Reframing the Innovation Debate

The very best human communication is in the form of stories. This might be in the form of the latest crime series or the latest hard core non-fiction book on the past or the present. Stories are powerful and at their best tap into our brains in ways that motive us to change or think something new. Of course, this can be good or bad as we should be all too aware. Over time with enough stories of a similar kind we can build up shorthand approaches to issues and topics, what I want to call here macro-narratives.

Over time, one feature of this narrowing of discourse on an economic or societal ‘problem’ is that particular data choices are repeatedly made to reinforce the story line while other data gets excluded. We have seen this over time in discussions of Canada’s ‘innovation problem’ where the data choices are often narrowed to business expenditure on research and development (often with only a small discussion of the actual industrial structure of Canada) and productivity as it particularly relates to comparisons with the USA. But there are holes in this macro-narrative around innovation.

There are many inadequate metaphors for what an economic system ‘does’, and I am aware that choice matters – that is the point of this very piece. But let’s begin by thinking about societies as systems for solving thousands of wicked^[1] problems simultaneously.

In the annual UN Human Development Report, the USA has been slowly losing ground on the key index since 1990. Canada consistently, rates (just) above the USA. In terms of health expenditure as percentage of GDP the USA ranks first in the world (2017 data) while Canada is 16^th. However, on life expectancy at birth the USA ranks 41^st, Canada 14^th. On a Gini coefficient of inequality, the USA ranks 105^th for the period 2010- 2018 while Canada manages to be 49^th.

The point is, yes Canada may have (probably does have) a technological competitiveness hole. However, which wicked problems are each system trying to solve for? At the time of working on this brief^[2] the USA ranked 6^th in the World for Coronavirus cases per million^[3], Canada 80^th. On deaths per million, the USA ranks 10^th and Canada 52^nd.

Is any of this really about innovation? On the typical macro-narrative basis of what has been called innovation – a techno-economic conceptualisation of the creation of new stuff – then obviously NO. But if these indicators point towards a society that is better able to ‘resolve’ for the next iteration its wicked problems (a measure of innovation surely) then yes, it is.

What about a different way into the problem? Canada currently has a population of around 38 million^[4] people who make approximately 22 billion transactions annually^[5]. Some of these are bills for councils and utilities such as electricity, gas and communications and meals. But beyond that it would seem safe to say that most transactions cover multiple individual items (groceries and home supplies). The number of individual items purchased by Canadians each year therefore must be in the range of 100s of billions of items. That is one massive economic sorting machine. One way economies can innovate around this massive  supply and demand ‘sorting machine’ is in the creation of new businesses.

Data from the Global Entrepreneurship Monitor – the world’s largest study of entrepreneurship, tells a different story to one we usually hear. In Canada, for example, the rate of entrepreneurship (measured as the TEA Index of total early-stage entrepreneurship activity) has increased from an average of 8.6 (for 2002-2006) to 15.1 (for 2013-2017), almost doubling. In the US the numbers have gone from 11.2 (average of 2002-2006) to 12.9 (average of 2013-2017) and Australia has nudged up 11.9 (average for 2003-2006) to 13.2 (average for 2014-2017^[6]).

TEA levels in Canada are now consistently above those in the USA. Perhaps these are not the Facebook and Googles of the world generating massive amount of wealth for a few people but then as I am trying to suggest, perhaps innovation in Canada and a significant number of other successful countries are solving a different set of wicked problems.

Our policy discourse still prefers to suggest that problems are tame and linear – that they might be ‘wicked’ is too difficult to communicate. Maybe it is time we tried to reframe the innovation discourse to focus on the ends rather than the means.

[1] As far back as 1973 Rittel and Webber coined the term ‘wicked problems.’ They observed that “A growing sensitivity to the waves of repercussions that ripple through such systemic networks and to the value consequences of those repercussions has generated the recent re-examination of received values and the recent search for national goals There seems to be a growing realization that a weak strut in the professional’s support system lies at the juncture where goal-formulation, problem-definition and equity issues meet” (p156) In 1973 there may have been a growing sensitivity to “wicked problems” but it does not seem to developed far, as we still tend to discuss policy in terms of “solving an assortment of problems that appeared to be definable, understandable and consensual” (p156).

[2] 2021-02-01.

[3] https://www.worldometers.info/coronavirus/

[4] Statistics Canada modelling https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2018005-eng.htm . Accessed 2021-02-01.

[5] Payments Canada.

[6] Josty, P. thecis.ca/measuring-entrepreneurship-lies-damn-lies-and-statistics/

Brian Wixted (PhD) is an Adjunct Professor with the Johnson Shoyama Graduate School of Public Policy. His interests are focussed on the network structure of global trade, the adoption of new digital technologies in specific economic settings (especially mining and agriculture) and 21st Century disrupted innovation policy – adapting to the cyber-economy as much as simply promoting firms to create “innovation”.