Innovation colleges and community final

www.contactnorth.caInnovation, College and Community – June 2010

Innovation, Colleges and Community

Stephen Murgatroyd, PhD FRSAChief Innovation OfficerContact North | Contact Nord

June 2010


What This Presentation is About:

1. Offering a context in which we need to understand Canada’s Innovation Imperative

2. Making sure we all understand innovation is not the same as R&D

3. Identifying the unique role of Colleges and Polytechnic institutions in Canada

4. Suggesting 10 Action Steps to re-start innovation in communities


Canada’s Innovation Imperative


Key Challenges for Canada Social and Economic Future

1. Competitiveness• Canada’s competitiveness is “stuck” with respect to other leading

economies in the world – ranked 9th in 2009-10 by World Economic Forum

• Our continued reliance on commodity exports will support growth, but will not sustain the economy in the long run – we need more value added products and services so as to compete in the global knowledge economy

• Our supply chain management systems need real improvement if we are to compete – transport is a major cost to us, as are labour costs, none of which are helped by internal barriers to trade


2. Knowledge Competitiveness• A key factor in innovation is the extent to which a place or region or

country can be defined as a knowledge rich economy. In the last world knowledge competitive index (2008) Ontario ranked 76th, Quebec 83rd, Alberta 85th, BC 112th – “could do better”

• We have good Universities, but in world rankings we do not appear as good as other jurisdictions – University of Toronto (58th), UBC (74th), Waterloo (94th), McGill (95th), SFU (104th), York (108th), UofA (121st) – China has five in the top 20, Turkey has 3 in the top 50.

• In comparison to Finland, we have one third less HQP in our workforce – people with graduate qualifications working in firms

• While we score high on patent filing, we score low on doing anything with patents that helps them generate wealth


3. Productivity• Canada’s productivity is poor relative to the US and not getting

better.

• Canada's business-sector productivity in 2007 was 75% of that of the U.S., compared to 90% in the early 1980s.

• Canada's productivity ranking has dropped from 3rd of the 20 countries in the Organisation for Economic Co-operation and Development (OECD) in 1960 to 15th of the current 30 members

• Productivity now grow at less than 1% annually.

• Falling productivity could cost every Canadian $30,000 in income over the next decade, according to the Governor of the Bank of Canada


4. Demographics• Canada’s demographics are challenging our firms, governments and

organisations.

• The 65 years and older population to rise from 3.92 million in 2001 to roughly 9.2 million people by 2041, or approximately one in four Canadians. The median age for the Canadian population has increased from 29 years old in 1981 to 39 in 2005. Over the same time period, the youth-dependency load, those aged 0 to 14 years of age, as a percentage of the population shrank by 5%.

• Birth rates plummet from just over 20%in 1956 to around 5% in 2005.

• Fewer workers, more seniors, higher taxes – “Canada's demographic situation poses grave threats to its future prosperity”.


5. War for Talent• Just as our workforce is shrinking, there is a war for talent

worldwide.

• The temporary “ceasefire” caused by the recession is now over, and the war begins again. Battlegrounds include senior management and executives, senior public service positions and heirs to the family business.

• Baby boom retirements will hit all of the developed world and lead to new patterns of immigration – immigration will be key to Canada’s economic future.

• The average weekly wage, measured across industries climbed 2.4% annually between 2006 and 2010. It’s predicted to rise 3.4% in each of the next five years, and stay close to 3% annually as far out as 2030. By that time, wages are predicted to be 21% higher than they are this year – one way of keeping talent.


6. Weak Execution of the Innovation Strategy• The strategy was clear – “to be recognized as one of the most

innovative countries in the world” and to be in the Top 5 OECD countries in R&D by 2010.

• This is what happened (2009 data from OECD): R&D intensity declined from 2.4% of GDP to 1.8% between 2004 and

2008 – OECD average is 2.2% Government financing of business R&D is 2.3% - OECD average is 6.3% Canada has a low number of patents (21 per million inhabitants in 2005-

07) compared to the OECD (33) and the G7 average (48). In 1998-2008, the rate of labour productivity growth in Canada (1.3%)

was below the OECD average (2.2%) – its lower now. University graduation rates for women (44% in 2007) are higher than the

OECD average (42%) but male rates (26%) are lower (29%). Graduation rates in science and engineering are lower than the OECD

average both at the university and the doctoral level.


Let’s All Understand Innovation


Innovation Has Two Forms – Private Sector and Public Good

Private Sector innovation occurs when:• A firm launches a new product or service which is new to them and/or

to the markets they serve

• The product or service generates revenues

• The product or service is sustainable

Public Good innovation occurs when:• A new practice, service or product is introduced which is intended to

achieve one or more of the following: Increased accessibility to a service Improvements in the affordability of a service Improved quality of a product or a service Improved productivity, efficiency or effectiveness


Innovation is sometimes…

Adopt / Adapt Innovation• Taking an idea from elsewhere and adapting it for a new use or

purpose and ensuring its widespread adoption – e.g. 3D movies to 3DTV, Birdseye frozen foods

Disruptive or Breakthrough Innovation• Using a new technology, discovery or process to transform the way

in which something is done (e.g. web based textbooks, ebooks, mobile learning)

• Changing the business model for an industry (e.g. travel, skills development in ICT)

90 - 95% of all innovation is adopt/adapt


No Necessary Connection Between

The Activity The Outcome

Research in a Laboratory Innovation

Patents Innovation

Investment of Government Funds

Innovation

University Commercialization Efforts

Commercialization

Cluster Formation Growth in GDP from that Industry


The 6 Key Requirements for an Effective Innovation System

Relentless focus on HQP development and engagement in the work of firms, innovative organizations

Significant incentives for firms to spend more on R&D – expanding IRAP, SR&ED etc

Public: Private partnerships for R&D – less reliance on University “curiosity” research to produce innovation

Effective linkages between firms in a sector – coopetition in clusters

More open innovation and a more open and faster IP system Access to capital


The Five Big Challenges for Canada

1. Increasing the absorption capacity of firms• Training and development and investments in skills

• Public: private funding for research, including business processes, service enhancements and market expansion – change the boundaries of SRED and IRAP

• Major support for productivity enhancement through capital tax allowances and “flow through shares”

2. Stop seeing universities as centres of commercialization – firms are• Refocus them on their core task – HQP development and R&D

• Require more private: public R&D

• Invest heavily in open innovation system for university research

• Create more effective linkages to venture capital


3. Relentless focus on improving productivity• Government support through tax incentives, grants and systematic

support services for productivity gains• Ensure the capital tax regime supports new equipment + training in its

use• Target sectors for major gains in two and three year cycles

4. Stimulate the development of business led industry clusters• Facilitate coopetition and open innovation• Share next practices• Benchmark performance

5. Transform our school system• Find everyone’s talent and push• 21st century skills and mindful teaching• Less accountability and high stakes testing, more focus on real

learning – “less is more”


The Community College and Innovation


10 Challenges for Colleges

1. Stop focusing on “innovation” and focus more on productivity, design, and the development of skills.

2. Embed creativity, change management and adaptability into all that you do – “the future isn’t what it used to be”.

3. Don’t focus on R&D, focus on design, development, deployment and sustainability.

4. Use your networks to create local and regional clusters.

5. Build cross functional capacity within the college and between the college and its partner firms / organisations.


6. Be “glocal” – think and connect globally and act locally.

7. Invest in a systematic way in futures thinking – partner with your industry sectors to develop roadmaps, systematic foresight

8. Relentlessly pursue and create private: public partnerships – it will accelerate innovation and improve productivity

9. Build capacities in the community – outreach, engage, inspire

10. Communicate your work directly to firms, industries, governments and the general public – celebrate every success every time everywhere!


“You cannot cross a chasm in two small leaps!”

[email protected]

Education

Innovation colleges and community final