Higher Education Strategy Associates

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September 15

Innovation Policy: Are Universities Part of the Problem?

We’re talking a lot about Innovation in Canada these days. Especially in universities, where innovation policy is seen as a new cash funnel. I would like to suggest that this attitude on the part of universities is precisely part of Canada’s problem when it comes to Innovation.

Here’s the basic issue: innovation – the kind that expands the economy – is something that firms do. They take ideas from here and there and put them together to create new processes or services that fill a market need in a way that creates value (there’s public sector innovation too but the “creating value” thing is a bit trickier, so we’ll leave that aside for now while acknowledging it exists and matters a lot).

Among the many places the ideas come from are higher education institutions (HEIs). Not necessarily local HEIs: ideas travel, so Toronto firms can grab ideas from universities in Texas, Tromso or Tianjin as well as U of T. The extent to which they will focus on ideas generated locally has to do not only with the quality of the local ideas, but also with the way the ideas get propagated locally. Institutions whose faculty are active and involved in local innovation networks will tend to see their ideas picked up more often that those who do not, partly because contact with local firms generates “better” scientific questions and partly because they will have more people paying attention to their work.

But ideas are really only a part of what matters in innovation. Does the business climate encourage firms to innovate? What’s the structure of business taxation? What kind of management and worker skill base exists? What regulations impede or encourage innovation? What barriers to competition and new entrants exist? What kind of venture capital is available? Does government procurement work in favour of or against new products or services? All of this matters in terms of helping to set firms’ priorities and set it on a more-innovative or less-innovative path.

The problem is, all this stuff is boring to politicians and in some cases, requires directly attacking entrenched interests (in Canada, this specifically has to do with protectionism in agriculture telecoms and banking). It requires years of discipline and trade-offs and politicians hate discipline and trade-offs. If only there were some other way of talking about innovation that didn’t require such sacrifice.

And here’s where universities step in to enable bad policies. They write about how innovation is “really” about the scientific process. How it’s “really” about high tech industries of the future and hey, look at all these shiny labs we have in Canada, wouldn’t it be great if we had more? And then all of a sudden “innovation” isn’t about “innovation” anymore, it’s about spending money on STEM research at universities and writing cheques to tech companies (or possibly to real estate companies to mediate a lot of co-working spaces for startups). Which as far as I can tell seems to be how Innovation Minister Navdeep Bains genuinely approaches his file.

Think I’m exaggerating? Check out this article from Universities Canada’s Paul Davidson about innovation in which the role of firms is not mentioned at all except insofar as they are not handing enough money to universities. Now, I get it: Paul’s a lobbyist and he’s arguing his members’ case for public support, which is what he is paid to do. But what comes across from that article is a sense that for Universities , l’Innovation c’est nous. Which, as statements of innovation policy go, is almost Nickelbackian in its levels of wrongness.

I don’t think this is a universal view among universities, by the way. I note SFU President Andrew Petter’s recent article in the same issue of Policy magazine which I think is much clearer in noting that universities are only part of the solution and even then, universities have to get better at integrating with local innovation networks. And of courses colleges, by putting themselves at the more applied end of the spectrum, are inherently aware that their role is as an adjunct to firms.

Universities are a part – a crucial part, even – of innovation systems. But they are a small crucial part. Innovation Policy is not (or should not be, anyway) code for “industrial policy in sci/tech things universities are good at”. It is (or should be) about firms, not universities. And we all need to remember that.