RECOMMENDED READING In the latest federal budget, the Minister of Finance [Chrystia Freeland] noted that we have a problem with innovation and pro- ductivity in the business sector, and that our policy should focus on private-market failure. For that reason, the government will establish an innovation agency mod- elled on countries such as Finland, Taiwan and Israel. It will provide direct funding to companies, and implement policies that will target all industry sectors in Canada and across all stages of production. What advice can you give Canada’s communities to achieve innovation- based growth? First, figure out what you want to look like in 15 or 20 years. What kind of companies do you want, and where do they sit in the global system of different stages of produc- tion? Once you know what industries you want, you can devise a strategy. It might be useful for cities such as Toronto, Van- couver and Montreal to imitate Israel and Silicon Valley, but most of Canada, which is resource rich, [has] different industries. Like Finland or Taiwan, a focus on different production stages might be a better model. It might be in forestry or critical minerals, where you can employ more people and have a long-term competitive edge. How necessary is government intervention for Canadian innovation? You can’t expect businesses, especially those with high profits, to suddenly say they will fix everything in the system. A public-private partnership is needed. Otta- wa is now willing to partner with business to figure out what should be the model for technology and innovation. R&D spending 1996 – except for the current one – also Canadian companies in all sectors – from by Canada’s business sector is the lowest had a wrong vision of how innovation high-end ICT [information and communi- among the G7 nations. And we are the only works. The current government now ad- cations technologies] to forestry. In doing country in the Organization for Economic mits that there was a problem of running so, we can innovate, median wages can go Co-operation and Development [OECD] on the wrong theory on how to stimulate up, and our children will have better lives where R&D expenditures have declined innovation in the business sector. If there than we have. DJ yearly since 2001. was one country that conflated invention with innovation, it’s Canada. SHIRLEY WON is a Toronto-based free- What’s behind Canadian business lance journalist and former business and neglecting R&D spending? You are a Clifford Clark Visiting investment reporter for The Globe and Mail. We have a system where business can Economist this year at the Department She also worked as a business reporter for make a lot of profit with a lot less risk and of Finance making policy suggestions. the Montreal Gazette, covering transporta- change. And federal governments since What can we expect? tion, real estate, retail and banking.