How to redefine Canadian innovation in an 'unforgiving world'

Speaker 1 [00:00:01] Hi. It’s John here.

Speaker 2 [00:00:02] And it’s Theresa.

Speaker 1 [00:00:04] Hey, Theresa. You know, if we did a word bubble on disrupters, I suspect that the top word would be innovation. It means everything. And some people say it means nothing. Curious what you think of when you hear the word innovation.

Speaker 2 [00:00:18] Oh, man, I’ve been thinking a lot about this and I still don’t have a clear answer. But to my mind, I think it’s the systems, the resources processes, the infrastructure that supports novel ideas that improve how we live, how we do business, really everything. It’s about improvement upon existing things. What are your thoughts, John?

Speaker 1 [00:00:39] Wow, Teresa, you’re such the tech person. I thought you were going to say Tesla iPhone model off various technologies as being the clichés of innovation. And here you are talking about systems. Yeah, innovations, all of those things and a lot more. I got to serve on the selection committee recently of the Governor General’s Innovation Awards. It was a great half day that I spent with some remarkable Canadians looking at amazing innovators in every sector from every region across the country. It’s the annual celebration of innovations that exemplify excellence and help improve the quality of life in Canada and around the world. And so often we forget that really is the test of innovation. Is it improving the quality of life, whether it’s a phone, a car or the way we run a school or a neighborhood?

Speaker 2 [00:01:32] You are so right, John. And even Steve Jobs, you know, going back to that iPhone reference, he’s one of the great tech innovators of our time. He understood that innovation is about more than just the iPhone. And he famously said that it’s what distinguishes between a leader and a follower. The innovator the leader is that bold risk taker who sees a need and risks a new approach. And when that proves successful, it encourages others to follow in that innovator footsteps, opening the door to the possibility of more innovation. And we’ll be exploring and inspiring example of that later on in the show. But the world has changed dramatically in recent years, John, and with it, the need to innovate is changing, too.

Speaker 1 [00:02:11] We’re going to need innovation at every turn as we try to come to grips with the fallout from COVID. As we think about the backlash on globalization and how we can continue to make goods in new, more innovative ways that don’t drive up the cost of living for everyone. And we’re going to have to do that in a world of economic and fiscal constraints where perhaps we don’t have the resources that we might have assumed even 12 months ago. And that’s where innovation really proves itself in allowing us all to do more with less and perhaps even leaving less of a footprint on the planet. This is Disruptors. An RBC podcast. I’m John Stackhouse.

Speaker 2 [00:03:00] And I’m trying to reset so. In this episode of Disruptors, we’re looking at innovation. What it is, where you find it in the Canadian economy and why it’s so important. After the break, we’ll hear from the two co-founders of a groundbreaking preschool in Nunavut who are bringing innovation to the world of early childhood education.

Speaker 1 [00:03:25] But first, our conversation with one of Canada’s leading thinkers on innovation. He’s a professor and author, a former tech entrepreneur and key advisor to the federal government who has some fairly provocative things to say on what this country should be doing to build a more prosperous innovation economy. Dan Breeziness is the Munk Chair of Innovation Studies, Co-Director of the Innovation Policy Lab and Professor of Global Affairs and political science at the University of Toronto. He’s also the Clifford Clark visiting economist at the Department of Finance. And prior to joining U of T in 2013, he co-founded a software startup in his native Israel. In addition to all that, and if all that weren’t enough in March, Dan won the Balsillie Prize for Public Policy from the Writers Trust of Canada for his book Innovation in Real Places Strategies for Prosperity in an Unforgiving World. Dan, welcome to Disruptors.

Speaker 3 [00:04:23] Thank you, John. Theresa It’s wonderful to be here.

Speaker 1 [00:04:26] It’s great to have you on the podcast and want to jump right into one of the arguments in your book about the difference between innovation and invention. Too many of us confuse or conflate those. I wonder if we can start off with a quick explanation of the difference between innovation and invention and why that’s important.

Speaker 3 [00:04:47] Let me move one step even further and then do that. So let’s first ask why innovation is important. And innovation is important because it’s the only way to have sustained economic inhuman wealth for growth, period. That’s it. So if you don’t care about those things, innovation is not important if you’re most human beings. Innovation is critically important. However, innovation is not only invention of new things. So if invention is the act of coming up with a new idea. Innovation is the act of employing those ideas to offer goods, products and services and all across the production stages. So from the coming up with a completely new idea to improving things, to combining them with others, to making them more accessible, all those things.

Speaker 2 [00:05:43] When we talk about innovation, often it’s an abstract terms. And so I’m wondering, could you provide an illustration of innovation, why it matters to a company or a country and what’s at stake?

Speaker 3 [00:05:54] Let’s start with one example. We are now talking in something that very old technology, which is called Tesla or videoconferencing. If only ten years ago, the three of us would had to do that. We will do everything in our power to make sure in the same room, because otherwise we’ll have to go to special ed rooms, which are unbelievably expensive. And the quality of what we can achieve in those rooms will be horrific. And that’s just ten years ago. And that technology was invented at least 30 years ago. What really happened that completely transformed it right to real innovation is that huge millions of millions of engineering hours in improving processing and improving software algorithm and improving data communication to the fact that when we had COVID, we actually did not need to stop most of what we’re doing, including the education of our kids, because teleconferencing zoom teams, the software we use now was not only good enough, but cheap enough. But we don’t even think about the cost.

Speaker 1 [00:07:01] Everything you lay out, Dan has me thinking about the role of government and the fact that government was arguably absent in a lot of that innovation that you just you just specified. Some people feel that innovation actually increases the farther you get away from it from government. And yet here you are in Ottawa at the in the beating heart of government in the Department of Finance. Why did you. Having spent so much of your life trying to understand innovation and being a participant in the innovation economy, want to go into the depths of government to try to tackle it as opposed to doing it from the outside world.

Speaker 3 [00:07:42] So, first of all, most people are wrong and in multiple ways. Okay. If you look just at the example that I gave you, we can also talk about things like vaccines and marinade technology on the rest. You will find out that up to 85, probably 90% of the funding and all of our resources, like human beings like me and professor of it, went into developing those technologies. So in the end, somebody can work for two years and make billions on them with government, public money, public people. Not only that, but if you would be in any class on the economics of innovation one on one, one of the first things that they will tell you is that you should expect under free market condition to have less than optimal innovation. And the reason are, I mean, there’s multiple reasons, but to simplify it. Innovation has a huge amount of both risk and uncertainty on. One side and the other without rules. We already mentioned patents. There is no way that if you and I, John, will spend years and all our money to come up with a new innovation, which in the end the just information, unless we state, then make sure that we can make money out of it. Everybody will copy us in a second. So we will have no incentives, no market incentives to actually spend all of time now added to uncertainty. Now add the risk and what you would expect under free market condition, meaning without government is to have very little innovation, if at all.

Speaker 2 [00:09:25] That’s strikes me as where we are living in a culture of comfort. Maybe some might use the word complacency. So what do you say to business leaders about how they might be able to move the dial and take on some more of that risk?

Speaker 3 [00:09:40] Up until a few years ago, if I was an investor, I would give gold medals to all the Canadian business management because they haven’t managed to give us one of the highest profit margin in the world with one of the lowest risk. The problem is, as a Canadian, it has to our society rather than negative consequences. Median wages, for example, are stuck for 46 years, and the quality of work is much, much, much lower than what they should have. I also think that Canadian managers are first and foremost Canadian. So if they understand what is at stake, if they understand the issue, this is a behavioral problem. And they are also giving other resources. Right, lower risk and lower uncertainty, which the government can do. Until we all figure out how Canadian business can routinized, so innovate all the time, then I think Canadian businesses will actually be very open to that. But when you have a story over 30 years in which you completely disregards what is a main failure, all your recommendation, policy solution, business behavior will take you in the wrong way because you don’t admit what is wrong.

Speaker 1 [00:11:00] You mentioned competition and the lack of competition is perhaps one of the inhibitors. And this has been widely discussed and debated over many, many decades in the country. We have regulated industries that have both manufactured and perhaps natural oligopolies. I work for one in the banking sector, but we also have the main airlines transportation, telecommunications at a high variance. I would suggest an innovation between those sectors. How do we ensure we’re getting more innovation in the market structures that we have, which does not have to be directed from government? Does it have to be demanded from consumers or is there some other kind of magic, magic formula?

Speaker 3 [00:11:42] So right now we are and what’s, I think technically called a pickle because and you can see it and I know I know you know the statistics for over 20 years, I’ll bear the meaning. Business investment in R&D has gone down and year after year we are now lower than Pilote, which basically means that we are a developing country level. We also look at other things which has a horrible name. TFT Or maybe multi-factor predictive. Basically, apart from telling you how much innovation you have, it tells you how Canadian businesses utilize their human capital. So High TSB is a Toronto Raptors, no matter what kind of players you give them. They excel and they reach a playoff. What most Canadian business look like now is that Toronto Leafs the highest wages in the industry for the lowest results possible. And so first, we need to figure out how we utilize Canadian, because this is now 30 years and businesses are profitable. We should not expect that it will come like manna from the earth. And we definitely do not want, unlike Finland and Israel, to be faced with existential crisis before versus change. So I think there’s two ways public discussion and honest one about what is wrong, which hopefully will also start demands from consumer and then collective action together. And here I would think that public policy has to lead because nobody else will do that.

Speaker 2 [00:13:25] To pivot slightly. So you’ve spent many years talking about how Silicon Valley is not necessarily the right model for innovation, and yet a lot of people still look to it. And we can think of Canada’s Supercluster strategy as being very similar in design. You’ve been critical of those high tech hubs for producing unequal levels of prosperity. So how do we build an innovation economy that does benefit the many and not just the few?

Speaker 3 [00:13:51] So let’s again go back to, if you remember, invention and innovation, and then let’s at the global system. And I think most people now understand after COVID that what really happened in the last 30 years is the way we, meaning humanity, produce of goods and services have been sliced into different stages. So a way to think about it is that there are at least four stages. We, Silicon Valley, focus on only the first one because it focused on only the first one, which is just R&D. It it’s a model of it does not create jobs for anyone who’s not an R&D engineer and maybe, you know, a venture capitalist and a few celebrity chefs. And when they finish a job, it actually moves to a different place, Korea, Taiwan, China, where they also need to do a huge amount of innovation. But what they do there create a lot of different kinds of jobs. So different skills. If you look about Canada, let’s just assume for a moment where do we really want to be with Silicon Valley, we might have three regions, Greater Toronto and I’m adding Waterloo and Hamilton just for the sake of it, Vancouver and Montreal that might be able to play that game, and it will create unbelievably high inequality. But then there is the rest of Canada. It is not clear to me why the forestry industry of Canada cannot compete with the Finnish one. Pulp and paper also in sophistication. Also in innovating in the equipment. We have a huge country with a huge amount of variance in both the natural goods and skills. Canada, unlike a place like Israel or a small place like Silicon Valley, can actually have different innovation models in different industries in different places. Each one of them focus on a different stage.

Speaker 1 [00:15:51] Dan, I wonder if I can ask you about the subtitle in your book, Strategies for Prosperity in an Unforgiving World that was actually from. Only 21. And I think it’s obvious to all of us that the world is even more unforgiving in 2022. How does innovation change in an unforgiving world, and what do Canadians need to really come to grips with to make it work for, for everyone?

Speaker 3 [00:16:15] Canadians should start thinking about innovation like hockey. We need to win and easily win and actually create more innovation. We might even help the world. Right? But we need to win. And the other team is very willing to get the few penalties in order to win the Stanley Cup. If we are not willing to inflict a few penalties at the right time, the Stanley Cup will keep on going to Florida.

Speaker 1 [00:16:41] That is so painful and so poignant. Spot on.

Speaker 2 [00:16:45] I wish I was a hockey fan.

Speaker 1 [00:16:47] Elbows off Canada.

Speaker 3 [00:16:48] Exactly. Maybe even knees if if we can get it corrected.

Speaker 1 [00:16:52] Dan, thanks so much for being on Disruptors.

Speaker 3 [00:16:54] You’re very welcome. And I hope to see you in the real world soon.

Speaker 1 [00:17:00] Coming up after the break, we’ll talk to the co-founders of an innovative new model for early childhood education. So stay right there.

Speaker 2 [00:17:10] What you’re listening to Disruptors an RBC podcast. I’m Theresa Dome, once let you know about a new weekly report from RBC Economics. It’s called Proof Point, and it provides original, timely economic insights from RBC’s economics and thought leadership team. Find out why demand for cash is at its highest level in 60 years, despite a broad shift to e-commerce. Or learn why Atlantic Canada has become a magnet for new residents. To explore more, visit RBC dot com slash thought leadership. Welcome back. On today’s show, we’re exploring all facets of the innovation economy. And as John mentioned, off the top, he was a judge at this year’s governor general’s innovation awards. So, John, what can you tell us about the winners?

Speaker 1 [00:17:58] Well, the winners are all on the public record now, so I’m not opening an envelope. And some of them you’ll recognize the first is carbon cure. You may recall CEO Rob Nevin was featured two summers ago on Disrupters, talking about their ambition to be a global leader in carbon capture technology to reduce the concrete industry’s carbon footprint.

Speaker 2 [00:18:18] Oh, and I hear there’s another disruptors alarm on the list of recipients as well.

Speaker 1 [00:18:22] That would be apply board and CEO Martin Vaziri and his brothers, who are such a great Canadian story. They came from Iran, went to University of Waterloo, and have developed through a high board, the world’s largest online platform for connecting international students with schools.

Speaker 2 [00:18:41] There was also a cool eye company I heard about.

Speaker 1 [00:18:44] That would be Brain Box A.I. and all of us in buildings right now, which is most Canadians will appreciate what they’re doing, which is applying AI to optimize energy use, especially in commercial buildings, to reduce the carbon footprint of heating and cooling systems.

Speaker 2 [00:19:02] And I think there was also a winner that came from our local university system.

Speaker 1 [00:19:06] A company called Desired Sensation Level or Dstl, which has produced the world’s first pediatric hearing aid prescription out of Western University in London, Ontario and the National Center for Audiology.

Speaker 2 [00:19:19] And as we’re reaching the tail end of the pandemic, can you tell us about the company that helped get us to this point?

Speaker 1 [00:19:26] That would be lipid nanoparticles that enables COVID 19, many vaccines. We all know what are now the household names behind many of the COVID fighting vaccines, companies like Pfizer. But they don’t do it on their own. They depend on a kind of supply chain of innovation, and that includes companies like lipid nanoparticles.

Speaker 2 [00:19:47] One of the other winners and our next guests are not on the technology side. By contrast, they found an innovative new way to deliver a program that is essential to our society. Karen New Track and Tessa Lockett are longtime educators who launched a preschool in the remote Arctic community upon Inlet, Nunavut. Launched in January 2016. It’s called Perovic, which means a place to grow. In a note to the preschool, combines traditional Inuit knowledge in ways and traditional Inuit child rearing with Montessori methods. In 2019, the PUREVIEW was awarded the $1 million Arctic Inspiration Prize for a project committed to addressing the, quote, causes rather than symptoms of issues facing the north. And this May Perovic was one of six winners of a 2022 Governor General’s Innovation Award. Karen TSO, welcome to Disruptors.

Speaker 4 [00:20:40] Thank you for having us.

Speaker 2 [00:20:42] I’d love to start with a bit of your backstory. So Karen, I understand you’ve lived in Pine Inlet all your life, but Tesla, you moved to the far north from Ottawa just over a decade ago. And I’m wondering how you ended up in Nunavut and ultimately how did you and Karen decide to launch Cervi?

Speaker 4 [00:20:58] I ended up in Nunavut in 2003 for the first time. I was going to Trump University and I took part in a Bush school program that was being run by the University of Manitoba. And this was done with a lot of different disciplines at the university. And I was able to go and join a summer long program in paying her tongue. And I immediately fell in love with the Inuit, and I knew I had to come back. So I got my teacher’s degree. And when my husband and I graduated from university, we were in interview. We wanted to be here more than anything. And so when we got to Pine Inlet, Karen and I met very early on when we arrived in the community, and it was a day meeting where we first met and the day meeting they were talking about how a certain issue that was at the forefront in the community at the time was referred to supporting students adequately at the high school and Pine Inlet and how we can improve supporting Grade nine students. And as children move through the school system, you know, the more and more we were looking at all of these issues, the more and more we were saying, well, we really need to be doing a better job earlier on in education, because even when children sometimes enter the school system, they might not have had access to proper early childhood education programs. And in Pine Inlet at the time, there wasn’t any. So Karen and I shook hands on it after a pretty heated discussion at the local Education Council and said, No, I think we have to do something about that.

Speaker 1 [00:22:30] So it felt like we have to do something about that should be sort of engraved in the desk or on the wall of every would be innovator, because that is really what innovation is about. It’s about someone deciding, I’ve got to do something about this, which is starts with identifying a problem. And probably anyone who’s listening who has is connected to education. And we all are recognized as problems everywhere in the education system. It’s a it’s a process of endless improvement. And I’m curious how you went beyond problem identification, because that’s often where innovation stops. People identify the problem. They point fingers, but no one figures out how to get to solutions. How how were you able to get from problem to solution.

Speaker 4 [00:23:19] In the preschool? We have a situation where just at the time when a child is entering, sort of being excited to potentially leave home and ready to branch out beyond the family unit. It’s a moment where we felt that it was really important to nourish and make sure that a child might have access to programing that, AH is not typically involved or accessed in in the in a community like Pine Inlet, which is a remote community in the Canadian High Arctic. And so often people say, well, we can’t get that here because of this, that or the other thing. Well, why not? So you get to a point where you just kind of have to know what you have and you just want to go in and do that and experiment. And the success that we’ve had in the community has been really central to parent support when people sort of so seeing what we were trying to do and trying to provide cultural materials, language materials that were really grounded in and what was important and pond and land. We received parent support immediately and that was really crucial to what we were doing and how we were doing it and why we became successful because so many people had input into what we were doing in the preschool. It was developed over a period of two years with the new Newman Arctic College. So at that time it was like a slow build and it had the involvement of so many people from the community. So everyone really had a vested interest and and seeing this program succeed, but also that everyone really had a part of themselves in it, like everything from little sewn materials and the. Preschool. You know, we had the elementary school teachers have input into the actual language development of Inuktitut in the preschool program imagery that was attached to certain silverbacks. And whenever Owen saw, we were just trying to do the best that we could so that we could support children in schools as a good launching pad to be ready for school. Everyone supported us right away. It was like this organic excitement around what we were trying to do and when everyone kind of became involved that it really generated this incredible energy behind it to make sure that it was successful.

Speaker 2 [00:25:36] One of the challenges for any innovator is scaling bring that new product or service or program to a broader market, and having a father reaching impact and having started with a classroom of 18 kids in 2016 but have since launched a program where trainers are now touring the North, introducing the program to the rest of Nunavut. How are you scaling and expanding that program? Will also retaining that grass roots approach that has in part made it so successful?

Speaker 4 [00:26:05] When we decided to move forward at the suggestion of NTI, we had made this project in Pond Inlet and it was really going well and Pond Inlet and we were contacted by Nunavut Technology Inc. and they said, We really like what you guys are doing in Pond Inlet. How can we support you in doing that? And we said, Well, what do you mean? What do you mean? What do you want us to do? And they said, Well, we have funding that we could support you by maybe making a documentary or in training binders. And and we said, Oh, that’s a great idea. Oh, that’s a great idea. I think we would pick a community that might be interested. And we’d already been contacted by several community programs who wanted to see what we were doing and actually come to the community to see how it was playing out in Parliament. So essentially we’ve reached out to Clyde River, the early Saxony program there, and they had already communicated with us that they’re interested in trying something similar to their preschool program. So we did a pilot project there and it was successful. And everybody contacts Karyn one at the time, you know, to say, hey, how can we how can we do that? How can we get that in our facility? And and it’s all word of mouth. It’s all very organic and how we can continue to expand, but it’s different for every community. And and we try to incorporate their culture because every every region is has different cultures. So for example, like in Panama, there’s a certain style of community sled. So for example, the sled that we might use in the preschool program in Pond Inlet and make a smaller version for it for the children to use in their play, there’s a totally different style of community in Cambridge or Rankin and the different ways of. So we have little clean sealskin cleaning boards and structures with little wooden, you know, is the nice to clean the seal skin. And each region may have different ways to clean their still skin and how we do it in pontoon.

Speaker 1 [00:28:23] But that kind of culturally appropriate technology, if I can put it that way, would be wonderful to have more broadly across society. So often we have things kind of presented to us or pushed on us as a one size fits all. And I think that’s one of the many things that makes you an innovator, is finding ways to do things in a culturally appropriate and and inclusive manner.

Speaker 4 [00:28:48] And our dialect is different. So we adapt to their dialect, like Cambridge Bay and Rankin and Pontin, but all have different dialects.

Speaker 3 [00:28:59] But it’s.

Speaker 4 [00:28:59] All right, it’s in it. And we knocked it and we can still understand their language, but we we adapt to their third language.

Speaker 2 [00:29:09] I think that that ability to adapt and to build on original ideas is extraordinarily important and terrific has been so successful. Again, you’re exporting the concept to different regions in different parts of the world, but it seems to me that the program is more than just educating young children. It’s also about empowering individuals, whatever their age, to find the solutions, to meet their needs and to create their own past success. Karen Tas I’d love to hear from you about what can future innovators and other communities around the world learn from the approach that you’ve created to inspire their own innovations?

Speaker 4 [00:29:45] I think what you’ve touched on there is something that to me is the most moving part of this project is that it’s not only about the development of a child, it is also about the development and fostering and healing of adults that. The training as well. So, for example, we’ve all been taught a certain way, usually in one specific way in our own education, which is top down, and to absorb knowledge and to have the teachings of others imposed upon us. If I may say and then in this project, when you enter a room of the training, when you have, okay, well, you’re here and you’re going to learn from the child, you’re going to sit in the side of the room and you’re going to observe how a child learns and how they move from one activity to another and how they are stimulating themselves by their own interests. That also transcends into the adults as well. Whenever we go and work with the community, we’re not saying, Hey, we have this great program, do what we do. It’s What do you need? How can we support you? This is our experience. But what kinds of things can we provide for you?

Speaker 2 [00:30:52] I think that is such an excellent sentiment and one of mutual respect and understanding. Karen and Tessa, thank you so much for joining us today and for being on Disruptors. Really appreciate your.

Speaker 4 [00:31:01] Time. Korean me.

Speaker 3 [00:31:03] Again.

Speaker 1 [00:31:06] What a thought provoking set of conversations and kind of a nice bookend for innovation. We started with Dan presidents who gave a profound overview of the innovation, challenge and imperative in the world that if we are going to improve prosperity, if we’re going to be able to afford all that we take for granted in our society, we are going to need to innovate much more than we are today, and that’s on business to really take forward. And then we heard from Karen and Tessa, who I thought captured really well how innovation is seen and should be seen through the eyes of the user. Too often we have innovation from a central organization. It can be a government, it can be a big company saying Here we’ve got a better mousetrap and we’ve made it accessible for you. But the user experience kind of sucks. And as we know, whether it’s technology or education or health care or other aspects of our lives, the user experience is critical to innovation. Teresa, what stood out for you?

Speaker 2 [00:32:11] I loved hearing from Karen and Tessa, John, and especially them talking about how they’ve shifted the locus of power in the classroom. And it’s that turning of conventions on their head that I think is a super key ingredient in making sure that innovation really is able to spread throughout the economy. And exactly as you mentioned, it is the focus on the user, in this case, the student that makes everything they do just so remarkable. I can clearly understand why it is spreading throughout the circumpolar world. It’s quite beautiful. That is all for now. Thanks to our guests, Dan President, Karen Nu, Tarak and Tesla Lockheed. Next week, join us for the latest tech and innovation buzz with our ten minute tech series. Until then, I’m Teresa Doerr.

Speaker 1 [00:32:54] And I’m John Stackhouse. This is Disruptors, an RBC podcast. Talk to you soon.

Speaker 2 [00:33:01] Disruptors, an RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR audio. For more disruptors content like or subscribe wherever you get your podcasts and visit our rbc.com/disruptors.

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