Implementing Canada

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Implementing Canadas Innovation
StrategyEngaging Stakeholders in Policy
Learning Process

• A. Duff Mitchell
• Manufacturing Competitiveness Directorate
• Industry Canada
• Six Countries Programme, Stockholm, Sweden
• May 23, 2006

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Canada Who we are public policy challenges
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Canada is a prosperous successful country

• large, resource rich country
• relatively small, high income, bilingual
  multicultural population
• federal political system situated next to
  U.S.
• Canada ranks high as place to live do business
• United Nations Human Development Index 5th
  among 177 countries in 2005
• World Economic Forums international
  competitiveness ranking 13th in 2005
• OECDs measure of living standards real GDP per
  capita was 2nd highest in G7, 9th in the OECD in
  2004

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Focused on three policy challenges innovation

• Increasing productivity growth on sustained basis
  (objective closing productivity gap vis-à-vis
  U.S.)
• Improving human capital through education
  training (objective one of best educated
  society/economy in world)
• Enhancing global economic reach (objective more
  global FDI, deeper trade links in key markets,
  creating stronger Canada brand)

Canadas Innovation Goal To be recognized as one
of the most innovative countries in the world
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Through policy learning success factors
identified

• Maintaining comparative advantage in competitive
  rapidly changing global marketplace requires
• quality of policies institutions ( quality of
  human resources national endowments)
• flexibility, adaptability speed in policy
  formation delivery
• continued alignment of government policies
  business strategies

Source Canadas Success is No Accident, Kevin
Lynch, Policy Options, April-May 2006
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Why an Innovation Strategy?
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Canadian economy performance is mixed
GDP per Person (US) for the G7 Countries

• 2nd in G7 re GDP
• 2nd re GDP growth from 1991 to 2003
• But productivity growth has lagged U.S.
  created income gap

Source OECD Economic Outlook
Real GDP, 2000 constant PPP
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and productivity challenges are mounting
Private sector RD investment performance low
ME investment as of GDP lowest in G7
Productivity growth also lags main trading
competitors
Source Canadas Success is No Accident, Kevin
Lynch, Policy Options, April-May 2006
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Canadian industries also facing increasing
pressures

• Higher Energy Prices
• price of oil natural gas rose by 200 455,
  respectively from 2001 to 2005
• Appreciated Canadian Dollar
• Canadian increased by more than 30 against US
  since 2003

• Emerging Countries
• China is now Canadas 3rd largest trading partner
  (total trade increased 555 between
  1992 2004)
• Increased competitiveness for value-added
  products

Canadas Merchandise Trade With China (Cdn
billion)
Source Trade Data Online.
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Our traditional competitors rank higher than
Canada in many areas
Benchmarks/Performance Canadas Rank (Out of 11)
Investment in Research and Development (RD)
Gross Domestic Expenditure on RD (GERD) 7th
Business Enterprise Expenditure on RD (BERD) 8th
Publication of Scientific Papers 5th
Commercialization
University/Industry Collaboration in RD 2nd
Technology Balance of Payments 5th
Skills, Education and Training
University and College Graduates 1st
Adult Participation in Continuing Education 6th
Regulations and Reform
Economy-Wide Regulatory Environment 6th
Public and Business Confidence / International Recognition
World Competitiveness Rankings 4th
FDI Confidence Index 7th

• Canada needs to rank near top to compete
  successfully
• But Canadas innovation performance ranks near
  bottom in G7 e.g., RD, continuing education,
  regulatory environment FDI

These 11 countries are Australia, Canada,
Finland, France, Germany, Italy, Japan, Spain,
Sweden, United Kingdom, and United
States Source Conference Board, Exploring
Canadas Innovation Character, June 2004
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Canada recognizes innovation challenge

• Key innovation challenge areas
• knowledge performance challenge (RD) promote
  creation, adoption, commercialization of
  knowledge (productivity growth)
• skills challenge ensure an adequate supply of
  people who create use knowledge (human capital)
• innovation environment challenge ensure that
  Canadas stewardship regimes marketplace
  framework policies are world-class (global
  economic reach)

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The Federal Government Innovation Strategy
Initiative
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National Innovation Strategy involved
multi-pronged engagement process

• National Engagement Process launched 2002
• February released Innovation Strategy Papers
  set directions for 2010
• May October asked Canadians for views on
  targets, priority actions, recommendations
• November National Innovation Summit
• Two overarching objectives
• mobilize Canadians to make commitments and turn
  them into action so that Canada becomes one of
  most innovative countries in world
• examine Governments Strategy to accomplish this
  goal then tell us if weve got it right

http//www.innovationstrategy.gc.ca
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Engagement process resulted in extensive outreach
Source Public Policy Forum, Engaging Leaders
Lessons from the Innovation and Learning Strategy
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Innovation initiative heard from all Canadians

• Innovation Secretariat established
• 10,000 Canadians participated in
• 33 regional events
• 80 sectoral group meetings
• 40 expert, best-practice, and interest group
  roundtables
• multiple streams, e.g. sectors, regions, youth,
  provinces
• 600 online responses from individuals SMEs
• 250 formal submissions received from
  organizations representing hundreds of thousands
  of Canadians (posted on line)
• key federal government departments involved
• Knowledge Matters Skills Learning for
  Canadians
• Achieving Excellence Investing in People,
  Knowledge Opportunities

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and Canadians had a lot to say

• Confirmed major directions set out in Innovation
  Strategy papers
• Suggested modifications to certain targets
  milestones
• Move faster in key areas (e.g. regulatory reform)
• Modify performance measures in key cases (e.g.
  RD intensity)
• Provide more clarity (e.g. cluster strategy)
• Pointed out deficiencies (e.g. insufficient focus
  on commercialization efforts skilled trades)
• Recognized that many stakeholders must
  collaborate
• Government cannot act alone innovation is
  everybodys business role for all key
  stakeholders
• Demonstrated sense of readiness to move forward
  Canadians mobilized ready to commit wanted
  fast action

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Canadian views captured for policy analysis

• Views summarized in Canadians Speak on Innovation
  and Learning
• Analysis of key issues recommendations by
  stream
• 2000 recommendations 5 key horizontal issues
  with 93 recommendations for prioritization at
  National Summit (National Summit Discussion
  Guide)
• http//www.innovation.gc.ca/gol/innovation/

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Agreement reached on 18 priorities across 5 themes
1. Improve RD Commercialization research capacity commercialization outcomes access to capital 2. Enhance innovation environment support innovation in tax system speed regulatory reform modernize IP system
3. Strengthen Learning Outcomes access learning opportunities innovation in learning system careers in skilled trades lifelong learning 4. Build an Inclusive Skilled Workforce increase labour force capacity integrate immigrants in workforce invest in workplace training 5. Strengthen Communities
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and Government commitments announced

• accelerate timetable for regulatory reform
• review of foreign ownership restrictions in
  telecom sector
• benchmark Canadas innovation performance
• reconvene in 2 years to assess progress
  determine next steps
• Results published in Summit Summary Report

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Government followed up with timely actions

• Budgets 2003, 2004 2005 delivered on most
  priority recommendations
• Increased funding for research (e.g., CFI,
  Granting Councils)
• Expanded support for successful programs (e.g,
  IRAP)
• Improved business environment (e.g., tax
  measures, risk capital)
• Improved financial assistance for students,
  foreign credential recognition
• Increased funding for RDAs, CFDCs, Atlantic tech
  clusters, social economy
• External Advisory Committee on Smart Regulation
  provided recommendations in September 2004
  Report on Actions Plans tabled March 2005
• CBOC benchmarking report released in September
  2004
• Auditor General audit of Innovation Strategy
  (November 2005)

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Policy learning from engaging stakeholders in
Innovation Strategy
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Post-Summit review of engagement strategy mixed

• Engagement process achieved core objectives
• consensus obtained on innovation challenge need
  for action
• government delivered on most commitments
  responded to priority recommendations (e.g.,
  Budgets 2003, 2004, 2005)
• themes identified at Summit continue to resonate
  in public policy discussions program funding
  decisions
• But not all expectations realized
• and many private sector stakeholders did not
  develop action plans

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External assessment critical of process
Public Policy Forum (PPF) observations based on
interviews of only 23 Summit leaders National
Summit was not successful in achieving its goals
of creating a national action plan or in securing
commitment from all sectors to participate in its
implementation because of flaws in the process,
agenda, participants, timing and
outcomes. Source Public Policy Forum, Engaging
Leaders Lessons from the Innovation and Learning
Strategy (pg., 11)
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PPF focused on perception of coordination
issues

• National Summit Process
• pre-set course of action
• dominated by universities who monopolized debate
• complicated by having two-leading departments
  (Industry Canada HRSDC)
• politicized by politics of the day
• National Summit Agenda
• too large to be meaningful (500 leaders over 2
  days)
• mix of priorities ideas ( too many ideas)
• some themes poorly defined (e.g., Strengthening
  Communities)
• Insufficient time for full discussion of issues
• not national enough in scope (especially re
  private sector)
• Post-Summit
• little awareness of follow-up actions
• taking stock Summit not held two years later
• outcomes too high-level too government-centric
• focus more on National Summit event than
  continued stakeholder engagement

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Overall conclusions from innovation strategy

1. importance of innovation was never in question
2. government actions must correspond to advice
   received during engagement process
3. communities sectors were ready to move, but
   were waiting for government to act as well
4. resources needed for follow-up work
5. approach must be integrated
6. partnerships must be established with enterprises
   communities
7. a Summit can gave credibility to Innovation
   Strategy, but just beginning of implementation
   process

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and lessons learned for future engagement

• federal co-leads on horizontal files can result
  in increased workload for stakeholders, imposes
  coordination challenges for departments can
  lead to an accountability vacuum
• focus on a short list of national issues to
  produce viable plan. Develop jointly with private
  sector to ensure they share responsibility to
  implement
• engage for implementation of action plans as well
  as development, using networks developed during
  consultation
• better communication of follow-up actions required

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Building on stakeholder engagement process
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Industry launches national consultation on future

• Canadian Manufacturers Exporters (CME)
  Manufacturing 20/20
• challenges changes affecting manufacturing
• future of manufacturing in Canada?
• 98 meetings held in 2004/05, involving 3,500
  manufacturers stakeholders
• input from 15 industry associations
• survey of 942 manufacturers in 2005
• National Manufacturing Summit (February 2005)
• Reports innovation, workforce capabilities
  international business
• www.cme-mec.ca

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Commercialization Expert Panel addresses key
issue

• People and Excellence The Heart of Successful
  Commercialization (April 2006)
• 11 recommendations
• focus on development of business-led
  Commercialization Partnership Board (CPB)
• would create new role for private sector as full
  partner in charting course for, developing
  policy related to, commercialization
• www.strategis.ic.gc.ca/commercialization

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Government to advance innovation in Budget 2006
Over the coming year, the Minister of Industry
will be developing a science and technology
strategy, in collaboration with the Minister of
Finance, that will encompass the broad range of
government support for research, including
knowledge infrastructure. The Government will
also undertake a review of the accountability and
value for money of the granting councils
activities.
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