Intentional Innovation

Much ink has been spilt in Canada regarding our lacklustre innovation capacity as a puzzling counterpart to our international excellence in basic research. I won't be retrying these arguments. Rather, I want to point out an excellent article on the need for intentional innovation and the absolute necessity of updating our approach to how we integrate research and industrial innovation ecosystems. 

In Canada needs a new approach to science, research to stay competitive, Robert Asselin does an excellent job of articulating the need for "The modern application of science and technology is the new frontier of economic competitiveness." This statement will alienate some who might prioritize the approach to publicly funded research outlined by Vannevar Bush in Science: The Endless Frontier, in which public funding was exchanged for autonomy to pursue basic research. Applied research and experimental development were thought to emerge naturally from market-facing actors who would create value from the fruits of basic research as they realized a vague downstream potential. That was good when this was first articulated in the 1945. But as Asselin points out "The arms-length science model we adopted after the Second World War does not provide an adequate framework for today’s economic paradigm."

As Asselin says, "the road to innovation is long and hard," and it requires us to think and act in new ways. This means being intentional about creating and protecting intellectual property (IP), and helping to foster collaboration across the public and private sectors. Below I've put a logic model that outlines such an approach, reposted from earlier. 

And we have successfully piloted this model in Toronto as part of an orchestrated COVID-19 response where the 8 colleges and universities in Toronto worked together to support City of Toronto research priorities. eCampusOntario is supporting all of our 53 members to bring this model to fruition across the province. 

Watch this space for more, but in the meantime, read this article. And while you are at it, check out this one From Dan Breznitz and Daniel Trefler.

An Integrated Model for Intentional Innovation: From Idea to Impact

Some missing links in the discussion on innovation

Much digital ink has been spilt over the nascent Canadian version of the storied DARPA, including a good overview by Alex Usher today. Usher rightfully points out some dissonance in the focus on disruptive versus incremental innovation; this incidentally confuses the difference between invention (new to the world) and innovation (new to a market). He also questions the focus on product innovation over process innovation, but misses marketing and organizational innovation. But his point is sound: “simply adopting big-country solutions is unlikely to help us overcome them.” 

In thinking this through there are two key points that are missed here and elsewhere (see for example this piece in the Logic). The first is the importance of private+public partnerships for R&D, and the second is a focus on demand-driven innovation. I would add a third here, which is the turn (finally) in Canada to a focus on the entire spectrum of R&D, and here I mean TRLs 1-9. More on this below.

Private+public partnerships for R&D (what I’ve elsewhere called P3RD) are essential for ensuring intellectual property (IP) generated in our world leading public research universities gets to markets. These partnerships are also essential for helping businesses to perform R&D and to innovate more broadly. Not only do research partnerships with higher education institutions helps companies to conduct R&D they might not otherwise do, they also give students valuable work integrated learning opportunities. This results in innovation literacy: “the ability to think creatively, evaluate, and apply problem-solving skills to diverse and intangible issues within industrial problems and multidisciplinary contexts.”

Demand-driven innovation is the opposite of what Canada has focused on in terms of Science and Technology policy. That is, we invest more per capita than most every other OECD country in publicly funded research, but we lag on business investment in research and commercialization. Read the CCA Report on Science and Technology – it is a comprehensive overview of the particular values, strengths and weaknesses of the Canadian research to innovation ecosystem. 

According to the Horizontal Review on business innovation and clean technology (2018) – which while 4 years old is still a good barometer of S&T policy – most business facing R&D support is for early stage effort (what the OECD Frascati Manual calls Basic Research). The Horizontal Review further outlines the following:

• Only 78% of support is focused on traditional product and process innovation and formal R&D
• Less than half of funding is directed to firms that are in a growth stage, and
• Only 8% support goes towards productivity enhancing technology adoption.

A focus on technology only (product innovation) disadvantages inclusive innovation, especially in the world of intangibles, a point made very clear by Ontario’s Expert Panel on Intellectual Property. 

As Alex Usher points out, according to Mazzucato the private sector does not generally invest in early stage research. And the public sector is not historically motivated to carry forward commercialization, preferring to publish results rather than commercializing them (though this is changing).

Most academic research is basic research – very little is applied research and hardly any is experimental development. This continuum matters. A lot:

The continuum from basic and applied research through to experimental development constitutes the types of activities that make up the innovation carrying capacity of national economies: the ability to proactively create value from public investments in basic research by fostering private sector receptivity and engagement to the public S&T systems.

Only 20,000 – 2% - of Canadian companies file SR&ED claims, the most reliable indicator we have for firms that conduct R&D activities, which are essential for innovating products and services for global markets. This is down from 25,000 a half decade ago. This may be only .5% of companies overall, but it represents a 20% drop in SR&ED filers. SR&ED is also down from 4 billion to 3 billion annually. This is not a good indicator for Canadian innovation. We can take from this the stark reality that not enough companies do R&D, and those who may be unsure if they want to conduct R&D have little or no incentive to start.

And this gets me back to the point missed by Usher and others. The discussion around a Canadian DARPA is worthwhile as it gets us into the mindset of developing challenge-based research capabilities. It socializes the idea that private+public partnerships for R&D is a good thing (this is the key DARPA model, along with limited time and funding). It puts us into the mindset that demand-driven research and innovation challenges are the right thing to do – to orient the best and brightest capabilities we have in our higher education institutions to address key challenges, be these health, environmental, social, or economic. 

The good news is that there are many working in this space. Check out OCI and Mitacs, who fund excellent programs that engage colleges and universities in all forms of research. Check out the good work happening at Communitech and their focus on “True North - solving Canadian problems with Canadian Innovation.” And check out how eCampusOntario is helping our 50 member institutions create research partnerships through a unique demand-driven innovation platform piloted with the City of Toronto. 

Working together we can mobilize the latent R&D capacity in our higher education institutions to increase the numbers of firms doing R&D with explicit reach out to those firms currently not innovating. Together we can aid the economic recovery and growth with Ontario-made innovation. Research partnerships have broad application and net benefits to our social and economic prosperity, supporting:

• Commercial Innovation via industry-sponsored R&D and commercialization of University research 
• Career opportunities for post-secondary graduates by providing relevant work experience and building their professional networks
• IP and Innovation Literacy by integrating student experiential learning and issuing micro-credentials for project work with partners 
• Employment and economic development by enhancing overall effectiveness of adjacent R&D for programs by providing a common entry point for Ontario businesses.

CARPA or no, the discussion around demand-driven innovation and research partnerships is right-headed. Not only that, but these are essential for competing in the global innovation economy. 

Post-Script: The Continuum of Research

I’ve written many times about this and why it matters. Developing the capacity and contribution for the span of R&D – from basic to applied research through to experimental development – is key to enacting intentional innovation. 

An excellent graphic from the CCA Report Competing in a Global Innovation Economy that describes the links between R&D, Innovation and Wealth Creation. 

Platform Mission Model

The eCampusOntario strategic framework is an integrated approach to providing the sector with the tools, resources and engagement needed for excellence in virtual learning and support for sector transformation. We are supporting the Ontario postsecondary education sector with a platform mission model that will lead to sustained and significant change in Ontario PSE. Our platform mission model is comprised of three components:

• Transmission: Access to systems and shared services 
• Transaction: Opportunity for engagement, collaboration and partnerships
• Transformation: Vision and driving sector transformation to realize global leadership 

The eCampusOntario Platform Model is comprised of three interrelated components: 1.Transmission - Access to systems and shared services; 2. Transaction: Opportunity for engagement, collaboration and partnerships; 3. Transformation: Vision and driving sector transformation to realize global leadership

The eCampusOntario platform mission model accounts for the sudden and enormous shift in post-secondary education due to the COVID-19 pandemic, but also considers the longer-term evolution of virtual learning. 

Fundamentally, we are creating, in collaboration with our member institutions, the necessary learner and educator supports to foster rich, humanized, inclusive and successful educational experiences within the realm of virtual learning. In practice this means developing new programs, frameworks, services and support systems – our platforms – that address sector-wide challenges and provide creative opportunities for addressing these challenges. 

eCampusOntario’s central role and ‘honest broker’ status means we are extremely well positioned to lead and coordinate the development of these platforms for the benefit of all Ontarians.

Research, Remote or Otherwise (plus 3 geese)

Some really good announcements on the research front this week from the federal government, including ample new support for COVID-19 medical research and vaccine development in addition to Support for students and new grads affected by COVID-19 and support from the granting councils for research assistants to extend research scholarships, grants and fellowships via various programs for several months.

There is also an additional $250M in funding for firms to access via the Industrial Research Assistance Program (IRAP). The Logic's overview (paywall alert) also details changes to the SR&ED (mainly halting audits) that Minister Bains has outlined in the COIVD response package to supporting firms in Canada. One thing that should be done is to get the SR&ED program in line with its original terms and conditions and support more experimental development activities - the ED part of the SR&ED that has historically been ignored by those administering the program. This singular failure of the way in which SR&ED is administered needs an urgent fix now as we look to support firms to pivot and reframe their businesses in a COVID context. 

This new funding will go a long way to ensuring that we can continue supporting research as much as is practicable while some facilities are closed, and to pivoting into remote research where this is feasible. There are also new avenues of research opening up, for example in looking at ways in which we are collectively navigating the changes and challenges before us, from remote learning to remote systems and service delivery, through to how culture and cultural production is being adapted to mental health and well being. 

The opportunity afforded here is to enable Canadian researchers to help not only lead the world in navigating the immediate public health crisis, but also in adaptation of the economy. And speaking of local adaptation, below is a particularly Canadian adaptation to the 2 meter physical distancing rule - stay three geese apart!

COVID-19 sign from Toronto's Beaches that says Do Your Part. Stay Apart. The length of 3 geese.

Research and the Transit of IP

The Ontario Expert Panel on Intellectual Property has recently convened discussion sessions intended to unpack and answer the questions of their mandate. 

Ontario, like many other jurisdictions around the world, is wanting to achieve more outcomes from the investments made in basic research. This is reasonable. Research and innovation policy discussions over the past couple of decades (at least) are concerned with how best to leverage the country’s research capacity into positive social, economic and cultural outcomes.

There are of course several issues with any model that seeks to enable more direct return on investment in basic research, chief among these is that there is seldom a straight and single path to commercialize an invention. And, the aims of science (and here I mean the entire research enterprise across all disciplines) is to create knowledge and freely share this. This is at odds with creating value in the economy.

Still, Canada – and Ontario – would do well to leverage the platform we have: world leading basic science facilities, excellent applied research and experimental development capacity, particularly in the Technology Access Centres, various innovation intermediaries and economic development agencies, and a multicultural population which is suitable for launching products and services into any country.

Key here is ensuring we can create a structured receptor capacity to support the transit of IP from idea to invoice. The logic model for Capacity and Contribution among research performers, which I have previously discussed, is one way to look at how we can better knit together the various system actors and enable them to play to their strengths.

I look forward to seeing what the IP Expert Panel puts together in December.

Research-Innovation Capacity and Contribution Logic Model

Budget 2019 and Full Spectrum Innovation

Federal Budget 2019 has been touted as a “skills budget” for its focus on supporting education across the primary, secondary and tertiary levels, and right through to entrepreneurship and supporting firms with a slight revamp of research tax credits. The implicit focus on education is noteworthy, as education is an important input to the research and innovation continuum. But some inconsistencies are evident in the ways in which various programs support activities related to education, research & development, and innovation & entrepreneurship. Addressing these will be relatively easy and will help Canadians companies better compete in the global innovation economy.

Several components of the Budget support its focus on skills, notably the new Canada Training Benefit, the International Education Strategy, the commitment to work integrated learning, and new funding through the Tri-Agency for graduate scholarships. Significant investments in Indigenous education and entrepreneurship will provide meaningful opportunities for indigenous people to attain higher education and create jobs via entrepreneurship. These are all very good to see.

Worth pointing out is that enriching the undergraduate experience through work integrated learning will be an important conduit for further downstream research: undergraduates become graduate students or enter industry where they can participate more directly in research activities. Research activities are of course one of the many ways in which work integrated learning offers all students opportunities to learn and work within specific contexts. Research activities, as part of work integrated learning, socialize participants to the practice of R&D and, ideally, its relationship to innovation and entrepreneurship.

The Scientific Research and Experimental Development (SR&ED) Program gets a modest tweaking in Budget 2019, notably eliminating barriers to scale-up firms in accessing the tax credit. These changes to SR&ED are welcome, but do not go far enough. In fact, they highlight a disjuncture in Canada’s approach to education and research and their relationship to innovation.

Over in the Canada’s Student Work Placement Program part of the Budget, it appears we are finally embracing what I call a full spectrum innovation: leveraging disciplines from the Sciences, Technology, Engineering, Arts, Math and Design (STEAM+D): “Budget 2019 proposes to expand the Student Work Placement Program to give students in fields outside of STEM—such as the arts, humanities and social sciences—access to work-integrated learning opportunities.” This is positive.

The disjuncture here is when we turn back to SR&ED, we see that “research in the social sciences or the humanities” are specifically excluded from SR&ED eligibility (as is “market research or sales promotion” – more on this below)[1].

The SR&ED adopts its definition from the OECD’s Frascati Manual in outlining the types of research it considers eligible for funding under the tax credit regime. A full comparison of the SR&ED and Frascati definitions of basic research, applied research and experimental development is beyond the scope of this brief review. Suffice to say any astute reader of science policy can see how strikingly similar these definitions are, even though the official history of the SR&ED definition does not once mention Frascati or the OECD.[2] No matter.

What is of consequence is that, unlike the Frascati Manual, the Canadian definition of research in the SR&ED regime omits the humanities and social sciences disciplines. This includes the disciplines of design.

Why is this important to science policy?

According to the Design Value Index published by the Design Management Institute, design-focused companies in 2015 outperformed the S&P 500 by 211%.[3] Design, and more broadly those disciplines in humanities and social sciences, are included in how Canada measures its strength in science and technology.[4] More to the point, lean startup methodology tells us we should embrace the full span of disciplines in order to enact a full spectrum innovation. The design-focused agile development approaches to product and service design and development, including talking to customers, are proven to better shape product-market fit and downstream business success. What we know about successfully supporting and scaling startups means conducting market research and sales promotion, yet these are excluded from SR&ED. And let’s not forget that product development is only one type of innovation. Services are a key feature of the Canadian economy.

The good news is that Canada is updating its definitions of what constitutes research, through the Canadian Research and Development Classification 2019.[5] Taking its cue from the Australian and New Zealand research classification systems (something OCAD University proposed to the Fundamental Science Review), the new CRDC will include the disciplines of design among other disciplines that have emerged in the past 40 years. This new definition will apply to the Tri-Agency; SR&ED would be wise to follow suit and update its own definition.

Budget 2019 expands Canada’s Student Work Placement Program to include humanities and social sciences. This represents a key step forward in ensuring we can create new products and services emerging from our excellent basic and applied research capacity. Modernizing our approach to SR&ED, and thus expanding our definition of what constitutes legitimate activities for creating better products and services for the global economy, will align public education and research activities with private sector research activities, itself a locus of public education via work integrated learning. Enabling Canadian companies to embrace multidisciplinary business methodologies from startup to scale-up will help Canada compete and prosper in the global economy.












[1] https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/claiming-tax-incentives.html


[2] https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/a-brief-history-definition.html


[3] https://www.dmi.org/general/custom.asp?page=DesignValue


[4] See, for example, the Council of Canadian Academies 208 report Competing in a Global Innovation Economy: The Current State of R&D in Canada. Expert Panel on the State of Science and Technology and Industrial Research and Development in Canada. https://www.scienceadvice.ca/reports/competing-in-a-global-innovation-economy/


[5] http://www.sshrc-crsh.gc.ca/funding-financement/nfrf-fnfr/crdc-ccrd-eng.aspx

The Logic of Inclusive Innovation: From Inputs to Outcomes

The Canadian Science Policy Conference (CSPC) 2018 edition was held in Ottawa recently and featured an excellent array of speakers focused on Building Bridges Between Science, Policy and Society. I had the good fortune to attend and also to convene a panel of experts on the topic of inclusive innovation:

• Dori Tunstall, Dean of Design, OCAD University, on BIPOC entrepreneurship (and Black Panther!)
• Malavika Kumaran, Senior Associate, Research, MaRS Data Catalyst, on women in tech
• Ken Doyle, Executive Director of TechAccess Canada on later-stage R&D and diversity of activity
• Dominique Bérubé, Vice-President, Research Programs, SSHRC will address the role of humanities and social sciences in addressing grand challenges and multidisciplinary research.

In order to achieve inclusive innovation, we need to ensure that the inputs, activities and outputs are inclusive. When we do so, we leverage the full spectrum of capacity from across society, and help to build more resilient social, cultural and economic outcomes.

Here is the summary of our panel:

What is inclusive innovation? How do we achieve it?

These are important questions to ask as we continue to pivot into a knowledge based global economy. Inclusive innovation is a worthy outcome to strive for. But in order to achieve it, we need to ensure that the inputs are inclusive. We can usefully plot this into a logic model, which provides a way for understanding the relationships between the various inputs, activities and outputs that will help us achieve the outcome(s) commensurate with the focus on inclusive innovation.

When we look at innovation through this lens and work back from the goal of inclusive innovation we can see that there are gaps in the material conditions that would support the outcome of inclusive innovation. Innovation inputs usefully include the pipeline of science and technology and research and development (S&T and R&D), funding, people, culture, activities: those conditions and material supports that are put into play against any innovation effort. For the purposes of our logic model we can usefully who is involved in innovation, what do they do, and what happens as a result.

·      Actors: ensuring that decolonization, diversity and equity lens is applied to all people engaging in innovation related activities – we want to ensure that the inputs to innovation are inclusive. 

·      Activities: what activities are prioritized? We need to focus on diverse activities across the span of research and development (R&D), the disciplines needed to stand up multidisciplinary effort, and the complementary skills and competencies needed to realize outputs and outcomes.

·      Outputs: what is produced that will reflect diverse inputs? What happens if we only count what is easy to count? The OECD’s innovation categories are useful here.

·      Outcomes: an inclusive society with a growth-focused economy in a global environment.

Understanding each of these in turn will help us rethink how we approach innovation, what activities we prioritize and why, and what outputs and outcomes we can expect to see.

Innovation Actors

By ensuring that we support decolonization, diversity and equity we can help to create the conditions for inclusive innovation. This means ensuring that we have gender diversity and parity, and equal representation from diverse cultural groups, in order to ensure that we have equal representation on the inputs and ideas that promote and formulate innovation. The historical conditions that have created baked-in biases have resulted in a politics of exclusion that we are only recently starting to unpack. Calling for inclusive innovation compels us to engage in decolonizing our approach to social inclusion. We can ensure that everyone can access education and therefore be a full, equal and meaningful participant in innovation activities.

Innovation Activities

Innovation activities also benefit from a variety of skills and competencies. These are most often utilized and deployed in concert with complementary skills, disciplines, points of view. To achieve inclusive innovation we must see the actors not only through a diversity and equity lens, but also diversity in the skills, competencies, disciplines, and credentials required at each step in the innovation process.

The activities of innovation also assume a balanced approach across the spectrum of research – from Basic Research, through Applied Research and Experimental Development.^[1] Complementarity across the spectrum of S&T and R&D requires innovation systems to leverage multiple points of contact in order to achieve innovation outcomes, including those disciplines and activities in the experimental development end of the spectrum.

Innovation Outputs

The full spectrum of innovation defined by the OECD includes product, process, organizational and marketing innovation. Each of these represents a key set of social, cultural and economic indicators, with assumed activities and outputs:

1. Product innovation: A good or service that is new or significantly improved. This includes significant improvements in technical specifications, components and materials, software in the product, user friendliness or other functional characteristics.
2. Process innovation: A new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software.
3. Marketing innovation: A new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing.
4. Organisational innovation: A new organisational method in business practices, workplace organisation or external relations. [2]

The types of activities are contingent on the innovation category. In a recent op-ed Beckton, Irvine and McDonald state that “mainstream networks, incubators and accelerators often don't cater to female entrepreneurs and the industries in which they operate”, which compounds another issue they identify related to innovation outputs: “a marketplace where key participants still tend to define innovation in terms of technology and goods. The result is a situation where innovations that flow from other parts of the marketplace – innovations often created by women running service companies – are not seen in a similar, positive light.”[3] This is an important point.

Innovation Outcomes

Inclusive innovation means focusing not just on simple to count measures such as patents and publications, but on the full spectrum of innovation outputs.

·      We need to ask: whose perspective has been left out of innovation?

·      What activities and disciplines are needed to facilitate innovation?

·      What outputs result from these inputs?

When we look at innovation through this lens and work back from the goal of inclusive innovation we can see that there are gaps in the material conditions that would support the outcome of inclusive innovation.

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[1] OECD Frascati Manual 2.1.64. See http://www.oecd.org/sti/inno/Frascati-Manual.htm. The OECD uses the terms Science and Technology (how national governments understand the public production of knowledge) and Industrial Research and Development (how national governments understand private sector R&D and innovation related activities.

[2] https://www.oecd.org/site/innovationstrategy/defininginnovation.htm

[3] https://www.theglobeandmail.com/report-on-business/rob-commentary/women-entrepreneurs-are-innovating-in-their-businesses-its-time-to-help-them-succeed/article38054681/