Perimeter Institute: Innovation Nation - Tom Jenkins Sept 2011 Presentation

A Simple Solution to Innovation Policy in CanadaTom Jenkins Executive Chairman & Chief Strategy OfficerOpenText CorporationSeptember 2011

Copyright © OpenText Corporation . All rights reserved.

Innovation Nation Agenda

Motivation Reports on this topic Major insights of these Reports What to do about this

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Copyright © OpenText Corporation . All rights reserved.3

Management Lesson

A crow was sitting on a tree, doing nothing all day. A small rabbit saw the crow, and asked him, "Can I also sit like you and do nothing all day long?

The crow answered: "Sure, why not. So, the rabbit sat on the ground below the crow, and rested. All of a sudden, a fox appeared, jumped on the rabbit and ate it.

Management Lesson:

To be sitting and doing nothing, you must be sitting very, very high up.

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Poor Relative Productivity Performance

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Impact on Standard of Living

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“A good hockey player plays where the puck is. A great hockey players plays where the puck is going to be" - The Great One

Innovation is the main driver of the economy

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http://particle.physics.ucdavis.edu/Graphics/Canada/Gretzky.jpeg


CCA Innovation Architecture

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Competition: The Elephant in the Room

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Reports on this topic Major insights of these Reports What to do about this

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Innovation Related Reports

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Foundation Principle

Competition

Innovation

Productivity

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Reports on this topic Major insights of these reports What to do about this

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Source: Industry Canada

Global Value Chains: Bombardier

These value chains have changed the basis of competition in the world

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0

50,000

100,000

150,000

200,000

250,000

2006 2010 2015 2020 2025 2030 2035 2040 2045 2050

(20

06

US

$ b

illio

ns

)

G-7 and BRIC GDP

BRICs Share of GDP

66%

62%

58%

53%47%

42%35%

Source: Goldman Sachs Global Economics, "The N-11: More Than an Acronym", March 2008.

The Rise of BRIC as % of World GDP

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Canadian Exports By Destination

BRIC was only 3% of total

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Canadian Based Global Leaders

From 1985 to 2011, Canada has gone from 15 to 42 corporations which are considered global leaders.

Less than 10% of these global leaders are from sectors with protection regimes.

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• Transport

• Uranium

• Telecommunications

• Broadcast

• Financial Services

• Culture

Sectoral Regimes

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• 30 year old legislation

• Major policy concern at the time was entry into NAFTA

• Less than 10% of the North American market is Canadian

• Control of national sovereignty an understandable concern

• Selected sectors were (and are) integral to the infrastructure to Canada

Sectoral Regimes Background

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The World has Changed Dramatically

Internet Mobile Global Value Chains

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Sectoral Restrictions: Telecom Cellular Mobile Penetration Rates, 2005

0 20 40 60 80 100 120 140 160 180

Canada Turkey

United StatesJapan

Poland France

South Korea OECD

Australia Germany Denmark

New Zealand Iceland

Norway United Kingdom

Portugal Czech Republic

Italy Luxembourg

Subscribers per 100 inhabitants

Source: OECD Communications Outlook 2007.


• The Sector Regimes were created prior to the Internet

• 30 years ago, policy interventions were surgical as sectors were not tightly integrated

• Today, the Internet now links many of the infrastructure sectors to the entire economy as well as the global economy

• Poor productivity in an enabling sector may be leading to poor productivity in other sectors

Sectoral Regimes Issues

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Logic Flow

Competition

Innovation

Productivity

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sub-optimal

sub-optimal

sub-optimal

leads to

leads to


Canadian Firms Enjoy Higher Profits some may have flexibility to set prices to meet profit goals

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Currency - A complicating factor

A very simple view of the Canadian economy is that it has two segments identified with different regions:

“The West” – Commodity based “The East” – Manufacturing & Services

Innovation has an impact for both regions but some of the natural economic feedback mechanisms between national economies can vary by segment of the economy

While Currency can be a “productivity safety valve” by having the currency decline thereby making relative productivity higher.

In the case of a “petro dollar” the currency is instead driven by commodity demand and cannot serve as a safety valve.

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Reports on this topic Major insights of these Reports What to do about this

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• Transport

• Uranium

• Telecommunications

• Broadcast

• Financial Services

• Culture

Review Sectoral Regimes

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A Balanced Model for Innovation

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Maintain a sustained focus on competitiveness.

broad mandate: publish research and be a public advocate for competition in the public and private sectors;

independent of government: small staff and a Board of Directors with a majority of members from outside government.

The Council is arguably the most important recommendation to spur innovation in Canada.

For more information visit the Competition Policy Review Panel website: www.competitionreview.ca

Competitiveness Council

http://www.competitionreview.ca/



Reports on this topic Major insights of these Reports What to do about this Conclusion

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The Innovation Policy Challenge: Getting the Balance Right

Slide 30

Society AspirationsEconomic Reality

Global Competition National Control


Having suboptimal productivity performance at this critical juncture in history is unwise

It would not be wise to miss the Information Revolution – any part of it!

Buggy whips are not an option for the future.

We Are at a Key Moment in Global Economic History

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“Capitalism is taking us toward a future of accelerating change. The first twenty years of the twentieth century saw as much technological progress as the entire nineteenth century. Currently, industrial societies appear to be doubling their rate of technological progress every ten years. If this continues, and there is every reason to suppose that it will, the twenty-first century will experience the equivalent of twenty thousand years of ‘normal’ human progress.”*

*Walter Read in Compete to Win : Canada Global Competition Review Panel

Innovation is Driving the Transformation of the Global Economy Right Now

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Closing Thought

Our competitiveness as a country and as a society will depend on our ability to make strategic policy decisions. Think Argentina and Canada over the past 100 years. It matters.

To remain competitive and maintain our particular concept of society we must strike a balance between the open market and sector regimes.

We cannot expect to have it both ways. We must have a comprehensive debate in Canada about this.

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Thank You

Visit Tom Jenkins’ Blog: Content Shift

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http://blogs.opentext.com/resolver.vcarp/blog/1.11.512/Content_Shift

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Perimeter Institute: Innovation Nation - Tom Jenkins Sept 2011 Presentation