What Canada Can Learn From Israel About Innovation

I've written before about our concern that Canada is experiencing an innovation void.

In my opinion, Canadian companies are very reliant on the Natural Resource Sector - the drill it, mine it, chop it mentality. This could be holding them back from innovating. To fully embrace a culture of innovation Canadian companies need to learn from their counterparts to the South and take more chances.

Recently we posted an interview with Mark Krupnik who earned a PhD in applied mathematics from Technion - Israel Institute of Technology. Now, I ran across an article in the Globe and Mail that looks deeper into what makes Israelis so innovation focused and what is holding Canada back.

Interestingly, it's not lack of innovation that seems to keep Canada consistently behind those countries with reputations for not only developing, but also commercializing innovation.

Our national output of discoveries is impressive. University of Toronto professors, as just one example, are third in publication totals world-wide, exceeded only by Harvard and Tokyo. But the commercialization record of Canadian universities is modest. Our best performers generate far less revenue than their U.S. or Israeli counterparts. And, when it comes to turning discoveries into popular products and services, our outputs are underexploited.

Israel by comparison has strong connections between researchers and business and government support and direction - all focused toward the future. Israel, unlike Canada, is a country virtually devoid of natural resources and so, perhaps has a greater incentive to develop an array of innovative industries to support its economic growth.

On the other hand, in less than a generation they have been able to go from exporting primarily agricultural goods to exporting primarily technology. Can Canada, or should Canada take the same route, de-emphasizing our export of natural gas, timber and oil and focusing solely on technological innovation? Probably not, but a future focused innovation strategy has its benefits.

In Israel, as in most countries leading the innovation parade, there are close connections between those involved in pure research and business leaders that can take these products to market. Funding for new research is backed by and encouraged the government and generous grants, both public and private are available for good ideas with good foreseeable, as well as unforeseeable commercial application.

In Canada by contrast, while innovation is heralded as a way in which to fuel our economic engine, the focus, too often has been on incremental changes to our major existing industries. One might consider that giving lip service to true innovation.

To truly take its place in the roster of countries leading innovation in the 21st century, Canada needs to refocus and rethink about the connections between industry and government. It needs far seeing entrepreneurs, as well as, leaders in established industries to advocate a change of course as T. Boone Pickins has in the U.S., rattling an industry entrenched with and supported by the current presidential administration.

Until Canadian companies re-evaluate the roles they play in innovation and our path toward the future, unfortunately Canada will lag behind.

The Canadian Innovation Void - Is It Holding back The Economy?

A Nova Scotia Chronicle-Herald article starts off with a thought that is of concern to many of we Canadians in marketing.

THE BIG QUESTION in Canada is, why are businesses performing so poorly as innovators when compared to their American and many other foreign competitors?

They are? Well yes.

In the early 1990s, output per hour of working in the Canadian business sector was close to 85 per cent of the U.S. level.

It is now down to about 75 per cent of the U.S. level, reflecting differences in innovation, which comes from bringing on new products or services or finding better ways to do things.

The article goes on to say that much of the difference in innovation comes down to management. Canadian companies are less enterprising than their counterparts in the U.S. and in many companies in Europe. While the government is often blamed, it is rather that Canadian companies are more focused on cost cutting to improve profitability than on inventing new products and services to grow their businesses.

While cost cutting, American style tends toward restructuring resulting in a leaner, more agile and risk taking environment, in Canada, lean manufacturing is not on the radar for over 1/3^rd of all companies (as compared to only 18% of companies in the U.S. and Europe.)

So why is this? In my opinion, Canadian companies are very reliant on the Natural Resource Sector - the drill it, mine it, chop it mentality. This could be holding them back from innovating. To fully embrace a culture of innovation Canadian companies need to learn from their counterparts to the South and take more chances.

We need to take greater risks in manufacturing, in exporting, in business development. We need to restructure organizations and cut out the fat. While the United States model of wholesale elimination of levels of management may be too drastic for Canadians to consider, European models, particularly those in Germany and Scandinavia may have ideas that can be implemented effectively.

As we struggle with the concepts of lean manufacturing, risk taking and innovation, we fall behind countries who have adapted these concepts to their own particular culture and political environment. As we fall behind we become not only less competitive but also risk continuing to grow our economy.

Finding the right answer is vital to our future because without more innovation, and the higher productivity it brings, we will have a tough time sustaining a prosperous economy and a high quality of life.

Amen.