Based on a methodology with benchmark statistics from the Organisation for Economic Co-operation and Development (OECD) and other sources, the Conference Board of Canada (CBoC) gave Alberta a D grade in terms of Innovation and placed Canada 14th out of 15 countries in their recent innovation report card.
We discuss how Alberta and Canada traditionally do well in terms of creating startups, but we struggle as a province and a nation at turning these into globally successful products/services with sustainable growth. According to an article Harry wrote for the CBoC's website, "while we produce almost 4% of the world’s research output and rank relatively high on creation of start-ups, Canada has had a mixed record on sustaining successful innovative companies."
Join us for an enlightening conversation with Harry Sharma as we talk about the grading, what we can do to improve as a province and a nation, and the Capabilities-Centred Innovation Framework for Canada that he's put forward.
Harry Sharma, Director, Innovation and Technology
Harry Sharma joined the Conference Board of Canada in May 2019 and brings with him over 15 years of experience in innovation, science and technology related areas. Harry has worked in multitude of roles in small and large organizations and dealt with impact analysis, strategy development, program evaluations and development. As a leader, Harry has worked with government, private and non-for-profits sectors to initiate new funding programs in support of Canadian technology start-ups as well as to address skills development challenges internationally.Harry earned his Bachelor of Science in Computer Engineering with Honours from the Rochester Institute of Technology and Master of Engineering in Engineering management from the University of Ottawa.
Harry is leading the efforts to develop and implement the new Capabilities-Centred Innovation Framework for Canada. Alberta Innovates is one of the four partners in this endeavour and represents a West Canadian provincial perspective.
Shift by Alberta Innovates focuses on the people, businesses and organizations that are contributing to Alberta's strong tech ecosystem.
The Conference Board of Canada recently graded Alberta with a D. in its biannual report card in innovation, with gifts, thought we're doing a great job. Well, we are, but COVID is messing things up. Grab your coffee or your steering wheel. And join us as we talk to a guest from the Conference Board of Canada about the details, his projections for the future of innovation, and how we can improve in our grade. Welcome to shift. Welcome to shift. I am your co host Katie Dean, and i'm john Hagen. Today on shift we've got Harry Sharma, Director of innovation and technology with the Conference Board of Canada. Welcome, Harry. Thank you, john. Thank you, Katie. It's a pleasure to be with you today. It's our pleasure. I got a little bit of a question to ask you. I hear that Canada has ranks 14 out of 15 countries, and Alberta was given a D in innovation report card that you guys produced by annually. How did that come about? Well, john, so the Conference Board of Canada, especially the innovation and technology team, here at the Conference Board, we look at some key indicators across our peer countries, mostly the OECD countries. And we look at the kind of key ingredients that are really required in knowledge based modern economies. So we look at the type of research that gets done in universities. And then we look at the private sector, the capacity of the private sector to take the new IP, the new novel products that are being created, and then take them to the market, really sell them in the marketplace. So when you combine all of those things put together Canada, unfortunately, hasn't Not fared as well as we would like against the OECD peer countries. And it stems mostly from the fact that the private sector is subpar capacity and going to the market and selling the new innovations in the marketplace. Canada continues to lag on that front. But when it comes to producing new knowledge and new IP out of the university sector out of colleges, Canada does really well. So part of the explanation for the sort of the the the less impressive performance on the innovation report card for Canada and for Alberta, you know, falls in that category, kind of the latter stages of the innovation spectrum. Okay, so if I'm getting this right, we're really good at coming up with great ideas. We're just not very great at taking them to market best, right? And then so you know, Katie, just to reinforce that Canada, if you look at historically we've had a very strong partnership. With the American businesses and the American value chains that get created so the US counterparts traditionally and historically have actually taken the the cool innovations that we produce and they are the ones who've sold it into the world for us in public. That's right well not they've been partners right so we do our bit they do their bit and that's kind of now reflected in the in the innovation knowledge based economy as well where they still have the the the the Global Connections right to sell into the marketplace. So that's where Yeah, that's where we are but now now when you talk about that, that role the Americans play or you know, perhaps other countries are is it got to do with Canada Canadian brain drain, like are we selling coming up with these these innovations, and then selling them off selling me IP off and that's where Releasing out or how this works. JOHN, there are actually two schools of thoughts around that, you know? Yes, it is a fact that Canadian innovation that gets created using taxpayer dollars do go down to the, you know, to the south of the border. Yes, it is a fact that a lot of the economic benefits that we would have seen back here in Canada end up being realized in other parts of the world. The other school of thought is, you know, the opportunity to create new ideas and to do the novel research that we do. It creates a lot of highly qualified people in this country, which has its own benefits, right. So really, depending on which side of the sort of the fence you fall on, you know, you can see sending those innovations to other countries as selling off or you could really see us playing our role in the global sort of integration value chain, if you want to call it that. So there are definitely two perspectives and depending on you know where you are, you can see it the way that that fits your narrative. Yeah, no, I was fine. Oh, sorry, john. No, that's a good debt. Let's go ahead. Whose was number one? If we're number 14. It alternates. So usually, the Nordic countries do really well, on our on our scorecard, you know, countries like Sweden or countries like Norway and Finland. And then the US also does quite well, I mean, they're in the middle of the pack for us. But the the Nordic countries really tend to dominate the the the innovation report card rankings. So what are those Nordic countries doing that we're not? Well, so they've a, they're, you know, they're much smaller countries. So they have more, you know, more kind of a unified government. I mean, we are Federal Constitution we are we have provinces we have we have a national government so priorities of provinces and federal governments can be different at times in Nordic countries you know is because they're smaller the the bureaucracy the governance is a lot simpler they can focus a lot more on getting the the the value chains established or providing the kind of support that would be very hard to push in in a in a in a multi layered governance system that we have. So, the Nordic countries have that going for them. What I would also say is because of their historical connections to other parts of the of the world, they have been able to establish a fair number of very large companies right. So think of IKEA think of Nokia, think of think of soft brain all the all the big kind of large forums that you hear about from from Nautica. They help they help in a way because not only of the products that they sell themselves, but they also create a value chain, a supply chain for smaller companies to innovate and then to become part of those very large multinational supply chains, right? So everybody gets to create new things, but then they have an opportunity to sell that thing into a supply chain that has access to global markets. And that's where Canada I rightly so has been investing quite a bit. You may have heard about the five new super clusters that the federal government has funded, and those are all kind of moving the country in that direction. Okay. Well, that's, that's exciting to hear. I just I, you know, to go back to my original question about ranging, so to speak. I'm just thinking what, what do these Nordic countries when they build these companies like IKEA and Nokia, the examples you'd given? How do they resist selling those Assets off to a large multinational that may want to scoop them up to say, hey, you're producing these great, you know, these these great companies, let's we'll give you x billion dollars and off we go, Well, these these companies are quite formidable, right? When it comes to it, they are, they are global leaders, they are very innovative, they continue to have presence across the world. So when you think about, you know, the kind of global conglomerates that you're thinking about john, these companies, you know, the the Nordic, the Nordic based large forms are actually some of the largest companies in the world themselves. So yeah, so they play at the level that that unfortunately, not many Canadian companies have been able to, to play. I mean, and they and you know, part of the innovation that has kind of have been now embedded in their and their innovation culture is to keep innovating, right. And then that's been that's been the success of Are those Nordic? Those Nordic firms? Right? Just for clarification that what I meant though, was when these companies were just starting out. And I understand that IKEA Nokia are much older than, you know, 10 years or anything like that. But I don't want to belabor the point, I understand what you're saying. Yeah. It also gives the younger companies or platform, right, so you've heard out all of the new app companies are emerging out of the Nordic countries, they rely on these relationships with these larger firms to actually gain global market share, right? So once you have a few anchor companies in a country or in a region, it benefits everybody else are out around them. That's a huge key point, I think, because they're building a culture of innovation in those in those jurisdictions, absolutely. John's culture of innovation plus access to real markets where where we have avenues, right? So so a lot of people you know, tend to sort of separate out the two like you can build a room In a good culture of innovation, but internal innovation does not necessarily translate into external innovation, right? where you'd really need to know how to, for example, market your product to different parts of the world, different cultures, different buying habits, different consumer preferences, you have to almost innovate on those aspects as well. So as innovation here is not necessarily referring to the coolest gadget, but it's so it's referring to finding ways to refine everything that you do, from a product perspective to marketing perspective to selling perspective, right to full spectrum needs to have these these innovative practices built in. Right. So, Harry, we're talking a lot about this current global innovation framework or evaluation framework and you have come up with a new framework called the capability centered innovation framework with the performance of The Conference Board of Canada, can you walk us through what that looks like? For sure. So, just kind of connecting it to what I was saying the innovation that happens happens at every step of the innovation spectrum, right. So you have to, you have to, you have to have the right capabilities in your organization's to create new products or new ideas. And then you have to have innovation in terms of qualifying that new knowledge or new product in terms of patents and and knowing what to do with those patterns. And then once you have the patents, you have to know how to market those patents, because most likely it requires building a portfolio of patents that actually add value to the end consumer side. So you have to know how to add those IPS together. And then ultimately, you have to know how to sell to the market. So with the capability centered innovation framework, what we're doing is we're we're we're taking That entire innovation spectrum and then we're developing assessment criteria along the chain longer spectrum innovations. And we're finding ways to see if an organization has what it takes to be innovative scale up and bring revenues back into the region where they started. So as part of this framework, we have now, you know, formulated a very comprehensive way to assess companies, assess regions, and we'll be deploying that. So we will be leveraging this new integration framework to look for patterns in different regions of Canada do Western companies do they have certain strengths on the innovation spectrum, but then they lack you know, in certain aspects of what they really You do have to be successful. So we'll be able to provide this this information, this assessment back to the policymakers back to the investors, so they can really leverage this and start allocating resources where they can garner the best return on their investment on public investments. How do you collect this information? No, that's a really good question, Katie. So it's been a lot of work. We've collaborated with the OECD, the OECD has what they call an Oslo manual, which has, which has been in existence since the 1970s. And it actually looks at how to measure innovation. So into 2018. They came out with a new version of the Oslo manual where they introduced a couple of new ways of looking at innovation, which calls for internal capabilities or forums to be innovative. So we collaborate with the OECD. We took What they had found in their most recent research, we undertook a very extensive national conversation in Canada. We talked to experts from academia. We spoke with lawyers that look at intellectual property here we spoke with entrepreneurs who had gone through successfully when the scale up process. So after this very extensive stakeholder engagement, we came up with with a list of questions that we believe will allow us to, you know, assess companies and we're currently in the process of undertaking one of the largest surveys around this topic, close to 1000 companies in Canada will be surveyed along this and we will develop what we call you know, a capability center Innovation Model. So we will know which ingredients if you want to call them no those are actually required for companies to be successful. festival in scaling up and in staying innovative. Now now that we have this model, we can, you know, go and talk to an individual company and benchmark them against the model that we have and predict and also inform them of the kind of strengths and weaknesses that they have to be able to successful. Oh, okay. How do you? So it sounds essentially like a survey that you're doing with these companies? How do you know, forgive my, the wording of how I asked this question, but how do you keep companies honest? How do you keep them from maybe padding their answers and going well, we want to appear better than we. We are. That's a good question, john. So there are definitely statistical ways for us to do that john, and and the way we sequence the survey questions the way we get at certain aspects of the responses, it allows us to pick out the outliers. may not fit, you know, the the the the information. So you can you can kind of make educated guesses where people may not have been as honest as as as, as they as you know, as as you expected. So, yeah, there are definitely statistical ways for us to take out those responses that don't, that don't, you know, make a lot of sense. Okay. And that's where you hear in surveys where they say this survey is accurate between 90 to 95%. You know, you hear those those qualifiers, right. So those are those are exactly so those are based on the number of responses and the and the size of the population that you're serving. So yes, we will have those as well. But to your earlier question about how do you ensure kind of the the credibility of the responses you're getting? Yeah, so there are definitely statistical ways for us to rule out the outliers in that in that sense. Yeah. So it wouldn't be a podcast. On shifts without me asking about gender and how the role that you know sexism and racism plays, so we know that women, you know, are proportion or are more likely to get less funding and there's less female entrepreneurs and innovators. So what is the CCI f going to do to prevent that kind of bias? Right? So the the the samples, the correspondence and the sample size that we've selected Katie is large enough and it is it is definitely keeping in mind of the of the sort of the gender bias and other equity growth biases that exists within the within sort of the the innovation sector but also related sectors. So we are going to be taking a look at the responses once we get in and we will we will certainly raise any any flags that we see in terms of representation of the respondents as well as, you know, any of the structural sort of characteristics that emerge from the survey? Because sometimes, you know, unfortunately, the the the population representation is such that you can't avoid having as skewed acuity groups represented, but that may be the the nature of the group itself, right. So, it's very important that not only do we do our best to capture you know, all of the views and represented by different equity groups, but we also want to, if it happens to be the case, we also want to be able to highlight the fact that the the the for example, the the startups, you know, they tend to be skewed towards a certain academic group. So yeah, we will be we will be paying very close attention to those facts. That's really great to hear. So, when I was reading about this that you mentioned that some he called it innovation, resilience. So you're looking for companies that are going to be innovation was Lance. So, can you tell us what like some of the key pieces of that are like what are some of the characteristics are sure yeah. So, you know in a very easy example is is in the for example, right in the in the tech world and the tech community usually a startup if they have a good idea and the the secure backing of the right kind of investors, they can grow very quickly, right, they can go from 100 users to a million users within within a matter of months. Right. So what happens is once you once they do pop up on on on on the world radar, basically everybody knows It says, you know, a very fast emerging company, all of a sudden the employees of this company that made the company what it is start getting approached by really big names. And what happens is all of that talent can actually disappear, they can make a move, because they have better offers or they have, you know, better ideas that have been provided by others. So one of the things that we're gonna we're that we're looking for, okay keenly is, what are some of the secret sauce as people call it in the tech word that keeps the employees engaged and motivated in that scalar phase? So when you're being really successful, how do you retain and, and rescale and upscale your talent so that they are not likely to leave ship as you're about to, you know, scale up and fly off into the into the bigger markets. And so that's the key characteristic that no other study has actually looked at, because that's part of the scale of challenge. Once you get to a certain stage, you are dealing with all sorts of different forces that you haven't had to deal with when you are a small company. So that's in our studies in our in our research, that's a big problem. Losing talent, and at the wrong time, can actually really diminish your possibilities or your potential to scale up. So that's just one example Katie, but I'm happy to go into other characteristics and other aspects of innovation resilience. I think that gives us a taste. What I'm curious about here is what happens to the companies that are found to be or are not found to be resilient. What do you what happens to them? Well, unfortunately, the you know, the innovation game and I'll send the scale up game is is very competitive. There. Hundreds of thousands of companies and entrepreneurs out there that are working as hard as they can. They're doing all the right things, but unfortunately, only a very, very, very few percentage of them will actually scale up and succeed. You know, if you're not if you're not there yet, what many entrepreneurs do is is the recognize the reading on the wall, and they go back to building something else new. You know, most of the famous names that you hear, you know, whether is Mark Zuckerberg or his, you know, Ma, you know, all that all that Oh, man, all of them, most of you know, all of them are are serial entrepreneurs, so nobody is really successful. Right? They try so what the trick is, you know, when do you know it's time to quit and go back and start something else. So that's a very common practice in the in the innovation space. Well, one of In the ecosystem here in Alberta, just recently, we had something called the innovation rodeo. And one of the presenters was a venture capitalist, and he was speaking about how it's absolutely beneficial for these companies. He never he didn't use the word non resilience, but they wish they would kind of fit into that companies that had failed or for whatever reasons. He likes to see them come back to him, because then they've got some feedback from him. They can iron out all the creases and refine their processes, not in not all instances or they just abandoning ship, they're fortifying they're revising and then they're coming back stronger than ever. Absolutely. And so, you know, the one thing I would add to it is is we don't see failure as as being innovation non resilience, right. failure in a in a in a in a startup or in a company is very much part of the of the process has stopped was the the process of elimination, right? Only the, the the team, the product that has that is adaptable that has the best resources has the best kind of talent to keep growing is going to succeed. Whereas, you know, as you correctly pointed out, others will go back to the to the drawing board, they'll come back stronger than before. And hopefully, you know, they'll get an opportunity to to scale up again. So that's that's very much part of the the process. And even though even the ones that had to go back, they might still be innovation resilient, is just they needed they needed to, you know, to find the right products on them. So let's go back to why Canada is number 14 out of 15. So, we meant we talked a little bit about brain drain as john puts it, so what can we do in Canada, as well as in Alberta to maintain our Our our brain trust and in our people and keep the innovations within our country. Right. Honestly, before I begin this, you know, I want to commend Alberta innovates for, for partnering with us on this on this on this innovation framework. I think their their contribution and their participation ensures that Western Canadian views and Western Canadian realities are, are incorporated in this framework. Because, you know, in Canada, the innovative regional innovation ecosystems do play a very strong role in providing that support that we talked about in ensuring companies have what it takes the right kind of platforms, the right kind of, you know, policy framework, the right kind of incentives from a from a financial point of view, all of those are really in Canada. Depends on on where you are, for example, the the the innovation ecosystem in Toronto right now is one of the strongest in the world. So you look at any kind of metric and the Toronto and the Waterloo innovation ecosystems perform really well because they have been able to build that. And so with with Alberta innovates coming on board, this project is going to ensure that Alberta policymakers and and all of the different regional innovation, innovation ecosystems that that exist there will have the best and the latest kind of information on how to support companies and and sort of the entrepreneurs that are in those in those regions so that they can be successful as well. And I think just to go back to your original question, Katie, I think a lot of what's happening in Canada right now is in the right direction. We're focusing very Much on on the the startups providing them with with the kind of market access that they need. So for example, the trade commissioner services out of out of global affairs Canada is providing tremendous support to to Canadian entrepreneurs and Canadian companies who are trying to find customers across the world. Right. So that's, that's very helpful. The other thing I would say is some of the the funds that have been set up through Business Development Bank of Canada and export development, Canada, those are really helpful as well because they're providing and helping to de risk. Some of the some of the, sort of the challenges that Canadian companies face especially given that we don't we don't have many anchor forums in Canada that can be the conduit for for smaller companies to sell into the global marketplace. So a lot of, you know, pieces of the puzzle are starting to come together. But But I think with the with the introduction of the capability centered innovation framework, we'll be able to provide additional information to policymakers on where to allocate resources for for for a better return on public investments. Okay. Well, that's that's, that's really cool. I like to dive a little bit deeper into what kind of work you're going to be doing without breaking. Now, if I understand properly, Alberta innovates as a group is going to be part of the advisory group and that you're going to be working specifically with the health unit for a while. That's right. That's right. So the health the health innovation team at Alberta innovates. Is is the is our direct liaison with the project. They are on the advisory and what we have been able to do in partnership with the team and Alberta innovates is to ensure that can be, you know, Canadian entrepreneurs who are located in Alberta, I have an opportunity to be part of the Innovation Model that we're going to be building. So what has worked for them, what has not worked for them, what kind of capabilities have they lacked in the past, all of this will be now reflected in this national model. And we will be able to then go back to the companies that Alberta innovates has supported in the past or portfolio of companies and will will do their assessment as part of this project, we will be able to go back to Alberta innovates at the end of this and then say, based on the the model that we've developed, you know, on on international best practices and extensive research that we've done, we have found that, you know, the companies that Alberta innovates has supported in the past have been, you know, success. Because they had these, these characteristics, these capabilities, what more would they need to have to really break through the sort of the barriers that they've encountered. So those are those are the kinds of really tangible benefits that we will be able to bring back to Alberta because of the partnership that we have with Alberta innovates what sort of timelines you're looking at here, it's so the the project will be completed for the for the partners over the next two months. So by the fall, Alberta innovates will have an initial assessment of the portfolio. But you know, the National innovation report card comes out later in the year towards towards November, December timeframe, john, so we will be incorporating this new framework and the assessments that we do as part of the overall standings that you see reflected in the in the in the list that you are We're into early. So I just want to ask one question. So wrap up here. What does Toronto have that Alberta doesn't have? What can we do better here in Alberta? And and in Canada? Yeah, I don't think Katie is it's about having or not having I think each region is unique. And I think both Alberta and Ontario and Toronto more specifically have their own unique offering. So I think it would be unfair to say, Toronto has this and that's why they're more successful. Gary, I'm asking you to choose your favorite child. I live in Ottawa, so I'm impartial. What I would say is, I think the key here would be through this framework is to really drill down and say, okay, you know, in Alberta companies are really good at getting their new ideas off the master mark. But do they have the right kind of access to intellectual property? expertise so that not only do they file for patents, but they actually know how to bring financial value now to the IP that they have, or or do they have the right kind of market access and the right kind of cultural exposure to other markets that maybe the Toronto entrepreneurs have had because of the demography because of the size of the city and all of that. So it's really a matter of pointing out key strengths and weaknesses of the of the of the companies of the capabilities within those companies that we can really hone in on and allow governments both at the provincial and at the federal level, to kind of start providing more resources to to address those those kinds of capabilities that may be that may be lacking there. Well, I'm really looking forward to seeing what these results are Harriet sounds like this work is really going to be what propels the innovation ecosystem. Both Firstly, you Ashley so that we are not 14 out of 15, Sweden. We're coming for you, Toronto, you're coming for you. But thank you so much for joining us, Harry. This was great. Thank you so much, Katie and john, this was a pleasure and and again, I think what we are doing is is is really gonna help Canada, Alberta, Ontario and all the other provinces and territories. really figure out how can we excel in this innovation game that we're all in? Absolutely. Thank you so much. Thank you very much. shift is brought to you by Alberta innovates. We can be found online at shift dots, Alberta innovates.ca. Or you can send us an email anytime at shift at Alberta innovates.ca. On behalf of everyone here, i'm john Hagen. Until next time, Transcribed by https://otter.ai