Only three countries have ever sent spacecraft to the Moon, and only one has ever had set humans afoot on it.  “Moonshots”, by definition, are things for big countries with big budgets.

So why in the hell do so many folks now want to talk about Canada engaging in “moonshots”?  It’s a fundamental misunderstanding of how countries like Canada can best engage in innovation, science and technology: an importation of big country ideas into a context of a smaller country that does not and cannot support them.

Let’s start today’s tour by looking at the third installment of the New North Star series by Robert Asselin and Sean Speer.  I am a fan of the first two parts of this now-trilogy (see here for an earlier discussion of their work), mainly because they have sensible thoughts about the nature of the productivity challenge facing Canada and on things like the Intangible Economy.  I am less of a fan of this new one, which is a full-throated defence of the idea of a Canadian Advanced Research Projects Agency (CARPA).

Broadly speaking, their argument for a Canadian version of the US Defence Department’s DARPA is that Canada is “not producing enough breakthrough inventions and failing to effectively transition the ones that the country does produce through the innovation process to commercialization, scale and, ultimately, global export.” and that only some kind of “new institutional arrangements with a disciplined focus on radical innovation” can achieve it.  This argument is unconvincing.

First of all, there is no discussion here about process innovation vs. product innovation even though they are implicitly focussed on the latter.  Second, the justification for why Canada must focus on “radical” vs. “incremental” innovation is unconvincing – it amounts to “a clean prosperous future needs really exciting new gadgets”, without explaining why any of these new gadgets need to be invented in Canada.  Third, the entire case for why CARPA is the correct way to achieve this goal is “go look at DARPA!”, which is odd because i) most of DARPA’s real successes happened over fifty years ago, ii) there have been dozens of attempts by the US and other countries to replicate DARPA and on the whole they have not gone well (a topic the authors seem to avoid). 

The authors do helpfully set out some recommendations about how a CARPA might work – rightly underlying both the need for very high levels of operational independence and that a portfolio approach to encouraging way-out wacky ideas is going to have a high failure rate and therefore requires a high tolerance for failure. However, it does not acknowledge some barriers for making that happen. Mostly, what we are left with as an argument is that Canada needs to be more ambitious and dream bigger (no argument from me) and therefore needs to try some “moonshots” (wait, what?) to create new tech, and the way to achieve that is through CARPA, because…well, because DARPA did some cool stuff once and we should do cool stuff, too. 

It’s not simply that the goal of producing more domestic “breakthrough” tech is a deeply puzzling solution (Canada, like every other small and medium-sized country in the world, has managed since its inception to be prosperous by using technology which was 95%+ developed elsewhere), it’s that the theory of change is weak.  How does lobbing a few hundred million a year into the economy for way-out ideas actually stimulate a change in business orientation that reliably leads to higher levels of overall productivity and investment in R&D?   To the extent DARPA works, it’s because the US Department of Defence has an enormous procurement budget which makes it possible for far-out ideas to conceivably turn into commercial opportunities.  The Government of Canada, to put it mildly, does not.  It is really hard to imagine what kind of gizmos the Government of Canada might need that wouldn’t more better value if purchased off the shelf.   So even if DARPA-like processes led to commercializable activity (which is only a serendipitous by-product of DARPA’s mission), that commercialization might well happen outside Canada because it’s not clear that the markets exist here for such products.

And this may be a bit of a nitpicky point, but what DARPA does is the exact opposite of a “moonshot”.  A moonshot – as Mariana Mazzucato engagingly points out in her recent book Mission Economy –involves vast amounts of spending on a single socio-technological objective, but it also implies the mobilization and co-ordination of vast numbers of people in both public and private sectors towards a single objective.  DARPA is about sub-contracting innovation to the private sector incrementally and hoping an acceptable percentage of these bets turn out.

Overall, Mazzucato has a more holistic and sensible approach to “moonshots” than pretty much anyone in Canada. In her telling a lot of what consists of moonshots is – like the Apollo Program – down to governments being able to set concrete goals and manage towards them, mobilizing both public and private sectors towards an audacious goal.  I am wholeheartedly in favour of re-orienting the talk of Moonshots to focus on governments’ ability to make big, holistic, and co-ordinated decisions about objectives and manage relentlessly towards them (I mean, God knows the pandemic has given us a ton of examples of what happens when governments can’t do that).

But Mazzucato – who splits her time between the UK and the US – has a penchant for describing government capabilities in terms that are difficult to reconcile with the limitations of governments who are not large enough to be nuclear powers.  This idea that governments can “shape markets” is not without merit, but it’s a hell of a lot more difficult for small/medium country governments than it is for larger ones (federalism often adds a level of complexity, too).  Obviously, she’s writing for a “big country” audience; the worry is that people in small/medium countries get the impression that this is something they can do just as easily.

Between Brookfield and this Asselin and Speer report, we are seeing a common theme: an assumption that what makes sense for the US or maybe the UK makes sense for Canada, too.  It doesn’t.  What makes faux-moonshots like DARPA and real moonshots like the Apollo Program work in the US is scale and we simply don’t have that.  We can play an important role in any number of product value chains, but pretending we can jump to the top of a product value chain because the government starts throwing some high-risk money around at some ill-defined problems is fantasy.  We have challenges which are specific to a small or medium-sized countries: simply adopting big-country solutions is unlikely to help us overcome them.