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Author's profile photo Adam Winfield

Why Canada’s innovators face long fight against suppression of excellence

In a recent interview with Joe Rogan, outspoken University of Toronto professor Jordan Peterson compared Canada to the American Midwest. “We don’t have this extreme culture [like the US] with the great highs and the great lows. We’re like elevator music compared to a full symphony.”

When Rogan asked Dr. Peterson if excellence is suppressed in Canada, his response was that excellence is suppressed everywhere, but more so in Canada than the US. “Canada is a middle class, middle-of-the-road society, which has its benefits. It’s nice and welcoming and not too experimental; calm and secure, but I don’t think it’s a place that’s great at dealing with excellence.”

Dr. Peterson’s view is not unique among Canadian academics and business leaders. In a 2016 paper, former businessman and government advisor Peter Nicholson looked back on 100 years of Canadian history to explain why the country struggles to promote innovative thinking and excellence.

He said Canadian governments have repeatedly failed to promote technological innovation since the 1920s. Rather than blame sheer incompetence, he believes the underlying reason for this long-term inertia is that it’s been too easy and too lucrative for Canada to let the US bear most of the risk in pushing science and technology forward.

During the 20th century Canada found itself in the cushy position of being relatively safe from international hostility, having abundant valuable resources and trading partners willing to pay for them (mainly the US), and offering a quality of life envied by much of the world. Given this blissful, almost utopian scenario, it’s easy to understand why motivation for change wilted.

Canada awakening from its utopian dream

Nicholson believes Canada needs to awaken from this peaceful slumber and realize the old model of prosperity is no longer sustainable because of shifts in the global economy. The combination of burgeoning Asian economies, new technologies, and pressure from climate change activists threatens “a severe disruption of Canada’s comfortable low-innovation equilibrium,” he warns.

He has a point. A meagre 38% of Canadian businesses are implementing digital technology, according to a recent IDC report. And Canada has dropped to 15th in the Global Innovation Index following a multi-year decline out of the top 10. The 2016 Index noted the country’s sluggishness in research and development, information and communication technology and energy efficiency.

Its great neighbour, the US, sits 4th, trailing only Switzerland, Sweden and the UK. America is famous for its innovation, but it could be argued the country enjoyed similar comforts to Canada throughout the 20th century: relative safety on home soil (barring what was at one time a reasonable threat of nuclear devastation), copious natural resources and a standard of living that, for the average American, was among the highest in the world.

If that was the case, why didn’t the US lose its mojo for scientific and technological advancement like Canada did? It’s a difficult question with no straightforward answer.

Comparing the country’s dominant political ideologies as a starter, the US has historically veered towards individualism, the idea that citizens can pull themselves up by their bootstraps, and suspicion of government, while Canada has been more about trust in government and the benefits of community.

The foundations of these differing principles go back to each country’s settlement stories. America was founded by people seeking liberation from government control, explaining the distrust of government and focus on the individual. Canada’s emphasis on community stems from the coming-together of fragmented European settlements in a combined effort to overpower the aboriginal population.

These founding values stuck, with the US staying loyal to the idea of “life, liberty and the pursuit of happiness” and Canada adopting the Commonwealth notion of “peace, order and good government”. No prizes for guessing which of these mantras better encourages innovation.

Canada’s past explains low innovation – but isn’t the full story

This explanation is, of course, a gross oversimplification of how the two countries became what they are today. It doesn’t take into account the significance of the US having ten times more citizens than Canada (330 million to 35 million), which provides major advantages in scope and scale. Nor does it factor in the United States’ military-industrial complex, which, cost-inefficient as it is, became a big innovation driver during the 20th century.

Nevertheless, it’s hard to deny the ghosts of Canada’s socialist roots haunted the country throughout the 20th century, leading it to be risk averse and slower in innovation than it could have been. While the US tore ahead with breathtaking technological pursuits, Canada was happy to let its vast natural resources (oil, mining minerals and farming) do its bidding.

With the signing of the North American Free Trade Agreement in 1994, Canada’s risk aversion set in even deeper, the country content to live off unrestricted trade of its resources. At the same time, more Canadians itching to innovate took advantage of new migrant worker laws to move south of the border to a more welcoming technological climate.

The feeling that Canada is drifting further behind the world’s most innovative countries has been growing ever since. There are regular reports of ‘brain drains’ – Silicon Valley’s tech companies routinely poaching Canada’s talented technologists – and barely a day goes by without a national newspaper column lamenting the country’s stagnation but failing to offer a substantive solution.

One of the more memorable critiques of recent times came from the former co-CEO of Canadian tech company Research In Motion (RIM), Jim Balsillie, who panned Canada’s economic policies and approach to innovation in a well-received piece for The Globe and Mail newspaper in March.

Maligning what he called “19th– and 20th-century policy strategies”, he echoed Peter Nicholson by saying they have “nothing to do with how wealth is generated in the 21st-century global economy.” He called the government’s discourse around innovation policy the “most superficial” he has seen in the 140 countries he’s done business in, blaming it for the “steady erosion of [Canada’s] national prosperity.”

Canada’s need for a new kind of infrastructure

The 19th– and 20th-century policies Jim was referring to include “immigration, traditional infrastructure such as roads and bridges, tax policy, stable banking regulation and traditional trade agreements” – all things he believes “have little impact on 21st-century productivity”. Today, he says, commercialization of intellectual property (IP) is the primary driver of wealth, but despite a 30-year advance warning the Canadian government hasn’t built an infrastructure to support this.

And it shows. “Canada has achieved zero growth in … innovation outputs despite hundreds of billions of taxpayers’ dollars spent on inputs. Compare that with the United States, which relentlessly built 21st-century policy infrastructure and saw its innovation productivity grow at 1 per cent per annum over the past three decades.”

Jim’s words won’t ease the fears of those already concerned with the Liberal government’s four-year $800 million ‘innovation’ budget, which is being doled out with a worrying degree of ambiguity to a handful of research clusters.

However, if what Jim says about Canada failing to lay the foundations for a 21st century economy is true, it would be unfair to hold the current government fully accountable for its vague innovation policy. The reality is that Canada, its government and its innovators are fighting against a deep-seated culture of inertia with roots in centuries-old socialism that deepened during 20th century prosperity.

This means proud Canadian innovators need to fight especially hard to make the country successful in the 21st century economy. Through the will of the Canadian people, the IP infrastructure Jim Balsillie says the country needs will eventually find its way to existence. He hasn’t given up on Canada, despite seeing RIM burn to the ground, nor have the country’s energetic band of inventors, incubators and investors. They know that while Canadian excellence may be suppressed, it’s still possible to excel.

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