One of the longest-standing criticisms of the Canadian economy has also become one of the most urgent, given the rapid evolution of global competition: We have never been particularly renowned for our innovation. Yes, we are supremely blessed with natural resources and are pretty good at exploiting them, but (with some notable exceptions) we're generally followers rather than leaders when it comes to producing great new ideas that change the world.
The criticism may feel right, particularly as it plays to our national sense of inferiority, a natural consequence of living next to the biggest and arguably the most brilliantly innovative economy in the history of humankind. But is it fair? After all, we're a relatively small industrialized economy; how do we measure our ability to innovate against other economies of greater scale, with entirely different sets of resources available to them?
Indeed, economic discussions surrounding innovation are fraught with difficulties, starting on the most basic and critical level with how you measure such a fuzzy concept in the first place, and quickly leading to how you compare countries with differing areas of innovative advantages, and which of these advantages is more important than others. Critics argue that measures focusing on the sheer volume of "innovation" – like, say, the number of patents registered in a year – attach a quantitative (and, therefore, flawed) value on something that is by its nature a qualitative concept. It's not how many innovations you produce that matters, this argument goes, but rather how good and meaningful and important your best innovations are.
This is the thinking behind a new innovation-quality index launched recently by Cornell University, French business school INSEAD and the World Intellectual Property Organisation, and highlighted on The Economist's website last week. The Global Innovation Index focuses on three key factors: University education, patents and publication of scientific research. The difference from similar indexes, however, is that this one tracks only each country's top achievements, rather than its national totals or averages. The index focuses on top achievements on the premise that these reflect only the most meaningful stratum of innovation – and that this is what separates the most innovative economies from the rest.
So, in comparing countries' universities, the index looks only at the rankings of each nation's top three schools. In comparing patents, it considers only those filed in at least three different countries. In comparing published research, it counts how often the research is cited in other papers. In theory, the result is a measure (or, at least, a better measure) of countries' capacity for the best innovation, rather than simply the most.
And how does Canada fare? Among major industrialized economies, it's a middle-of-the-pack innovator – nestled in between France and Sweden, a discernible notch or two below the traditional innovative leaders such as the United States, Great Britain, Germany and Japan. (Among all countries globally, Canada ranks 11th.)
But the details of Canada's ranking by this measure are more telling. By the university education measure, Canada's top three schools rank higher than every other country except the U.S. and Britain. Canada's citations of scientific research are in the top five in the world.
Where Canada's innovation falls down, however, is in international patents. Canada ranks a weak 19th in the world by this measure, well behind the likes of Denmark, Israel and even Barbados.
In short, we have great schools and world-class thinkers, but for some reason that's not translating into a lot of global-scale breakthroughs. This finding suggests a need to address our policy approach to research and development; we're stumbling on a critical step needed to convert big brains and great ideas into vehicles for economic growth and global leadership.