There is little doubt Canada is capable of research excellence and that our top 10 universities are well regarded internationally. However, this post will bring into question the broad assertion of “Paradox Lost” and propose that the Canadian public sector shares some of the responsibility for our poor innovation performance.

Canada spent $11,400,000,000 on Higher Education Research & Development (HERD) or a total of 0.7% of our overall GDP. This data is available from a vast number of publications, including CD Howe’s “From Curiousity to Wealth Creation”, and HERD spending is often used as our key success metric. Granted, Canada does an excellent job of tracking spending and input metrics when it comes to HERD. However, what needs to improve are the metrics and productivity related to HERD spending.

Diagram 1 is based on the Association of University Technology Managers (AUTM) 2012 data and contains highlights comparing the top 10 US and Canadian universities. The first observation of note is the complete absence of spending data in the US highlights. The US data is entirely output based and measures the results of their spending. The Canadian metrics by contrast emphasize spending over all else. If Canada is to become more innovative our metrics have to shift toward output measurements so that we as nation work to continuously improve productivity. How much money is being spent is not a valid measurement of success.

To create a more compelling argument as to why measuring input metrics when attempting to determine overall success makes no sense, I will provide the following analogy:

I propose to the Ottawa Senators that they should offer me $15,000,000 for the remainder of the 2014 season to help them make the playoffs. By the logic being used to validate HERD spending in Canada I, as the highest paid player in the NHL, should now be the best player by virtue of my salary. Unfortunately at the end of the season what truly matters are my output metrics (goal scoring, assists and total points) and wins for the team. If the Senators pin their hopes on my $15,000,000 salary to make the playoffs with no output expectations whatsoever they will be deeply disappointed.

We need to change the way we think about innovation in Canada and focus on outcome based metrics to achieve success. As an old boss of mine used to say, “What gets measured gets done.” We currently measure our spending and are continuously getting better at it to the detriment of innovation in Canada. This isn’t the entire story but it definitely contributes to Canada scoring a “D” in innovation, according to the Conference Board of Canada.

Fostering and facilitating a more entrepreneurial innovation ecosystem in Canada is everyone’s responsibility and that means “facing the brutal facts.” The key issue with “Paradox Lost” and the eight other reports that came before it is that Canada’s weak performance is a shared responsibility. The onus does not lie completely at the feet of business. There is a wealth of extremely talented researchers in Canada and to stimulate innovation we absolutely must focus their energy into achieving more promising output metrics; not to have them striving to simply increase funding every year.

In summary, if we are to succeed in creating a more innovative society academia must:

1)      Realize that spending is not a measure of success.

2)      Implement and use meaningful metrics to measure the success of HERD spending.

The next post in the series will be myth #4, “Canada business innovation is weak by international standards, and this is the primary cause of Canada’s poor productivity growth.”

Ian Graham & Gareth Graham