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LS3 is a rough-terrain robot from Boston Dynamics that was funded by DARPA and the U.S. Marine Corps.

Canadians have long suffered from a corrosive form of innovation envy. Living next to the world’s most inventive and entrepreneurial economy does that to a country.

The science that emerges from the vast petri dish to the south stands a far better chance of leading to the creation of new products, treatments and technologies than university research here. The reasons are both cultural – the American drive to innovate is deeply ingrained – and structural. The U.S. economy is 12 times bigger than ours and its massive defence budget underpins its innovation ecosystem.

Such obstacles have not stopped policy makers here from seeking to copy Uncle Sam, even though Canada lacks many of the critical ingredients for success. Ottawa’s recent superclusters strategy shows why the copycat approach rarely works.

The latest new/old idea to (re)gain currency among Canadian innovation gurus involves the creation of a Canuck version of the U.S. Defense Advanced Research Projects Agency, or DARPA. Both the Liberal and Conservative 2021 election platforms promised the creation of a CARPA, underscoring a rare bipartisan consensus on how to kick-start federal innovation policy. And Liberal Innovation Minister François-Philippe Champagne’s Dec. 16 mandate letter instructs him to move forward with “a uniquely Canadian approach modelled on [DARPA].”

DARPA was created in 1958 in response to the Soviet Union’s launch of the Sputnik satellite and its accompanying sense that the United States was losing the space race to its Cold War Communist adversary. Since then, the agency has privileged a “moonshot” mentality, backing high-risk, high-reward research that aims to ensure U.S. technological and military superiority over Russia and China.

CARPA advocates cite DARPA’s role in creating the internet, GPS and mRNA vaccines. They add the main appeal for seeking to emulate the U.S. approach involves DARPA’s ability to accept failure without having to worry about a political backlash.

“Only 5 to 10 per cent of DARPA’s programs ultimately produce successful outcomes, which reflects its high preference for risk in pursuit of radical innovation,” write Robert Asselin and Sean Speer in a new Public Policy Forum study. “Although it may seem counterintuitive, this institutional willingness to fail is key to DARPA’s success.”

Indeed, a moonshot mentality is necessary, the authors say, to achieve net-zero carbon emissions by 2050. Existing technologies will not get the world close to meeting that goal. Only “radical innovation” will. Accepting that much of the research a CARPA backs will end up in the dumpster is part of that process.

Mr. Asselin, a senior-vice president of policy at the Business Council of Canada, and Mr. Speer, a professor at the University of Toronto’s Munk School of Global Affairs and Public Policy, previously served in government. Mr. Asselin was an adviser to former Liberal finance minister Bill Morneau; Prof. Speer worked for Conservative prime minister Stephen Harper.

They know better than most how politics has often tainted innovation policies, making them seem indistinguishable from corporate welfare or regional economic development slush funds. To succeed, a CARPA would need to avoid that trap.

“DARPA’s day-to-day operations, including project selection, are highly autonomous and free from bureaucratic and political interference,” they note. “Program managers are granted extraordinary authority to establish programs and fund projects without congressional or executive approval. They can also cancel projects and shift funding without requiring higher-up sign-offs or approvals.”

It remains to be seen whether Mr. Champagne would support such a hands-off approach. The Liberals have promised $2-billion to fund CARPA’s initial endowment. But it could all be for naught if politicians are unable to resist the temptation to direct research funding to pet projects or ones with the highest visibility. The Liberal-created Canada Infrastructure Bank serves as a cautionary tale in this regard.

Skeptics argue the CARPA approach is doomed to fail without the broader innovation ecosystem needed to commercialize new technologies in Canada. In the absence of such an ecosystem, the intellectual property that emerges out of CARPA could end up being acquired by foreign companies to create wealth outside Canada.

Still, other countries have embraced the DARPA approach. British Conservative Prime Minister Boris Johnson’s government recently created an Advanced Research and Invention Agency (ARIA), with seed funding of £800-million ($1.37-billion).

“The new agency will be independent of government and led by some of the world’s most visionary researchers who will be empowered to use their knowledge and expertise to identify and back the most ambitious, cutting-edge areas of research and technology – helping to create highly skilled jobs across the country,” according to a British government news release. “It will be able to do so with flexibility and speed by looking at how to avoid unnecessary bureaucracy and experimenting with different funding models.”

Canada, evidently, is not alone in its innovation envy.

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