Why Canada Lags in the Innovation Economy

Canadian entrepreneurs are among the top in the world and have the potential to generate significant wealth for the Canadian economy. However, as described by Jim Baillie in his article for the Globe and Mail titled,  “Canadians can innovate, but were not equipped to win” Canada has a history of struggling to commercialize its ideas. Baillie argues that Canada is simply not equipped for global competition, which is becoming increasingly problematic considering the nature of today’s ‘innovation economy’, which is producing a decline in commodity prices and manufactured exports. The corner stones of today’s economy are entrepreneurship, technology and innovation, but Canada has been slow to produce the infrastructure and policies necessary to adapt to this model. Baillie highlights that the “policies that helped us design infrastructure for traditional industries have little impact on an innovation economy”.

One of the primary reasons Canada’s tech economy lags behind is due to ownership. Canada relies on traditional ownership rules introduced by NAFTA and the FTA, which worked well for our manufacturing industries, but can not hold up in the new fast paced innovation economy. For example, within NAFTA there is little to no mention of intellectual property rights, which act as a “currency in the innovation economy”. So although NAFTA opens up borders making the trade of material goods easier, it doesn’t address the ownership of ideas. Furthermore, the actual process of deciding who ‘owns’ an idea is still decided in courts outside of Canada (usually the United States) and works to benefit their economies and not ours. 

In a sense, Canada’s policy makers have yet to adapt to the new fast-paced technological and innovation driven economy and our government has failed to create the proper infrastructure necessary for us to compete. Instead of applying the logic of traditional economic policy to all of Canada's sectors, we should be following in America’s footsteps by creating and implementing sophisticated copyright and intellectual property policies, as well as creating a private and public framework for commercializing ideas. 

References:

http://www.theglobeandmail.com/report-on-business/rob-commentary/balsillie-learns-canadian-innovators-not-equipped-for-global-competition/article24346408/