1. Innovation, Colleges and
Community
Stephen Murgatroyd, PhD FRSA
Chief Innovation Officer
Contact North | Contact Nord
June 2010
Innovation, College and Community – June 2010 www.contactnorth.ca

2. What This Presentation is About:
1. Offering a context in which we need to understand
Canada’s Innovation Imperative
2. Making sure we all understand innovation is not the
same as R&D
3. Identifying the unique role of Colleges and Polytechnic
institutions in Canada
4. Suggesting 10 Action Steps to re-start innovation in
communities
Innovation, College and Community – June 2010 www.contactnorth.ca

3. Canada’s Innovation Imperative
Innovation, College and Community – June 2010 www.contactnorth.ca

4. Key Challenges for Canada Social and
Economic Future
1. Competitiveness
• Canada’s competitiveness is “stuck” with respect to other leading
economies in the world – ranked 9th in 2009-10 by World
Economic Forum
• Our continued reliance on commodity exports will support growth,
but will not sustain the economy in the long run – we need more
value added products and services so as to compete in the global
knowledge economy
• Our supply chain management systems need real improvement if
we are to compete – transport is a major cost to us, as are labour
costs, none of which are helped by internal barriers to trade
Innovation, College and Community – June 2010 www.contactnorth.ca

5. 2. Knowledge Competitiveness
• A key factor in innovation is the extent to which a place or region or
country can be defined as a knowledge rich economy. In the last
world knowledge competitive index (2008) Ontario ranked 76th,
Quebec 83rd, Alberta 85th, BC 112th – “could do better”
• We have good Universities, but in world rankings we do not appear
as good as other jurisdictions – University of Toronto (58th), UBC
(74th), Waterloo (94th), McGill (95th), SFU (104th), York (108th), UofA
(121st) – China has five in the top 20, Turkey has 3 in the top 50.
• In comparison to Finland, we have one third less HQP in our
workforce – people with graduate qualifications working in firms
• While we score high on patent filing, we score low on doing anything
with patents that helps them generate wealth
Innovation, College and Community – June 2010 www.contactnorth.ca

6. 3. Productivity
• Canada’s productivity is poor relative to the US and not getting
better.
• Canada's business-sector productivity in 2007 was 75% of that of
the U.S., compared to 90% in the early 1980s.
• Canada's productivity ranking has dropped from 3rd of the 20
countries in the Organisation for Economic Co-operation and
Development (OECD) in 1960 to 15th of the current 30 members
• Productivity now grow at less than 1% annually.
• Falling productivity could cost every Canadian $30,000 in income
over the next decade, according to the Governor of the Bank of
Canada
Innovation, College and Community – June 2010 www.contactnorth.ca

7. 4. Demographics
• Canada’s demographics are challenging our firms, governments and
organisations.
• The 65 years and older population to rise from 3.92 million in 2001 to
roughly 9.2 million people by 2041, or approximately one in four
Canadians. The median age for the Canadian population has
increased from 29 years old in 1981 to 39 in 2005. Over the same
time period, the youth-dependency load, those aged 0 to 14 years of
age, as a percentage of the population shrank by 5%.
• Birth rates plummet from just over 20%in 1956 to around 5% in
2005.
• Fewer workers, more seniors, higher taxes – “Canada's
demographic situation poses grave threats to its future prosperity”.
Innovation, College and Community – June 2010 www.contactnorth.ca

8. 5. War for Talent
• Just as our workforce is shrinking, there is a war for talent
worldwide.
• The temporary “ceasefire” caused by the recession is now over, and
the war begins again. Battlegrounds include senior management and
executives, senior public service positions and heirs to the family
business.
• Baby boom retirements will hit all of the developed world and lead to
new patterns of immigration – immigration will be key to Canada’s
economic future.
• The average weekly wage, measured across industries climbed
2.4% annually between 2006 and 2010. It’s predicted to rise 3.4% in
each of the next five years, and stay close to 3% annually as far out
as 2030. By that time, wages are predicted to be 21% higher than
they are this year – one way of keeping talent.
Innovation, College and Community – June 2010 www.contactnorth.ca

9. 6. Weak Execution of the Innovation Strategy
• The strategy was clear – “to be recognized as one of the most
innovative countries in the world” and to be in the Top 5 OECD
countries in R&D by 2010.
• This is what happened (2009 data from OECD):
 R&D intensity declined from 2.4% of GDP to 1.8% between 2004 and
2008 – OECD average is 2.2%
 Government financing of business R&D is 2.3% - OECD average is 6.3%
 Canada has a low number of patents (21 per million inhabitants in 2005-
07) compared to the OECD (33) and the G7 average (48).
 In 1998-2008, the rate of labour productivity growth in Canada (1.3%)
was below the OECD average (2.2%) – its lower now.
 University graduation rates for women (44% in 2007) are higher than the
OECD average (42%) but male rates (26%) are lower (29%).
 Graduation rates in science and engineering are lower than the OECD
average both at the university and the doctoral level.
Innovation, College and Community – June 2010 www.contactnorth.ca

10. Let’s All Understand Innovation
Innovation, College and Community – June 2010 www.contactnorth.ca

11. Innovation Has Two Forms –
Private Sector and Public Good
Private Sector innovation occurs when:
• A firm launches a new product or service which is new to them and/or
to the markets they serve
• The product or service generates revenues
• The product or service is sustainable
Public Good innovation occurs when:
• A new practice, service or product is introduced which is intended to
achieve one or more of the following:
 Increased accessibility to a service
 Improvements in the affordability of a service
 Improved quality of a product or a service
 Improved productivity, efficiency or effectiveness
Innovation, College and Community – June 2010 www.contactnorth.ca

12. Innovation is sometimes…
Adopt / Adapt Innovation
• Taking an idea from elsewhere and adapting it for a new use or
purpose and ensuring its widespread adoption – e.g. 3D movies to
3DTV, Birdseye frozen foods
Disruptive or Breakthrough Innovation
• Using a new technology, discovery or process to transform the way
in which something is done (e.g. web based textbooks, ebooks,
mobile learning)
• Changing the business model for an industry (e.g. travel, skills
development in ICT)
90 - 95% of all innovation is adopt/adapt
Innovation, College and Community – June 2010 www.contactnorth.ca

13. No Necessary Connection Between
The Activity The Outcome
Research in a Laboratory Innovation
Patents Innovation
Investment of Government Funds Innovation
University Commercialization Efforts Commercialization
Cluster Formation Growth in GDP from that Industry
Innovation, College and Community – June 2010 www.contactnorth.ca

14. The 6 Key Requirements for an Effective
Innovation System
 Relentless focus on HQP development and engagement in the
work of firms, innovative organizations
 Significant incentives for firms to spend more on R&D –
expanding IRAP, SR&ED etc
 Public: Private partnerships for R&D – less reliance on
University “curiosity” research to produce innovation
 Effective linkages between firms in a sector – coopetition in
clusters
 More open innovation and a more open and faster IP system
 Access to capital
Innovation, College and Community – June 2010 www.contactnorth.ca

15. The Five Big Challenges for Canada
1. Increasing the absorption capacity of firms
• Training and development and investments in skills
• Public: private funding for research, including business processes,
service enhancements and market expansion – change the
boundaries of SRED and IRAP
• Major support for productivity enhancement through capital tax
allowances and “flow through shares”
2. Stop seeing universities as centres of commercialization –
firms are
• Refocus them on their core task – HQP development and R&D
• Require more private: public R&D
• Invest heavily in open innovation system for university research
• Create more effective linkages to venture capital
Innovation, College and Community – June 2010 www.contactnorth.ca

16. 3. Relentless focus on improving productivity
• Government support through tax incentives, grants and systematic
support services for productivity gains
• Ensure the capital tax regime supports new equipment + training in
its use
• Target sectors for major gains in two and three year cycles
4. Stimulate the development of business led industry clusters
• Facilitate coopetition and open innovation
• Share next practices
• Benchmark performance
5. Transform our school system
• Find everyone’s talent and push
• 21st century skills and mindful teaching
• Less accountability and high stakes testing, more focus on real
learning – “less is more”
Innovation, College and Community – June 2010 www.contactnorth.ca

17. The Community College
and Innovation
Innovation, College and Community – June 2010 www.contactnorth.ca

18. 10 Challenges for Colleges
1. Stop focusing on “innovation” and focus more on
productivity, design, and the development of skills.
2. Embed creativity, change management and adaptability
into all that you do – “the future isn’t what it used to be”.
3. Don’t focus on R&D, focus on design, development,
deployment and sustainability.
4. Use your networks to create local and regional clusters.
5. Build cross functional capacity within the college and
between the college and its partner firms / organisations.
Innovation, College and Community – June 2010 www.contactnorth.ca

19. 6. Be “glocal” – think and connect globally and act locally.
7. Invest in a systematic way in futures thinking – partner
with your industry sectors to develop roadmaps,
systematic foresight
8. Relentlessly pursue and create private: public
partnerships – it will accelerate innovation and improve
productivity
9. Build capacities in the community – outreach, engage,
inspire
10. Communicate your work directly to firms, industries,
governments and the general public – celebrate every
success every time everywhere!
Innovation, College and Community – June 2010 www.contactnorth.ca

20. “You cannot cross a chasm
in two small leaps!”
stephen@contactnorth.ca
Innovation, College and Community – June 2010 www.contactnorth.ca