy” only made it into party talking points this past week.
This is troubling for two reasons: 1. Entrepreneurs commercializing ideas is how new and enormous wealth is generated in the innovation economy; 2. Canada’s prosperity depends on succeeding in the global innovation economy.
Such prospects are not lost on the hundreds of thousands of Canadians who are clearly trying to get rich by commercializing ideas. A recent report by the Global Entrepreneurship Monitor found that Canada ranked second only to the United States for its share of working-age population either engaged as an entrepreneur or working directly for one. More than 140 publicly funded incubators are currently in operation in Canada.
Yet candidates who vow to lead Canada’s economy continue to stick with same public policy strategies employed over the past 30 years: pour more taxpayers’ money into the same inputs of traditional infrastructure, manufacturing subsidies, basic research funding, and targeted grants or tax credits. In addition, they promise more funding into incubators even though we have no metrics to determine if they are delivering revenue growth, external financing and job creation. This mix of policies has consistently delivered zero innovation output growth.
When this “innovation strategy” fails – as it predictably has over the past 30 years – leaders of all political stripes chastise businesses for being “complacent” with “weak receptors” for high-quality research while “sitting on dead money.” Except that business only invests in research that can be commercialized profitably.
Candidates on the campaign trail often quote experts who have never commercialized a Canadian idea globally but who suggest that the key to improving our innovation record is a change in grant and tax policies. They keep selling us the illusion that we are always one policy tweak, or one fast train, away from joining the ranks of global innovation leaders.
Instead of focusing on building the infrastructure required to succeed in the innovation economy, our leaders are counting on traditional infrastructure to spur growth. Traditional infrastructure spending is good for the country. New infrastructure creates immediate jobs while being constructed and leaves better communities to live and work in. But productivity in the innovation economy does not come from fast trains or new roads and bridges. Productivity in the innovation economy comes from generating new ideas that generate new revenue.
Traditional infrastructure does not help Canadian entrepreneurs sell more ideas globally. We need the type of infrastructure that’s designed to capture new wealth from Canadian ideas. Ideas are not tangible goods. The global market for ideas is created primarily in the United States by judges, legislators and agency heads. The rules for this market change are frequently based on aggressive lobbying by interested parties. Those parties are usually tech companies with broad swaths of intellectual property and strategies for capturing more wealth from them.
This summer, U.S. website Politico reported that in 2014, Apple, Amazon, Facebook and Google shelled out record amounts to influence Washington. Federal lobbying records in Canada show that over the past two years, the U.S. tech firms Google, Microsoft, Amazon and eBay lobbied Canadian officials, including cabinet ministers, at an increasing rate: more than once every week – 108 times to be exact.
They have met with our officials to discuss the Copyright Act, broadcasting and online content, programs for the adoption of their technologies by small and medium-sized enterprises, Internet advertising and data protection. These are all areas in which these companies are already generating big profits. Compare that to promising new Canadian tech companies Shopify and Hootsuite with zero listed lobbying engagements.
We can’t expect our politicians and policy makers to create strategies to advance our prosperity unless they have the benefit of working together with our entrepreneurs to understand their businesses and how they can help them scale up globally. Scaling up technology companies is a systemic and deliberate exercise born out of a sophisticated public-private framework designed to capture wealth from ideas globally. That framework has to be created by industry and Ottawa working together to advance our collective prosperity just as they do in leading innovation nations.
We need an innovation lobby that’s exclusively devoted to helping Canadian companies scale up globally. Our current business associations involved in innovation and trade policy are overly dominated by foreign multinationals whose global business agendas are not set in Canada and whose CEOs are not incentivized to advance Canadian prosperity. By organizing themselves and working closely with Ottawa, Canadians entrepreneurs can help our policy makers design strategic policies for intellectual property rights in trade agreements, judicial strategies when ideas ownership is on the line, technology standards strategies and many others.
As it currently stands in the realm of innovation public policy, Canada is adopting the rules shaped by U.S. business interests that the U.S. government imposes on us and that are designed solely to advance U.S. interests. This type of economic colonialism is all the more troubling given the fact Canadian innovators and entrepreneurs have the potential to generate new wealth that is needed to pay for the promises we’re hearing this election season.
It’s disheartening to see so little attention paid to innovation in this election especially as the Organization for Economic Co-operation and Development forecasts slower grow in Canada’s economy. So where will the new wealth we so desperately need come from? Ask your local candidate and their party leaders. Canadian entrepreneurs need a party that campaigns on the slogan: “It’s the innovation economy, stupid.”Report Typo/Error
Follow us on Twitter: