Higher Education Strategy Associates

What Is Innovation/Innovation Policy, Anyway?

I write and tweet a lot about innovation policy, mainly with respect to my frustration with our current government’s two-dimensional views on the subject.  I’ve been meaning to write a piece on how to do innovation policy right, but based on a number of conversations I’ve had with folks, I think it’s important first to deal with the question of: “what is innovation” and “what is innovation policy”? Because frankly these terms are getting slung around with such abandon that they appear to have lost all meaning and many people are simply dismissing the policy area as a large waste of time.

Sometimes, it’s hard not to sympathize with this point of view.  This week in a Vancouver Sun op-ed, UBC President Santa Ono described innovation as “a never-ending exchange between the realities of today and the potential of tomorrow.”  To which I think most people would respond with a heathy “you what, mate?”

More helpfully, Ono also included in his article the OECD definition of Innovation: “the implementation of a new or significantly improved product (good or service) or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations.”  Even apart from any methodological difficulties in tracking this, it is still a bit tricky as a definition.  For instance, not everything which is new is beneficial or adds value. Crystal Pepsi comes to mind here.

But more broadly, the best way to think of innovation as a policy goal is: can a country/province/whatever become a place where people can put new ideas into practice easily and quickly.  It doesn’t have to be a “new product” (although Canadian governments sometimes act like this is what it means); it can also be a new process.  And it need not be strictly in the commercial sphere; innovation in the public sector is important, too.

Or, at a broader level, how can we be more like Estonia and less like Greece?

Now, as you can imagine, this is tricky because no one actually knows how to be more like Estonia (or Denmark, or Finland – pick a Nordic-ish country).  We can sort of describe what makes them the way they are, but there is no road map to getting from here to there.  But basically the critical questions are:

  1. How do we get ideas to generate and circulate faster?  (This goes back to the Paul Romer question I posed back here).
  2. How do we get people to turn ideas into practical ideas to create new/improved products and processes?
  3. How do we ensure that new products and processes do not get stamped down simply for reasons of inertia or protecting vested interests?

Some of these issues lend themselves to direct government spending.  Some of them are about regulations and incentives, which governments can also change.  And finally, some of them are issues of culture (institutional and otherwise) which is an altogether trickier terrain.

Governments can address the skills part of this through education.  Funding more doctoral students, attracting more top profs, etc. leads to more Highly Qualified Personnel and hence generating more ideas at the frontier of science.  Funding of basic science also plays a role here.  Governments can change the nature of secondary and undergraduate of education in ways that might make workers more likely to be problem-solvers, idea generators and early adopters of other people’s new ideas/technology.  It can incentivize entrepreneurialism through tax policy and to some extent through grants and – maybe, the jury’s still out – education as well.  But culture plays a big role here and credible ideas for how to shift this are thin on the ground (though I think we can all probably agree that a strategy of having Ministers go around encouraging people to “take risks” and “think outside the box” has, to put it politely, a low probability of success).

As for the third part, not squashing new products…obviously regulatory and competition policy really plays a role.  But again, part of it is cultural, and takes place inside firms and other institutions, areas where policy does not easily reach.  Take the medical products industry: how do you combine a culture of looking after patient safety with a culture of encouraging innovation (which by definition means making mistakes on the way to success)?  Or how do you get companies to pursue innovations which may make existing profitable product lines less profitable?

Evidently, this is complicated stuff.  In some ways it is easier to step back and say what Innovation Policy is not.  It is not Science Policy, which is about deciding how to invest in basic research – though Science Policy affects Innovation Policy for obvious reasons.  It is not Growth Policy, which is about finding the highest rates of economic growth in the short term, because Innovation Policy is in the end much more concerned with developing ideas which will matter 10-20 years out than what will boost growth right now.  It is definitely not Industrial Policy, because it is about economy-wide pre-conditions for industry, not about picking winning industries because they seem to be “hot”.

(I have recently been informed that the Ministry of Innovation actually includes my daily blog posts in its media monitoring.  If whoever is in charge of this operation could mark up that last section IN HUGE RED INK before slipping a copy to Minister Bains, that’d be awesome.  Thanks.)

So that’s my take on the meaning of innovation and innovation policy.  Tomorrow: what an ideal policy looks like.

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One Response to What Is Innovation/Innovation Policy, Anyway?

  1. Bob Lemieux says:

    Hi Alex:

    I enjoyed reading your “One Thought” today about what is innovation. I agree that the term ‘innovation’ is used very broadly and, many times, inappropriately. My view has always been that innovation is defined by how it changes and improves our lives.

    Innovation is rarely incremental, and often disruptive. I think of Steve Jobs when I think of innovation, and how the ‘i’ technology platform of Apple has changed our lives. In defining innovation, it is important to think about its foundation: curiosity. One of my scientific heroes, Louis Pasteur, famously said back in 1854 “Dans les champs de l’observation le hasard ne favorise que les esprits préparés”, which has been widely translated as “Chance favors the prepared mind”. The quote speaks to the importance of following one’s curiosity and passion in scientific enquiry, and how many innovative technologies arose from chance and/or unexpected discoveries. This proven fact (i.e., not alternative) underscores the critical importance of fundamental, curiosity-based research in fueling innovation, and the need for governments to maintain and further expand its funding.

    As has been raised many times by University of Waterloo president Feridun Hamdullahpur, another critical element that contributes to innovation is research collaboration in and among the various disciplines, a concept known in academic circles as interdisciplinarity. By way of example, I have spent the past 25 years developing new liquid crystal materials for fast-switching display applications. As an organic chemist, I (my students, actually) design and synthesize new molecules with liquid crystalline properties, and I rely on collaborations with physical chemists and condensed matter physicists to understand the relationships between molecular structure and physical properties that enable technological advances.

    I think it is worth noting that in all areas of science, and I include social sciences and humanities here, innovation often takes place at the interface of two or more disciplines but that, in order to maximize these synergistic interactions, physical proximity is important. Think of the scientific ‘water cooler’ moments when collaborators run into one another—perhaps in the hallway, by the blackboard in a faculty lounge, or in a shared instrumentation facility—and start exchanging ideas, putting something down on paper or up on the board, or modify an experiment on the fly. These critical interactions can only happen when researchers are co-located, which remains a challenge in a university setting where most faculty members are typically housed in departmental structures that are not always conducive to interdisciplinary activities—the proverbial academic ‘silos’.

    At the University of Waterloo, we are currently planning for a new ‘Science Centre for Innovation’ that will integrate researchers from various disciplines on thematic research floors according to a hub-and-spoke model where the hub is a shared instrumentation facility, which will act as the scientific ‘water cooler’. Strategic co-location of researchers with complementary expertise, including fundamental and applied researchers from the Faculty of Science and across the University, will create an environment where targeted technological advances can take place, but also where prepared minds can take advantage of chance discoveries to take quantum leaps and enable disruptive innovation. Above and beyond its interdisciplinarity themes, the integration of the Waterloo science start-up incubator Velocity Science, and our Science & Business undergraduate program in the Science Centre for Innovation will create a unique entrepreneurial ecosystem that can be leveraged by all occupants to facilitate the commercialization of innovative technologies. This concept aligns well with the University of Waterloo’s reputation as Canada’s most innovative university, and the continued growth of the Toronto-Waterloo innovation corridor.

    Bob Lemieux
    Dean of Science
    University of Waterloo

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